City prevailing wage laws ruled constitutional
LANSING — In a case involving a contractors' group and the City of Lansing, the Michigan Supreme Court on Tuesday ruled that local prevailing wage laws — which require union-rate pay and benefits on city jobs — are constitutional.
The Associated Builders and Contractors sued Lansing in 2012 in an attempt to overturn the city's prevailing wage ordinance as unconstitutional.
The Ingham County Circuit Court ruled in favor of the contractors, but that decision was reversed by a three-judge panel of the Michigan Court of Appeals, which in a split decision upheld the right of the city to pass such an ordinance.
On Tuesday, the Supreme Court said the Court of Appeals was wrong in the way it dealt with the prevailing wage issue, but it said the result the appeals court arrived at was the correct one.
"The City of Lansing has the authority ... to enact an ordinance that established a prevailing wage," the Supreme Court said.
The 6-0 opinion, written by Chief Justice Robert Young Jr., reflected a unanimous view of the court since Justice Brian Zahra agreed with the result, but wrote a separate concurring opinion.
Lansing Mayor Virg Bernero issued a statement praising "a landmark ruling for working people not just in Lansing, but across Michigan."
Lansing's ordinance, adopted in 1992, requires contractors to agree to pay a prevailing wage before the city will approve development agreements.
A 1923 Michigan case said cities didn't have the authority to set third-party wages.
The Supreme Court ruled that the Court of Appeals was correct in concluding that the legal landscape has changed since then, since the 1963 state constitution gives cities more authority than the one in effect in 1908, which the 1923 decision was based on.
But the Court of Appeals should have struck down the 1923 decision, not just ignored it, the Supreme Court said.
The City of Detroit has a living-wage ordinance that also has been challenged in the courts.
Chris Fisher, CEO of ABC, said a 2015 law passed by the Legislature prevents local governments from enacting new prevailing wage ordinances. But the law allowed Lansing and about 30 to 40 other communities that already had one, to keep them.
"The court ruled they can have a prevailing wage, even if it's a bad idea," Fisher told the Free Press.
The ABC contractors also have been trying to repeal the state prevailing wage law — which requires payment of union-rate wages and benefits on state-funded or state-sponsored construction projects — through a petition drive they have backed. Their earlier efforts to have the law repealed by the Republican-controlled Legislature stalled after Gov. Rick Snyder said he would veto a bill to repeal the prevailing wage law.
Petitions asking the Legislature to repeal the law, which ABC says adds to the cost of public construction jobs, are to be turned in by June 1, Fisher said. If the Legislature failed to act on a valid petition drive, the question would go on the November 2016 ballot.
Protect Michigan Jobs, the group formed to fight the ballot drive to repeal the prevailing wage law, issued a statement Tuesday praising the court ruling.
"Prevailing wage policies help ensure Michigan has sufficient numbers of skilled construction workers by providing for training schools, fair pay that attracts good workers and benefits that keep them on the job," said Bart Carrigan, cochair of Protect Michigan Jobs.
Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4.