California Supreme Court Decision Fails to Address
Whether Charter Cities Must Pay Prevailing Wages
SBCTC Will Continue the Fight to Require Prevailing Wages
The California Supreme Court issued its long-awaited decision today in City of Long Beach v. Dept. of Industrial Relations, but the Court did not decide whether charter cities are subject to the state's prevailing wage law. Instead, the Court stated that it would leave the question open.
The Court of Appeal had held that the payment of prevailing wages is a "statewide concern" and, therefore, that charter cities are bound by the state's prevailing wage law despite the cities' "home rule" authority. The California Supreme Court granted review of the case.
Unfortunately, in today's decision, the Supreme Court avoided the main question by holding that the project that was the subject of the case - an animal shelter built by the SPCA in Long Beach - was not a public work. The Court stated that the development agreement limited the use of public funds to "pre-construction activities" and that the law in effect when the development agreement was signed did not clearly spell out that the use of public funds for "pre-construction" made a project a public work.
The law was amended in 2000 by an SBCTC-sponsored bill which made clear that work performed during the design and preconstruction phases is covered by the prevailing wage law. But the animal shelter contract was signed in 1998.
Because the project was not a "public work" under the law in effect in 1998, the Supreme Court ruled that it was unnecessary for the Court to decide whether charter cities are subject to the prevailing wage law.
The Court stated: "We leave open for consideration at another time important questions raised by the parties, including ...whether the [prevailing wage law] is a matter of such 'statewide concern' that it would override a charter city's interests in conducting its municipal affairs."
The SBCTC has long argued that the prevailing wage law is a matter of statewide concern and will continue to vigorously assert that position, which is supported by the California Legislature, the Attorney General, and common sense. Because the California Supreme Court has left the issue open, the SBCTC anticipates filing an appropriate test case to litigate the issue.
If a charter city in your jurisdiction is about to let a project without requiring the payment of prevailing wages - or has adopted a policy of refusing to follow the prevailing wage law - please forward this information to Jim Lewis, State Building & Construction Trades Council, 1225 8th Street, Suite 375, Sacramento, CA 95814.
Jim will pass this information on to the SBCTC's attorney, Scott Kronland, at Altshuler, Berzon, Nussbaum, Rubin & Demain, who is evaluating potential test cases.