Labor & Employment Law Daily Wrap Up, GOVERNMENT CONTRACTS—D.D.C.: Union trade groups granted preliminary injunction to ensure compliance with EO regarding PLAs on construction projects, (May 20, 2025)

By Ronald Miller, J.D.

The union groups sufficiently demonstrated an injury in fact in the explicit removal of PLA requirements in amended solicitations for federal large-scale construction projects.

Two union building trades groups were granted their motion for preliminary injunctive relief against memoranda issued by the Department of Defense and the General Services Administration, which they alleged unlawfully revoked the project labor agreement (PLA) requirement set forth in EO 14063. As an initial matter, the federal court in the District of Columbia determined that the plaintiffs had standing to bring claims because they sufficiently demonstrated a concrete, particularized, and actual harm resulting from the memoranda’s discouragement of PLAs; the policy shift foreseeably and materially weakened the plaintiffs’ bargaining position, thereby sufficiently demonstrating the traceability requirement; and an order setting aside the memoranda would re-establish the “bargaining chip” that the EO provides the unions. Further, the court found that the memoranda constituted final agency action for purposes of APA review (North America’s Building Trades Union v. Department of Defense, No. 25-1070 (RC) (D.D.C. May 16, 2025)).

Executive Order 14063. On February 4, 2022, President Biden issued Executive Order 14063, which provides that “in awarding any contract in connection with a large-scale construction project, or obligating funds pursuant to such a contract, agencies shall require every contractor or subcontractor engaged in construction on the project to agree, for that project, to negotiate or become a party to a project labor agreement with one or more appropriate labor organizations.”

The EO requirement pertains to federal construction projects with an anticipated cost to the federal government of $35 million or greater. However, “[a] senior official within an agency may grant an exception from the requirements... for a particular contract” under circumstances specified in section 5 of the EO. On December 18, 2023, the Office of Management and Budget (OMB) issued a memorandum—without prior public notice or opportunity for comment—offering guidance to federal agencies on the exceptions to the PLA Rule and related reporting requirements.

On December 22, 2023, the Federal Acquisition Regulatory (FAR) Council issued a final rule implementing the requirements of the Executive Order effective on January 22, 2024. The EO and the PLA Rule mandate that agencies publicly disclose any granted exemptions by posting them on a designated public website.

DOD memorandum. On February 7, 2025, DOD issued a memorandum stating that contracting officers should no longer require agreements to negotiate PLAs for large-scale projects, instructing them to amend solicitations accordingly. Similarly, on February 12, 2025, General Services Administration issued its own memorandum, exempting Land Port of Entry (LPOE) projects from the PLA requirement. The memoranda “announce that the agencies intend not to require PLAs in future solicitations.”

Two union building trades groups challenged the memoranda issued by the DOD and GSA that exempt certain large-scale construction projects from the PLA requirements set forth by Executive Order 14063. They argued that these memoranda unlawfully revoke the PLA requirement set forth in the EO and its implementing regulations, thereby harming North America’s Building Trades Unions’ (NABTU’s) ability to negotiate and administer PLAs. As a result of the memoranda, existing solicitations for projects were amended to exclude the PLA requirement that was included in the original solicitation. On one project, an affiliated group allegedly experienced direct harm when the amended solicitation halted ongoing negotiations the union was engaged in with a contractor expected to bid for that project.

The plaintiffs filed this action on April 9, 2025, alleging that the DOD and GSA have deviated from the requirements of EO 14,063 by issuing memoranda that override the PLA mandate. They allege injury based on the agencies’ decisions not to include the PLA requirement in future solicitations, which exclusion they claim interferes with their ongoing practice of negotiating such agreements with contractors bidding on federal large-scale construction projects.

APA violations. The complaint brings three claims under the Administrative Procedure Act, 5 U.S.C. § 706. Counts I and II allege that the DOD and GSA memoranda constitute final agency actions “not in accordance with law” under Section 706(2)(A), because the memoranda violated the EO and its implementing regulations. Count III asserts that DOD’s memorandum also violates the APA because it is arbitrary and capricious due to insufficient explanation. The plaintiffs seek a declaration that the memoranda are unlawful and an injunction barring their enforcement.

On April 10, 2025, the plaintiffs filed a motion for a preliminary injunction to prevent enforcement of the agencies’ memoranda while the case proceeds. They argued that the agencies’ actions unlawfully hinder their ability to negotiate PLAs by eliminating the “bargaining chip” that the PLA mandate provides them, and thus, they sought a preliminary injunction to prevent further harm.

Standing. Before considering the merits of the plaintiffs’ APA arguments, the court first addressed their standing to bring these claims. To establish Article III standing, a party must show that: (1) they have suffered an injury in fact, (2) the injury is fairly traceable to the challenged action of the defendant, and (3) it is likely that the injury will be redressed by a favorable decision.

The plaintiffs argued that they have standing because they suffered concrete and particularized injuries directly caused by the defendants’ memoranda, which they claim eliminated or changed the “bargaining chip” the EO provided them by requiring the negotiation of PLAs on solicitations for large-scale federal construction projects. Specifically, they argued that the memoranda excluded them from the contracting process and allegedly led to the loss of specific PLAs they were in the process of negotiating or would have negotiated in the future.

In response, the defendants argued that the plaintiffs lacked Article III standing because they failed to demonstrate a concrete injury. They assert that the plaintiffs’ claimed injury is speculative, because the memoranda merely direct government agencies to remove the PLA requirement from future solicitations, without precluding contractors from submitting bids that voluntarily contain them.

Injury in fact. To establish that he has suffered an injury in fact, a plaintiff must have suffered “an invasion of a legally protected interest,” that is “(1) concrete, (2) particularized, and (3) actual or imminent.” Here, the court determined that the plaintiffs sufficiently demonstrated an injury in fact: a concrete, particularized, and actual harm resulting from the memoranda’s discouragement of PLAs. It was sufficiently demonstrated in the explicit removal of PLA requirements in amended solicitations. The NABTU and its affiliates had a direct role in negotiating PLAs for federal large-scale construction projects for which the solicitations were amended post the memoranda, demonstrating a tangible change in their operating environment.

Because the challenged memoranda operate by broadly exempting projects from PLA mandates without applying the EO’s case-by-case exceptions, the memoranda deprive the plaintiffs of the structured leverage the EO is designed to ensure. The plaintiffs have also shown that this impairment has an alleged direct effect on their members’ ability to participate in federal contracting, such that the injury is personal and specific. Thus, the plaintiffs’ alleged injury was immediate and particularized, and ongoing, flowing directly from the memoranda’s effect on federal contract practices for large-scale projects.

Causation. Next, the plaintiffs sufficiently demonstrated that their injuries were “fairly traceable” to the defendants’ issuance of the memoranda because those injuries are not the result of “the independent action of some third party not before the court,” but rather flow in a direct and predictable manner from the challenged policy change. They identified a specific instance where a contractor ceased negotiating PLAs immediately after the issuance of the DOD and GSA memoranda. Given the elimination of the requirement that solicitations must include a mandate to negotiate PLAs, third parties reacted in “predictable ways” to the removal of the mandatory PLA requirement, satisfying the traceability standard. Because the plaintiffs have shown that the policy shift foreseeably and materially weakened their bargaining position within the federal contracting framework, they sufficiently demonstrated the traceability requirement.

Redressability. Finally, the plaintiffs sufficiently demonstrated redressability by establishing that their asserted injury—diminished bargaining leverage in negotiating PLAs—is likely to be remedied by the relief sought. They identified a specific injury caused by the removal of the EO’s presumption in favor of PLAs and established that vacating the memoranda and enforcing the EO would likely restore the procedural framework that enhanced their bargaining position. Here, an order setting aside the memoranda would re-establish the “bargaining chip” that the EO provides the unions, realigning the agencies and the contractors’ conduct with the EO’s presumption, thereby enhancing the plaintiffs’ ability to secure PLAs in future large-scale construction contracts.

Likelihood of success on APA claims. The court next turned to the plaintiffs’ substantive APA claims, specifically whether they demonstrated a “likelihood of success on the merits.” Here, the court concluded that the plaintiffs were likely to succeed on the merits of their APA claims because the defendants’ memoranda were not in accordance with the law, as they deviated from the requirements of the EO without providing adequate justification or following the proper exception process.

Claim of intermediate steps. As a preliminary matter, the defendants argued that the challenged memoranda were not final agency actions subject to judicial review. According to the defendants, the memoranda were intermediate steps that merely direct future actions, such as amending or omitting PLA requirements in solicitations for large-scale construction projects, which solicitations are themselves the final agency actions. They further argued that because the memoranda do not impose legal obligations, they fail the Supreme Court’s Bennett test for finality.

However, the court found that the memoranda constituted final agency action for purposes of APA review. In evaluating the first Bennett prong, the court concluded that the plaintiffs alleged facts sufficient to demonstrate that the memoranda constitute final agency action within the meaning of the APA. The memoranda were plainly not tentative or preliminary but were the agencies definitive and authoritative positions on the requirement (or now, the lack thereof) for PLAs in their respective procurement processes. Thus, these memoranda were not intermediate steps in a broader deliberative process; they are final instructions that implement a binding policy and preclude further consideration at the individual solicitation level.

Under the second Bennett requirement, the memoranda have a direct and appreciable impact on legal obligations and practical rights. By eliminating the requirement that bidders on DOD and GSA projects negotiate PLAs, the memoranda altered the legal framework established by the EO, which mandated that agencies include the PLA requirements on solicitations for large-scale projects absent a project-specific exception. The memoranda functionally nullify that mandate in broad swaths of the agencies’ procurement activity. That deprivation constitutes a legally cognizable injury under Bennett, as it “presently and directly limits or defeats a party’s ability to enter into an advantageous business arrangement.”

Thus, the court found that both prongs of the Bennett test were satisfied. The memoranda were final agency actions because they (1) constituted the culmination of DOD and GSA’s decisionmaking regarding PLA requirements and (2) carry binding legal consequences that alter rights, obligations, and economic relationships between the agencies, contractors, and labor organizations. As such, the court found that judicial review under the APA was appropriate.

Substantive APA claims. The court turned next to the substantive APA claims. The plaintiffs argued that the DOD and GSA violated the APA by issuing memoranda that contradict the EO. Under the APA, courts must “hold unlawful and set aside agency action” that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” 5 U.S.C. § 706(2)(A)), or when it exceeds statutory authority, § 706(2)(C)).

Agencies are bound to follow binding executive orders unless rescinded or overridden through lawful procedures. In this context, the EO is akin to a regulation. Evaluating a claim that agency action is contrary to law, then, necessarily involves interpreting the language of the EO.

Here, the court found that the memoranda are contrary to the law set forth in the EO because they flatly contradict the unambiguous requirements of the EO and its implementing regulations, in direct violation of the APA. The memoranda issued by DOD and GSA effectively nullify the mandatory PLA requirement imposed by Section 3 of the EO. These memoranda instead purport to establish blanket class deviations and class exceptions—a legal maneuver explicitly foreclosed by the language of the EO as reinforced by the FAR.

Because the memoranda constituted final agency actions that disregarded the EO’s legal requirements, relied on unauthorized class deviations or exceptions, and rested on a misreading of the decision in MVL USA, Inc. v. United States, 174 Fed. Cl. 437 (Fed. Cl. 2025), the court found that the memoranda were not in accordance with law under the APA.

Irreparable harm. Moving to the next prong of the preliminary injunction analysis, the plaintiffs argued that, absent a preliminary injunction, they will suffer irreparable harm because the defendants’ memoranda obstruct their ability to negotiate and implement PLAs for large-scale construction projects.

Here, the court found that the plaintiffs made a sufficient showing of irreparable harm.

They sufficiently showed that without a declaration that the memoranda are unlawful and an injunction preventing their enforcement, imminent harm is unavoidable. The harm at issue is not speculative or remote; rather, it is concrete, immediate, and directly traceable to the issuance of the defendants’ memoranda. The plaintiffs have sufficiently demonstrated that they are currently experiencing concrete disruptions in PLA negotiations—disruptions that are traceable to agency action and not within the plaintiffs’ control to remedy.

Moreover, the D.C. Circuit has repeatedly recognized that interference with collective bargaining rights constitutes irreparable harm. The loss of bargaining power, particularly the mandated context within which such bargaining historically occurred under the EO, cannot be restored through damages or later litigation.

Balance of equities and public interest. The final two factors—balancing the equities and the public interest—also support granting the preliminary injunction. An injunction ensures that the defendants abide by the procedural and substantive requirements of the EO and the APA and halts any unlawful action in implementing memoranda that effectively nullify the EO’s mandate. The defendants’ claimed harm—reduced flexibility in procurement discretion—is minimized where the EO already permits case-by-case exemptions, which the plaintiffs do not seek to eliminate. Thus, the requested injunction does not constrain lawful discretion but merely prevents the enforcement of an unlawful categorical exclusion.

The case is No. 25-1070 (RC).

Judge: Contreras, R.

Attorneys: Jonathan David Newman (Sherman Dunn) for North America’s Building Trades Unions. Benjamin S. Kurland, U.S. Department of Justice, for U.S. Department of Defense.

Companies: North America’s Building Trades Union; Baltimore-D.C. Metro Building and Construction Trades Council

Cases: GovernmentContracts FederalRegulations Labor UnionsMembers AgencyNews DistrictofColumbiaNews