Associated Builders & Contractors Greater Mich. Chapter v. Charter Twp. of Meridian
| Decision Date | 08 December 2022 |
| Docket Number | 359027 |
| Parties | ASSOCIATED BUILDERS AND CONTRACTORS GREATER MICHIGAN CHAPTER, Plaintiff-Appellee, v. CHARTER TOWNSHIP OF MERIDIAN, Defendant-Appellant. |
| Court | Court of Appeal of Michigan — District of US |
Ingham Circuit Court LC No. 21-000206-CZ
Before: M. J. Kelly, P.J., and Shapiro and Patel, JJ.
This case arises from defendant Meridian Township adopting "Guidelines" that require employers working on Township contracts to pay "prevailing wages" and fringe benefits. The trial court held that the Guidelines violate the Local Government Labor Regulatory Limitation Act ("LGLRLA" or "the Act"), MCL 123.1381 et seq., and the Township appeals by right. For the reasons stated in this opinion, we affirm the trial court's ruling that the Guidelines fall within the scope of the LGLRLA's prohibitions. Local governments may contract with bidders who pay a prevailing wage and may consider wage levels when deciding which bid to accept as to a particular contract, but they may not, as Meridian has done, adopt a blanket policy effectively barring bid awards to companies that do not pay prevailing wages.
The LGLRLA became effective on June 30, 2015, with the passage of 2015 PA 105. Most relevant to this case, the Act provides:
A local governmental body shall not adopt, enforce, or administer an ordinance, local policy, or local resolution requiring an employer to pay to an employee a wage or fringe benefit based on wage and fringe benefit rates prevailing in the locality. This section does not apply to state projects subject to 1965 PA 166, MCL 408.551 to 408.558. [MCL 123.1386.]
On March 16, 2021, the Meridian Township Board adopted "Guidelines," which provide in relevant part as follows:
On April 5, 2021, plaintiff, a trade association, filed a complaint requesting that the trial court declare the Guidelines null and void for violation of the LGLRLA.
The Township moved for summary disposition under MCR 2.116(C)(8) (failure to state a claim). It argued that the LGLRLA only prohibits a local government from enacting prevailing-wage regulations that apply generally to all employers. According to the Township, the Act does not limit a local government's authority to determine the terms and conditions of its own contracts. And because the Guidelines concern only contracts involving the Township's own property, projects and expenditures, they do not violate the LGLRLA. In response, plaintiff argued that regardless of how the Guidelines were labeled, they required employers-even if only employers who have a municipal contract-to pay prevailing wages and fringe benefits to their workers in violation of MCL 123.1386. Plaintiff maintained that it would be unreasonable to conclude that MCL 123.1386 does not apply to government-funded construction projects when that is the primary focus of prevailing-wage schemes.
After hearing oral argument, the trial court granted summary disposition to plaintiff under MCR 2.116(I)(2) (). The trial court reasoned that despite their label, the Guidelines required employers working on Township projects to pay a prevailing wage and therefore violate MCL 123.1386. This appeal followed.[1]
The Township argues that the trial court erred by concluding that the Guidelines violate MCL 123.1386. We disagree.[2]
As an initial matter, the Township relies heavily on Associated Builders & Contractors v Lansing, 499 Mich. 177; 880 N.W.2d 765 (2016), in support of its position that when spending its own money on its own projects, it has the authority to determine the terms and conditions of its contracts. We agree with the Township's reading of Associated Builders and that it has constitutional authority to pass the Guidelines. However, as will be discussed, Associated Builders did not address the LGLRLA, and so it is not dispositive of the question presented by this appeal.
Associated Builders concerned a city of Lansing ordinance "requiring contractors working on city construction contracts to pay employees a prevailing wage."[3] Id. at 181. Relying on Attorney General ex rel Lennane v Detroit, 225 Mich. 631; 196 N.W. 391 (1923), the plaintiff argued that the ordinance was unconstitutional "because municipalities do not have the authority to adopt laws regulating the wages paid by third parties, even where the relevant work is done on municipal contracts paid for with municipal funds." Associated Builders, 499 Mich. at 181. The Supreme Court overruled Lennane, determining that it was no longer viable in light of the 1963 state constitution, which had amended the relevant constitutional provision to include the following language:
Each such city and village shall have power to adopt resolutions and ordinances relating to its municipal concerns, property and government, subject to the constitution and law. No enumeration of powers granted to cities and villages in this constitution shall limit or restrict the general grant of authority conferred by this section. [Id. at 185, quoting Const 1963, art 7, § 22 (emphasis removed).]
Further, a new provision, Const 1963, art 7, § 34, was added providing that "[t]he provisions of this constitution and law concerning counties, townships, cities and villages shall be liberally construed in their favor." Id. at 186 (quotation marks omitted). Given these provisions "express[ing] the people's will to give municipalities even greater latitude to conduct their business," id., the Court held that the municipality had constitutional authority to enact the prevailing-wage ordinance, reasoning in part as follows:
. . . [T]he wages paid to employees of contractors working on municipal contracts have a self-evident relationship to "municipal concerns, property, and government" if those words are even reasonably, if not liberally, construed. Those wage rates concern how a municipality acts as a market participant, spending its own money on its own projects. If a municipality has broad powers over local concerns, it certainly has the power to set terms for the contracts it enters into with third parties for its own municipal projects-including provisions relating to the wages paid to third-party employees. This way the municipality controls its own money, and presumably expresses its citizens' preference as to what those who work on public projects should be paid. We see nothing in these municipal aims that falls outside the ambit of Article 7, § 22 of the 1963 Constitution. [Id. at 187-188.]
The Court concluded that "[u]nder our Constitution, cities and villages may enact ordinances relating to 'municipal concerns, property and government,' including ordinances and charter provisions regulating the wages paid to third-party employees working on municipal construction contracts, 'subject to the constitution and law.'" Id. at 192, quoting Const 1963, art 7, § 22.
Significantly, the ordinance at issue in Associated Builders was exempt from the LGLRLA because it was passed before December 31, 2014.[4] Accordingly, although Associated Builders was decided after the LGLRLA was passed, there was no need for the Supreme Court to address the Act and it did not. Contrary to the Township's argument, nothing can be inferred from the Supreme Court's silence on this matter. See People v Seewald, 499 Mich. 111, 121 n 26; 879 N.W.2d 237 (2016). Moreover, this case does not concern whether the Township has constitutional authority to adopt the Guidelines. Rather, the question is how that general authority has been curtailed by the LGLRLA. As the Associated Builders Court repeatedly noted, a municipality's authority under Const 1963, art 7, § 22, is "subject to the constitution and law." See e.g., Associated Builders, 499 Mich. at 192. See also id. at 188 n 24 (). Indeed, the Township does not challenge the Legislature's authority to enact the LGLRLA but instead claims that the Guidelines do not violate the Act. Accordingly, this appeal turns on the interpretation of the LGLRLA.
To continue reading
Request your trial