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Jeffer Mangels Butler & Mitchell LLP (JMBM) is proud to announce 18 of its attorneys have been selected by their peers for inclusion in the list of Best Lawyers in America®  for 2018.

Among those, three are members of JMBM’s Government, Land Use, Environment and Energy Group: Benjamin Reznik, Jon Welner and David Cincotta.

Benjamin M. Reznik, Chair of JMBM’s Government, Land Use, Environment and Energy Group
Ben’s practice emphasizes real estate development entitlements, zoning and environment issues, including frequent appearances before city planning commissions, city councils and other governmental boards and agencies on behalf of real estate development firms and various industries. Ben leads a group of distinguished attorneys that specialize in  CEQA and NEPA, air emissions, energy, licensing, government contracts, and has been described by Curbed LA as “the most powerful lobbyist in LA”.  Since joining JMBM in 1997, Ben has obtained project approvals for several million square feet of commercial space and several thousand  residential units valued in excess of $50 billion.

Jon Welner, Partner, Environmental Law and Chair, Prevailing Wage Group
Jon represents clients in all areas of environmental, natural resource, and land use law. His practice includes the regulation of air, water, hazardous substances, hazardous waste, radiological materials, contaminated properties (“Brownfields”), power plants, oil and gas facilities, coastal development, endangered species and other natural resources, as well as matters involving CEQA and NEPA, the Williamson Act (farmland preservation), OSHA/Cal-OSHA (workplace safety), and Prop 65 (chemicals in products).Jon is also recognized as one of the foremost practitioners of prevailing wage law in California and is frequently involved in complex and groundbreaking cases on behalf of developers, contractors, and manufacturers.

David Cincotta, Of Counsel, Land Use Law

David Cincotta specializes in obtaining land use entitlements for large commercial, mixed-use and residential developments in San Francisco and throughout Northern California. His practice focuses on land use, zoning and environmental law, and includes real estate transactions, real estate financing and historic preservation law. He is experienced in negotiating and documenting purchases, sales, commercial leases and financing of land and buildings for both commercial and residential projects. His clients include publicly owned corporations, real estate investment trusts, individuals, small firms and foundations with a concentration on real estate developers and property owners.

We congratulate all our lawyers who were honored by Best Lawyers® and recognize their dedication to providing our clients with outstanding results and exemplary service.

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PREVAILING WAGE LAW is California’s “other” minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose.  It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars—and can be brought years after construction is complete.

The U.S. Court of Appeals Has Revived AB 219 Once Again!

In a dizzying turn of events, the U.S. Court of Appeals has revived AB 219 for a second time. Less than three weeks ago, I posted an article describing how the U.S. District Court issued a permanent injunction overturning AB 219, effectively striking it down for the second time. Now it’s back!

A Quick Recap

AB 219 took effect on July 1, 2016. It applied California prevailing wage requirements to the delivery of ready-mix concrete to public works. This was big news for two reasons: (1) it hit the ready-mix concrete industry—and all of the businesses that depend on it—very hard; and (2) it represents the first time that prevailing wage requirements have been imposed on material suppliers (as opposed to on-site contractors).

On June 30, 2016—the day before AB 219 took effect—eight ready-mix companies filed a lawsuit in federal court challenging the constitutionality of the new statute on Equal Protection grounds. In essence, they argued it was unfair to single out ready-mix concrete companies for special treatment, leaving all other material suppliers unaffected. Continue reading

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PREVAILING WAGE LAW is California’s “other” minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose.  It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars—and can be brought years after construction is complete.

The U.S. District Court in Los Angeles has struck down AB 219 as unconstitutional once again.

AB 219 took effect on July 1, 2016. It applied California prevailing wage requirements to the delivery of ready-mix concrete to public works. This was big news for two reasons: (1) it hit the ready-mix concrete industry—and all of the businesses that depend on it—very hard; and (2) it represents the first time that prevailing wage requirements have been imposed on material suppliers (as opposed to on-site contractors).

On June 30, 2016—the day before AB 219 took effect—eight ready-mix companies filed a lawsuit in federal court challenging the constitutionality of the new statute on Equal Protection grounds. In essence, they argued it was unfair to single out ready-mix concrete companies for special treatment, leaving all other material suppliers unaffected.

Since then, the Court battle has taken a number of dramatic twists and turns. AB 219 has been suspended, reinstated, overturned, and appealed, as follows:

  • Oct. 21, 2016—District Court issues preliminary injunction suspending enforcement of AB 219. [AB 219 not in effect.]
  • Oct. 24, 2016—State appeals the preliminary injunction.
  • Dec. 16, 2016—Court of Appeals stays the preliminary injunction pending appeal. [AB 219 back in effect.]
  • Mar. 14, 2017—District Court issues permanent injunction overturning AB 219. [AB 219 not in effect.]
  • Mar. 14, 2017—State appeals the permanent injunction.
  • Mar. 29, 2017—State files motion to stay the permanent injunction pending appeal.

If the Court of Appeals grants the stay, AB 219 will be back in effect once again!

What should ready-mix companies do now?

With all of this back and forth, what should ready-mix companies do? Should they stop complying with AB 219, since it has been declared unconstitutional by the District Court? Or should they continue complying until there is a final decision on appeal?

Companies should consult with their own legal counsel to decide on a course of action. Here are some important considerations:

  • Contracts. Even though AB 219 has been ruled unconstitutional, ready-mix companies must still comply with their contractual obligations. If they have contracts requiring them to pay prevailing wage or take other steps consistent with AB 219, they must continue to do so (or modify the contract).
  • Non-DIR Enforcement. The lawsuit challenging AB 219 was brought against the Director of the Department of Industrial Relations (DIR) and the Labor Commissioner, the chief enforcement official at DIR. DIR has therefore taken the position that the permanent injunction only prohibits the enforcement of AB 219 by DIR—not enforcement by other agencies such as Caltrans or by workers or unions in private lawsuits. So despite the District Court’s ruling, we can expect Caltrans to continue requiring and enforcing AB 219 on its projects; and some drivers might work with unions to file lawsuits against their employers. (Of course, ready-mix companies will argue that no agency or person should be allowed to enforce AB 219, since the District Court ruled it to be unconstitutional!)
  • Retroactive Enforcement. DIR has also taken the aggressive position that if AB 219 is upheld on appeal, DIR intends to retroactively enforce it going back to the date it first took effect, i.e., July 1, 2016. This policy seems patently unfair: it requires companies to comply with AB 219 even though the District Court has declared the law to be unconstitutional. It is not clear whether courts in the future will allow DIR to do this. Nonetheless, DIR’s position creates uncertainty and risk for ready-mix companies who choose not to comply with AB 219.

What’s Next?

DIR has moved for a stay of the permanent injunction, pending a final decision on appeal. The Court will decide on the stay in the next few weeks.

The parties are scheduled to file their appeal briefs in August and September 2017. Oral argument will likely be scheduled for early 2018, with a decision sometime later in the year.
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Jon Welner is a leading practitioner of prevailing wage law in California. He is a Partner at Jeffer Mangels Butler & Mitchell LLP (JMBM) and Chair of JMBM’s Prevailing Wage Group. Contact him at JWelner@jmbm.com.

JMBM’s Prevailing Wage Group advises and defends developers, contractors, and manufacturers on the most challenging and complex prevailing wage matters in California.

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By Jon Welner

welner.jpg

PREVAILING WAGE LAW is California’s “other” minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars–and can be brought years after construction is complete.

The federal prevailing wage statute, known as “Davis-Bacon,” has been in place for over eighty years. In essence, it requires that union wages be paid on all federal construction projects.

Over the years, there have been occasional efforts to weaken or eliminate the Davis-Bacon Act, but none have been successful. The last major effort was during the Reagan Administration. In addition, a number of presidents have temporarily suspended Davis-Bacon during public emergencies, as President Bush did in the aftermath of Hurricane Katrina. More recently, bills to repeal Davis-Bacon were introduced in the House and Senate in 2015 (H.R.987 & S.1785). But with Democrats firmly in control of the Senate and the White House, the bills were purely symbolic efforts.

Continue reading

Published on:

By Jon Welner

welner.jpg

PREVAILING WAGE LAW is California’s “other” minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars–and can be brought years after construction is complete.

U.S. Court of Appeals Reinstates Law That Makes Deliveries of Concrete Subject to California Prevailing Wage (AB 219)

In 2015 the California Legislature adopted AB 219, a ground-breaking law that extended prevailing wage requirements to material suppliers for the first time. Specifically, the law made deliveries of ready-mix concrete to public works subject to prevailing wage. (See prior post on AB 219 for more info.)

On June 30, 2016–the day before AB 219 took effect–eight ready-mix companies filed a lawsuit in federal court challenging the Constitutionality of the new statute on Equal Protection grounds. In essence, they argued it was unfair to single out ready-mix concrete companies for special treatment, leaving all other material suppliers unaffected.

In a dramatic move, on October 18, 2016, the federal court issued a preliminary injunction suspending enforcement of AB 219 by the Department of Industrial Relations, the primary state agency responsible for enforcing prevailing wage rules. (See prior post on the PI for more info.)

Now–in an even more dramatic twist–the U.S. Court of Appeals has weighed in, striking down the lower court’s preliminary injunction! (Technically, the Court of Appeals granted a motion to stay the preliminary injunction, suspending it until the Court of Appeals has a chance to rule on whether to uphold or overturn it. See Order.)

This means that AB 219 is once again in full effect and DIR is free to enforce compliance by ready-mix companies.

Whew! Can’t wait to see what happens next!

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Jon Welner is a leading practitioner of prevailing wage law in California. He is a Partner at Jeffer Mangels Butler & Mitchell LLP (JMBM) and Chair of JMBM’s Prevailing Wage Group. Contact him at JWelner@jmbm.com.

JMBM’s Prevailing Wage Group advises and defends developers, contractors, and manufacturers on the most challenging and complex prevailing wage matters in California.

Published on:

By Jon Welner

welner.jpg

PREVAILING WAGE LAW is California’s “other” minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars–and can be brought years after construction is complete.

The Number of Charter Cities Exempt from Prevailing Wage Has Dropped from 52 to Almost None in Less Than Two Years

A charter city is a city that governs itself by adopting a “charter”–sort of a municipal constitution–rather than by complying with general state laws. California has 121 charter cities (out of a total of 482 cities).

In California, charter cities have supreme control over their own “municipal affairs.” This means that charter city ordinances and regulations supersede all state laws with regard to local matters. State Building & Construction Trades Council of California v. City of Vista (2012) 54 Cal. 4th 547, 555-556 (“City of Vista”).

This power also applies to prevailing wage. In City of Vista, the California Supreme Court held that charter cities are free to decide whether or not they want to apply State Prevailing Wage Law to locally funded public works:
Continue reading

Published on:

By Jon Welner

welner.jpg

PREVAILING WAGE LAW is California’s “other” minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars–and can be brought years after construction is complete.

U.S. District Court Suspends New Law that Made Deliveries of Concrete Subject to California Prevailing Wage (AB 219)

In a surprise move, the U.S. District Court in Los Angeles issued an Order today blocking implementation of AB 219, a new statute that added the delivery of ready-mix concrete to the growing list of activities covered by California Prevailing Wage Law. (Please see my prior post on AB 219 for additional background.)

AB 219 was passed last year and took effect on July 1, 2016. The new law imposed massive new burdens on the ready-mix industry, including complex new record-keeping and tracking requirements. On June 30, 2016, a group of eight ready-mix companies filed a lawsuit challenging the new statute as a violation of Equal Protection and federal law. The Court granted the plaintiffs’ motion for a preliminary injunction on October 18, 2016.
Continue reading

Published on:

By Jon Welner

welner.jpg

PREVAILING WAGE LAW is California’s “other” minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars–and can be brought years after construction is complete.

AB 219 Expands Prevailing Wage To Include Deliveries of Ready-Mix Concrete

Since the 1930s, prevailing wages have applied only to construction work, not to the manufacture or delivery of construction supplies.

In California this distinction was made explicit in 1976, when the Court of Appeal held that “materialmen” and “employees of materialmen” who sell supplies to the general public are exempt from prevailing wage law; and “the delivery of standard materials” to a public work is not subject to prevailing wage. O. G. Sansone Co. v. Department of Transportation (1976) 55 Cal. App. 3d 438, 442-443.

Simply put: prevailing wage has always applied to the bricklayer, not to the bricks.

Until now. Last year, the California Legislature passed and the Governor signed AB 219, which extends prevailing wage requirements to the delivery of ready-mix concrete to public works. The bill was codified as Labor Code Section 1720.9.
Continue reading

Published on:

By Jon Welner
welner.jpg

PREVAILING WAGE LAW is California’s “other” minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars–and can be brought years after construction is complete.

The Way DIR Calculates Prevailing Wage Rates Ensures that the “Prevailing Wage” Is Almost Always a “Union Wage”

“Prevailing wage” is a misnomer. Contrary to what the name implies, the prevailing wage is not the wage rate prevailing in a given area. That is the “market rate.” Rather, the prevailing wage rate is generally the rate that union workers get paid in a specified area, which is much higher than the market rate.
Continue reading

Published on:

By Jon Welner
welner.jpg

PREVAILING WAGE LAW is California’s “other” minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars–and can be brought years after construction is complete.

Even if you think your project is private, it still might be a “Public Work” subject to Prevailing Wage in California!

Five Traps to Avoid
California Prevailing Wage Law applies to any project “paid for in whole or in part out of public funds.”

Prior to 2002, this was easy to understand. Public funds were public funds. If a project received cash from a state or local agency, it was a “public work” subject to prevailing wage.
Continue reading