Employers in the construction industry are familiar with the constant changes regarding whether project labor agreements (PLAs) or labor peace agreements will be required on some jobs. On December 18, 2024, Oregon Governor Tina Kotek signed Executive Order 24-31, implementing a requirement that PLAs be established on certain construction projects funded by the state. EO 24-31 was implemented on the heels of a battle between the Associated General Contractors (AGC) and the Oregon Department of Transportation (ODOT) regarding ODOT’s authority to require a PLA. Related litigation concerning Former President Biden’s attempt to require PLAs on a federal level has, too, taken center stage in recent months. Now, EO 24-31 is also embroiled in litigation.
Although we do not yet have clear guidance from the courts on the future of EO 24-31 specifically, the prevalence of PLA mandates and the ensuing battles over their propriety make clear that the topic is an important one for employers to understand.
What is a Project Labor Agreement?
A PLA is a type of collective bargaining agreement that sets forth the terms and conditions of employment for a construction project. Unlike traditional collective bargaining agreements, PLAs are typically established before the work begins, and often before skilled trades are even employed for the job. PLAs set the terms and conditions only for a specific construction project. These pre-hire agreements have unique rules under Section 8(f) of the National Labor Relations Act which apply only to employers “engaged primarily in the building and construction industry.”
Opponents of PLAs, use research to show that PLAs do increase costs, such as a report conducted by ODOT in 2022, that shows PLAs are likely to increase costs for public projects. That same report also provided support to an argument frequently made by opponents of PLA mandates in showing that PLAs result in fewer bidders for state projects, thus decreasing competition and increasing costs.
Proponents of PLAs are often unions and argue that PLAs increase stability in various forms. The use of PLAs, proponents assert, ensure labor peace and a predictable timeline for construction projects. Proponents further argue that PLAs do not increase costs.
Understanding EO 24-31
EO 24-31, effective as of the date signed in December 2024, implemented burdensome requirements for “every contractor and/or subcontractor engaged in the construction” of a public improvement project where onsite labor costs constitute 15% or more of the total construction, reconstruction, or major renovation project costs. Specifically, EO 24-31 required all contractors to “negotiate or become a party to a project labor agreement with one or more appropriate labor organizations.” Effectively, EO 24-31 mandated union participation in all state-funded construction projects.
Further, EO 24-31 specified that PLAs negotiated or entered into pursuant to the Order must include certain provisions. The PLA must guarantee against strikes, lockouts, and other similar job disruptions; provide for effective, prompt, and mutually binding procedures for resolving labor disputes; and establish mechanisms for labor-management cooperation on matters of mutual interest and concern.
Certain projects are categorically exempt from the requirements detailed above. Such projects include those which constitute either necessary emergency construction work or minor alterations, repairs, or maintenance necessary to preserve a public improvement. Further, projects that are short, lack operational complexity, or involve only one craft or trade are exempt from the PLA requirements.
Although the language of EO 24-31 implies that it applied to all projects funded by a state agency, whether directly or indirectly, a “Frequently Asked Questions” sheet issued by Governor Kotek stated that it does not apply to local projects that utilize state funding. Accordingly, only projects directly funded by the state are subject to the Order’s requirements.
Challenges to EO 24-31
In February 2025, a coalition of construction groups filed a complaint in Marion County Circuit Court challenging EO 24-31. Among the coalition of groups challenging the Order are the AGC Oregon-Columbia Chapter, the Associated Builders and Contractors, Pacific Northwest Chapter (ABC), the Northwest Utility Contractors Association (NWUCA), and the National Federation of Independent Business (NFIB).
The challenge centers on two primary issues. The first argument centers on Governor Kotek’s authority to implement a PLA mandate via Executive Order. The coalition argues that the mandate effectively establishes a law, and that Governor Kotek therefore needed to utilize the proper legislative or rulemaking processes in order to lawfully create such an obligation. The second issue concerns whether EO 24-31 itself violates Oregon laws on open and competitive bidding.
Temporary Injunction Against EO 24-31
On March 24, 2025, a Marion County Circuit Court Judge issued a temporary injunction against EO 24-31 in the lawsuit detailed above. Practically, the temporary injunction means that the Order is suspended from taking effect for the time being. The underlying lawsuit will proceed and will either result in a permanent block of EO 24-31 or a finding that its implementation was constitutional.
Takeaways for Employers
Employers in the building and construction industries who work on state-funded projects should be vigilant in ensuring they stay up to date on the latest PLA developments in Oregon.
Nicole Elgin is an attorney at Barran Liebman LLP, where she represents employers on a wide range of employment issues. For questions, contact her at 503-276-2109 or nelgin@barran.com.
Lex Shvartsmann is a law clerk with Barran Liebman LLP, where she partners with attorneys in client trainings, legal research, and the drafting of employment policies and handbooks.
