Executive Order 13502 is the first step to funneling a significant portion of the $787 billion in Stimulus Bill money to union workers. Executive Order 13502 promotes the use of Project Labor Agreements in large scale construction projects where the total cost to the federal government exceeds $25 million. Bush Administration Executive Orders prohibiting the use of project labor agreements have been revoked under the Obama Executive Order.

The term "project labor agreement" as used in this order means a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project and is an agreement described in 29 U.S.C. 158(f).   Project Labor Agreements require all contractors, whether they are unionized or not, to subject themselves and their employees to unionization in order to work on a government-funded construction project. The terms of the union collective bargaining agreement are part of the public construction project’s bid specifications.  In order to receive a contract, a contractor must sign the agreement and subject its employees union dues and work rules on the construction project.

E.O 13502 is currently discretionary allowing the executive agency to mandate the use of PLAs if it determines that a PLA will "advance the Federal Government’s interest in achieving economy and efficiency in Federal procurement, producing labor-management stability, and ensuring compliance with laws and regulations governing safety and health, equal employment opportunity, labor and employment standards, and other matters." However, E.O. 13502 requires the Department of Labor and OMB to make a recommendation about whether broader use of project labor agreements would help to promote the economical, efficient, and timely completion of such projects. The recommendation is due by early August, 2009 and is to cover both Federal construction projects those receiving Federal financial assistance.

The likely result of the DOL/OMB study will be the expanded requirements for project labor agreements to all federal and federally assisted construction contracts. Given the enormity of government spending on public works project under the current and future stimulus bills, project labor agreements are a huge boon for unions. Similar union preferences may also find their way in other aspects of federal contracting affecting trillions of dollars in government spending.

Nonunion employers, already facing enhanced unionization risks, must further prepare to impact of project labor agreements. Strategies in this area may include business restructuring through double breasting, training managers and adopting defensive policies and practices.