Lead Opinion
A charter city entered into certain contracts for the construction of public buildings. A federation of labor unions then petitioned the superior court for a peremptory writ of mandate, asserting that the city must comply with California’s prevailing wage law notwithstanding local ordinances stating otherwise. The prevailing wage law requires that certain minimum wage levels be paid to contract workers constructing public works.
Under the state Constitution, the ordinances of charter cities supersede state law with respect to “municipal affairs” (Cal. Const., art. XI, § 5), but state law is supreme with respect to matters of “statewide concern” (California Fed. Savings & Loan Assn. v. City of Los Angeles (1991)
I. Facts
In 2006, the voters of the City of Vista in San Diego County approved a 0.5 percent sales tax to fund the construction and renovation of several public buildings. The proposed projects involved the seismic retrofit of an existing fire station and the construction of two new fire stations, a new civic center, a new sports park, and a new stagehouse for the city’s Moonlight Amphitheatre. At that time, Vista was a general law city.
The Vista City Council then authorized a special election for residents of the city to vote on a ballot measure that would change Vista from a general law city into a charter city. In the voter information pamphlet, the “City
The ballot measure passed with approximately 67 percent of the votes cast. Shortly thereafter, Vista amended a city ordinance to prohibit any city contract from requiring payment of prevailing wages unless (a) such payment is compelled by the terms of a state or a federal grant, (b) the contract does not involve a municipal affair, or (c) payment of the prevailing wage is separately authorized by the city council.
In October 2007, Vista’s city council adopted a resolution approving contracts to design and build two fire stations and authorizing the mayor to execute the contracts. The contracts did not require compliance with the state’s prevailing wage law. A court action by plaintiff followed.
Plaintiff State Building and Construction Trades Council of California, AFL-CIO (the Union), is a labor federation composed of 131 local unions, 16 district labor councils, and 22 local building trades councils that collectively represent more than 300,000 men and women working in the construction industry in California. The Union petitioned the San Diego County Superior Court for a peremptory writ of mandate to direct Vista and its officeholders to comply with the state’s prevailing wage law. Vista countered that prevailing wage issues are not a statewide concern, and that “charter cities have the legal right to determine whether or not to require ‘prevailing wages’ in local public works contracts that involve locally funded, ‘municipal affairs’ under the California Constitution and the laws governing charter cities.” The Union moved for issuance of a peremptory writ of mandate. The Union argued that the prevailing wage law “addresses important statewide concerns” and therefore it applies to charter cities “just as it applies to other cities.” In support of its petition, the Union submitted a declaration of its president, Robert L. Balgenorth, asserting the regional nature of the construction industry and describing apprenticeship training in that industry. Vista opposed the motion, arguing that as a matter of law “Charter Cities have fiscal control over local ‘municipal affairs’ and these Cities can determine whether to include ‘prevailing wage’ requirements in local public works contracts.”
The Union here appealed. In a two-to-one decision, the Court of Appeal affirmed the trial court. After observing that both the legislative record and the trial court record were inadequate to establish that application of the prevailing wage law to charter cities is necessary to protect regional labor markets, the Court of Appeal concluded that the Union had failed to prove the existence of a statewide concern. In the dissent’s view, however, the wage levels of contract workers constructing public works can have a depressive effect on regional wages, and therefore they are a statewide concern.
We granted the Union’s petition for review to decide whether the state’s prevailing wage law applies to charter cities.
II. Discussion
A. California’s Prevailing Wage Law
In 1931, the California Legislature enacted the state’s prevailing wage law.
Earlier the same year, Congress had enacted the Davis-Bacon Act (Pub.L. No. 71-798 (Mar. 3, 1931) 46 Stat. 1494, codified at 40 U.S.C.
When the California Legislature established the Labor Code in 1937, it replaced the 1931 Public Wage Rate Act with a revised, but substantively unchanged, version of the same law. (Stats. 1937, ch. 90, § 1720 et seq., pp. 241-246.) The 1937 law, like the 1931 law, directed the “body awarding any contract” to “ascertain the general prevailing rate of per diem wages in the locality ... for each craft or type of workman needed to execute the contract.” (Stats. 1937, ch. 90, § 1773, p. 243; see Stats. 1931, ch. 397, § 2, p. 910.) As a result of a 1976 amendment, the prevailing wage law now requires that local wage rates be determined by the Director of California’s Department of Industrial Relations rather than by the body awarding the contract (Stats. 1976, ch. 281, § 2, p. 587), but the prevailing wage law’s general purpose and scope remain largely unchanged.
Here, Vista contends that it need not comply with the prevailing wage law because the law invades Vista’s constitutionally guaranteed autonomy as a charter city. In resolving the issue, we begin with a brief overview of the home rule doctrine set forth in the California Constitution.
B. California’s Home Rule Doctrine
Charter cities are specifically authorized by our state Constitution to govern themselves, free of state legislative intrusion, as to those matters deemed municipal affairs. Article XI, section 5, subdivision (a) of the California Constitution provides: “It shall be competent in any city charter to provide that the city governed thereunder may make and enforce all ordinances and regulations in respect to municipal affairs, subject only to restrictions and limitations provided in their several charters and in respect to other matters they shall be subject to general laws. City charters adopted pursuant to this Constitution shall supersede any existing charter, and with respect to municipal affairs shall supersede all laws inconsistent therewith.” (Italics added.) The roots of this provision trace back more than 100 years.
In California Fed. Savings, supra,
Here, we reaffirm our view—first expressed 80 years ago (see City of Pasadena v. Charleville (1932)
C. Applicability of California’s Home Rule Doctrine Is a Question of Law
The Court of Appeal treated the dispute in this case as a factual one, and it characterized its decision against the Union in terms of a failure of proof. For example, the court observed: “[T]he question we face is whether either the
Thus, the Court of Appeal here did not hold that the wage levels of contract workers constructing a locally funded public work are categorically a municipal affair and not a statewide concern. Rather, the Court of Appeal held that the legislative record was inadequate to establish a statewide concern and that the Union had failed to prove its case in the trial court.
The Court of Appeal’s approach raises the question whether the determination of a statewide concern presents predominantly a legal or a factual question. Fundamentally, the question is one of constitutional interpretation; the controlling inquiry is how the state Constitution allocates governmental authority between charter cities and the state. The answer to that constitutional question does not necessarily depend on whether the municipal activity in question has some regional or statewide effect. For example, we have said that the salaries of charter city employees are a municipal affair and not a statewide concern regardless of any possible economic effect those salaries might have beyond the borders of the city. {Sonoma County Organization of Public Employees v. County of Sonoma (1979)
Of course, the inquiry is not wholly removed from historical, and hence factual, realities. In California Fed. Savings, supra, 54 Cal.3d at pages 17 to 18, for example, we said: “[C]ourts should avoid the error of ‘compartmentalization,’ that is, of cordoning off an entire area of governmental activity as either a ‘municipal affair’ or one of statewide concern. Beginning with the observation in Pac. Tel. & Tel. Co. v. City and County of S. F. [(1959)] 51 Cal.2d [766,] 111 [
Nevertheless, the question whether in a particular case the home rule provisions of the California Constitution bar the application of state law to charter cities turns ultimately on the meaning and scope of the state law in question and the relevant state constitutional provisions. Interpreting that law and those provisions presents a legal question, not a factual one. (County of Riverside v. Superior Court (2003)
Therefore, the Court of Appeal here gave too much weight to the Union’s asserted failure to prove its case, implying that the issue before the court was one of sufficiency of the evidence. The answer to whether the prevailing wage law can be applied constitutionally to charter cities is not conclusively determined solely by the evidentiary record in the trial court or by the legislative record. The question remains one of state constitutional interpretation. {County of Riverside, supra, 30 Cal.4th at pp. 286-287; Sonoma County, supra,
D. Application of California Fed. Savings’s Four-part Test
We now apply the four-part test of this court’s 1991 decision in California Fed. Savings, supra, 54 Cal.3d at pages 16 to 17, which we summarized at page 556, ante.
1. Whether the wages of contract workers constructing locally funded public works are a municipal affair
The wage levels of contract workers constructing locally funded public works are certainly a “municipal affair.” We said so explicitly in our 1932 decision in Charleville, supra,
We there held that the issue of wage levels of contract workers improving a city-owned reservoir was, as a matter of law, a “municipal affair.” (Charleville, supra,
It is apparent from our analysis in Charleville, supra,
2. Existence of an “actual conflict” between state law and charter city law
This court’s 1991 decision in California Fed. Savings, supra, 54 Cal.3d at pages 16-17, emphasized the importance of determining, as a matter of statutory construction, that state law actually conflicts with local law before proceeding to the difficult state constitutional question of which law governs a particular matter. Here, no party contends that California’s prevailing wage law exempts charter cities from its scope. Indeed, the prevailing wage law makes express reference to charter cities, defining “ ‘public works’ ” to include “[s]treet, sewer, or other improvement work . . .
3. Whether the wage levels of contract workers constructing locally funded public works is a statewide concern
When, as here, state law and the ordinances of a charter city actually conflict and we must decide which controls, “the hinge of the decision is the identification of a convincing basis for legislative action originating in extramunicipal concerns, one justifying legislative supersession based on sensible, pragmatic considerations.” (California Fed. Savings, supra,
We reached essentially the same conclusion when we addressed the question in our 1932 decision in Charleville, supra,
The Union points out that as a result of a 1976 amendment to the state’s prevailing wage law (Stats. 1976, ch. 281, § 2, p. 587), the wage levels mandated by that law are no longer set by the local body awarding the
In a related argument, the Union contends that the economy of the state has become more integrated during the 80 years since this court’s 1932 decision in Charleville, supra,
The Union further notes that the state’s prevailing wage law now requires contractors on public works projects to hire apprentices from state-approved apprenticeship programs, thereby ensuring the proper training of the next generation of skilled construction workers. (Lab. Code, § 1777.5.) The Union contends that this requirement of the prevailing wage law is essential to California’s long-term economic health. If the prevailing wage law did not include this requirement, the Union argues, then construction contractors bidding competitively on public works projects would refuse to hire apprentices, in an effort to reduce costs; apprentices then might not be able to obtain enough work to support themselves and to complete their on-the-job training requirement. The Union asserts that the training of the next generation of skilled construction workers is a statewide concern, not merely a local concern, and the prevailing wage law has become an integral part of the state’s scheme for training these workers.
These arguments by the Union underscore the importance of identifying correctly the question at issue. Certainly regional labor standards and the proper training of construction workers are statewide concerns when considered in the abstract. But the question presented here is not whether the state government has an abstract interest in labor conditions and vocational training. Rather, the question presented is whether the state can require a charter city to exercise its purchasing power in the construction market in a
The Union’s arguments also conflict with our previous decisions. In Sonoma County, supra,
As discussed above, Sonoma County, supra,
More recently, in County of Riverside, supra,
Although the three cases just cited—Sonoma County, supra,
Significantly, this case is not like others in which we found a statewide concern to justify the application of a state law to charter cities. For example, our cases have suggested that a state law of broad general application is more likely to address a statewide concern than one that is narrow and particularized in its application. (S.F. Labor Council, supra, 26 Cal.3d at pp. 789-790; Charleville, supra,
Here, the state law at issue is not a minimum wage law of broad general application; rather, the law at issue here has a far narrower application, as it pertains only to the public works projects of public agencies. In
We are aware that the Legislature has recently stated that the wage levels of contract workers constructing locally funded public works are a matter of statewide concern. The Legislature’s view is expressed in two amendments to the prevailing wage law, one in 2002 and the other in 2003, each addressing a relatively narrow category of public works. Uncodified sections of both amendments state: “It is a matter of statewide concern that every public agency in California pay the prevailing rate of per diem wages to workers employed on public works projects undertaken by those public agencies.” (Stats. 2003, ch. 851, § 1, p. 6247, italics added; Stats. 2002, ch. 892, § 1, p. 5541, italics added; see Stats. 2002, ch. 868, § 1, p. 5455.) Likewise, a 2003 concurrent resolution of the Legislature stated in relevant part: “[T]he Legislature reaffirms its intent for the state prevailing wage law to apply broadly to all projects subsidized with public funds, including the projects of chartered cities, as the law addresses important statewide concerns . . . .” (Sen. Cone. Res. No. 49, Stats. 2003 (2003-2004 Reg. Sess.) res. ch. 135, pp. 6833-6834.)
But as we noted earlier (see pt. H.C., ante), the Legislature’s view as to what constitutes a statewide concern is not determinative in resolving the constitutional question before us. This court considered similar legislative findings in regard to the statute requiring The Regents of the University of California to pay prevailing wages, and the court concluded that those findings were not controlling. (S.F. Labor Council, supra, 26 Cal.3d at pp. 790-791; see County of Riverside, supra, 30 Cal.4th at pp. 286-287.) Although we give such statements by the Legislature great weight (Baggett v. Gates, supra,
Disposition
We affirm the judgment of the Court of Appeal, which in turn affirmed the trial court’s judgment denying the Union’s petition for a writ of mandate.
Cantil-Sakauye, C. J., Baxter, J., Chin, J., and Corrigan, J., concurred.
Notes
“ ‘The Government Code classifies cities as either “general law cities” (cities organized under the general law of California) or “chartered cities” (cities organized under a charter). [Citations.] ... [A] general law city . . . must comply with state statutes that specify requirements for entering into contracts. [Citations.]’ ” (City of Orange v. San Diego County Employees Retirement Assn. (2002)
The prevailing wage law replaced a law from the late 19th century that required payment of at least $2 per day for labor on public works. (Stats. 1897, ch. 88, § 1, p. 90.)
Proposition 13, an initiative measure that the California electorate passed on June 6, 1978, added article XIII A to the California Constitution, placing significant limits on the taxing power of local and state governments.
Dissenting Opinion
This case requires that we resolve a dispute between the Legislature and a charter city, two entities granted specific lawmaking authority by our state Constitution. On the one hand, “[t]he legislative power of this State is vested in the California Legislature which consists of the Senate and Assembly . . . .” (Cal. Const., art. IV, § 1.) The state Legislature wields “the entire law-making authority of the state, except the people’s right of initiative and referendum” and “may exercise any and all legislative powers which are not expressly or by necessary implication denied to it by the Constitution.” (Methodist Hosp. of Sacramento v. Saylor (1971)
In this case, the Legislature exercised its lawmaking powers to enact sections 1720 to 1861 of the Labor Code, commonly referred to as the prevailing wage law, which generally requires payment of the prevailing wage to workers on publicly funded construction projects. By contrast, defendant City of Vista (Vista), a charter city, exercised its lawmaking powers to enact an ordinance that (in most instances) prohibits city contracts from requiring the payment of the prevailing wage. In this area of overlapping lawmaking authority, a constitutional tension exists.
This court is the final arbiter of the meaning of the California Constitution. Unlike when we interpret state statutory law or federal constitutional law,
The majority’s approach to this case is neither fair nor reasonable. Instead, the majority goes astray by making a series of analytical missteps. First, in concluding Vista’s ordinance comes within the protected zone of municipal affairs, the majority places unjustified weight on Vista’s fiscal interest in saving money on the construction of public buildings, and relies on an outmoded “Depression Era” decision that interpreted a different law (maj. opn., ante, at pp. 558-559) long ago eclipsed by more modem economic ideas.
Second, by failing to appreciate the full impact of the prevailing wage law, the majority significantly undervalues the statewide economic concerns the law addresses, and fails to accord appropriate weight to the Legislature’s express findings and declarations that the prevailing wage law should apply to charter cities and that it addresses a matter of statewide concern. Finally, the majority fails to recognize the difference—critical in the context of municipal governance and independence—between state regulations affecting public employees and those affecting private employees who contract with the city.
For these reasons, I dissent.
I. Discussion
As the majority recognizes, we resolve disputes over the scope of the municipal affairs doctrine by applying the test set forth in California Fed. Savings & Loan Assn. v. City of Los Angeles (1991)
Requiring a showing of “statewide concern” as a condition of “state legislative supremacy” requires the state to articulate a dimension to the state law that “demonstrably transcend[s] identifiable municipal interests.” (California Fed. Savings, supra,
As the majority acknowledges, the issue we decide today is a legal, not a factual, one (maj. opn., ante, at p. 558), and in resolving it we must undertake an evaluation of the facts and circumstances of each individual case, exercising independent review. {California Fed. Savings, supra,
A. Does Vista’s Ordinance Come Within the Protected Zone of Municipal Affairs?
The majority asserts that “[t]he wage levels of contract workers constructing locally funded public works are certainly a ‘municipal affair.’ ” (Maj. opn., ante, at p. 558.) No citation to authority is required to conclude that the provision and financing of a proper city infrastructure, whether it be housing, hospitals, libraries or other civic buildings, is the business of a city, chartered or otherwise. Vista has imposed a citywide sales tax increase to pay for the cost of the design, construction and renovation of some of its civic buildings. That these costs are to be borne by Vista alone, and not shared by the state, is a significant factor in favor of finding the public works at issue fall within the municipal affairs doctrine. (See Southern California Roads Co. v. McGuire (1934)
The question, however, is not whether the design and physical construction of Vista’s civic buildings constitute a municipal affair, as they do, but whether Vista’s choice not to require the private construction firms with which it has contracted (or will contract) to pay the state prevailing wage to its construction worker employees is also a matter within the city’s municipal affairs. Vista contends a charter city’s internal fiscal affairs, including labor and employment issues, necessarily fall within the municipal home rule doctrine. Of relevance is section 5, subdivision (b) of article XI of the California Constitution, which provides a nonexclusive list of the types of matters falling within the municipal home rule doctrine. That section provides: “It shall be competent in all city charters to provide, in addition to those provisions allowable by this Constitution, and by the laws of the State for: (1) the constitution, regulation, and government of the city police force (2) subgovernment in all or part of a city (3) conduct of city elections and (4) plenary authority is hereby granted, subject only to the restrictions of this article, to provide therein or by amendment thereto, the manner in which, the method by which, the times at which, and the terms for which the several municipal officers and employees whose compensation is paid by the city shall be elected or appointed, and for their removal, and for their compensation, and for the number of deputies, clerks and other employees that each shall have, and for the compensation, method of appointment, qualifications, tenure of office and removal of such deputies, clerks and other employees.”
In light of this constitutional provision, the salary level of the mayor and city council members clearly falls within a city’s municipal affairs, as does the compensation level of the “city police force” as well as those city employees involved in the “subgovernment in all or part of a city” such as “deputies, clerks and other employees.” (Cal. Const., art. XI, § 5, subd. (b), italics added; see Bishop v. City of San Jose, supra,
But the more removed workers are from the heart of city government, the less the city’s legitimate interest in controlling their compensation. This case, for example, involves no Vista employee. Vista has contracted (or intends to contract) with private design and construction firms, which in turn have hired (or will hire) private construction workers, who will be paid not by Vista but by the construction firms. If a firm underbids the project, it is the firm, not the
To reach its conclusion that Vista’s zone of protected municipal affairs nevertheless includes the wages of private construction workers, the majority relies uncritically on City of Pasadena v. Charleville (1932)
Contrary to Charleville’s premise that the United States Constitution prohibited state legislatures from imposing a minimum wage law, that the California Legislature may provide for minimum wages for workers is now firmly established. (Cal. Const., art. XIV, § 1 [“The Legislature may provide for minimum wages and for the general welfare of employees . . . .”].) Accordingly, whether a state may enforce laws such as the prevailing wage law to address matters of statewide concern has been untethered from the artificially created constitutional constraints of the Lochner era.
In light of this erosion of the legal assumptions underlying Charleville, supra, 215. Cal. 384, and because the PWRA of 1931 was markedly less extensive than the modem prevailing wage law, Charleville cannot be considered persuasive today. Moreover, given the obvious changes to our state’s economy since 1932 when Charleville was decided, i.e., its growth
Because Vista’s interest in controlling the wages of private contract workers is much less than its interest in dictating wage levels of its own employees, and absent the legitimizing effect of Charleville, supra,
. B. Does the Prevailing Wage Law Address a Matter of Statewide Concern?
The relative strength of Vista’s interest in preserving its public fisc aside, the crux of this case is the majority’s conclusion that the prevailing wage law fails to address a matter of statewide concern. (Maj. opn., ante, at p. 566.) In reaching that conclusion, the majority disregards the prevailing wage law’s far-reaching economic impact on our state economy. The Legislature has recognized the scope of the prevailing wage law’s statewide effect, having explicitly declared its intent in 2002 that “[p]ayment of the prevailing rate of per diem wages to workers employed on public works projects is necessary to attract the most skilled workers for those projects and to ensure that work of the highest quality is performed on those projects” (Stats. 2002, ch. 892, § 1, subd. (a)(1), p. 5541), that “[p]ublic works projects should never undermine the wage base in a community, and requiring that workers on public works projects are paid the prevailing rate of per diem wages ensures that wage base is not lowered” (id., subd. (a)(2)), and that it is a matter of “statewide concern” that public works undertaken by public agencies pay workers the
These legislative statements are entitled to great weight (California Fed. Savings, supra,
Even aside from the Legislature’s considered views, that the prevailing wage law addresses substantial statewide concerns that would be undermined were charter cities allowed to opt out of the law is not a close question. As a general matter, we have held that the promotion of uniform fair labor standards is an important statewide concern sufficient to override local prerogatives. For example, we held in People ex rel. Seal Beach Police Officers Assn. v. City of Seal Beach, supra,
Similarly, in Professional Fire Fighters, Inc. v. City of Los Angeles, supra,
The prevailing wage law is to the same effect. Article XIV of the California Constitution is entitled “Labor Relations.” Section 1 of that article provides that “[t]he Legislature may provide for minimum wages and for the general welfare of employees . . . .” The Legislature is thus granted specific constitutional authority to address labor issues on a statewide scale. It exercised that power by enacting the Labor Code, providing expressly that “[i]t is the policy of this state to vigorously enforce minimum labor standards in order to ensure employees are not required or permitted to work under substandard unlawful conditions or for employers that have not secured the payment of compensation, and to protect employers who comply with the law from those who attempt to gain a competitive advantage at the expense of their workers by failing to comply with minimum labor standards.” (Lab. Code, § 90.5, subd. (a).)
By first enacting the PWRA in 1931, and then replacing it a few years later with the much expanded prevailing wage law, the Legislature created an economic framework, applicable throughout the state, protecting Californians who work in the construction trades and, by extension, the viability of the construction industry as a whole. “The overall purpose of the prevailing wage law is to protect and benefit employees on public works projects.” (Lusardi Construction Co. v. Aubry (1992)
The evolution of the modem prevailing wage law strongly supports the Legislature’s considered view that the wages paid on publicly funded construction projects impacts more than local concerns. As the majority recognizes (maj. opn., ante, at pp. 560-562), wage schedules are now established at the state rather than the local level, and the state Director of the Department of Industrial Relations considers wage levels throughout regional economies instead of focusing on a particular locality. This “trend toward economic regionalization” (maj. opn., ante, at p. 561) makes sense in the modem, post-1932 world (see dis. opn., ante, at p. 570) where, as an expert for plaintiff State Building and Construction Trades Council of California, AFL-CIO (SBCTC) testified below, construction workers travel many miles from their homes to jobsites in the region. To allow Oakland to pay construction workers significantly less than Berkeley, or Anaheim less than Santa Ana, would logically create downward pressure on wages
The prevailing wage law supports the statewide economy in a second way, mentioned but discounted by the majority (maj. opn., ante, at pp. 560-562), requiring contractors on public works projects to participate in a statewide apprenticeship program. This program allows apprentices in the construction trades to learn on the job, ensuring the state will be supplied with a steady stream of skilled and semiskilled workers in the construction industry. “Between April and June 1994, California had 175 joint apprenticeship
Allowing charter cities to opt out of the prevailing wage law undermines this program by affording them the benefit of it (by using workers trained in state apprenticeship programs) without their paying for the privilege. In his declaration below, SBCTC’s expert explained: “Because of the unstable nature of construction-industry employment, a particular contractor might not be willing to invest the resources in training an apprentice for a multi-year period and might not be able to expose individual apprentices to all the different work processes necessary to become a journey-level worker in the craft. The current system of multi-employer apprenticeship programs allows the industry to share the costs, burdens and rewards of training new workers. The success of apprenticeship programs is vital to training the next generation of skilled construction workers in California.”
“The prevailing wage law bolsters the State’s apprenticeship training system by requiring contractors on public work who employ workers in apprenticeable crafts to use apprentices from state-approved programs to meet a specified minimum ratio of apprentice hours to journeyperson hours. The contractors are permitted to pay these apprentices at a lower wage rate. In this way, the prevailing wage law provides employment for apprentices so they can obtain the necessary on-the-job training in a variety of work processes to graduate from the programs.” “Absent the prevailing wage law, contractors that invest in apprenticeship training would find themselves at a competitive disadvantage to contractors that do not invest in apprenticeship training. Non-participating contractors could seek to hire apprenticeship-program graduates without having contributed to the cost of their training.”
Against the considerable weight of the evidence that the prevailing wage law addresses an issue of statewide concern, the majority’s answer is not to engage the issue, but to reframe the question. The majority thus asserts that the question is not whether regional labor standards and apprenticeship programs address an issue of statewide concern, but whether “the state can require a charter city to exercise its purchasing power in the construction
Moreover, in focusing narrowly on Vista’s costs, the majority fails to adhere to the California Fed. Savings test that requires us to use a wide-angle lens, cautioning that “courts should avoid the error of ‘compartmentalization,’ that is, of cordoning off an entire area of governmental activity as either a ‘municipal affair’ or one of statewide concern.” (California Fed. Savings, supra,
Finally, in reframing the question, the majority gives the prevailing wage law a cramped and limited construction, failing to appreciate the sweeping nature of the legislation and viewing it instead as an unwarranted control on local spending priorities. But courts must give the prevailing wage law a liberal construction so that the general purpose and goals of the law are not defeated. (City of Long Beach v. Department of Industrial Relations, supra,
Having reframed the issue to be decided, the majority asserts the case is controlled by Sonoma County Organization of Public Employees v. County of Sonoma, supra,
The majority inexplicably finds this key factor “irrelevant.” (Maj. opn., ante, at p. 564.) But a charter city’s power to control the compensation of its employees, especially those integral to municipal governance, is expressly recognized by the state Constitution. (Cal. Const., art. XI, § 5, subd. (b).) The compensation of private contract workers is not.
II. Conclusion
The California Legislature long ago decided that stabilizing the construction trades and ensuring a steady supply of skilled and semiskilled workers in those trades was beneficial to our state’s long-term economic health. Accordingly, the Legislature, like many other states,
Because the majority mistakenly characterizes Vista’s interest in saving money on its construction projects as falling within the municipal affairs doctrine, and concomitantly fails to accord sufficient weight to the obvious statewide economic interests served by the prevailing wage law, I dissent.
Liu, 1, concurred.
See Lochner v. New York (1905)
“Neither the State nor any county, political subdivision, incorporated city, town, nor any other municipal corporation shall prohibit, deny or obstruct the right of firefighters to join any bona fide labor organization of their own choice.” (Lab. Code, § 1960.)
The prevailing wage law affects more than just wages. As SBCTC’s expert stated below: “Throughout the State, local craft unions and district labor councils have negotiated master labor agreements with contractors’ associations that establish wages, fringe benefits and other terms of employment. These collective bargaining agreements provide for uniform hourly wages, regardless of the contractor that is employing the worker, and require contractors to contribute to the same multi-employer benefits plans, so workers will enjoy health care and pension benefits notwithstanding the lack of continuous employment with a single contractor. This labor relations structure enables signatory contractors to respond to fluctuating demands for labor and enables construction workers to maintain steady employment and to receive health and pension benefits that protect them and their families.” (See Lab. Code, § 1773.1, subd. (a) [per diem wages under the prevailing wage law “shall be deemed to include employer payments for” health and welfare, pension, and vacation benefits]; see also Franchise Tax Bd. v. Laborers Vacation Trust (1983)
Thirty-one states have enacted a prevailing wage law. (Alaska Stat. §§ 36.05.010 to 36.05.900; Ark. Code Ann. §§ 22-9-301 to 22-9-315; Conn. Gen. Stat. §§ 31-53 to 31-55a; Del. Code Ann. tit. 29, § 6960; Haw. Rev. Stat. §§ 104-1 to 104-4; 820 Ill. Comp. Stat. 130/1 to 130/12; Ind. Code Ann. §§ 5-16-7-1 to 5-16-7-5; Kan. Stat. Ann. § 68-2317 [for highway contracts]; Ky. Rev. Stat. Ann. §§ 337.505 to 337.550; Me. Rev. Stat. Ann. tit. 26, §§ 1303 to 1314; Md. Code Ann., State Fin. & Proc. Code, §§ 17-201 to 17-226; Mass. Gen. Laws ch. 149, §§ 26 to 27H; Mich. Comp. Laws §§ 408.551 to 408.558; Minn. Stat. §§ 177.41 to 177.44; Mo. Rev. Stat. §§ 290.210 to 290.340; Mont. Code Ann. §§ 18-2-401 to 18-2-432; Nev. Rev. Stat. §§ 338.020 to 338.095; N.J. Stat. Ann. §§ 34:11-56.25 to 34:11-56.47; N.M. Stat. Ann. §§ 13-4-10.1 to 13-4-17; N.Y. Labor Law § 220.3(a); Ohio Rev. Code Ann. §§ 4115.03 to 4115.16; Or. Rev. Stat. §§ 279C.800 to 279C.870; 43 Pa. Cons. Stat. §§ 165-1 to 165-17; R.I. Gen. Laws §§ 37-13-1 to 37-13-17; Tenn. Code Ann. §§ 12-4-401 to 12-4-415; Tex. Gov’t Code Ann. §§ 2258.001 to 2258.058; Vt. Stat. Ann. tit. 29, § 161 [for state construction projects]; Wn. Rev. Code §§ 39.12.010 to 39.12.900; W.Va. Code §§ 21-5A-1 to 21-5A-11; Wis. Stat. § 66.0903; Wyo. Stat. Ann. §§ 27-4-401 to 27-4-413; see Guam Code Ann. tit. 5, ch. 50, § 50105.)
See the Davis-Bacon Act (Mar. 3, 1931, ch. 411, 46 Stat. 1494, codified at 40 U.S.C. §§ 3141-3148); U.S. v. Binghamton Construction Co. (1954)
See Los Angeles Administrative Code, division 10, chapter 1, article 1, section 10.7.1 (requiring payment of the prevailing wage in all city contracts); id., section 10.7 (specifically waiving the city’s rights under the municipal affairs doctrine); see also San Francisco Administrative Code, chapter 6, article U, section 6.22(E) (“All contractors and subcontractors
There are 120 charter cities in the state of California. SBCTC states in its brief that more than half the state’s population lives in charter cities.
The Legislature recently acted to specify that if a charter city’s ordinance prohibits consideration of a project labor agreement (defined by Pub. Contract Code, § 2500, subd. (b)(1) as a “prehire collective bargaining agreement that establishes terms and conditions of employment,” including wages) for a public works project, “state funding or financial assistance shall not be used to support that project” (Pub. Contract Code, § 2502). (Both provisions added by Stats. 2011, ch. 431, § 2, enacting Sen. Bill No. 922 (2011-2012 Reg. Sess.).) The history of this legislation notes that the law was deemed necessary because “[s]everal counties (Stanislaus, Orange and San Diego) and Charter Cities (Chula Vista and Oceanside) have banned [project labor agreements] . . . .” (Assem. Com. on Business, Professions and Consumer Protection, Rep. on Sen. Bill No. 922 (2011-2012 Reg. Sess.) as amended Sept. 2, 2011, p. 3.)
Just this year, the Legislature returned to the subject and highlighted its commitment to give localities the option of using project labor agreements. Section 2503, added to the Public Contract Code, provides that if a charter city’s ordinance “prohibits, limits, or constrains in any way the governing board’s authority or discretion to adopt, require, or utilize a project labor agreement, . . . then state funding or financial assistance shall not be used to support any construction projects awarded by the city.” (Stats. 2012, ch. 11, § 1.) Both new laws are not effective until January 15, 2015, to allow cities to repeal ordinances that establish blanket bans on project labor agreements.
Dissenting Opinion
I join Justice Werdegar’s dissent. I write separately to highlight additional shortcomings in the court’s analysis that prevent it from properly resolving this case.
The court holds that article XI, section 5 of the California Constitution, the municipal home rule provision, bars the Legislature from requiring charter cities to pay prevailing wages to construction workers on public works projects. While generally stating the applicable law correctly, the court fails to bridge the wide analytical gap between that law and the result it reaches. The court employs a vague analysis that puts great weight on a few factors while refusing to consider other factors that the opinion itself concedes are pertinent to determining whether the prevailing wage law should apply to charter cities. As a result, no clear legal principle emerges from the court’s opinion, even as it repeatedly insists that the issue before us is a question of law.
Today’s decision is a misstep as a matter of method as well as result. Unlike cases where a state law limits a municipal prerogative specifically protected by constitutional text, the instant dispute is one “with no unmistakable signs to guide us between the domain of state and local powers.” (Ex parte Daniels (1920)
I.
Article XI, section 5, subdivision (a) of the California Constitution provides: “It shall be competent in any city charter to provide that the city governed thereunder may make and enforce all ordinances and regulations in respect to municipal affairs, subject only to restrictions and limitations provided in their several charters and in respect to other matters they shall be subject to general laws. City charters adopted pursuant to this Constitution shall supersede any existing charter, and with respect to municipal affairs shall supersede all laws inconsistent therewith.” Subdivision (b) further provides: “It shall be competent in all city charters to provide, in addition to those provisions allowable by this Constitution, and by the laws of the State for: (1) the constitution, regulation, and government of the city police force[,] (2) subgovernment in all or part of a city[,] (3) conduct of city elections[,] and (4) plenary authority is hereby granted, subject only to the restrictions of this article, to provide therein or by amendment thereto, the manner in which, the method by which, the times at which, and the terms for which the several municipal officers and employees whose compensation is paid by the city
As the court correctly states, under this article “the ordinances of charter cities supersede state law with respect to ‘municipal affairs’ . . . but state law is supreme with respect to matters of ‘statewide concern.’ ” (Maj. opn., ante, at p. 552, citation omitted.) Determining what constitutes a “municipal affair” or a “matter of statewide concern” in the course of resolving conflicts between state mandates and municipal prerogatives has not been an easy task. Nevertheless, several important principles have emerged from our cases.
First, when we have considered California Constitution article XI, section 5 and similar constitutional home rule provisions for counties and for the University of California, we have been most protective of home rule prerogatives explicitly recognized in the text of our Constitution. Most prominently, we have limited or invalidated state laws that unduly interfere with the prerogative of local governments to set the salaries of their own employees. (See County of Riverside v. Superior Court (2003)
Second, in determining whether a state statute may be applied to a charter city, we have examined the “extramural” or “extramunicipal” dimension of the statute—that is, the reach of the statute beyond merely controlling local matters. (California Fed. Savings & Loan Assn. v. City of Los Angeles (1991)
Fourth, in considering what constitutes a municipal affair or statewide concern, “courts should avoid the error of ‘compartmentalization, ’ that is, of cordoning off an entire area of governmental activity as either a ‘municipal affair’ or one of statewide concern.” (CalFed, supra,
A corollary of this fourth principle is that in order to determine the shifting boundaries between state and municipal legislative power, courts will engage in a factual inquiry to understand the nature of historical changes relevant to the determination. In some cases, the evidence considered will be general, judicially noticeable facts. (See, e.g., Pacific Telephone, supra,
Finally, and critically, we have long held that “[w]hen there is a doubt as to whether an attempted regulation relates to a municipal or to a state matter, or if it be the mixed concern of both, the doubt must be resolved in favor of the legislative authority of the state.” (Abbott v. City of Los Angeles (1960)
With these principles in mind, let us now examine today’s opinion.
II.
The court ignores or misapplies the principles above in conducting its analysis. First and foremost, the court discounts as irrelevant the record evidence demonstrating the state’s extramunicipal interest in supporting construction labor markets and apprenticeship programs. Although the Court of Appeal below concluded that the evidentiary record and legislative findings
But the court jousts with a strawman. No one suggests that factual findings by the Legislature or trial court should be “controlling.” The important point, amply supported by our precedents (see ante, at pp. 581-582), is that such findings are relevant to the inquiry. The court actually acknowledges this point, as it must, when it says “[o]f course, the inquiry is not wholly removed from historical, and hence factual, realities” (maj. opn., ante, at p. 557) and then recites the above quoted guidance from CalFed, supra, 54 Cal.3d at pages 17-18, emphasizing the factual and historical nature of the inquiry. This recitation turns out to be an empty gesture, however, for one searches in vain for any discernible application of CalFed’s guidance in the court’s analysis of the prevailing wage law. Simply put, there is none.
That is not to say that the historical and factual justifications for the prevailing wage law go unmentioned in today’s opinion. The court devotes four detailed paragraphs to describing a declaration submitted by an expert for plaintiff State Building and Construction Trades Council of California, AFL-CIO. (Maj. opn., ante, at pp. 560-562.) As the court says, the declaration explains file prevailing wage law’s beneficial effects on construction labor markets, the increasing regionalization of those labor markets as workers travel long distances to a jobsite, the fact that wages are generally set regionally rather than locally, and the importance of the prevailing wage law in supporting apprenticeship programs that train the next generation of skilled workers. (Ibid.)
After reading this lengthy and quite plausible explanation of why the Legislature enacted the prevailing wage law, one might expect some analysis that examines how much weight the historical and factual underpinnings of the law should have in determining whether it addresses a matter of statewide concern. One might expect some explanation, in light of the court’s holding, of why the record falls short of identifying “a convincing basis for legislative action originating in extramunicipal concerns, one justifying legislative super-session based on sensible, pragmatic considerations.” (CalFed, supra,
This passage merits several comments. To begin with, in labeling the state’s interest “abstract,” the court does nothing more than employ a rhetorical device to diminish the importance of that interest. The court does not explain in what sense the state’s interest in supporting regional labor markets and apprenticeship programs designed to maintain a highly skilled, well-paid construction workforce throughout California is “abstract.” Surely the court is not faulting the Legislature, the representative body for our entire state, for legislating on the basis of labor market trends, public policy goals, and laws of supply and demand that have not been particularized to, say, the City of Vista or San Diego County. If the court is instead using “abstract” to mean that the Legislature has not sufficiently demonstrated that the prevailing wage law will truly benefit regional labor markets and support apprenticeship programs, then one would expect the court to hold, with the Court of Appeal, that there was insufficient evidence in the record to establish the law’s efficacy. But the court rejects that position, so the sufficiency of the evidence cannot really be the court’s concern.
If the court uses the term “abstract” to mean that the present inquiry requires us to consider the statewide concern not in isolation but in relation to the asserted municipal interests, then I agree. But if we are to assess the relative strengths of the state and local interests, then why should we not look to evidence bearing on the respective strengths of those interests? That is precisely the kind of evidence we examined in CalFed to determine that the state acted constitutionally in eliminating what had formerly been a local prerogative. (CalFed, supra, 54 Cal.3d at pp. 21-24 & fn. 21.) It is also the kind of evidence pertinent to assessing whether the extramunicipal dimension of the state law at issue is robust or trivial. (See ante, at p. 580.) Yet the court simply dismisses the state interest as “abstract” without any meaningful evaluation of its factual and historical underpinnings.
While forcefully invoking the city’s fiscal interests (see maj. opn., ante, at p. 562 [“Autonomy with regard to the expenditure of public fluids lies at the heart of what it means to be an independent governmental entity.”]), the court does not acknowledge, much less grapple with, the readily apparent limitations on this rationale for immunizing a charter city from an otherwise applicable state law. Instead, the court opts for an undiscriminating, categorical approach that holds the prevailing wage law inapplicable to charter cities, no matter how strong the state’s interest or how slight the intrusion into the charter city’s treasury. Notably, the City of Vista has not put forward any evidence indicating how much, if at all, the prevailing wage law would increase the city’s costs for the public works projects at issue. One might wonder, on the principle that you get what you pay for, whether the higher wages required by the prevailing wage law are at least partially offset by the
The extremity of such a conclusion is a symptom of additional problems with the court’s categorical approach. The majority relies on precedent, chiefly this court’s 80-year-old decision in City of Pasadena v. Charleville (1932)
It is beyond dispute that construction labor markets have become increasingly regional since Charleville was decided. (Maj. opn., ante, at p. 561; dis. opn. of Werdegar, J., ante, at p. 574.) Given that fact as well as obvious and important changes in the legal landscape since 1932, it is mystifying that the court does not flinch in continuing to follow a Lochner-era precedent built on Lochner-era premises. (Lochner v. New York (1905)
Even without CalFed’s specific instruction to analyze the constitutional concept of municipal affairs on the basis of changing historical circumstances, there is ample reason to reconsider Charleville under the doctrine of stare decisis. That doctrine authorizes a court to revisit precedent when “related principles of law have so far developed as to have left the old rule no more than a remnant of abandoned doctrine [citation]” and when “facts have so changed, or come to be seen so differently, as to have robbed the old rule of significant application or justification [citation].” (Planned Parenthood of Southeastern Pa. v. Casey (1992)
In addition to relying on questionable precedent, the court reaches its categorical holding by denying any relevant distinction between a charter city’s interest in controlling the wages of its own employees and its interest in controlling the wages of employees of private contractors building public works: “If, as the Union contends, the prevailing wage law’s shift from a purely local focus to a regional focus has made the wage levels of workers constructing locally funded public works a matter of statewide concern, then that would be true whether the case involved public employees or private employees.” (Maj. opn., ante, at p. 564.) This statement is the predicate for the court’s reliance on our cases holding that the Legislature may not directly dictate the compensation of charter city employees. (Id. at pp. 562-564, discussing County of Riverside v. Superior Court, supra,
But the court’s position ignores key differences in the nature of the local interest involved. Most importantly, municipal control of employee compensation, unlike control of the wages of contract employees, is explicitly protected by the text of article XI, section 5, subdivision (b) of the California Constitution and similar constitutional home rule provisions. (See ante, at pp. 579-580.) Moreover, as a practical matter, the two types of control are not comparable. Employee salaries make up the vast majority of a municipality’s budget. In Los Angeles, for example, employee salaries comprise 85 percent of the budgets of city departments. (See Los Angeles Mayor Antonio Villaraigosa, Mayor’s Office Web site, Balanced Budget, Frequently Asked Questions,
The court relies on two other factors to support its holding. First, it contends that “a state law of broad general application is more likely to address a statewide concern than one that is narrow and particularized in its application.” (Maj. opn., ante, at p. 564.) “[T]he state law at issue is not a minimum wage law of broad general application; rather, the law at issue here has a far narrower application, as it pertains only to the public works projects of public agencies.” (Ibid.) This lack of general application “further undermine[s] the Union’s assertion that the matter here presents a statewide concern and therefore requires Vista, a charter city, to comply with the state’s prevailing wage law on the city’s locally funded public works projects.” (Id. at p. 565.)
I agree that the general applicability of a state law to public as well as private entities supports the conclusion that the law has an important extra-municipal dimension. However, as a matter of fact and logic, there is no reason to suppose that a state law’s lack of general applicability means it does not have a significant extramunicipal dimension. The court asserts that, in contrast to a minimum wage law, “the law at issue here has a far narrower application, as it pertains only to the public works projects of public agencies.” (Maj. opn., ante,' at p. 564, italics added.) Yet public works projects are a multibillion-dollar annual enterprise in California, and charter cities, which contain over half the state’s population (see dis. opn. of Werdegar, J., ante, at p. 578, fn. 7), no doubt account for a substantial share of those dollars. Instead of regulating this vast enterprise by imposing statewide minimum wages for construction workers through general legislation applicable to private and public entities, the Legislature has chosen to influence such wages through the market-based approach of directing the purchasing power of public entities to support union-level wages. Instead of indicating that the prevailing wage law is not a matter of statewide concern, the application of the law only to public entities plausibly represents a
The other factor on which the court relies is that “state laws at issue set forth generally applicable procedural standards, and consequently impinged less on local autonomy than if they had imposed substantive obligations.” (Maj. opn., ante, at p. 564.) It is true that our decision in Seal Beach, upholding the MMBA’s “meet and confer” requirement, observed that the city council “retains the ultimate power to refuse an agreement and to make its own decision.” (Seal Beach, supra,
III.
Perhaps the most serious error in the court’s analysis is its disregard for the principle that doubts about whether a law is a matter of statewide concern must be resolved in favor of the legislative authority of the state. (Abbott v. City of Los Angeles, supra,
In fairness, there is no reason to expect that any single factor will properly resolve the case before us. The factors that the court does consider—the possible costs to the city, the law’s lack of general applicability, the law’s substantive as opposed to procedural character—may validly be used to assess the state’s and the city’s relative interests. But the court refuses to undertake a factual or historical inquiry to determine the relative strengths of the state and municipal interests, even though that is what our precedents instruct. The court refuses to reconsider Charleville, supra,
I have no objection to an all-things-considered approach to the present inquiry because it is probably the best we can do. But such an approach (1) must truly consider all relevant aspects of the inquiry, not just an arbitrary few; (2) should lead us to reach fairly limited holdings instead of categorical pronouncements; and (3) should cause us “to exercise more than the usual caution” before invalidating the work of a coequal, politically representative branch of government (Ex parte Daniels, supra,
As Justice Werdegar explains (dis. opn. of Werdegar, J., ante, at pp. 573-576), the record evidence indicates that the prevailing wage law is a reasonable means of supporting regional construction labor markets and apprenticeship programs. There is no question that the law interferes with municipal autonomy. But the law does not invade any local prerogative expressly protected by constitutional text. And it is not clear that the law’s interference with municipal autonomy is excessive in relation to the legitimate public purposes that the Legislature aims to achieve. There is, in this case, “a convincing basis for legislative action originating in extramunicipal
I respectfully dissent.
Werdegar, J., concurred.