By Dirk VanderHart, Oregon Capital Chronicle
Oregon construction firms say an order by Gov. Tina Kotek last year mandating union labor in many state projects amounts to an illegal power grab. Now they’re asking a judge to step in.
Last week, a coalition of contractor associations and more than a dozen individual construction firms sued Kotek in Marion County Circuit Court, arguing she has overstepped her authority.
They’re seeking a freeze on the directive while they make the case that Kotek cannot make the changes she seeks without legislative authority or necessary rulemaking by state agencies.
Kotek’s executive order “is an unconstitutional exercise of power by the Governor,” the suit says. “Under the Oregon Constitution, the Governor is not vested with the power to make law, regardless of the policy objective.”
Kotek’s office declined to comment, citing pending litigation.
The order at the heart of the case requires state agencies to use tools known as “project labor agreements” in state construction projects where onsite labor costs makeup at least 15% of the cost.
PLAs, as they are known, are contracts between a project owner – like the state – and one or more labor unions that will be providing workers.
The particulars vary, but PLAs lay out the working conditions for the entire project, including provisions on hourly pay and benefits. There’s often a guarantee there will be no strikes by unions or lockouts by employers. Some deals include requirements to use a target number of apprentices or to work with minority-owned businesses – a feature Kotek has argued will ensure the state is supporting disadvantaged communities.
But the central feature of the agreements – that they require union participation in projects – is controversial.
Opponents of PLAs argue they discourage bids from construction firms that don’t typically use union labor, reducing competition. They point to studies that have found PLAs lead to higher costs.
Supporters say PLAs offer certainty and stability to projects, and that the use of union labor ensures a quality final product. They offer their own studies suggesting that PLAs do not increase costs, and that they can help projects come in earlier and with minimal labor strife. “For large complex construction projects, particularly in the transportation arena, there should be a project labor agreement,” Kotek told reporters in January. “I don’t believe it’s going to blow a big hole in the budget because the folks who are saying that can’t show me the numbers.”
As Willamette Week first reported in January, the Oregon Department of Transportation concluded in a 2022 report that PLAs were likely to increase costs in state highway projects, citing six separate studies it had analyzed.
Kotek issued her order the week before Christmas, catching many contractors (and infuriated Republican lawmakers) off guard.
Contractors say that timing wasn’t random. The state chapter of the Association of General Contractors had already sued over the state’s attempts to use PLAs in a handful of highway projects, and prevailed in circuit court. Kotek’s order came a little more than a week after that case was argued before the Oregon Supreme Court.
The crux of the contractors’ arguments is that Kotek overstepped her constitutional powers with the December order. The suit suggests such a policy must either come from the Legislature – which declined a bill to take a similar step in 2023 – or go through proper rulemaking processes.
“Governor Kotek performed a legislative function via executive order by unilaterally imposing a PLA requirement on nearly every public construction project in the State,” the suit says.
While Kotek’s order took effect immediately, it allowed agencies to claim an exemption through March 31. It’s not clear any state projects are moving forward with a project labor agreement as a result of the order.
This story was first published by Oregon Public Broadcasting.