Federal Judge Strikes Down 3 Wage Laws

A federal judge has struck down three pioneering local laws in Northern California that required “prevailing wages” to be paid to construction workers on large private projects.

The federal government and many localities have required for years that “prevailing” wages--typically approximating union wages--be paid on government building projects. But the laws tested in this case appeared to be the first in the nation imposing the requirement on the private sector.

As a result, the laws drew attention from business and labor groups nationwide, and the ruling Friday, in U.S. District Court in San Francisco, was of broad significance in discouraging such ordinances elsewhere.

Adopted in Contra Costa County and the cities of South San Francisco and San Bruno, the laws were challenged by the U.S. Chamber of Commerce and a contractors’ group. Three labor organizations in the building trades joined the case on behalf of the localities.

U.S. District Judge Charles A. Legge ruled that the local laws were preempted by the National Labor Relations and Employee Retirement Income Security acts. He also held that the laws illegally infringed the right of private parties to form contracts.

Tom Adams, an attorney who argued the case on behalf of the localities and union groups, called the ruling “an improper form of judicial activism.” He said an appeal is likely.

“The judge ignored two U.S. Supreme Court decisions that basically held that wage regulation isn’t preempted,” Adams said.

Robin Conrad, an attorney who is vice president of the National Chamber Litigation Center, the legal arm of the U.S. Chamber of Commerce, called Legge’s 41-page ruling “a great decision for the business community” and insisted that it won’t harm most workers.

“The only workers who stood to benefit from these ordinances were construction workers,” she said.

The laws required builders of projects above a certain size to pay at least the prevailing wage as determined by the state Department of Industrial Relations. A 1989 study commissioned by Contra Costa County found that prevailing construction wages in the county were $25.86 per hour, including benefits. Non-union workers get much less.

Supporters argued that the laws were needed to make sure contractors hire competent workers who will build safely, and because non-union workers, often lacking benefits, put a strain on local services.

Opponents claimed that the laws were intended only to force the hiring of union labor, to the detriment of lower-paid workers and buyers of new buildings.

Rejecting the laws, the judge wrote: “Rather than promoting safety and broad economic goals, or even the timely completion of construction projects, the resolutions and the ordinance are instead economic legislation for the benefit of certain groups, primarily the members of certain unions.”

Adams said San Mateo County has a similar law (like the one in Contra Costa, it only covers unincorporated areas) that could also be affected should a challenge arise, as does the Bay Area community of Belmont.