Oregon Governor Tina Kotek’s recent executive order mandating project labor agreements (PLAs) for major state-funded construction projects has ignited a heated political and legal battle. Signed on December 18, the executive order requires state agencies to negotiate and sign labor agreements with contractors on projects where labor costs account for at least 15% of the total budget. While the order aims to ensure fair wages, strong working conditions, and skilled labor, it has faced significant opposition from construction trade groups and Republican lawmakers, who argue that it will increase costs and disadvantage small and non-union contractors.
The executive order requires contractors to comply with strict labor dispute procedures and mandates the hiring of workers who are more experienced and skilled. Supporters of the order, including union leaders, argue that such measures would guarantee higher quality work, prevent labor disputes, and potentially streamline construction timelines by fostering a more organized workforce. In the case of large-scale projects, like the ongoing Interstate Bridge replacement, PLAs are seen as a tool for unifying standards across contractors, ensuring that all workers, whether unionized or not, adhere to the same set of labor regulations.
However, the executive order has raised alarm among critics who claim that it disproportionately benefits unionized contractors while undermining competition from non-union firms, particularly those in rural areas. Mike Salsgiver, CEO of the Oregon chapter of Associated General Contractors, expressed concern that the order would raise construction costs by limiting the pool of eligible contractors and reducing the number of bids for projects. A 2022 report from the Oregon Department of Transportation further fueled these concerns, suggesting that PLAs on major projects often lead to cost increases between 10% to 20%. The analysis found that while PLAs provide benefits such as reducing labor disputes, they also put non-union contractors at a distinct disadvantage.
Contractor groups have emphasized that non-union workers in Oregon receive the same wages and training as their union counterparts, arguing that the executive order unfairly discriminates against non-union firms and creates an unnecessary barrier to entry for small businesses. “Non-union workers in this state are trained just as well and to the same standards as their union counterparts,” said Jenny Dixson, executive director of the Northwest Utility Contractors Association, in a statement. “Instead of being proud of all Oregon labor, the governor’s order suggests something that’s simply not true.”
Supporters of the executive order, including labor attorney Daniel Hutzenbiler, counter that the real concern among opponents is that the mandate will prevent them from underpaying workers or circumventing labor laws, which can often lead to worker exploitation. Additionally, union advocates argue that smaller, rural contractors can still bid on projects, and that project labor agreements often include provisions to prioritize local workers.
While Republican lawmakers have expressed strong opposition, accusing the governor of an unconstitutional power grab, Democratic lawmakers, who hold majorities in both legislative chambers, have remained largely silent on the matter. This political divide mirrors broader national debates over PLAs, with Democrats generally advocating for their use, while Republicans seek to limit their scope. A number of Republican-led states have already enacted bans on such agreements, while Democratic-controlled states, including Oregon, have supported their implementation for publicly funded projects.
The governor’s office has remained firm in its stance, affirming that the executive order is essential for ensuring public dollars are spent efficiently and benefit local communities. “The governor acknowledges a philosophical difference between her and opponents of project labor agreements,” said Roxy Mayer, a spokesperson for Kotek. “But it is time to stop fighting over the tool itself and get to work building the infrastructure Oregonians will rely on for years to come.”
Despite the resistance, Kotek has shown no intention of rolling back the executive order. While the state’s Republican leadership is exploring potential legal challenges, the governor’s commitment to her mandate signals that the debate is far from over. The issue is likely to remain a central topic in Oregon’s ongoing legislative session, as lawmakers tackle funding for critical infrastructure projects that will be affected by the new labor policies.
As the state moves forward with its infrastructure plans, all eyes will remain on the outcome of this political clash and its potential ripple effects across the construction industry and beyond.
