Federal Government Lends Unions a Helping Hand

On February 6, 2009, President Obama signed an Executive Order encouraging government agencies to implement project labor agreements on large-scale construction projects. The Order further provided that if a government agency decides to utilize a labor agreement, then it may require all of the contractors and subcontractors for that particular project “to negotiate or become a party to a project labor agreement with one or more appropriate labor organizations.” The purpose of the Order is to promote “the efficient and expeditious completion of Federal construction contracts” by alleviating labor disputes that could cause unnecessary project delays and increased costs. However, not all in the construction industry are pleased with the Order. Stephen Sandherr, Chief Executive Officer of the Associated General Contractors of America, issued statement criticizing President Obama’s Executive Order claiming that it has the potential to limit a general contractor’s ability to compete for federal construction contracts. Further, Stefan Gleason, Vice President of the National Right to Work Legal Defense Foundation, stated that the Order encourages federal agencies to implement discriminatory, pro-union labor agreements that will cause undue harm and burden to the vast majority of private-sector construction workers who have not unionized. However, given the President’s recently adopted stimulus package, which includes larges sums of money earmarked for construction projects, only time will tell whether the Executive Order harms or helps the ailing construction industry.

Posted by: Shannah J. Morris

Categories: Construction Contracts, Current Developments / Legislation, Labor and Employment