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Appeals Court upholds prevailing wage, but Supreme Court looms

Date Posted: September 19 2003

LANSING - The Michigan Prevailing Wage Act survived another assault by the anti-union Associated Builders and Contractors, as a state Court of Appeals panel ruled last month that the law is not "impermissibly vague" nor "an unconstitutional delegation of legislative authority," as the ABC contended.

The ABC's Saginaw Valley Area Chapter brought the lawsuit before what it considered a friendly Midland County Circuit Court in 2000, which issued a semi-victory for the ABC. But the new state appeals court ruling dismissed the "vague" contention by the ABC, and then reversed a victory for the ABC provided by the circuit court, which allowed further "discovery" of the nonunion contractors group's claim that the act was unconstitutional under state law.

"There is no actual controversy," the appeals court said in its ruling, adding that the injuries sought by the ABC "are at this point merely hypothetical."

The ABC claimed that its member-contractors have been injured by instances of misclassification of workers. The ABC also said that union targeting programs - where union funds are used to help union contractors win bids - result in lower pay rates, thus allowing union contractors to underbid nonunion contractors.

Furthermore, the ABC said the state Department of Consumer and Industry Services, in charge of determining what constitutes overtime and fringe benefit rates for construction workers, has no authority to do so from the Michigan legislature.

"The ABC is digging up and recycling similar legal arguments that were used in states like California and Nevada, and they're using them here," said building trades attorney Doug Korney. "But the results have been the same. They've lost."

As we have pointed out numerous times, The Michigan Prevailing Wage Act of 1966 is the single most important law that upholds all construction worker wages in the state.

Except for a 19-month period beginning in 1994 when the act was suspended by a conservative federal judge, the law has been extremely important in maintaining construction wage levels. Research by Stanford University released last year found that in nine states that repealed their prevailing wage law during the 1980s, construction workers' wages fell 17.5 percent.

But the court victory for both union and nonunion construction workers is tempered by the knowledge that the case is probably headed for review by the Michigan Supreme Court - a panel which is dominated by conservative judges who have a reputation for throwing out legal precedent, especially when those precedents don't favor the business community.

"I see absolutely no reason why the Michigan Supreme Court should accept this case," Korney said. "But if they do decide to accept arguments, look out, we have a problem. They are a very predictable court - if they take the case, they're going to rule in favor of the business community."