Allied Construction Industries v. City Of Cincinnati, Laborers International Union of North America, Local 265 (United States Court of Appeals for the Sixth Circuit)

Posted by National Alliance for Fair Contracting on

January 4, 2018

http://www.opn.ca6.uscourts.gov/opinions.pdf/18a0004p-06.pdf

“We hold that the City was acting as a market participant in enacting the Ordinance, and therefore these provisions are not preempted by ERISA. … Cincinnati enacted Ordinance No. 282-2012 … to provide guidelines for selecting the “lowest and best bidder” on certain projects of the “Department of Sewers” …

[It] lists fifteen factors to be considered in selecting the lowest and best bidder, two of which are at issue here. Section 320-3(j) requires the bidder to certify whether:

  • it provides, or contributes to, a health care plan for those employees working on the project and shall provide a copy of the health plan upon request…
  • it contributes to an employee pension or retirement program, including, but not limited to, a 401K, a defined benefit plan, or similar plan, for its field employees working on the project and shall provide a copy of the plan upon request…
  • [it] imposes an apprenticeship standard, requiring each bidder to certify that “[f]or the duration of the project, the bidder will maintain or participate in an apprenticeship program for the primary apprenticeable occupation on the project,” and that that apprenticeship program must have graduated at least one apprentice for each of the past five years. …
  • [it] requires the winning contractor to pay $.10 per hour per worker into a preapprenticeship training fund, managed by the City. …

The City and the Union argue that the Ordinance cannot be preempted by ERISA because the City was acting as a market participant, rather than as a regulator, by codifying in the Ordinance its preferences for bidders… [T]he goal of “efficient procurement” does not restrict a state or municipality to selecting the cheapest possible bidder. To the contrary, “just as private entities serve their purposes by taking into account factors other than price in their procurement decision,” so too can a municipality…

In his report submitted in this case, Dr. Dale Belman, a professor at Michigan State University, explained:

“[p]rivate sector owners who undertake construction projects for their own use are concerned with factors beyond the bid price for a project. This reflects a purpose of minimizing the long term costs of a construction project where quality, timeliness, safety and predictability are as important as bid price in determining the capital and operating costs of a construction project. In adopting the ordinance, the [City] acted in a manner similar to other large owners who are building for their own purposes.”

[A] municipality might reasonably conclude that a contractor who provides these benefits is less likely to experience significant employee turnover, improving the stability and overall quality of a project. This is consistent with the City’s stated goal to find contractors who are committed to the City’s “safety, quality, time, and budgetary concerns.” …Moreover, the apprenticeship requirements in §§ 320-5 and 320-7 are connected to the City’s reasonable concern over a possible shortfall of trained workers who would be available for City projects in the future. … The City has a strong proprietary interest in developing a skilled workforce for its many future projects….

The City was acting as a market participant in enacting the Ordinance, and thus, the Ordinance is not subject to ERISA preemption… [W]e REVERSE … and direct the district court to enter judgment in favor of the City of Cincinnati.”

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New York State Reciprocal Debarment Legislation Signed into Law by Governor Cuomo

Posted by National Alliance for Fair Contracting on

PRESS RELEASE GlobeNewswire
Dec. 22, 2017, 02:09 PM

On December 18, New York Governor Andrew Cuomo signed into law new reciprocal debarment legislation to amend labor and general municipal law, as it relates to reciprocity of debarments imposed under the federal Davis-Bacon Act. The bill states that any contractor debarred by the U.S. Department of Labor for violations of the Davis-Bacon Act cannot work on New York State public works projects. The statute will take effect in March 2018.

“This is an important new State law that ensures that contractors barred on the federal level from public works projects won’t have the ability to win new projects in the State of New York,” said John Ballantyne, NRCC’s Executive Secretary-Treasurer. “We’re pleased to support a law that ensures that hardworking men and women carpenters receive good pay and benefits from reputable, law-abiding companies in the State.”

…

“Unscrupulous contractors that violate workers’ rights don’t deserve to be rewarded with contracts paid for by hardworking taxpayers,” said Assemblymember Harry Bronson. “This law is a step in the right direction to help ensure that workers are protected from dishonest employers and our communities’ projects are completed by upstanding businesses that pay and treat their employees properly. Federal law, under the Davis-Bacon Act, dictates that contractors are prohibited from obtaining federal contracts if they’ve been debarred by the U.S. Department of Labor for wage payment violations. My legislation corrects a loophole in New York State law that allowed federally debarred contractors to still obtain state public works contracts. As a member of the Assembly Committee on Labor, I will continue to be an outspoken advocate for workers’ rights and continue to stand up for fair wages and vital protections.”

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Guest Column: Prevailing wage supports Oakland County communities (MI)

Posted by National Alliance for Fair Contracting on

Andy Meisner is Oakland County treasurer
POSTED: 01/12/18, 3:12 PM EST

Big things are happening here in Oakland County. In November, Oakland County voters approved millions of dollars in public projects to improve our schools, sidewalks and communities – all smart investments in our future.

These projects show that our economy continues to grow. We’ve come a long way since the stagnant, cash-strapped Recession years, and we can make even more progress working together.

Unfortunately, some special interests in Lansing want to gamble with Michigan’s prevailing wage law in hopes of increasing their profits. That would create roadblocks to growth in Oakland County, and it’s the wrong move.

Repealing the prevailing wage is being hawked by special interests as a way to save taxpayers’ money. If that sounds too good to be true, it’s because it is. Repealing prevailing wage will send qualified workers out of state, leaving projects to lower-skilled workers. It will lead to expensive mistakes and cost-overruns that will be passed onto taxpayers when projects are built with cheap labor by out-of-state contractors, compromising safety and quality.

…

Prevailing wage is a smart investment that levels the playing field so local Michigan contractors have the opportunity to compete for public projects, without being undercut by the fly-by-night operations that employ cheap, low-skilled labor. By requiring all contractors who bid on a project to pay their workers a fair wage, quality contractors are challenged to work smarter and employ innovative ideas, not just cut costs by slashing wages.

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Prevailing wage supporters launching counter-petition (MI)

Posted by National Alliance for Fair Contracting on

Jonathan Oosting
Updated 11:25 p.m. ET Dec. 7, 2017

Lansing – A coalition of construction unions and contractors are launching a petition drive for an initiative to preserve Michigan’s prevailing wage law, an attempt to thwart a separate petition drive seeking repeal.

The state’s Republican-led Legislature could decide early next year whether to scrap the 1965 law, which requires union-rate wages and benefits on state-financed or sponsored construction projects.

But the Michigan Prevails coalition and the Protect Michigan Jobs ballot committee are urging legislators against taking up the repeal initiative.

“They can do what they want to do, but make no bones about it, we are not going to take this lying down,” said Patrick Devlin, secretary-treasurer of the Michigan Building and Construction Trades Council, who is helping organize the counter-petition.

The Protect Michigan Taxpayers ballot committee, funded largely by an association representing contractors who do not use union labor, last month submitted more than 380,000 signatures for a repeal plan. If approved by the Board of State Canvassers, the measure would advance to legislators.

…

“This isn’t just about the unions,” said Mike Crawford, executive director for the Michigan Chapter of the National Electrical Contractors Association. “This is very much a business issue. The prevailing wage law … makes sure that public construction projects are bid on an equal footing, at least as far as labor is concerned.”

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(Visit Michigan Prevails Website)

Letter: Prevailing wage stabilizes labor market (MI)

Posted by National Alliance for Fair Contracting on

DetroitNews
Published 10:57 p.m. ET Jan. 3, 2018

Michigan is experiencing a skilled-worker crisis. Our state’s construction industry is booming and contractors are struggling to find the workers needed to participate on public projects. From a business perspective, the prevailing wage is a proven tool to retain qualified workers on Michigan’s public projects and entice new recruits into the trades (Re: The Detroit News’ editorial, “Let’s move past prevailing wage,” Dec. 14).

Contractors know Michigan’s prevailing wage laws help stabilize the labor market on publicly funded projects so we can find the workers needed to finish projects and make the best use of taxpayer dollars. I want Michiganders and policymakers to understand there could not be a worse time to repeal Michigan’s prevailing wage law.

I was there when we suspended the prevailing wage laws in the ’90s, and I saw how it devastated our skilled workforce for publicly funded projects. Facing reduced hourly rates, our workforce became transient. Decades of loyalty was supplanted by a revolving workforce forced to focus on finding the best pay. The best workers were lured away by increases in hourly wages, making it harder to complete the schools our children attend, the roads we drive on and other infrastructure projects on time or on-budget.

Repealing Michigan’s prevailing wage laws did not save money or benefit public clients 20 years ago and it will not help them now. Today, we are experiencing the same market trends. All contractors, including Barton Malow, have turned down work due to a lack of available workers. With billions more in publicly-funded jobs coming online this spring, Michigan can’t afford to gamble like we did in the ’90s with our skilled workforce.

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Prevailing wage protects Michigan families, workers (MI)

Posted by National Alliance for Fair Contracting on

By Stephanie Chang
Dec 17, 2017

The main thing Michiganders need to remember about the prevailing wage repeal proposal is this: Do not be fooled.

This year, special interests collected signatures to put the question of repealing Michigan’s long-standing prevailing wage law before the Legislature or on the ballot – often misconstruing the true intent of what their petition would do.

I oppose this proposal, and one need only visit my Detroit and Downriver district to understand why.

Michigan’s prevailing wage law ensures that our publicly financed buildings, roads, bridges and utilities are constructed using highly skilled and trained workers who are paid the regional average for their trade. The law doesn’t artificially inflate wages or the cost of construction and doesn’t force workers to be union members.

It just ensures that the people building our infrastructure earn a fair wage and benefits, and that their pay reflects their level of training. The law keeps skilled tradespeople and their families here in Michigan, where they participate in the economy and pay taxes.

Michigan created the middle class, and I am seriously concerned when the middle class is threatened by the potential slashing of wages and benefits for our hardworking friends, neighbors and family members.

Mistakes happen when inexperienced, lesser-trained workers do the work.

For example, there is courthouse in a community outside of Detroit that took 21 months to complete – far longer than the six months anticipated. From the noisy HVAC system that prevented judges from being able to hear proceedings to the counter windows missing holes for clerks to speak through, the shoddy work increased project costs tremendously.

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New CA law requires contractors to assume subs’ unpaid wages

Posted by National Alliance for Fair Contracting on

AUTHOR – Kim Slowey
PUBLISHED – Dec. 1, 2017

Dive Brief:

  • California contractors acting as direct contractors on private construction projects will be financially responsible for any wages, fringe benefits and union contributions left unpaid by subcontractors and their sub-tiers, per a new law signed by Gov. Jerry Brown, JD Supra reported. The law encompasses all private contracts entered into starting Jan. 1.
  • Direct contractors will not have to pay any penalties or liquidated damages that arise from a subcontractors neglecting to pay their employees, but the law will require direct contractors to monitor closely their subcontractors’ payrolls.
  • The law allows for direct contractors to withhold payment from any subcontractor that does not provide the required payroll records. To protect against having to assume any subcontractors’ or their sub-tiers’ unpaid costs, direct contractors should add indemnity language to their subcontracts.

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Worker rights preemption in the US

Posted by National Alliance for Fair Contracting on

A map of the campaign to suppress worker rights in the states

The Economic Poilcy Institute (EPI) released a new map outlining the campaign to suppress workers rights. Click on the link below to visit EPIs website

Cities, counties, and other local governments are enacting policies that raise standards for working people, but state legislatures are lowering those standards back down with preemption – the use of state law to void local ordinances. Twenty-six states have preemption laws that target five key worker rights.


Letter to the Editor: Prevailing wage is good policy (IL)

Posted by National Alliance for Fair Contracting on

DECEMBER 15, 2017
By Frank Manzo IV – Guest columnist

One of the many factors that has made Bruce Rauner one of the nation’s least popular Governors has been his proposals to cut pay for middle-class wage earners. So it came as little surprise to see the Illinois Policy Institute (IPI) – a group with close ties to Rauner – recently attacking the Illinois Prevailing Wage Act.

Prevailing wage functions as a local minimum wage on publicly-funded construction jobs like roads, bridges, schools and police stations. It promotes a level playing field for local contractors, ensures these projects are done right and produces good middle-class jobs for skilled local workers.

Like Rauner, the IPI has recently argued for repealing prevailing wage in Illinois. In so doing, the IPI is passing off flawed analysis with little basis in reality as sound policy.

But don’t take my word for it.

Indiana repealed its prevailing wage law in 2015, and “it hasn’t saved a penny,” according to the state’s Assistant Republican Floor Leader in the House, Ed Soliday. And before repealing its law outright, Indiana took other steps to hollow out its construction labor standards. The effect was not only a decline in wages, but hundreds of middle-class jobs fleeing the state. While IPI claims that repeal would save money and boost employment, the fact is that neither happened in the real-life example of Indiana.

But the experience of Indiana and the observations of Rep. Soliday are hardly outliers. Most peer-reviewed economists have arrived at the same conclusions. I have authored or co-authored 25 studies on these laws myself.

Here’s what we’ve found:

First, labor represents a small and historically declining share of construction budgets and prevailing wage has no effect on total project costs.

Reams of data have shown that eliminating local market-based prevailing wage standards only results in high-skilled local workers getting replaced by lower-skilled workers, often from out-of-town. This ultimately yields not just lower wages- but lower levels of productivity, higher spending on fuel and materials, higher risk of safety problems and shoddy workmanship, and more construction workers reliant on taxpayer-funded government assistance programs.

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The Illinois Policy Institute Receives a Failing Grade on Prevailing Wage (IL)

Posted by National Alliance for Fair Contracting on

Published by Frank Manzo, IV
December 7, 2017

A new report released by the Illinois Policy Institute on prevailing wage is factually inaccurate. Here’s why.

The Illinois Policy Institute is a libertarian policy organization with close financial and lobbying ties to Illinois Governor Bruce Rauner. None of their research has ever been subject to peer review. On December 6, 2017, the Illinois Policy Institute released a report calling for the repeal of the Illinois Prevailing Wage Act- a longstanding goal of Governor Rauner. This brief highlights the biggest problems and factual inaccuracies in their report.

Inaccurate Claim #1: “The empirical literature is still divided on the impact of prevailing wage on construction costs.”

Fact: Most peer-reviewed studies (over 75 percent) have concluded that prevailing wage laws have no impact on total public construction costs.

“We got rid of prevailing wage and so far it hasn’t saved a penny.” -Rep. Ed Soliday, Assistant Republican Floor Leader, Indiana House of Representatives, 2017

Inaccurate Claim #2: Prevailing wage laws “favor disproportionately white, unionized workers.”

Fact: By stabilizing the wage floor, prevailing wage reduces income inequality among construction workers of all backgrounds. Prevailing wage standards cover construction workers of all races- union and non-union alike. Peer-reviewed research has found no relationship between prevailing wage laws and the racial composition of the construction labor force. Over the past 10 years, the union membership rate was higher for African-American workers in Illinois’ construction and extraction occupations than for comparable white workers.

“Davis-Bacon has been instrumental in bridging the wage gap for historically disadvantaged sectors of our society. In the face of decaying social and economic opportunities, this measure provides women and minorities with an important tool to achieving greater parity with their mainstream counterparts.”
-Congressional Black Caucus, 1995.

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