On June 14, a federal district court in Minnesota dismissed a constitutional challenge to four public-sector project labor agreements (or “PLAs”). Specifically, in Christian Labor Association vs. City of Duluth, 2023 WL 3996240 (D. Minn. June 14, 2023), the court concluded that including a hiring-hall requirement and a union-security clause in a public-sector PLA did not violate the First Amendment.
The decision is important because public-sector PLAs will become more prevalent following Executive Order 14063, which generally requires the use of PLAs on all federal construction projects, where the total estimated cost to the government is $35 million or more.
Several cities in northern Minnesota entered into PLAs with the local Building and Construction Trades Council. Each PLA required contractors and subcontractors to:
• Recognize a union that belongs to the Building and Construction Trades Council as the sole and exclusive bargaining representative of their employees working on PLA projects.
• Hire their employees through the unions’ job-referral system (i.e., hiring halls).
• Abide by the wage rates, rules of employment and fringe benefit contributions negotiated by a council-
The PLAs also contained a “union security clause” that required employees hired to work on PLA projects to “become” and “remain members” of a Building and Construction Trades Council affiliated union while working on the PLA project.
A group of non-union contractors challenged the PLAs’ hiring-hall requirement and union-security clause as violative of the First Amendment.
Court Upholds the PLAs’ Hiring-Hall Requirement
In assessing the hiring-hall provision, the court first noted that the Supreme Court has recognized that “referral provisions” in the building and construction industry “serve well both labor and management” because “the contractor who frequently is a stranger to the area where the work is done requires a ‘central source’ for [its] employment needs; and a [construction worker] looking for a job finds in the hiring hall ‘at least a minimum guarantee of continued employment.’”
The court also noted that in its 1993 Boston Harbor decision, the Supreme Court rejected a challenge to a PLA used on a publicly-funded project where the PLA included recognition of a local building and construction trades council and the primary use of union referral systems to supply the labor force.
Ultimately, the court concluded that “no reasonable juror could conclude that the PLAs’ referral provisions amount to forced expression or expressive association in violation of the First Amendment.” Thus, the court dismissed the plaintiffs’ challenge to the hiring-hall provision of the PLAs.
Court Upholds the PLAs’ Union-Security Requirement
Plaintiffs argued that the union-security provision cannot be sustained in the wake of the Supreme Court’s decision in Janus v. AFSCME, Council 31, 138 S. Ct. 2448 (2018). In Janus, the Supreme Court held that public-sector workers cannot be compelled to pay mandatory union dues under the First Amendment.
In rejecting the plaintiffs’ argument, the court first noted that the Supreme Court’s decision in Janus applies only to public-sector employees. PLAs, on the other hand, apply to private-sector workers. As the court explained, “the PLAs incorporate privately-negotiated collective bargaining agreements to set the terms of employment for the employees of private sector contractors — the PLAs do not cover employees of the Public Entities.” Because PLAs cover private-sector workers, the court concluded that Janus was inapplicable and, as a result, the court dismissed the plaintiffs’ First Amendment challenge to the union-security clause contained in the PLAs.
PLAs promote economy and efficiency in the administration and completion of government construction projects. While the Supreme Court first recognized the lawfulness of public-sector PLAs in its 1993 Boston Harbor decision, the recent decision in Christian Labor Association confirms that public-sector PLAs do not violate the First Amendment. Accordingly, state and federal entities can continue to use PLAs for government construction projects that include hiring hall requirements and union-security clauses.
Grant Collins is an MSBA-certified specialist in traditional labor law and employment law at Felhaber Larson. His labor practice involves advising employers on their rights and obligations under collective bargaining agreements and the NLRA and representing employers in grievance arbitrations and unfair labor practice charges. Reach him at firstname.lastname@example.org.