State and local governments throughout the country have taken a number of actions within the last five years to change construction labor policy. Some of these changes have expanded opportunities for merit shop contractors to compete for projects, while others have served to limit competition from contractors that are not signatories to collective bargaining agreements. One thing many of these new statutes and ordinances have in common is exposure to legal challenges from those unhappy with the changes.

Associated Builders and Contractors’ (ABC) success in working with public officials to guarantee government neutrality with regard to project labor agreements on taxpayer-funded construction projects will protect more than $60 billion annually in 21 states from the threat of wasteful special interest handouts.

In response to these PLA reform statutes, construction labor unions filed federal legal challenges between 2011 and 2013 in Iowa, Idaho, Michigan and Louisiana. In each of these complaints, the plaintiffs argued the National Labor Relations Act (NLRA) preempts the state government neutrality laws. The construction labor unions made this same argument in their unsuccessful complaint against Executive Order 13202 issued by President George W. Bush in 2001. That executive order banned government-mandated PLAs on federal and federally funded construction projects.

In Iowa, a federal district court judge dismissed a complaint filed by international and local construction labor unions alleging that the NLRA preempts an executive order banning PLA mandates on state-funded projects issued by Iowa Gov. Terry Branstad (R) in January 2011. The plaintiffs did not appeal, and this case was resolved in favor of Gov. Branstad’s ability to protect taxpayer-funded construction from wasteful and discriminatory PLA mandates.

The construction labor unions also filed federal challenges in 2011 against PLA reform statutes in Idaho and Michigan. In Michigan, the U.S. Federal Court of Appeals for the 6th Circuit ruled in 2013 that the NLRA did not preempt the state’s government neutrality law. The construction labor unions did not appeal this ruling; as such, the Michigan statute is in effect and protects taxpayer-funded construction from PLA mandates.

The Idaho case is still outstanding. At the district court level, a federal judge found the NLRA preempted the government neutrality statute adopted by the Idaho legislature in 2011. On appeal by the state, the U.S. Circuit Court of Appeals for the 9th
Circuit sent the case back to the district court for procedural reasons. The case is now back before the circuit court.

In 2013, the construction labor unions filed a federal complaint in Louisiana against a government neutrality statute enacted in 2011. This case is still pending at the federal district court level.

Merit shop advocates also are playing offense on the legal front. For several years, state and local government entities have adopted responsible contractor/employer policies that include onerous requirements that simply are not necessary in the modern construction environment, including provisions designed to reward contractors that utilize registered apprenticeship programs. While many merit shop contractors rely on registered apprenticeship programs to train their employees, many others use different forms of craft training. Merit shop advocates believe contractors that utilize craft training deserve a fair opportunity to compete for projects without participating in a registered apprenticeship program.

Lawsuits were filed in response to responsible contracting policies adopted in Fall River, Mass., and Quincy, Mass. At both the federal district court level and at the U.S. Circuit Court of Appeals for the 1st Circuit (in the Quincy complaint), judges found that the responsible contracting policies violated federal law.

The response from local government entities was almost immediate. Several municipalities in Massachusetts suspended enforcement of their responsible contracting policies. While other local government entities remain intransigent, it is likely enforcement of their policies will result in future legal challenges.

ABC and other merit shop advocates remain committed to working with government at all levels to ensure that open shop contractors have fair opportunities to win work and build projects in their own communities.   


Andy Conlin is director of state and local affairs for Associated Builders and Contractors. For more information, email conlin@abc.org.