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Judge blocks Phoenix’s prevailing wage ordinance

In just seven pages, an Arizona judge reversed the city’s efforts to pay construction workers competitive wages, citing a 1984 law directly prohibiting such action.

PHOENIX (CN) — The city of Phoenix’s efforts to establish a prevailing wage for construction workers was shot down Monday for the second time in two years — this time by a state court judge who for now has settled the debate over its legality. 

Emboldened by a legal opinion by Democratic Attorney General Kris Mayes in June 2023, the city argued it has the authority to set a prevailing wage because cities have the authority to set a minimum wage, and “a prevailing wage is a type of minimum wage.”

Maricopa County Judge Brad Astrowsky dismantled the city’s argument in just seven pages.

“Statute, by its plain language, prohibits any Arizona political subdivision, such as the city of Phoenix and the city of Tucson, from enacting an ordinance that requires contractors and subcontractors to pay their workers not less than the prevailing rate of wages,” Astrowsky wrote in a Monday summary judgment ruling. “A prevailing wage ordinance is not a minimum wage law, and the minimum wage law did not impliedly repeal the prevailing wage prohibition because the two laws can be harmonized by reasonable construction.”

On Jan. 9, both the Phoenix and Tucson city councils passed ordinances — which were set to take effect July 1 — establishing that construction contractors working for the cities must provide employees with union-level wages and benefits consistent with local wage standards for a given type of work. In other words, a company would be required to offer the average pay for a specific job, rather than the minimum required by law. 

Phoenix’s ordinance passed 6-3 against the wishes of some contractors, who warned the city that a prevailing wage requirement will hurt small and minority-owned businesses that can’t afford to pay the same wages that larger contracting firms can. The City Council repealed a similar ordinance last year, just one month after it passed amid threats of legal action from the conservative think tank Goldwater Institute. 

Goldwater made good on its promise to sue the second time around, representing the Arizona Builders Alliance, Minority Contractors of Arizona and the Arizona chapter of the Associated General Contractors Of America.

Though a 1984 law prohibits Arizona cities from establishing a prevailing wage outright, Phoenix's attorneys argued in court documents that a 2006 law allowing cities to establish their own minimum wage implies that the city can set a prevailing wage, because a prevailing wage is a kind of minimum wage. 

“That’s the kind of argument only a government attorney could love,” Goldwater vice president of legal affairs Timothy Sandefur said in a press release

Astrowsky wrote that it is “generally disfavored” to argue that more recent law implies the repeal of an older law, especially when they can be construed to work in harmony. In this case, he ruled, minimum wage laws are entirely separate from prevailing wage laws, so one doesn’t affect the other, despite what Mayes suggested in her opinion. 

Astrowsky agreed with the plaintiffs, handing a summary judgment in their favor. 

“Another day, another court order overruling BOGUS LEGAL ADVICE given by Attorney General Mayes as she works to provide cover for her liberal causes,” Senate Republicans posted to X, formerly Twitter. “This is a huge win for taxpayers and the rule of law!”

State Senate President Warren Petersen and Speaker of the House Ben Toma, both Republicans, intervened in the case to argue alongside Goldwater and the contractors associations. Neither responded to a request for comment. 

Phoenix City Councilmember Betty Guardado, who championed the effort to pass the prevailing wage ordinance, called the ruling disappointing. 

“We work every day to seek solutions for outpaced inflation, the affordable housing crisis, those experiencing homelessness and so much more,” Guardado said in a press release. “Yet we are met with decisions like this that undermine our ability to offer better living wages. Our city's workers deserve better, and we will continue to fight for their right to earn a decent living. This is an unacceptable outcome that undermines our efforts to support the backbone of our local economy.”

Though advocates of the ordinance said in January that higher wages would spur economic growth, city staff warned against increased costs on construction jobs they say would ultimately hurt taxpayers in the long run.

“Today’s decision is a victory for Arizona taxpayers — who deserve to have public works projects run as closely as possible to true market conditions, instead of having their costs decreed by politicians in order to benefit their political friends,” Sandefur said. “It’s also a win for workers themselves, who deserve to do work in a competitive environment where wages are based on merit, instead of political dictate.”

Phoenix Mayor Kate Gallego, a Democrat, voted to support the ordinance in January after voting against it last year.

“Today’s decision is disappointing, and we are exploring potential next steps," she said when asked whether the city will appeal the ruling. "Those building the future of our city deserve to be paid fairly and I plan to exhaust every legal avenue to ensure workers earn the wages they deserve.”

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Categories / Business, Courts, Employment, Regional

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