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Court says local government policy runs afoul of union wage law

Texas Department of Transportation

The Michigan Court of Appeals says local governments cannot make paying union-level wages an automatic condition of awarding contracts. The unanimous decision by a three-judge panel, released Friday, says a policy adopted by Meridian Township in mid-Michigan violated a 2015 state law that made it illegal for governments to require contractors to pay their employees union-level wages.

The Meridian Township board did not enact an ordinance, but, instead, set “guidelines.” The appeals court held that was a meaningless distinction.

The judges unanimously held local governments can take wages into account when considering bids “… but they may not, as Meridian has done, adopt a blanket policy effectively barring bid awards to companies that do not pay prevailing wages.”

Jimmy Greene with the Associated Builders and Contractors of Michigan says prevailing wage requirements cost taxpayers money on publicly funded projects. He said his organization is disappointed the decision leaves room for local governments to give preferential treatment to contractors that pay union-level wages.

“We were a little dismayed by the idea that they added verbiage in there that gave kind of license to municipalities to supersede it or go around it – put it that way,” he told Michigan Public Radio.

The Meridian Township policy is similar to an executive order from Governor Gretchen Whitmer that is also being challenged in court.

But Greene said the focus of the fight over wages is going to move next year from the courts to the Legislature as Democrats are about to take control of the House and the Senate.

“You know, we’re just right now playing defense to see what’s going to come out of the Legislature before we do anything from a legal standpoint,” he said. “But what’s coming out of the Legislature come January, that’s a whole different issue. We don’t know.”

Incoming Senate Majority Leader Winnie Brinks said allowing prevailing wage requirements in government contracts is a priority.

“Senate Democrats will work to make sure our laws reflect our mission to restore the prevailing wage back to what it was before previous Republican leadership undercut the promise of living wages for the people who build our state,” she said in a statement to Michigan Public Radio.

Rick Pluta is Senior Capitol Correspondent for the Michigan Public Radio Network. He has been covering Michigan’s Capitol, government, and politics since 1987.