Biden’s Project Labor Agreement Mandate Faces Successful Challenge in Court

In a win for taxpayers, builders and contractors, this week the U.S. Court of Federal Claims ruled that the Biden administration’s project labor agreement (PLA) policy implementation was illegal, teeing up more legal challenges in the future.

PLAs require contractors to sign union labor agreements, often forcing government contractors to abide by inflated union wage scales and hire union-approved laborers. This locks non-union workers out of the government contract entirely. Biden’s rule required PLAs on federal construction projects estimated to cost $35 million and above. Other Biden policies independent of the rule subjected state and local governments reliant on federal infrastructure projects to pro-PLA grant programs to continue receiving assistance. The Biden administration bypassed both houses of Congress to enact these policies through regulatory schemes.

These initiatives steered taxpayer dollars used for construction contracts directly into the hands of union bosses and unionized contractors. This was problematic given nearly 90 percent of the construction industry is not unionized, thus limiting competition, driving up prices for construction and delaying project timelines. In 2021, the RAND Corporation found that PLA mandates in Los Angeles increased the construction costs of housing by 14.5 percent, resulting in approximately 11 percent fewer affordable homes able to be built with the same level of funding.

In June of last year, Americans for Tax Reform joined with other free market groups to highlight the adverse impacts of these regulatory burdens on construction.

On Sunday, the U.S. Court of Federal Claims ruled in favor of twelve construction companies, all members of the Associated Builders and Contractors (ABC) and Associated General Contractors (AGC), which had filed bid protests against the federal government over the anti-competitive PLA policies. The Court ruled that “[t]he agencies’ 2024 implementation of the mandate… is arbitrary and capricious.”

In response to the ruling, Ben Brubeck, the Vice President of Regulatory, Labor and State Affairs at ABC, said, “ABC and its federal contractor members are ecstatic that the judicial system has delivered justice for American taxpayers and the 90% of the U.S. construction industry workforce that is nonunion.”

Brubeck encouraged federal contractors to continued filing bid protests against federal agencies who may still seek to enact PLA mandates. He noted that under PLA mandates, non-unionized workers are exposed to “union wage theft of up to 34% of their compensation unless they join a union and vest in union benefits plans.”

He did point out that the fight is not over, with PLAs still being pushed on federally assisted infrastructure projects procured by local and state governments and private developers. ABC joined with other business groups on January 9 in penning a letter to President Donald Trump requesting an executive order to restore fair and open competition, which they estimated could save taxpayers up to $10 billion annually.

The Trump administration’s opposition to Biden-era policies such as the PRO Act demonstrates that the new administration is prepared to side with workers and taxpayers over the interests of union bosses and organized labor. President Trump can take action to reverse Biden’s PLA mandates by issuing his own executive order rescinding Executive Order 14063. There are also legislative proposals with merit, such as the Fair and Open Competition Act.

Freedom of association and a focus on minimizing both cost blowouts and project delays in government contracts are essential in securing a good outcome for workers and taxpayers alike. Americans for Tax Reform applauds this latest victory in the Court of Federal Claims and looks forward to more being done to dismantle the anti-competitive Big Labor policies of Joe Biden and Kamala Harris.