Oregon Governor's Executive Order Regarding Project Labor Agreements (PLAs) for State Construction Projects

Oregon Governor Tina Kotek issued Executive Order No. 24-31, titled "Establishing Project Labor Agreements[1] for State Construction Projects" ("EO 24-31" or "Order"), on December 18, 2024. On December 31, 2024, the Governor's Office issued FAQs in an effort to clarify EO 24-31. 

Here are some of the key points and our takeaways from EO 24-31 and the FAQs.

• The Order is effective as of December 18, 2024.[2] However, per the FAQs, projects that were advertised prior to December 19, 2024, are not subject to the Order.
• All Oregon state agencies awarding any contract or obligating funds in connection with a construction project shall require every contractor and/or subcontractor engaged in the construction of the project to agree, for that project, to negotiate or become a party to a project labor agreement ("PLA") with one or more appropriate labor organizations.
  • Per the FAQs, the Order is limited to state agencies and, specifically, public improvement projects where:
    • The state is the contracting authority and the constructed improvement is owned by the state;
    • 15% of more of the total construction costs of the project is made up of onsite labor; and
    • The project does not meet exemption criteria.[3]
• PLAs will be required for public improvement projects where labor costs constitute 15% or more of the total construction, reconstruction, or major renovation project costs.
  • Per the FAQs, "construction labor" (presumably, as it relates to the above "labor costs" requirement) means "all of the work done at the physical location of a construction project," so presumably offsite labor would be excluded.
• "Local projects are not covered by this order even if they utilize state funding," which raises the question of what constitutes "local projects."
• PLAs for these projects shall:
  • Contain guarantees against strikes, lockouts, and similar job disruptions.
  • Set forth binding procedures for resolving labor disputes arising during the term of the particular PLA.
  • Provide other mechanisms for "labor-management cooperation" on matters such as productivity, quality of work, and safety and health.
  • Fully conform to all federal and state statutes, laws, rules, and regulations.
  • Be non-exclusionary to open shop and local firms.
• Affordable housing projects that are owned by non-state entities are not subject to the Order.
• The Order does not apply to broadband projects if "the state will not own the constructed asset[.]"
• Although the Order states that it does not apply to projects "that are of short duration, lack operational complexity, or involve only one craft or trade," the FAQs do not explain what constitutes such projects and, instead, leaves it up to State agency directors who would like to "seek an exemption based on the complexity or duration of the project" to "petition the Governor directly."
  • Per the FAQs, the Governor's Office or its designee will be providing "[m]ore detailed instructions" on the exemption process in the "coming weeks."
• Per the FAQs, non-union contractors who bid on state projects subject to the Order will be expected to enter into PLAs.

Certainly, the impact of the Order is significant for not only non-union (or open shops) but also rural counties and state and county budgets and project costs.[4]

For assistance in determining how EO 24-31 may apply to you, or in reviewing or analyzing proposed PLAs relating to a project, whether in Oregon or elsewhere, please contact our construction and government contracts group.