Friday, February 4, 2022: Biden Issued an Executive Order Unionizing All Large Construction Contracts
President Biden announced a new Executive Order (EO) on the “Use of Project Labor Agreements For Federal Construction Projects.” Staying on protocol, The White House followed its traditional publicity and marketing playbook to (a) publish an Executive Order on a Friday to dominate weekend news channels, and (b) force “echo reporting” on the story from the trade industry reporters later the next week when the White House will cause the Federal Register to publish the EO which will then assign it a number.
If the federal courts do not enjoin it as an outright violation of the National Labor Relations Act (which allows employees to decide whether they wish to become union members, or not), this EO will require federal Government contractors and subcontractors on large-scale federal construction projects (meaning $35 million and above) to negotiate a “Project Labor Agreement” (“PLA”) with one or more appropriate labor organizations, or to become a party to an existing PLA.The EO outlines the requirements for the prescribed PLAs (Section 4) but allows three exceptions (see Section 5, outlined immediately below). A senior official may grant an exception given a written explanation of why at least one of the following is true:
- Requiring a project labor agreement on the project would not advance the Federal Government’s interests in achieving economy and efficiency in Federal procurement. Such a finding shall be based on the following factors:
- The project is of short duration and lacks operational complexity;
- The project will involve only one craft or trade;
- The project will involve specialized construction work that is available from only a limited number of contractors or subcontractors;
- The Agency’s need for the project is of such an unusual and compelling urgency that a project labor agreement would be impracticable; or
- The project implicates other similar factors deemed appropriate in regulations or guidance issued pursuant to section 8 of this order.
- Based on an inclusive market analysis, requiring a project labor agreement on the project would substantially reduce the number of potential bidders so as to frustrate full and open competition.
- Requiring a project labor agreement on the project would otherwise be inconsistent with statutes, regulations, Executive Orders, or Presidential Memoranda.
The EO also requires quarterly reporting of project labor use to the Office of Management and Budget (Section 6).
Effective Date
Within 120 days (by June 4, 2022), the FAR Council will publicly propose Rules in the Federal Register needed to implement the provisions of the Order. The FAR Council will thereafter then consider and evaluate public comments on the proposed Rules prior to issuing a Final Rule.
Additional Information
In advance of the issuance of the Executive Order, the Biden Administration released a Fact Sheet outlining how the EO will “benefit taxpayers, contractors, and workers.”
How We Got Here
With union membership continuing to fall to precipitously low levels, and with The White House tied at the hip to the unions, the Biden Administration and the union movement tied their fortunes to the PRO Act. Realizing that the first year Biden Administration had failed to win passage of the PRO Act, the strategy changed to bury it in the Reconciliation Act (the budget bill). With that bill snarled for the last 7 months in internal debate on the Democrat side-of-the-aisle, with union membership continuing to fall during the Biden Administration and with Democrats eyeing a near-certain loss of the U.S. House of Representatives and a likely loss of the U.S. Senate in mid-term elections now only 10 months off, the unions decided to hedge their bets and get something…anything. Hence, the as-of-yet unnumbered Executive Order imposing unionizing by executive fiat on all large federal construction projects irrespective of the employees’ statutorily protected rights to democratically vote on union issues.
This Executive Order, predicated (yet again) on the President’s authority to administer federal procurement, is yet another test of the reach of the President’s powers under the Federal Procurement Act (“FPA”). With the President unable to control the Congress, or even work with it for bi-partisan action, he is turning more frequently than any other President to accomplish his policy agenda, alone, through devising orders for federal contractors with his asserted powers under the FPA.
The federal courts rejected that approach taken in the vaccination mandate Executive Order for federal government contractors/subcontractors. The judicial view was that the FPA was a narrow delegation of Congressional authority to the President to manage the procurement of the federal Executive Branch agencies. However, the courts have not viewed the FPA as a mandate to avoid the Congress on universally applicable policy issues.
And as to large construction projects, the President is operating at the nadir of his power to order unionization to avoid strikes (which would interfere with the completion of federal government construction projects) at a time that strike interference on federal contract projects is almost unknown. With both other branches of government lining up to limit President Biden’s efforts to dictate public policies they believe belong to the Congress, we are watching an embattled President try to force his will nonetheless through streaming Executive Orders coming out so fast the White House Press Office cannot even keep up with Press Releases to announce the EOs.
The head knocking will continue as a cornered President is now bunkered in, “going it alone” and lashing out with tools his team is manufacturing at hyper-speed within the closed walls of the basement of the White House.
It’s going to be a tough year for all three branches of the federal government as we get closer to the mid-term elections.