In February 2022, President Biden signed an executive order establishing a presumptive requirement that contractors and subcontractors on federal construction projects valued at $35 million or more must enter into project labor agreements with unions. The order included three exceptions for situations where such agreements would not advance economy and efficiency, would substantially reduce competition, or would be inconsistent with other laws. The Associated Builders and Contractors and its Florida First Coast Chapter, whose members generally prefer non-union work, filed a facial challenge in the Middle District of Florida. They argued the order violated the Competition in Contracting Act, the Federal Property Act, the First Amendment, the Administrative Procedure Act, and the National Labor Relations Act. The district court denied their motion for a preliminary injunction, ruling that the associations failed to show irreparable harm under the Competition Act and were unlikely to succeed on their other claims. While this appeal was pending, the Office of Management and Budget issued a memorandum confirming the order remained in effect under the subsequent administration.
The Eleventh Circuit affirmed the denial of the preliminary injunction, correcting the district court's reasoning regarding irreparable harm but agreeing with the ultimate result. The court first held that the district court erred by focusing solely on the Competition Act when evaluating irreparable harm; it should have considered whether the alleged First Amendment violations constituted a per se irreparable injury. However, the court proceeded to analyze the merits of the facial challenge and concluded the plaintiffs were unlikely to succeed on any of their claims. Under the Competition Act, the court found the mandate facially valid because the executive order and its implementing regulations include specific exceptions to preserve full and open competition, meaning there is at least one set of circumstances where the mandate complies with the law. Regarding the Federal Property and Administrative Services Act, the court determined the President has broad authority to prescribe policies he considers necessary to carry out the Act's goal of an economical procurement system. The court rejected the argument that the major questions doctrine applied, noting the President was exercising proprietary authority over government purchasing rather than regulating the general public. On the First Amendment claim, the court applied the rigorous standard for facial challenges, requiring the plaintiffs to show unconstitutional applications substantially outweigh constitutional ones. The court found the associations failed to demonstrate that requiring contractors to associate with unions for a specific project significantly impedes their expressive activities, citing Supreme Court precedent that the government, as a proprietor, may require exclusive bargaining agents on its projects. Finally, the court dismissed challenges under the Administrative Procedure Act and the National Labor Relations Act, noting the President is not an agency subject to the APA and that the government may specify terms for its own contracts without violating the Act.
The district court's denial of the preliminary injunction stands, allowing the General Services Administration and other federal agencies to continue enforcing the project labor agreement requirements for large-scale construction projects while the underlying litigation proceeds. The decision clarifies that the President's authority under the Federal Property Act extends to mandating labor conditions for federal contractors and that such mandates are unlikely to be successfully challenged on First Amendment grounds when the government acts in its proprietary capacity. The case remains open for further proceedings on the merits of the facial challenge, but the immediate regulatory framework remains in place.
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