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The California Legislature passed AB 219 in 2015, expanding coverage of California’s prevailing wage law to include hauling and delivery of ready-mix concrete to public works projects, effective July 1, 2016 as California Labor Code § 1720.9.
On June 30, 2016, a group of ready-mix companies (that manufacture and deliver ready-mixed concrete directly to construction sites using their own drivers) filed a lawsuit in U.S. District Court in Los Angeles against the Department of Industrial Relations and the Division of Labor Standards Enforcement.
Plaintiffs claim that § 1720.9 was unconstitutional because it violates the Equal Protection Clause of the United States Constitution. Specifically, Plaintiffs allege that the new law arbitrarily singled out ready-mixed concrete suppliers for inclusion under the prevailing wage law while leaving out all other construction materials suppliers. In response, the state argued that ready-mix drivers have distinctive duties compared to drivers of other construction materials. For example, they use a specialized mixer vehicle to deliver custom formulated concrete that is highly perishable and there are a limited number of ready-mix suppliers that are large, sophisticated employers. With the guarantee of prevailing wages, skilled and capable workers may be encouraged to pursue ready-mix work, ensuring that buildings, dams, and bridges are structurally sound and that “that work of the highest quality is performed on those projects.” The state contends that these are among the many factors that provided the Legislature with a rational basis for applying AB 219 to only ready-mix drivers at the current time.
On March 6, 2017, the trial court judge agreed with the ready-mix companies and granted a “motion of summary judgment” against the state finding that it had no case and that the statute violated the Equal Protection Clause of the United States Constitution. On March 14, 2017, the court issued an injunction permanently enjoining the state from enforcing the statute. That same day, Defendants filed a notice of appeal of the judgment and permanent injunction in the Ninth Circuit Court of Appeals.
The fight over AB 219 is hardly over. On March 29, 2017 the state filed what is referred to as an “urgent motion” for stay of the permanent injunction pending appeal of the trial court’s ruling. In support of its request for a stay, the state argues that “if the permanent injunction is left undisturbed until the appeal is resolved, there will be great confusion for public agencies awarding public works contracts, higher-tier contractors, and ready-mixed suppliers about how to proceed with the bidding, contracting, and record-keeping aspects of ongoing and upcoming public works projects.” The state seeks a response to its stay request by April 21, 2017.
Where do things go from here? If the appellate judges agree with the trial judge’s rulings the state could appeal to the U.S. Supreme Court. If the appellate judges overturn the rulings, the case will go back to the trial court and likely proceed to trial. Alternatively, the state could return to the drawing board and rewrite the bill so that it expands prevailing wage coverage to similarly situated construction material delivery drivers.
Alison Gibbs is a trial lawyer and senior associate attorney at Hunt Ortmann, which specializes in construction and employment law. If you would like additional information about the subject matter of this bulletin, please contact Alison Gibbs at email@example.com.