Based on a case study of non-citizen Palestinian workers in the Israeli construction sector, this article explores the dynamic relationship between the exclusionary imperative of ethnonationalism and the inclusionary imperative of neoliberalism. The authors argue that these imperatives together constitute a heuristically useful framework that can help to explain the choices of social actors and the constraints on these choices, as well as the apparently contradictory developments that affect industrial relations institutions and the employment relationship more broadly. While neoliberalism generally weakens organized labor, the study shows how the dynamic between these two imperatives can open space for the inclusion of disenfranchised ethnonational groups within collective labor relations—a first step to political empowerment. The study thus re-asserts the importance of organized labor as a powerful actor able to engender progressive change, even for the “ethnonational other” under rigidly ethnonationalistic regimes.