A group of construction contractors has filed a lawsuit challenging Oregon Governor Tina Kotek’s recent executive order mandating the use of project labor agreements (PLAs) on most state-funded construction projects. The lawsuit, which was filed in Marion County Circuit Court on Friday, claims that the governor does not have the constitutional authority to enforce such requirements.
The contractors argue that Kotek’s order creates an unfair and anti-competitive environment. According to the complaint, the governor has exceeded her executive powers by implementing PLAs, which are labor agreements that require construction projects to hire unionized workers. This decision has led to strong pushback from the construction industry, with many arguing that it will result in higher costs for taxpayers.
Mike Salsgiver, CEO of the Associated General Contractors Oregon-Columbia chapter, voiced concerns in a statement released on Friday. He said, “We believe that the governor exceeded her executive powers and created an anti-competitive environment, disregarding the advice of one of her own agencies regarding the added cost to Oregon taxpayers.”
Governor Kotek’s executive order, issued on December 18, 2024, mandates that PLAs be used on state-funded construction projects when on-site labor costs make up at least 15 percent of the total project costs. The order will impact the majority of large-scale state construction projects, including high-profile undertakings such as the Interstate 5 Rose Quarter Improvement Project and the Interstate Bridge Replacement Project.
Supporters of the governor’s decision, including organized labor allies, argue that project labor agreements are essential for maintaining labor peace and ensuring certainty on large infrastructure projects. They believe that PLAs will help streamline negotiations and reduce the likelihood of strikes or labor disruptions during crucial phases of construction.
However, opponents like Laurie Kendall, president of the Associated Builders and Contractors Pacific Northwest chapter, express concern about the potential for increased costs and delays. “The last thing Oregonians can afford right now are the higher costs and cost overruns that come with union-only PLAs,” Kendall stated.
The contractors’ lawsuit argues that the governor’s executive order is unlawful, claiming that it forces state agencies to comply with the requirements immediately, without waiting for a legal resolution. The complaint highlights that the mandate could lead to significant financial burdens for taxpayers and may result in fewer businesses being able to participate in state projects.
The plaintiffs in the lawsuit represent a wide range of Oregon’s construction industry, including major groups like the Associated General Contractors Oregon-Columbia chapter, Associated Builders and Contractors’ Pacific Northwest chapter, and the Utility Contractors Association of Oregon and Southwest Washington. Several individual construction companies, such as HP Civil Inc., Hamilton Construction, and Interlaken Inc., are also included in the complaint.
Kotek’s office has yet to provide a response to the lawsuit or offer comment on the matter. As of Friday evening, no statement has been issued from the governor’s office regarding the ongoing legal challenge.
The outcome of this lawsuit could have significant implications for the future of construction projects in Oregon. If the lawsuit succeeds, the governor’s order could be overturned, potentially resulting in a shift in how labor agreements are structured on state-funded projects. The case is expected to proceed through the legal system, and more developments are anticipated in the coming months.
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