Six Cities Challenge California Wage Laws

     SAN DIEGO (CN) - California laws requiring charter cities to pay prevailing wages on public projects are unconstitutional, Fresno and other communities claim in court.
     The cities - Carlsbad, Vista, Oceanside, El Cajon, El Centro and Fresno - say that three bills unconstitutionally interfere with charter cities' rights to govern themselves.
     In essence, the fight boils down to wages for public works projects, and the insistence that charter cities can set their own rates, no matter what local unions say.
     All six cities challenge Senate Bill 7, signed by Gov. Jerry Grown on Oct. 13, 2013.
     Its first two paragraphs, which amend the state Labor Code, state: "Existing law requires that, except as specified, not less than the general prevailing rate of per diem wages, determined by the Director of Industrial Relations, be paid to workers employed on public works projects. Existing law defines 'public work' to include, among other things, construction, alteration, demolition, installation, or repair work done under contract and paid for, in whole or in part, out of public funds, and street, sewer, or other improvement work done under the direction and supervision or by the authority of any officer or public body of the state, or of any political subdivision or district thereof, whether the political subdivision or district operates under a freeholder's charter or not.
     "This bill would prohibit a charter city from receiving or using state funding or financial assistance for a construction project if the city has a charter provision or ordinance that authorizes a contractor to not comply with prevailing wage provisions on any public works contract. The bill would, except as specified, prohibit a charter city from receiving or using state funding or financial assistance for a construction project if the city has awarded, within the prior 2 years, a public works contract without requiring the contractor to comply with prevailing wage provisions. This bill would authorize charter cities to receive or use state funding or financial assistance if the city has a local prevailing wage ordinance, applicable to all of its public works contracts, that includes requirements that are equal to or greater than the state's prevailing wage requirements, as specified. This bill would exclude contracts for projects of $25,000 or less for construction work, or projects of $15,000 or less for alteration, demolition, repair, or maintenance work. This bill would require the Director of Industrial Relations to maintain a list of charter cities that may receive and use state funding or financial assistance for their construction projects."
     Its provisions, and the projects covered by then, are to begin on Jan. 1, 2015.
     Oceanside also challenges SB 829, which states that "if a charter provision, initiative, or ordinance of a charter city prohibits, limits, or constrains in any way the governing board's authority or discretion to adopt, require, or utilize a project labor agreement that includes specified taxpayer protection provisions for some or all of the construction projects to be awarded by the city, state funding or financial assistance may not be used to support any construction projects awarded by the city, as specified." (Emphasis added.)
     Oceanside also challenges SB 922, which began as a bill addressing tuberculosis screenings, but morphed into a companion bill to SB 829. It states, in relevant part: "This bill would authorize a public entity to use, enter into, or require contractors to enter into, a project labor agreement for a construction project, if the agreement includes specified taxpayer protection provisions."
     It would authorize the members of the governing board of a local public entity to choose by majority vote whether to use, enter into, or require contractors to enter into a project-labor agreement for a specific project or projects awarded by that entity and whether to allocate funding to a specific project covered by such an agreement.
     "This bill would prohibit a charter provision, initiative, or ordinance from preventing the governing board of a local public entity, other than a charter city, from exercising this authority on a project-specific basis," the bill states. "This bill would also provide that if a charter provision, initiative, or ordinance of a charter city prohibits the governing board's consideration of a project labor agreement for a project to be awarded by the city, or prohibits the governing board from considering whether to allocate funds to a city-funded project covered by such an agreement, then state funding or financial assistance may not be used to support that project, as specified."
     The plaintiff cities claim the bills "interfere with the exercise of direct democracy retained by the electorate" of the charter cities.
     They named as defendants: Secretary of State David Lanier, Director of Industrial Relations Christine Baker and Labor Commissioner Julie Su.
     Of the six plaintiff cities, Carlsbad is by far the wealthiest. Its estimated median household income of $77,577 in 2011 exceeds the statewide median by 35 percent.
     The cities seek writ of mandate and declaratory judgment.
     They are represented by James Lough, with Lounsbery, Ferguson, Altona & Peak, of Escondido.
     The 45-page lawsuit in Superior Court includes another 112 pages of exhibits.