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A coalition of construction contractors this past Friday filed a lawsuit challenging Gov. Tina Kotek’s executive order that requires project labor agreements for most state projects.

The lawsuit, filed in Marion County Circuit Court, comes after Kotek’s order drew strong backlash in the construction industry. The contractors allege Kotek 鈥渄oes not have the power鈥� under the Oregon constitution to require project labor agreements for state projects, according to the complaint.

鈥淲e 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,鈥� Mike Salsgiver, CEO of the Associated General Contractors’ Oregon-Columbia chapter, stated in a news release on Friday.

Kotek’s Dec. 18 order requires project labor agreements be used for state-funded projects when on-site labor costs amount to 15 percent of project costs, which would capture the vast majority of large-scale projects.

It comes as the state prepares to embark on major infrastructure undertakings, including the Interstate 5 Rose Quarter Improvement Project and the Interstate Bridge replacement project.

Matthew Mues, a construction attorney with Davis Wright Tremaine LLP who is not involved in the lawsuit, pointed to studies showing PLAs raise costs.

鈥淚f the executive order requiring PLAs on public projects in Oregon is upheld and maintained, it will have an effect on open shop contractors, and it will increase the cost of construction of those public projects,鈥� Mues said.

Kotek’s office and allies in organized labor have argued that PLAs will provide labor peace and certainty for big infrastructure projects.

The governor’s office did not respond to messages seeking comment.

鈥淭he last thing Oregonians can afford right now are the higher costs and cost overruns that come with union-only PLAs,鈥� stated Laurie Kendall, president of the Associated Builders and Contractors’ Pacific Northwest chapter.

鈥淭he issue is ripe for adjudication because the Governor has directed all state agencies to comply with the requirements of her executive order immediately,鈥� the complaint states.

The contractors may have reason to hope for relief from the courts after a string of legal victories against similar orders.

In April 2024, AGC and three contractors won a preliminary injunction in Marion County Circuit Court against a community workforce agreement, or CWA, that was entered into between the Oregon Department of Transportation and 37 labor organizations. In that case, Judge Jennifer K. Gardiner said the CWA was 鈥渟pecifically designed to prioritize union labor.鈥�

鈥淭o suggest that, because bidding is open to everybody, it necessarily creates an open and equal playing field, is simply false and disingenuous,鈥� Gardiner wrote in her order.

Like the earlier lawsuit, this one opposing the PLA requirement was filed in Marion County, suggesting the contractors like their chances in that court.

鈥淚 anticipate based upon the ruling they received on CWAs, that was a motivating factor in filing it in Marion County,鈥� Mues said.

At the federal level, PLAs ran aground in January, when Judge Ryan T. Holte of the U.S. Court of Federal Claims found in favor of contractors who challenged a 2022 executive order by then-President Joe Biden mandating PLAs be used for all federal government construction projects costing $35 million or more.

Holte relied in part on a General Services Administration market survey that found PLAs could be expected to increase costs and decrease bidders’ interest.

The plaintiffs in the new lawsuit include a wide swath of the Oregon construction industry: Associated General Contractors’ Oregon-Columbia chapter, Associated Builders and Contractors’ Pacific Northwest chapter, the Utility Contractors Association of Oregon and Southwest Washington, the National Federation of Independent Business, HP Civil Inc., Hamilton Construction, K&E Excavating Inc., Interlaken Inc., Moore Excavation Inc., Iron Horse LLC, Hatch Western Co. Inc., Hydro-Temp Mechanical Inc., North Santiam Paving Co., Berrien Concrete, American Concrete Co., Kerr Contractors Oregon and Emery & Sons Construction Group.

The contractors are represented by Schwabe, Williamson & Wyatt PC of Portland. Kotek is named as the defendant.