D.C. Hire Law Survives Challenge by Contractors

WASHINGTON (CN) - A federal judge has upheld requirement that D.C. residents get hired first for city-funded building jobs, no matter their qualifications.

Three contractors and four skilled laborers sued the Washington two years ago over the 1984 First Source Employment Act, but U.S. District Judge Emmet Sullivan dismissed the complaint Monday after lamenting the many obstacles the district faces in budget autonomy.

"This case thus represents something of a twist in the long line of cases in which the district has repeatedly confronted the uncontroverted fact that its unique constitutional status prevents it from enjoying benefits states take for granted," Sullivan's 63-page ruling states.

The law requires contractors on government-assisted jobs to hire from a first source registry of unemployed city residents, and also requires contractors to have city residents make up 51 percent of their new hires for projects costing more than $100,000. Another provision lets the mayor set goals for increasing employment opportunities for city residents.

Judge Sullivan noted that the district of course cannot levy a commuter tax like other cities can, creating an economic imbalance where "approximately 70 percent of jobs are held by non-residents."

This, coupled with the district's unemployment rate exceeding the national average, puts the city at a heavy economic disadvantage.

"The court is aware that similar state statutes, when challenged under the Privileges and Immunities Clause of the Constitution, have all been struck down as unconstitutional," Sullivan wrote. "However, the district, unlike every other jurisdiction in the country that imposes an income tax on its own residents, is barred by the Home Rule Act from levying a commuter tax on income earned by non-residents working here."

And the District still faces more obstacles. Courts have told the city in the last 14 years that it cannot elect representatives with voting rights in Congress, cannot control expenditures of locally derived funds and cannot prosecute its own crimes, according to the ruling. The city also cannot appoint its own judges or enact zoning regulations without submission to the National Capital Planning Commission.

"These restrictions apply to the district for the precise reason that it is not a state, but rather an 'exceptional' constitutional creation, over which Congress retains ultimate authority," Sullivan wrote, differentiating the district from other states where similar laws have failed.

The plaintiffs - Metropolitan Washington Chapter of Associated Builders and Contractors, Miller & Long Concrete Construction, and Hawkins Electrical Construction of D.C. - argued that the city's employment problem isn't that too many residents are looking for too few jobs. The true problem according to the conplaint is that the city lags behind in educating and training the construction workforce.

"The First Source Employment Act has never created a sing job - and never will," their complaint said.

Though Judge Sullivan ruled that the contractors and laborers could show injury and had standing to sue, he ultimately ruled that their arguments failed to prove that the law is unconstitutional.

The court could not determine, however, whether the law was "narrowly tailored" to address the city's inability to levy a commuter tax.

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