The Building Tradesman Newspaper

Friday, June 06, 2014

Appeals court rebukes ABC, upholds Lansing's prevailing wage law

By Marty Mulcahy, Editor

LANSING – A Michigan Court of Appeals ruling on May 28 upheld a 22-year-old prevailing wage ordinance in the City of Lansing that has ramifications in municipalities across Michigan.

“We find that defendant’s (the City of Lansing) prevailing wage ordinance is a valid exercise of municipal power because it does not conflict with the constitution or state law,” said a summary of the case by state Appeals Court judges Jane Beckering and Donald Shapiro, making the majority ruling. The dissenting third judge, David Sawyer, contended that cities do not have the power to set prevailing wages unless it’s specifically granted by the state Legislature or the Michigan Constitution.

The case stemmed from a 2012 lawsuit brought by the anti-union Associated Builders and Contractors, who contended that regarding the City of Lansing’s prevailing wage law, “the regulation of third party wage and benefit rates is a matter of state, not municipal concern, which has been established by binding Michigan precedent.” The ABC asked the court to rule that Lansing’s prevailing wage law be made invalid.

In 2012, making his ruling in favor of the ABC’s position, Ingham County Circuit Judge Clinton Canady III cited a 1923 state Supreme Court decision involving the City of Detroit. That ruling, he said, showed that “a municipality lacks the authority to regulate the level of wages and benefits provided by private businesses to its employees.”

In overturning Judge Canady’s decision, the appeals court majority said the 1923 Supreme Court ruling had no discussion “as to why the setting of wage rates was a matter of state concern.” In addition, since that 91-year-old decision, the appeals court judges said the state’s 1963 amended Constitution granted Michigan’s cities and villages the “power to adopt resolutions and ordinances relating to its municipal concerns.”

Michigan Building and Construction Trades Council attorney John Canzano, who filed an informational “amicus” brief in the case but did not litigate it, said the 1923 case makes a poor precedent “because it was in a completely different era,” before the passage of significant federal workplace laws adopted in the 1930s.

“This ruling is important,” Canzano said. “It means that all local prevailing wage laws in Michigan are now valid, and that local units of government can and should enforce those laws.”

Canzano said prior to this case, local prevailing wage laws have not been enforced over the past few years in Michigan. A previous appellate court ruling on a similar case let stand a lower court’s decision that invalidated a local prevailing wage law. The appeals court ruling basically said only the state Supreme Court has jurisdiction in such home rule decisions governing municipalities, but the state Supreme Court declined to take up that case. Now, there’s a new court precedent.

“I am very pleased with the court’s ruling,” said Lansing Mayor Virg Bernero. “Through the years, Lansing’s prevailing wage ordinance has helped share the benefits of economic development with working families across our community. Wednesday’s decision by the Court of Appeals reaffirms the city’s right to continue on that path by ensuring that workers on publicly-funded construction projects receive a fair wage.”

State and local prevailing wage laws set standards for construction workers’ wages and benefits on taxpayer-funded projects. Such laws prevent contractors from hiring low-wage, out-of-area workers in order to win contracts and undermine local wage standards.

Chris Fisher, president and CEO of the Michigan chapter of Associated Builders and Contractors,  told the Lansing State Journal that said his organization likely will appeal the ruling to the state Supreme Court. The ABC has repeatedly used the courts and any influence it has over state legislators to attempt to repeal local and prevailing wage ordinances and the Michigan Prevailing Wage Act of 1965. There are currently no less than six bills in the state Legislature that would repeal the statewide prevailing wage law in entirety or in part.