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Michigan Supreme Court upholds prevailing wage

Date Posted: March 17 2006

LANSING - The state Supreme Court finally slammed the door on the Associated Builders and Contractors-Saginaw Valley Chapter's bulldog-like effort to overturn the Michigan Prevailing Wage Act.

The end to the six-year-old case came on Feb. 27, when the Michigan Supreme Court refused to hear any more arguments on the matter. The ABC failed to convince the state high court to overturn a ruling by the Michigan Court of Appeals from July 2005 that upheld the constitutionality of state's prevailing wage law.

"This is great news for the building trades," said Michigan Building Trades Council attorney John Canzano. "If we lost this law it would be almost impossible to get it back under the current political landscape."

The Michigan Prevailing Wage Act of 1965 requires that prevailing wages be paid to workers on construction projects involving state tax money. Generally, the prevailing wage in localities around Michigan is in line with union wage scales. Loss of the prevailing wage law would have virtually assured a downward spiral of Michigan construction workers' wages.

The case brought by the Saginaw Valley ABC had huge implications for Michigan's entire construction workforce. We've been following the case since its inception:

The ABC originally filed a lawsuit in what it expected would be an employer-friendly Midland County Circuit Court in 2000, alleging that the Prevailing Wage Act is unconstitutional under Michigan law. The Midland court gave the ABC a partial victory, but when the case first went to the Michigan Court of Appeals in August 2003, the legal panel ruled against the ABC.

The panel ruled that the prevailing wage law is not "impermissibly vague" as the ABC alleged and that the (financial) injuries sought by the ABC "are at this point merely hypothetical." The ABC also argued that state legislature was abandoning its role as rule makers by allowing the union rate to be the prevailing rate.

On Dec. 9, 2004, the Michigan Supreme Court heard arguments from attorneys for the ABC and the Michigan Building Trades Council together with the State of Michigan on whether the ABC-Saginaw Valley Area Chapter had the legal standing to go to the courts to challenge the legality of the state's prevailing law.

The high court did rule that the ABC had legal standing and was affected by the law. However, on the issue of whether the Prevailing Wage Act is unconstitutional, the court sent the case back to the Court of Appeals for a ruling.
On July 19, 2005, a three-judge panel of the Michigan Court of Appeals upheld the statute. The court unanimously disagreed with the ABC's contention that the state's prevailing wage law is unconstitutional. The appellate court cited state legal precedent and stated: "Having considered the merits . . . we conclude that the PWA does not unconstitutionally delegate legislative authority to private parties, and . . . that the PWA is not unconstitutionally vague…."

In issuing a statement on this case, Michigan Appeals Court judge William Whitbeck wrote: "…Since 1972 there have been 13 proposed amendments to exempt certain projects from the Prevailing Wage Act. During the same time period there have been 10 attempts to repeal the act. However, no proposed amendment, or repeal of the act has passed.

"In essence, the Saginaw ABC invites us to do what the legislature has refused to do: repeal the Prevailing Wage Act. As is clear from the majority opinion, today we have declined that invitation."

On Feb. 27, the Michigan Supreme Court agreed, and curtly ruled in a single paragraph that "we are not persuaded that the questions presented should be reviewed by this court."

In other words, case closed, at least for now. The Michigan Supreme Court is widely viewed as tilting well into the conservative side - but Canzano said in this case, "they followed the law, and we gave them a lot of good reasons to do so."