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The Oregon Supreme Court ruled today against the Oregon Department of Transportation and in favor of the Oregon-Columbia Chapter of the Associated General Contractors of America in a dispute over a rule ODOT imposed in 2023, requiring union labor on eight projects around the state.
“The Oregon Department of Transportation’s challenged rule is declared invalid,” the court wrote in a split decision.
The dispute stemmed from 2021 legislation requiring what are called community workforce agreements, or CWAs, on certain infrastructure projects.
After the legislation passed, according to the court’s chronology of events, “ODOT began negotiating the terms of a CWA with various trades councils and labor unions, leading to the execution of an initial CWA on Oct. 20, 2022.”
The CWA comprised 22 sections that described agreements between the agency and labor on issues such as wages and benefits, training and apprenticeships, hiring procedures, and “labor peace,” i.e., strikes.
ODOT then identified eight prospective public works projects around the state it planned to execute under the CWA it had negotiated with the various trade unions. The agency began soliciting bids on the first of eight projects that would be covered by the CWA on Dec. 21, 2023.
In January 2024, AGC, whose membership includes union and nonunion contractors, challenged the CWA in Marion County Circuit Court.
The contractors’ group argued that ODOT had wrongly excluded AGC from the state’s rulemaking process. In April 2024, Judge Jennifer Gardiner issued an order staying the implementation of the agreement ODOT had reached.
“Employing a tool that has never been utilized before in Oregon, a tool that is premised on prioritizing utilization of union labor to the expense of open-shop labor, is prejudicial,” Gardiner wrote. “It is an irreparable prejudice to exclude 70% of our contractors.”
ODOT appealed Gardiner’s order, and the Oregon Court of Appeals sent the matter to the state’s top court, which heard oral arguments in December.
In its ruling today, the Supreme Court sustained AGC’s complaint that it had been improperly excluded from the rulemaking process.
“ODOT was required to follow the Oregon’s Administrative Procedure’s Act’s rulemaking procedures before adopting those policies,” the court wrote. “Accordingly, we conclude that the Community Workforce Agreement is an invalidly promulgated rule.”
In a footnote, the court clarified that it was ruling on ODOT’s flawed process, not on the substance of the agreement it had reached with unions.
“To clarify, our opinion today does not preclude ODOT or other state agencies from creating a CWA to govern all community benefits contracts,” the court wrote. “It just requires them to engage in notice-and-comment rulemaking before committing to using the terms of CWA in all community benefit contracts, thereby promoting public involvement and transparency in the process.”
Mike Salsgiver, the CEO of AGC’s Oregon-Columbia Chapter, cheered the court’s decision.
“AGC is pleased that a majority of the court agreed with our arguments,“ Salsgiver says. “This is a good day for fair and open competition in our industry in Oregon.”
Representatives for Gov. Tina Kotek and Oregon Attorney General Dan Rayfield, who represents the governor in court, could not immediately be reached for comment.
This story was produced by the Oregon Journalism Project, a nonprofit newsroom covering Oregon.