Eighty-one years ago, California passed a law requiring contractors on “public works” projects to pay the general prevailing rate of wages to all workers. One year later, the California Supreme Court determined that wage rates for workers on locally funded public works projects are a “municipal affair” and not subject to California’s prevailing wage law.
Now the California Supreme Court has reaffirmed its view that the “home rule” doctrine still dictates that wage rates on public works projects be left up to the municipality. Attorney Jim Brown of Sedgwick, LLP, in San Francisco explains the case.
Vista Voters and City Council Take Charge
In 2006, the voters of the city of Vista (San Diego County) voted in favor of a one-half percent sales tax to raise funds for the seismic retrofit of a fire station and the building of two new stations, a new civic center, a sports park, and a stage house for the city’s amphitheater.
At that time, Vista was a “general law” city, which meant it had to comply with state laws concerning contracts, including the prevailing wage law.
In February 2007, the city attorney recommended to the city council that Vista change from a “general law” city to a “charter” city, which would allow it to establish its own laws for certain contracting procedures related to “municipal affairs,” including determining whether the city would pay prevailing wages for certain construction contracts it entered into. The city council authorized a special election for city residents to vote on becoming a “charter” city.
After the ballot measure passed with 67 percent of the vote, the city council amended a city ordinance to prohibit any city contract from requiring payment of prevailing wages unless payment is required by the terms of a federal or state grant of money for the project, the contract doesn’t involve a “municipal affair,” or the city council separately authorizes payment of prevailing wages.
Union Loses in Trial and Appellate Courts
The State Building and Construction Trades Council of California, AFL- CIO, is an organization that includes 131 local unions, 16 labor council districts, and 22 local building trade councils, representing more than 300,000 men and women who work in
the California construction industry.
The union wasn’t pleased with the new Vista city ordinance and decided to attempt a legal challenge of the law’s impact on the city’s payment of prevailing wages. The union’s first challenge was a petition to the San Diego Superior Court asking that Vista be ordered to comply with the state prevailing wage law.
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Vista’s position was that charter cities in California have the right to determine whether to pay prevailing wages when the public works contract involves only local funds and is purely a “municipal affair” of the city.
The union took the position that because of the regional nature of the construction industry in California, the state prevailing wage law “addresses important statewide concerns” and therefore applies to charter cities in the same manner it applies to all other cities. Referring to prior court decisions upholding the rights of charter cities to direct their own municipal affairs, the trial court upheld the city ordinance.
The union then sought relief from the California Court of Appeals. The appellate court recognized that the union did establish that in general, the labor market for the construction industry in California is regional (rather than local).
However, the court also determined that the union didn’t prove that the contracts entered into by municipalities (such as Vista) significantly affect regional labor markets. The court stopped short of saying that in every instance a locally funded public work is strictly a “municipal affair” and not of statewide concern.
Tomorrow, the California Supreme Court’s ruling—and reasoning—in the case.
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I’d love to know how many voters that 67% that passed the ballot measure represents–and how many of them really understood the measure. Not many, I’d bet.
I’d love to know how many voters that 67% that passed the ballot measure represents–and how many of them really understood the measure. Not many, I’d bet.