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Federal Agencies May Require Project Labor Agreements For Federal Construction Projects

Posted on: February 16th, 2009

On Friday, February 6, 2009, President Barack Obama issued what may be the most far reaching of the various Executive Orders he has issued affecting federal contractors.

The Executive Order, entitled “Use of Project Labor Agreements for Federal Construction Projects,” sets forth an official government policy to recommend that executive agencies begin requiring project labor agreements in all large-scale construction projects.  The order defines “large scale construction project” as any project where the cost to the federal government is $25 million or more.  The order also defines a “project labor agreement” as “a pre-hire collective bargaining agreement with one or more labor unions that establishes the terms and conditions of employment for a specific construction project.”   

If an executive agency determines that a Project Labor Agreement would promote “economy, efficiency and labor stability while ensuring compliance with federal laws,” the agency may require every contractor or subcontractor to agree to negotiate or become a party to a project labor agreement with “appropriate labor organizations.”

The impact of this latest Executive Order could fundamentally change labor relations for federal contractors if mandatory Project Labor Agreements are commonly required by federal agencies in letting construction contracts.  In effect, the required use of Project Labor Agreements would virtually require that all covered contractors for federal construction contracts (defined as work involving construction, rehabilitation, alteration, conversion, extension, repair or improvement of builds, highways or other real property) use union labor.

The order is effective immediately and requires the Federal Acquisition Regulatory Council (FAR Council) to amend FAR regulations to implement the order within 120 days.  Within 180 days, the Director of the Office of Management and Budget, along with the Secretary of Labor, shall provide the president with recommendations regarding broader use of project labor agreements.

The full text of the executive order can be found here.

If you have any questions, please contact one of our Labor & Employment attorneys.

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