Posted: November 21, 2012
Our law firm has served as general labor counsel to Associated Builders and Contractors, Greater Michigan Chapter (“ABC”) for over two decades. ABC, an association of construction contractors dedicated to the merit shop philosophy, has long been a leading voice championing free market principles in the Great Lakes Bay Region and in the state as a whole.
Our firm has litigated numerous cases for ABC over the years, often seeking to eliminate anti-competitive, special interest legislation. Many of those fights have concerned the Michigan prevailing wage law – a law which mandates the payment of union scale wages and benefits for all workers performing construction work funded by the State of Michigan. Our efforts caused the law to be unenforceable in 1994 (reinstated on appeal in 1997) and in a subsequent suit rendered its criminal enforcement mechanisms effectively unavailable as punishment against any contractors unable to navigate its complex, illogical, and often undefined requirements.
ABC and our law firm have now turned our attention to eliminating less-infamous (yet equally perverse) municipal prevailing wage ordinances. The legal theory underlying our attack on these ordinances stems from court precedent holding that only the State of Michigan, and not its various cities, has the authority under the Michigan Constitution to regulate the wage or benefits of third parties.
Our firm first sued the City of Bay City seeking to have its municipal prevailing wage ordinance held unenforceable. Its city council repealed the ordinance before a court decision could be rendered. Thereafter, in April, 2012, our office set its sights on the seat of power in Michigan – the City of Lansing – seeking to invalidate that city’s prevailing wage ordinance.
While many of the lawyers in our firm participated in the strategies and pleadings, Kraig Schutter argued the case before Ingham Circuit Court Judge Clinton Canady, III. In addition to addressing the technical aspects of constitutional law, Kraig was able to demonstrate to the court the perverse economics underlying prevailing wage laws and that such laws represent nothing more than legislative assistance to uncompetitive unionized contractors in the marketplace at taxpayer expense. Kraig showed that prevailing wage requirements necessarily force non-union contractors to artificially raise their wage and benefit rates up to the same exorbitant levels as union contractors, thus, reducing their competitive advantage. Whichever company – whether union or non-union – wins the job under the artificially leveled playing field, the price tag for the necessarily bloated wage and benefit rates mandated by the law is passed to the taxpayer.
The judge agreed with our arguments. Finding the ordinance to be in conflict with the Michigan Constitution, he ruled in a written opinion that the City of Lansing’s ordinance is unenforceable. Armed with this decision, ABC and our firm plan a statewide campaign demanding immediate repeal of special interest prevailing wage ordinances maintained by other Michigan cities.
Should you wish to hear more about this case or how Masud Labor Law Group can assist your company or organization with its labor and employment law concerns, please feel free to contact any one of our talented and knowledgeable lawyers.