|
|
|
|
|
 |
 |
|
||||||
|
Search:
|
President Obama Issues Fourth Pro-Union Executive Order
Posted: February 9, 2009
Page Tools:
For More Information Contact:
Related Practice Areas:
Project Labor Agreements Can Be Mandated for Federal ContractorsIn another boost to organized labor, President Barack Obama on February 6, 2009, signed an Executive Order, effective immediately, authorizing executive agencies of the federal government to require every contractor or subcontractor on a large-scale construction project to negotiate or become a party to a Project Labor Agreement (PLA) with one or more labor organizations. This is the fourth pro-labor Executive Order signed by President Obama since January 30th. A PLA is a pre-hire collective bargaining agreement between contractors and one or more unions that establishes the terms and conditions of employment for a specific construction project. The stated rationale for this Order is that a PLA can promote the “efficient and expeditious completion of Federal construction contracts” by ensuring a “steady supply of labor” and the avoidance of “labor disputes” which can delay the project. This Executive Order, which specifically revokes contrary Executives Orders issued by former President George W. Bush in 2001 and reinstates a Clinton-administration rule, was immediately hailed by organized labor. "This is yet another reason for working families to be grateful that we have a champion in the White House," Teamsters General President Jim Hoffa stated. In the same vein, Mark H. Ayers, president of the AFL-CIO Building and Construction Trades Department (BCTD), praising President Obama, stated: “The Bush anti-PLA executive order was exactly the type of special interest-driven politics and policy that American voters rejected overwhelmingly last November…. [Project Labor Agreements] provide maximum benefit to construction users; union and non-union workers; union and non-union contractors; lenders and insurance companies; and taxpayers.” The reaction of the business community, not surprisingly, is far different. Stephen Sandherr, chief executive officer of the Associated General Contractors of America, said of the mandate, "Today's executive order has the unfortunate potential to limit contractors' ability to compete for projects at a time when the government is reporting that over one million construction workers have lost their jobs.” Specifically, the Order applies to government-funded projects providing for “construction, rehabilitation, alteration, conversion, extension, repair or improvement of buildings, highways or other real property” where the total cost to the federal government is $25 million or more. The Order has a broad sweep. It provides that the contracting government agency may mandate a contractor to use a PLA if use of such agreement will:
Further, any PLA provided for under the Order will bind all contractors and subcontractors on the project. The Order requires the Federal Acquisition Regulatory Council (FAR Council) to take necessary actions to amend the Federal Acquisition Regulation to implement the provisions of the Order within 120 days of the date of the Order. Possibly signing an even wider application of PLAs, the Order also mandates the Director of OMB, in consultation with the Secretary of Labor and with other officials, as appropriate, to provide the President within 180 days recommendations on whether broader use of PLAs, both with respect to construction projects under federal contracts and those receiving federal financial assistance, would help to promote the economical, efficient, and timely completion of such work. Potential Challenges to OrderWhether an Executive Order of this type is permissible previously has been challenged unsuccessfully. The National Labor Relations Act generally prohibits any legislative or executive regulatory action prohibiting or mandating an employer from becoming party to an agreement with a labor organization. However, the Supreme Court has recognized an exception to this principle when the government is acting as a “proprietor” and interacting with private participants in the marketplace. See Bldg & Constr. Trades Council v. Associated Builders & Contractors, 507 U.S. 218 (1993) (the “Boston Harbor” case). Relying on this principle, the United States Court of Appeals for the District of Columbia upheld former President George W. Bush’s prior Executive Order prohibiting the use of PLAs. The Court said: “A condition that the Government imposes in awarding a contract or in funding a project is regulatory only when, as the Supreme Court explained in Boston Harbor, it ‘addresse[s] employer conduct unrelated to the employer’s performance of contractual obligations to the [Government]’…. Here the Government correctly notes that that the ‘impact of [the] procurement policy extends only to work on projects funded by the government.’ Because the Executive Order does not address the use of PLAs on projects unrelated to those in which the Government has a proprietary interest, the Executive Order establishes no condition that can be characterized as ‘regulatory.’” See Building and Construction Trades Dep’t v. Allbaugh, 295 F.3d 28 (D.C. Cir. 2002). * * * Many legal and strategic considerations face contractors and subcontractors — non-union and union — who might consider working on government contracts under this Executive Order. An understanding of the ramifications of the Order surely is one of them. Undoubtedly, some union-free employers will be concerned that once their employees are represented by a union on a PLA, the employees might seek representation on other work. In fact, many unions who currently favor PLAs attempt to include language that will automatically extend the terms of the agreement to all other operations of the employer. These and other pitfalls await unwary employers who proceed without guidance. The union-free employer who understands and addresses the risks of doing business with the government under a PLA could be rewarded by diminished competition from others who shy away from bidding for such work. Even more subtle concerns may apply to contractors whose workforces now are unionized and are parties to union contracts. Under this Order, these employers could be told that their agreements are not with the “appropriate” union or unions, or that the terms of those agreements are inadequate for a particular PLA. Before bidding on contracts subject to a government-mandated PLA, such employers need to understand the implications it might have for their current relationships and agreements. Jackson Lewis attorneys are available to answer your inquiries about all of the recent and expected changes in Workplace Law in the Obama Administration and the 111th Congress.
| |||||||
