Entrepreneurs sue township for illegal privilege to enter into a union – Michigan Capitol Confidential
Officials thumb their noses at 2015 ban on special treatment for unions in government contracts
A group of non-union construction companies are suing Meridian Township in Ingham County Court, claiming its officials blatantly violate a state ban on local governments from imposing effective wage mandates on contractors.
The lawsuit is the latest skirmish in a years-long battle between unions and private contractors who are excluded from government contracts for not paying what unions say is the going local rate for various trades and tasks. It was filed last month by the Associated Builders and Contractors-Greater Michigan Chapter.
Critics of the current wage demands argue that they lead to higher costs to taxpayers and denying opportunities to non-union businesses and their employees.
After years of effort and multiple setbacks, non-union contractors achieved historic victory in 2015 with Michigan’s passage Law on regulatory limitations on the work of local authorities. And in 2018, they prevailed again when lawmakers approved a measure, initiated by a petition, outlawing current wage mandates in state contracts.
The lawsuit alleges that a township policy adopted in 2020 (revised and called a “guideline” in March 2021) is “prima facie invalid”. He says the township has “an illegal policy” under the 2015 law, which prohibits a local government from requiring a contractor to “pay … a salary or benefits based on … the rates in force in the locality ”.
According to the official minutes of the March city council meeting, the ordinance was intended to demonstrate “solidarity with unions in the region and the state (and a) commitment to supporting jobs that offer a living wage, a secure retirement and good social benefits “.
“It’s important to take a stand now because if we don’t fight now it will spread,” said ABC-GMC President Angela Madarang. “We haven’t worked so hard for so many years … to give up now.”
William Fahey, a lawyer for Meridian Township, said in an interview last week that ABC’s claim about the 2015 law is incorrect. The law prohibits current wage requirements in private, but not public, contracts, he said.
Local government units retain the right to demand that their contractors pay “fair and not substandard” wages to their employees, he said.
The Michigan Supreme Court upheld this right in a 2016 case involving the city of Lansing, Fahey said.
ABC attorney Kraig Schutter said the latest lawsuit did not address the legality of existing local wage ordinances passed before 2015. But the 2015 statute clearly prohibits the Meridian Township ordinance enacted in 2020-2021, did he declare. Meridian Township’s official response to the lawsuit is expected in June.