Will Mandated Project Labor Agreements Again Trigger Ineligibility for Federal Funds?

Political observers are now speculating about which executive actions Donald Trump will take after becoming President. One of his actions may reverse federal policy toward government-mandated union Project Labor Agreements on federally-funded projects.

President Trump can rescind President Obama’s 2009 executive order encouraging Project Labor Agreements on federally-funded projects. In addition, he can issue his own executive order prohibiting them. President George H.W. Bush signed such an executive order in 1992 and President George W. Bush did the same in 2001.

Construction union leaders criticized Trump during the 2016 general election because he had allegedly refused to sign union Project Labor Agreements for his own private development projects. While many contractors working on his projects employed union trade workers, Trump’s companies did not impose a top-down union mandate that would cut competition and increase costs for no good reason. Labor relations for contractors were considered to be the affairs of labor and management, not the project owner.

Even if Trump had surrendered to the demands of union officials, top construction union officials in Washington, D.C. would not have supported Trump’s campaign for President. They supported Hillary Clinton, who sought union campaign support and promised to support union positions on issues. President Trump owes nothing politically to them.

Money at Risk in California, Where Politicians Love Project Labor Agreements

Any regular reader of UnionWatch.org already knows that California leads the way in using government-mandated Project Labor Agreements to cut bid competition, increase labor costs, and give unions a monopoly on public works projects. The Contra Costa County Board of Supervisors in 1994 became the first of more than 200 California local and regional governments that have required their construction contractors to sign Project Labor Agreements with unions. The number has increased dramatically since Governor Jerry Brown took office at the end of 2010.

Governor Brown has signed into law union-backed bills that nullified existing local bans on Project Labor Agreements, prohibited future local Project Labor Agreement bans, and cut off state funding for cities that banned Project Labor Agreements by exercising their constitutional rights to do so under their city charters. He also signed a bill that enshrines Project Labor Agreements as a legal and desirable specification for public works bidding. Other new laws impose costly mandates on local governments but include exemptions if the local government requires contractors to sign a Project Labor Agreement.

Contractors must sign a Project Labor Agreement to work on the first three construction packages put out to bid by the California High-Speed Rail Authority. But contractors have also been required to sign Project Labor Agreements for small contracts related to bird, weed, and dust control. No public works contract is immune, not even contracts that fall below the $2000 minimum threshold for Davis-Bacon federal prevailing wage coverage.

The problem is political, of course, as proven by the inconsistent positions held by the California politicians who promote Project Labor Agreements. California’s elected officials who most loudly decry the potential loss of federal funding to local governments because they have “sanctuary” immigration policies were also the backers of state laws to cut off state funding to local governments that banned Project Labor Agreements. And the elected officials who most often spout the word “democracy” were the champions of punishing local governments (City of San Diego, City of Chula Vista, County of San Diego) where voters had approved Project Labor Agreement prohibitions via ballot measures.

How Will an Executive Order Banning Project Labor Agreements Help California?

Would an executive order help California taxpayers and local government services? Government and union documents from 2001 through 2010 reveal 19 specific California local construction projects that absolutely would have included Project Labor Agreement mandates in bid specifications except for the Bush executive order. It is likely that many more federally-funded projects would have included Project Labor Agreements if the executive order was not in place.

After President George W. Bush signed the executive order in 2001 banning Project Labor Agreements on federally-funded projects, the Contra Costa County Building and Construction Trades Council and the City of Richmond joined the Building and Construction Trades Department, AFL-CIO to file a lawsuit to overturn it. Obviously California was the epicenter of the abuse. (The lawsuit failed.)

A Presidential executive order would also impose accountability on California local governments already requiring their contractors to sign Project Labor Agreements. California local governments such as the Port of Oakland and the Sacramento Regional Transit District had to apply for federal agency approval for an exemption from the 2001 executive order to continue their existing Project Labor Agreement policies. This gave local opponents and experts an opportunity to argue to the federal agency against the exemptions by demonstrating that these union deals were harming taxpayers, customers, and individual contractors and their non-union employees.

Protecting Americans from the Excesses of California

California regional and local government officials will continue squandering taxpayer money on costly and unnecessary special deals to give their union backers a monopoly on public works construction. Apparently the majority of people of California don’t know, don’t care, or like it. They keep voting for union-backed politicians who in turn vote for Project Labor Agreements.

But in most of the United States, Americans do care about California wasting federal money on union schemes. By the end of 2015, 23 states had banned Project Labor Agreements. A few other states have imposed bans in the past, and several states are considering bans in 2017. Only a handful of states have a significant union lobbying effort to promote government-mandated Project Labor Agreements. And California is the only state where Project Labor Agreements are routinely imposed as a brazen political payoff without any real effort to justify them as a public policy.

If federal money is going to California for high-speed rail and other “Progressive” visions, then that money needs to be spent on the best quality construction at the best price. If California politicians want to guarantee work to their union allies and campaign benefactors, they can choose not to seek federal funding. It will be their choice.

TIMELINE OF PRESIDENTIAL EXECUTIVE ORDERS ON PROJECT LABOR AGREEMENTS

Executive Order 12818 (George H.W. Bush)

Open Bidding on Federal and Federally Funded Construction Projects

• Signed: October 23, 1992
• Federal Register page and date: 57 FR 48713; October 28, 1992
• Revoked by: EO 12836, February 1, 1993
• See: EO 13202, February 17, 2001

Executive Order 12836 (Bill Clinton)

Revocation of Certain Executive Orders Concerning Federal Contracting

• Signed: February 1, 1993
• Federal Register page and date: 58 FR 7045; February 3, 1993
• Revokes: EO 12818, October 23, 1992
• Revoked by: EO 13202, February 17, 2001
• See: 58 FR 12140

Executive Order 13202  (George W. Bush)

Preservation of Open Competition and Government Neutrality Towards Government Contractors’ Labor Relations on Federal and Federally Funded Construction Projects

• Signed:   February 17, 2001
• Federal Register page and date:   66 FR 11225, February 22, 2001
• Revokes: EO 12836, February 1, 1993; Memorandum of June 5, 1997
• See:  EO 12818, October 23, 1992
• Amended by: EO 13208, April 6, 2001
• Revoked by: EO 13502, February 6, 2009

Executive Order 13502 (Barack Obama)

Use of Project Labor Agreements for Federal Construction Projects

• Signed: February 6, 2009
• Federal Register page and date: 74 FR 6985, February 11, 2009
• Revokes:  EO 13202, February 17, 2001; EO 13208, April 6, 2001

Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.