A Marion County Circuit Court judge ruled on March 12 that Governor Tina Kotek’s executive order requiring state agencies to negotiate project labor agreements (PLAs) for all state construction projects was unconstitutional.
The decision finalizes a temporary halt issued nearly a year ago and is seen as significant for small businesses and contractors who argued the order overstepped executive authority. The ruling affects how public construction projects are managed in Oregon, with implications for costs and competition among contractors.
Oregon Public Broadcasting reported, “Thursday’s ruling makes that decision final.” The outlet added, “The lawsuit against Kotek’s order hinged on whether the governor could lawfully issue the PLA order. Plaintiffs in the suit said she had gone too far, issuing a decree that crossed the bounds of her executive power into the law-making power of the Legislature.”
According to The Oregonian, “Kotek’s December 2024 executive order would have mandated that state agencies negotiate and sign so-called project labor agreements with contractors on essentially all construction projects overseen by the state, such as seismic upgrades to a bridge.”
Anthony Smith, state director for NFIB in Oregon, said about Judge Hart’s initial decision last March, “NFIB’s small business members welcome Judge Hart’s decision. They’re looking forward to continuing to bid on public projects – and get them built. There are limits to executive power and we’re grateful to the court for this acknowledgment.”
A February 21, 2025 news release announcing the legal challenge stated that studies have shown union-only PLAs can increase construction costs by 13 to 20 percent without raising wages or benefits. Willamette Week found an analysis by the Oregon Department of Transportation indicating PLAs could raise taxpayer costs by 10-20%.
The 2024 NFIB Tax Survey showed that small-business owners in construction made up 15.8% of total membership, ranking third behind agriculture (16.6%) and services (23.4%).
Observers say this ruling may influence future decisions regarding executive orders related to public contracting and labor agreements in Oregon.
