A federal judge in Louisiana dismissed on procedural grounds AGC of America’s Construction Advocacy Fund-financed lawsuit challenging the Biden administration’s government mandated PLA regulation.

On March 12, a federal judge in Louisiana dismissed on procedural grounds AGC of America’s lawsuit challenging the Biden administration’s regulation requiring project labor agreements (PLAs) on federal construction projects of $35 million or more. The decision, however, does not prohibit the association from refiling a lawsuit again.

The judge was unpersuaded that there was imminent harm to construction contractors because, among other things, the regulation gives “Senior Procurement Executives” in federal agencies the authority to grant exceptions to the government-PLA mandate and there is no evidence that they will not grant such exceptions. In addition, the judge thought the alleged injuries to companies’ business practices was too speculative at this juncture, as no contractor has been denied a contract, for example, as a result of this regulation.

While AGC disagrees with the court’s analysis, it is clear that the implementation of the government-PLA mandate by federal agencies—and whether exceptions are granted—will be weighed heavily in judicial review. In filing this lawsuit, AGC understood that its case could be dismissed on procedural grounds. The association calculated, nevertheless, that the regulation’s harm to its members and the possibility for success far outweighed any decision to delay filing.

The association will continue to seek further evidence of the regulation’s impact to contractors in its efforts to oppose this government-PLA mandate. To that point, AGC is seeking evidence showing:

• Exemptions are denied and/or indications that they are clearly not going to happen;
• Contractors are still uncertain as to when they’ll have to present a PLA, particularly in cases where there’s only a very short time contemplated by the opportunity;
• Examples of procurement agencies providing additional details about what must be required in a PLA;
• Examples of actual PLAs negotiated and submitted with bids;
• Actual attempts by member companies to try to negotiate a PLA that have been rebuffed by the unions; and
• Actual examples of unsuccessful attempts to identify qualified signatory subcontractors.

AGC is consulting with legal counsel to determine the appropriate path forward.

The federal PLA Mandate will require every federal prime contractor and subcontractor to engage in negotiation or agree to PLAs on federal construction projects valued at $35 million or more, with limited exceptions, beginning on Jan. 22, 2024. According to an AGC of America analysis of data obtained via a Construction Advocacy Fund-financed lawsuit under the Freedom of Information Act, the Department of Defense federal construction agencies rejected PLA mandates 99.4 percent of the time even when encouraged to do so under the Obama-Biden Administration.  AGC of America neither supports nor opposes contractors’ voluntary use of PLAs on government projects or elsewhere but strongly opposes any government mandate for contractors’ use of PLAs. AGC is committed to free and open competition for publicly funded work.

AGC has long maintained that the federal government should not mandate PLAs.  The use of government-mandated PLAs hurt union contractors, open-shop contractors, and fails to promote economy and efficiency in federal procurement.  AGC of America submitted extensive comments opposing the rule when it was first proposed in 2022. Through the association’s grassroots efforts, AGC members sent more than 8,500 communications against the proposal via formal comments and messages to their federally elected officials.

For more information, contact Jordan Howard at [email protected] or (703) 837-5368.