The project manager should follow the risk management plan that was developed during the planning phase of the project. The risk management plan should include a risk register that identifies the potential risks, their probability and impact, and the planned responses for each risk. Since the labor union contract negotiation was documented as a risk, the project manager should log the issue and execute the risk response plan that was prepared for this situation. This may involve implementing contingency plans, fallback plans, or workarounds to minimize the negative effects of the risk on the project objectives. The other options are not appropriate because they do not follow the risk management plan or they introduce new risks or changes to the project scope, schedule, or budget. References:

A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Sixth Edition, Chapter 11: Project Risk Management, pp. 397-441.

PMP® Examination Practice Questions: 400 Practice Questions and Answers to help you Pass, Question 400, p. 401.