A brewing conflict in California over prevailing wages between a city and labor unions has been resolved with a ruling by the California Supreme Court that prevailing wages were not applicable for the construction of two new city-owned fire stations.
Court rules prevailing wages not applicable: The conflict started with a City of Vista law banning prevailing wage requirements on city public works
projects. The State Building and Construction Trades Council of California, AFL-CIO filed suit over the issue, citing a state law that requires payment of prevailing wages on
public works projects. The case worked its way up through the court system, and on
July 2, 2012 the Supreme Court ruled in favor of the City of Vista, a charter city.
"Municipal Affair" or "Statewide Concern"? The Supreme Court's
ruling hinged on drawing a line between the interests of charter cities and the
state. In general, charter cities have the right to govern their own internal
"municipal affairs." However, if this results in a city law conflicting with
state legislation that properly addresses a legitimate "statewide concern," the
city law is preempted by state law.
In this case, the Court found that, although the city's rejection of
prevailing wage requirements was at odds with state requirements, the issue was nonetheless
a localized municipal affair that did not rise to the level of a statewide
concern. Thus, as a charter city, it falls under the City of Vista's authority
to regulate.
Future Impacts While this case is concluded, its impacts are
predicted to be far-reaching. The demarcation between the municipal authority of
charter cities and the state's jurisdiction over statewide concerns has been
long-running battle in California. The lure of reduced costs without prevailing wage requirements may prove a
compelling draw for many cities experiencing difficult financial
situations.
Additional Resources:
- Summary of the decision by Littler Mendelson, a national employment & labor law firm
- Full California Supreme Court Opinion (PDF)
Mike Purdy's Public Contracting Blog© 2012 by Michael E. Purdy Associates, LLChttp://PublicContracting.blogspot.com
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