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Modular Building Institute sues Oregon over out-of-state prevailing wage rule
The lawsuit challenges Oregon House Bill 2688 after a July 1, 2026 rule would require off-site factory work for “bespoke” modules used on Oregon public projects to pay Oregon wages.
The Modular Building Institute has filed a federal lawsuit against Oregon’s labor commissioner, arguing Oregon’s prevailing-wage expansion unlawfully applies state wage requirements to out-of-state modular fabrication for public projects, according to HousingWire.
The group says Oregon House Bill 2688, signed last year, went beyond prevailing wages at construction sites by effectively requiring factories making “bespoke” components to pay Oregon wages regardless of where the factory is located, with a Bureau of Labor and Industries rule taking effect July 1, 2026.
MBI, which represents 708 modular construction companies worldwide, argues the policy discriminates against interstate commerce, relies on a vague definition of bespoke work, and intrudes on foreign commerce authority. An attorney with the Pacific Legal Foundation said Oregon cannot reach across state lines to dictate how businesses operate in other states based on where a finished product is later used.
The complaint cites multiple constitutional theories, including that the law discriminates against interstate commerce under the dormant Commerce Clause. The outcome, the lawsuit argues, could affect whether other states adopt similar models, HousingWire reports.