The Site Report - Construction Law Insights: Issue 2, 2022

What Does Biden's Union Mandate Mean for Construction Projects?

"President Biden signed an executive order that would require large projects funded by the infrastructure law to use project labor agreements — pre-contract commitments by employers to enter into a collective bargaining agreement with at least one union."

Why this is important: On February 4, 2022, President Biden signed an executive order requiring that all projects funded by the Bipartisan Infrastructure Law to use project labor agreements. President Biden states that the executive order is going to help ensure that we build a better America, and seeks to target the difficulties in predicting labor costs due to the fact that construction employers do not usually have a permanent workforce, and promote the efficient and timely completion of construction projects undertaken by federal contractors. The executive order directs the Department of Labor and White House Office of Management and Budget to develop a training program on the new policy for contract workers, however, many employers remain hesitant about the costs and constraints of the requirement. Specifically, the executive order may scare away contractors unfamiliar with union requirements, therefore limiting competition, which in turn cuts against the Administration's goal of reducing project costs. In addition, research has demonstrated that government-mandated project labor agreements increase construction costs. Although the Protecting the Right to Organize Act ("PRO Act") may eliminate reduction in competition by promoting unionization of companies, the Act remains pending in the Senate, and the employers' concerns remain a reality.

Please see full Newsletter below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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