Building and Const. Trades Dept. v. Allbaugh

• Decision Date: 12 July 2002
• Docket Number: No. 01-5436.,01-5436.
• Citation: 295 F.3d 28
• Parties: BUILDING AND CONSTRUCTION TRADES DEPARTMENT, AFL-CIO, et al., Appellees, v. Joe ALLBAUGH, Director, Federal Emergency Management Agency, et al., Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

295 F.3d 28

BUILDING AND CONSTRUCTION TRADES DEPARTMENT, AFL-CIO, et al., Appellees, v. Joe ALLBAUGH, Director, Federal Emergency Management Agency, et al., Appellants.

No. 01-5436.

United States Court of Appeals, District of Columbia Circuit.

Argued May 10, 2002.

Decided July 12, 2002.

Appeal from the United States District Court for the District of Columbia (No. 01cv00902).

Mark B. Stern, Attorney, U.S. Department of Justice, argued the cause for appellants. With him on the briefs were Roscoe C. Howard Jr., U.S. Attorney, Gregory G. Katsas, Deputy Assistant Attorney General, U.S. Department of Justice, Alisa B. Klein and Ara B. Gershengorn, Attorneys.

Jerry W. Kilgore, Attorney General, State of Virginia, Roger L. Chaffe, Senior Assistant Attorney General and Chief, and William E. Thro, Special Assistant Attorney General, were on the brief for amicus curiae Commonwealth of Virginia in support of appellants.

Stephen A. Bokat, Maurice Baskin and Glenn Taubman were on the brief for amici curiae Chamber of Commerce of the United States, et al. in support of appellants.

Victoria L. Bor argued the cause for appellees. With her on the brief were Laurence J. Cohen, Terry R. Yellig, Michael B. Roger and Sandra Benson.

John Gaal and Arnon D. Siegel were on the brief for amicus curiae New York Thruway Authority in support of appellees.

Albert H. Meyerhoff, Stanley S. Mallison, Stephen J. Burton, David L. Hashmall, Gary L. Lieber, Katherine Brewer and Jonathan Cuneo were on the brief for amici curiae Sierra Club, et al. in support of appellees.

Eliot Spitzer, Attorney General, State of New York, Seth Kupferberg, Assistant Attorney General, Bill Lockyer, Attorney General, State of California, Manuel M. Medeiros, State Solicitor General, J. Joseph Curran Jr., Attorney General, State of Maryland, Thomas F. Reilly, Attorney General, Commonwealth of Massachusetts, were on the brief for amici curiae State of New York, et al. in support of appellees.

Before: GINSBURG, Chief Judge, and RANDOLPH and TATEL, Circuit Judges.

Opinion for the Court filed by Chief Judge GINSBURG.

GINSBURG, Chief Judge:

Executive Order No. 13,202 provides that, to the extent permitted by law, no federal agency, and no entity that receives federal assistance for a construction project, may either require bidders or contractors to enter, or prohibit them from entering, into a project labor agreement (PLA). The plaintiffs — the Building and Construction Trades Department of the AFL-CIO (BCTD), the Contra Costa Building and Construction Trades Council (BCTC), and the City of Richmond, California — brought this suit to challenge the validity of the Executive Order. The district court held the Executive Order invalid and enjoined its enforcement.

We hold that the President had authority under Article II of the Constitution of the United States to issue Executive Order No. 13,202, and that the Executive Order is not preempted by the National Labor Relations Act. Therefore, we reverse the judgment of the district court and vacate the injunction.

I. Background

A PLA is a multi-employer, multi-union pre-hire agreement designed to systemize labor relations at a construction site. It typically requires that all contractors and subcontractors who will work on a project subscribe to the agreement; that all contractors and subcontractors agree in advance to abide by a master collective bargaining agreement for all work on the project; and that wages, hours, and other terms of employment be coordinated or standardized pursuant to the PLA across the many different unions and companies working on the project. The implementation of a PLA on a project underwritten by the Government almost always is accomplished by making agreement to the PLA a bid specification, thereby allowing the contracting authority to ensure that firms at every level — from the general contractor to the lowest level of subcontractor — comply with the terms of the PLA.

President George W. Bush issued Executive Order No. 13,202 on February 17, 2001, establishing the policy of the Government with regard to the use of PLAs in federal and federally funded construction contracts. See Preservation of Open Competition and Government Neutrality Towards Government Contractors' Labor Relations on Federal and Federally Funded Construction Projects, 66 Fed. Reg. 11,225 (Feb. 22, 2001) (Executive Order). The Executive Order provides that the Government will neither require nor prohibit the use of a PLA on any federal or federally funded construction project. Section 1(a) provides that, "[t]o the extent permitted by law," no federal agency or construction manager acting on its behalf shall "in its bid specifications, project agreements, or other controlling documents" for a construction project "[r]equire or prohibit bidders, offerors, contractors, or subcontractors to enter into or adhere to agreements with one or more labor organizations, on the same or other related project(s)." Section 3 applies the same prohibition to "any executive agency issuing grants, providing financial assistance, or entering into cooperative agreements for construction projects." The Executive Order makes clear that it does not prohibit a contractor or a subcontractor from entering into a PLA, see id. § 1(c); it merely prevents the contracting authority from either requiring or forbidding the use of a PLA for a project. The result in practice is to leave to the contractors working on a project the choice whether to enter into, and to require their subcontractors to enter into, a PLA, presumably depending upon whether it is likely to increase or to decrease their costs. See, e.g., UNITED STATES GENERAL ACCOUNTING OFFICE, PROJECT LABOR AGREEMENTS, THE EXTENT OF THEIR USE AND RELATED INFORMATION, GAO/GGD-98-82 (May 1998) 9 (describing instructions for bidders issued by Department of Labor allowing, but not requiring, "a responsive bidder [to] have a Project Labor Agreement (PLA) with its contractors" because a "PLA is one possible method of meeting th[e] goal" of ensuring good labor relations).

The plaintiffs brought suit in the district court to enjoin enforcement of the Executive Order, naming as defendants the Director of the Federal Emergency Management Agency, the Secretary of Housing and Urban Development, the Secretary of Transportation, and the members of the Federal Acquisition Regulatory Council. The BCTD, which consists of 14 national labor organizations representing workers in the construction industry, averred that it and its affiliates had entered into and intended to negotiate many PLAs, the future availability of which would be affected directly by the Executive Order. The City of Richmond alleged that the Executive Order prevented it from requiring the use of PLAs on several federally funded construction contracts lest it lose its access to federal funds. The BCTC, which consists of 27 local labor unions representing construction workers in Contra Costa County, California, claimed in turn that but for the Executive Order it would negotiate PLAs with respect to work on federally funded projects put out for bid by the City of Richmond.

One of the projects for which the BCTD had negotiated a PLA was the Woodrow Wilson Bridge Construction Project, the purpose of which is to replace a drawbridge over the Potomac River. The Congress, after transferring ownership of the existing bridge to an interstate authority established by the District of Columbia, the State of Maryland, and the Commonwealth of Virginia, appropriated more than $1.5 billion for the project. See Woodrow Wilson Memorial Bridge Authority Act of 1995, Pub.L. No. 104-59, tit. IV, §§ 405, 410, 109 Stat. 568, 629, 633-34 (1995). Maryland took responsibility for building the structures crossing the Potomac River and the highways and interchanges on the Maryland side, and Virginia agreed to build the highways and interchanges on the Virginia side of the River. Before the President issued Executive Order No. 13,202 affiliates of the BCTD and the construction manager for the Maryland State Highway Administration entered into an agreement to set terms for the construction of Maryland's share of the project.

The agreement provided that Maryland would incorporate a PLA into its bid specifications and that the successful bidder for the project would be bound by the PLA regardless whether the contractor's employees were members of a union. As required by federal regulations, see 23 C.F.R. §§ 630.205(e), 635.104(a), 635.112(a), Maryland submitted the bid specifications to the Federal Highway Administration (FHWA) for approval, but the FHWA rejected them because the newly issued Executive Order prohibited the State from requiring adherence to a PLA. Maryland later awarded the contract without requiring that the awardee enter into a PLA, which left the BCTD no role in the project.

Upon application of the BCTD, the district court issued a preliminary injunction "prohibiting the defendants from enforcing the Executive Order against the Wilson Bridge PLA." Bldg. & Constr. Trades Dep't v. Allbaugh, 172 F.Supp.2d 67, 79 (2001). The court held that the Executive Order conflicts with the National Labor Relations Act, 29 U.S.C. § 151 et seq., and that without an injunction the BCTD would suffer irreparable harm because "before the Executive Order was put in place ... [the] BCTD had negotiated an agreement, binding on Maryland, and Maryland was using its best efforts to implement it," 172 F.Supp.2d at 79.

A few weeks later the district court issued a permanent injunction against enforcement of the Executive Order. The court held first that, pursuant to the reasoning of the Supreme Court in Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 72 S.Ct. 863, 96 L.Ed. 1153 (1952), the President could not impose the conditions in § 3 of the Executive Order upon the administration of federal funds without the express authorization of the Congress, See Bldg. &...