Republican politicians and building trade associations fiercely opposed Gov. Tina Kotek’s union-friendly executive order, which she has reiterated her commitment to.
While Democratic politicians, who control sizable majorities in both legislative houses, are largely remaining mute, those opponents are already considering their possibilities for retaliation.
State agencies must negotiate and sign labor agreements with contractors on all large state-funded construction projects where labor accounts for at least 15% of the total cost, according to the Dec. 18 order.
State agencies are required by the executive order to bargain for fair pay, benefits, and working conditions for all employees. In exchange, contractors are required to hire workers who are usually more competent and experienced and adhere to stringent labor dispute procedures in order to prevent walkouts.
Following the issuance of the executive order, the governor’s office emphasized that the obligation does not apply to affordable housing or institutions of higher education. Additionally, agencies can request exclusions for particular projects directly from Kotek’s office.
A few weeks prior to lawmakers’ arrival in Salem last month for a months-long legislative session that will entail drafting a significant transportation financing package, the executive order was issued. Millions of dollars for significant capital projects that will be impacted by the governor’s order are probably included in that package.
Unions and other supporters of the directive contend that requiring so-called project labor agreements lowers building costs and schedules while maintaining a high level of decent working conditions and fair pay. Opponents, however, contest those claims and wonder how restricting competition among construction companies benefits taxpayers.
Kotek’s office stated that the executive order would assist ensure that Oregonians are aware that public funds are used effectively and benefit the communities where they are spent.
While opponents contend that the governor overreached herself, they also claim that the rule will disproportionately harm small and rural contractors, increase prices, and cause work to be delayed.
According to Mike Salsgiver, chief executive of the Associated General Contractors chapter in Oregon, the executive order totally defeats the purpose of the existing public contracting legislation.
Possible advantages and disadvantages
For many years, large-scale building projects across the country have employed project labor agreements. The agreements have been utilized by a number of public and commercial entities in Oregon to reduce the impact of labor conflicts and offer apprenticeship possibilities.
By establishing uniform labor and workplace standards for all contractors and subcontractors, irrespective of union status, project labor agreements can aid in streamlining organization and enforcement in large-scale projects like the Interstate Bridge reconstruction project. The bridge reconstruction project’s leaders stated that before Kotek’s presidential order, they had previously intended to use a labor agreement.
Research on project labor agreements has produced conflicting findings about how they affect construction schedules and costs. Kotek’s office has not made any state analysis available to the public to back up her assertions that the executive order will expedite construction.
The advantages of project labor agreements have actually been contested in at least one state agency assessment. According to a 2022 Oregon Department of Transportation review, which was first published by Willamette Week on January 29, project labor agreements for large projects often resulted in cost increases of 10% to 20%.
Six studies that together examined data from over 1,000 projects around the country were considered in the analysis. Project labor agreements, according to the authors, have a number of benefits, but they are fundamentally unjust to nonunion workers and contractors.
It is much easier for union contractors who already have union members on board, according to the executive order’s opponents, because project labor agreements usually require construction companies to hire a specific threshold of union workers.
Opponents claim that forcing non-union contractors to follow union-negotiated guidelines will deter many of them from bidding for state contracts, lowering the number of competitive bids for a particular project and driving up costs.
Paloma Sparks, executive vice president of the statewide business lobbying group Oregon Business & Industry, told a committee of lawmakers on Monday that she is extremely worried about the extent to which this will harm smaller contractors, especially in rural areas where just no contractors have been able to compete.
Those worries are misplaced, according to union leaders who stand to gain from the executive order. They note that whether or not they use union workers, small and rural contractors are still able to submit bids for the projects. Provisions requiring a specific number of local workers may also be included in project labor agreements.
Additionally, they contend that the training opportunities and influx of highly skilled individuals that project labor agreements typically bring could be advantageous to rural towns. They also point out that larger companies still compete with rural contractors even in the absence of project labor agreements.
Ironworkers Local 29 political director Lorne Bulling said, “I almost feel like we, as the unions, are giving up more in this executive order.” According to him, for instance, unions that normally have the right to strike must choose to cede that right, and they are not assured employment on projects. In the meantime, the order guarantees that non-union workers cannot be disregarded.
Supporters of the executive order contend that non-union contractors’ desire to evade the stricter labor and workplace regulations mandated by project labor agreements is a contributing factor in the resistance.
The executive order’s supporters contend that non-union contractors often disregard labor laws, which can result in worker exploitation that could be avoided with union oversight, despite the fact that non-union construction workers in Oregon are legally required to make the same amount as union workers when working on public works projects.
Daniel Hutzenbiler, a seasoned labor lawyer who represents a number of Oregon unions, stated, “I believe their real concern is that they can no longer get away with underpaying people or paying them the incorrect (wage), because there will be actual enforcement.” That’s the only reason I can think of for the cost to go up.
That’s not the case, according to contractor groups. According to a statement from Jenny Dixson, executive director of the Northwest Utility Contractors Association, non-union employees in this state receive training that is on par with and up to the same standards as that of their union colleagues. The governor’s directive implies something that is just untrue, rather than expressing pride in all Oregon labor.
The group is considering possible challenges to the order, according to Salsgiver, the state leader of the Associated General Contractors. It filed a lawsuit against the Oregon Department of Transportation last year, claiming that the agency had overreached itself in negotiating labor agreements for eight projects totaling $180 million, according to a December Northwest Labor Press story. On December 9, the Oregon Supreme Court heard the challenge.
Political conflict
Many politicians were taken aback by the presidential order, which immediately triggered a political debate in Salem, where lawmakers met in January for a five-month legislative session that would include the laborious task of creating a state budget.
Republicans are furious about the executive order, saying it will hurt non-union or rural contractors and increase agency costs needlessly. The state department of transportation, which is in charge of many of the projects that would fall under the mandate, is at the center of the discussion. The department has asked for an extra $1.8 billion annually to improve the state’s infrastructure and roadways.
According to a January OPB report, House Republican Leader Christine Drazan stated last month that Kotek’s executive order told her that Democrats were not committed to ever controlling prices.
The national dispute over labor agreement mandates on federally sponsored projects is reflected in the political battle. They are generally opposed by Republicans and supported by Democrats. While several Democratic-led states have legislation allowing their usage, almost two dozen Republican-led states have outlawed them.
Democratic senators in Oregon have previously backed the requirement that large projects receiving state money have project labor agreements. For instance, a provision requiring project labor agreements for all future offshore wind energy projects was included in a 2024 measure that was opposed by all but two Republicans.
In a harsh press release on December 20, Senate Republican Leader Daniel Bonham referred to Kotek’s executive order as an offense to Oregon’s contractors and an unlawful power grab, asserting that the Democratic-controlled Legislature, not Kotek, should make such decisions.
However, Republicans have few practical ways to challenge the executive order because they are the minority party in both chambers. Democrats have not indicated that they intend to enact legislation that would add more restrictions to the presidential order.
Kotek, meantime, has stated that she has no intention of rescinding the executive order and has reaffirmed her support to it.
In a statement, the governor’s spokesman, Roxy Mayer, stated that she recognizes a philosophical difference with those who oppose project labor agreements. However, the time has come to put aside the argument over the tool itself and begin constructing the infrastructure that Oregonians will depend on for many years to come.
State politics and government are covered by Carlos Fuentes. You may contact him at [email protected] or 503-221-5386.
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