A constitutional challenge to New Jersey’s race-and gender-conscious hiring requirements for construction project labor agreements portends an emerging state and local front in Trump-era battles against diversity efforts.
The state’s requirement that contractors show they’ve made “good faith efforts” to engage historically marginalized groups for “targeted employment goals” violates the Fourteenth Amendment’s equal protection clause and amounts to race- and gender-based discrimination, according to builder Earl Asphalt Co.'s April 30 federal lawsuit in New Jersey.
The company argues there’s no evidence of past or present race and gender discrimination in New Jersey’s construction industry to legally justify minority employment goals for contractors bidding for public projects. Contractors’ rights to free speech and association are also allegedly violated by requirements to sign project labor agreements that mandate pre-hire collective bargaining with unions.
Earl Asphalt’s “married” the “currently popular complaint about minority preferences” with traditional First Amendment claims commonly used to challenge PLAs, “to put the camel’s nose under the tent,” said Peter Philips, a labor economics professor at the University of Utah.
This dual legal strategy, if successful, may provide others with arguments to attack state procurement regimes like New Jersey’s, discrimination law scholars and policy experts said.
The equal protection claim aligns with the Trump administration’s campaign to curtail diversity, equity, and inclusion in the public and private sectors, which prompted a growing list of Republican-led states to rewrite longstanding requirements for civil service employment or public contracting practices that consider protected traits like race or promote DEI.
Their main argument is that initiatives aimed at repairing inequalities are biased against White individuals, and are outdated or ineffective in assessing whether race and gender-conscious steps provide remedies.
The New Jersey suit was filed by the Pacific Legal Foundation and Wisconsin Institute for Law & Liberty. The plaintiff’s counsel and the state didn’t respond to comment requests.
Equal Protection
To establish an Equal Protection claim, Earle Asphalt must demonstrate that it was treated differently than other similarly situated contractors due to discrimination without a lawful reason.
The company claimed in part that its refusal to adopt race and gender-based employment practices led to missed contracting opportunities, and the regulations aren’t supported by evidence of state-sponsored bias against women and racial minorities in New Jersey’s procurement programs.
The case will come down to New Jersey’s ability to provide substantial evidence of discrimination in the industry to justify equity-focused procurement rules, said Michael Foreman, an employment discrimination law professor at Penn State Dickinson Law. “The battle will be in discovery.”
The state has to show that its requirements are merely goals and “good faith efforts” as part of its interests in expanding equal employment opportunities, not rigid quotas, Foreman added.
The race bias claim will face “strict scrutiny” review, requiring the government to show policies are narrowly tailored to achieve a compelling state interest, Foreman said. Meanwhile, the district court will likely use “intermediate scrutiny” for the gender bias claim, requiring a showing that a law or policy is based on an important interest rather than traditional gender stereotypes.
The suit mirrors the Justice Department’s bid to dismantle Minnesota’s affirmative action program, which the federal agency said considers gender, race, and other protected classes for civil service employment in violation of Title VII of the 1964 Civil Rights Act.
That case, filed in January, turns on the viability of the US Supreme Court’s 1979 Steelworkers v. Weber and 1987 Johnson v. Transportation Agency rulings that allow affirmative action plans in narrow circumstances to address race or sex imbalances in historically segregated jobs.
A plan must be temporary, aim to eliminate these imbalances in segregated job categories, advance the goal of addressing historic workplace discrimination, and not affect the rights or advancement of other workers, attorneys said. Minnesota’s plan isn’t temporary and doesn’t identify any prior or current discrimination, the DOJ alleged.
“The fact that you have the United States government pushing this issue is going to empower others to file challenges like this,” Foreman said, and determine “whether they can undermine Weber’s and Johnson’s justification for any type of voluntary affirmative action” efforts.
State Regimes
PLAs vary by state. Many agreements include provisions ensuring construction project tax dollars provide economic opportunities to underrepresented or local populations, and improve the local labor market, said Philips, who writes about PLAs and procurement.
Disadvantaged worker categories may be based on income, work history, veteran status, single-parenthood, and other categories that don’t involve race or gender, he said.
Beyond the Constitution and Title VII, plans can trigger lawsuits under Section 1981 of the 1866 Civil Rights Act, and analogous state laws prohibiting contracting and employment bias.
In October, Philadelphia agreed in a settlement to exclude any race- or sex-based quotas on contractors or unions representing municipal workers following a suit with similar claims to the New Jersey complaint.
“The Constitution does not permit governments to divide people by race or sex, no matter how they rebrand it,” said a statement from Nick Barry, senior counsel for Stephen Miller-founded America First Legal, which helped sue the city.
That followed the US Court of Appeals for the Third Circuit’s revival of a constitutional challenge by contractors regarding a rule that only dues-paying union members can work on public projects. The appellate court, however, didn’t address the Section 1981 claim that a district judge dismissed for lack of evidence of discrimination.
Most state PLAs don’t address race and gender, but public entities must consider how courts view these agreements to avoid liability risks and potentially upending costly projects already in motion, said California-based attorney Julian Gross.
“If there are increased costs, they pass them through to the public sector and then the public,” he said.” So the real tricky decision for the public entity is trying to balance all the interests at stake and assess legal and financial risk when they’re running these very complicated projects.”
The case is Earle Asphalt Co. v. N.J. Turnpike Auth., D.N.J., No. 3:26-cv-04860, complaint filed 4/30/26.
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