Ninth Circuit Considers Challenge to Prevailing Wage Law

(CN) – The Ninth Circuit Monday considered arguments by nonunionized construction groups challenging a California wage law they claim prevents the open-shop industry from exercising its free speech rights.

The Associated Builders and Contractors of California Cooperation Committee and Interpipe Contracting appealed the dismissal of their case brought against Attorney General Xavier Becerra, Labor Commissioner Julie Su and Department of Industrial Relations director Christine Baker, which challenged the constitutionality of an amendment to the state wage law that went into effect in 2017.

Senate Bill 954 only allows employers who make payments to an “industry advancement fund” as required by a collective bargaining agreement to receive a prevailing wage credit through a state subsidy. Those employers who pay into industry advancement funds that lobby on behalf of the construction industry but aren’t required to buy a union contract can no longer receive the credit.

Supporters of the law said the amendment protects construction workers from having a portion of their wages collected and used to further causes which may go against workers’ own interests, such as reducing wages.

Associated Builders’ attorney Anastasia Boden with Pacific Legal Foundation in Sacramento told the Ninth Circuit panel of Circuit Judges Jacqueline Nguyen and Consuelo Callahan and Judge Robert Pratt sitting with distinction from the Southern District of Iowa California’s wage law prohibits industry groups like theirs from raising funds to get their message out to the public, trampling their First Amendment rights.

Boden said Associated Builders’ revenues have fallen by 99 percent due to the law which prevents open-shops from receiving prevailing wage credits for donating to organizations like theirs.

But Judge Pratt challenged that the wage law directly inhibited the industry advancement organizations from exercising their free speech rights, asking Boden to identify what her group can’t say now that it could before the law went into effect.

“We’re certainly still allowed to speak,” Boden said.

“Exactly,” Pratt responded.

Attorney Ken Lau, representing Su and Baker, was told by Judge Callahan the judges were looking at the case seriously in terms of preemption “since California likes to tell everyone what to do on everything.”

Lau said the amended law was about minimum labor standards and protections for workers and “sets the floor” on what employers can do in diverting wages to industry advancement funds.

“Poor Judge Scalia would probably flip in his grave if he heard us talk about the legislative intent, but what is the legislative intent?” Callahan asked.

“Its workers’ wages we’re dealing with here and workers can choose whether to send their wages to industry advancement funds,” Lau said, following questioning from Callahan and Nguyen.

Seth Goldstein with the Attorney General’s Office told the panel the wage law is “viewpoint and content neutral.”

“It does not target speech for or against unionization,” Goldstein said.

He said the law is focused on workers agreeing to having their wages reduced via a collective bargaining process since they have more “bargaining power” than those workers who might experience an “imbalance of power” if they aren’t protected by a collective bargaining agreement.

Callahan called the case “interesting and difficult” before the panel took it under submission.


%d bloggers like this: