The Trump administration is considering rolling back an Obama-era rule designed to steer federal contracts to companies with labor unions, but the White House's desire for a major infrastructure program may hinder the move.
At issue are “project labor agreements,” collective bargaining agreements unique to the construction industry that require companies to recognize unions and agree to their rules for a work project. Former President Barack Obama signed an executive order in 2009 encouraging federal agencies to require PLAs in contracts exceeding $25 million.
Business lobbyists have been pushing the Trump administration to undo the rule. “We have had conversations with them on it and we think it is something that they are looking at,” Ben Brubeck, vice president of regulatory, labor, and state affairs for Associated Builders and Contractors, told the Washington Examiner.
In January, Brubeck’s group and 13 other business groups, including the Chamber of Commerce, wrote the White House to “respectfully request” that it rescind Obama’s executive order.
Fans of PLAs argue that they promote efficiency by providing “structure and stability to large-scale construction projects,” as the Obama executive order says. Among other features, PLAs often have no-strike clauses. Business groups don't like them because they put non-union bidders at a disadvantage.
President Trump has direct experience with PLAs, and he has little reason to feel warmly toward them. In 2006, he sued three Chicago-area building trade unions, saying they violated a PLA’s no-strike clause when they walked off work for the Trump International Hotel and Tower in the Windy City. The lawsuit was settled out of court, the terms subject to a confidentiality agreement.
In addition, Trump’s director of the Office of Management and Budget, former Republican Rep. Mick Mulvaney, was the chief sponsor of a 2015 bill called the Government Neutrality in Contracting Act to eliminate PLAs in all federally funded construction projects.
However, construction trade unions and their Democratic allies strongly favor PLAs, and the administration may need their help to pass his $200 billion infrastructure plan. While the administration called for eliminating regulatory barriers to speed up the projects, it did not mention PLAs as an issue.
The White House, meanwhile, has stressed the infrastructure bill as one area where it can work with both sides of the aisle. “We don’t want to do this unilaterally. We want to discuss and work in consultation on a bipartisan basis with the Hill to address the infrastructure needs of the country,” Transportation Secretary Elaine Chao said Tuesday.
A Transportation Department representative referred questions to the White House. A spokesman there could not be reached.
“There is going to be a balancing act. It’ll be interesting to see what happens,” Brubeck said.