Associated Gen. Contractors of Wash. v. State, 100258-1

• Docket Number: 100258-1
• Decision Date: 13 October 2022
• Citation: 518 P.3d 639
• Parties: ASSOCIATED GENERAL CONTRACTORS OF WASHINGTON, a Washington Nonprofit Corporation; Associated Builders and Contractors of Western Washington, Inc., a Washington Nonprofit Corporation; Inland Pacific Chapter of Associate Builders and Contractors, Inc., a Washington Nonprofit Corporation; and Inland Northwest AGC, Inc., a Washington Nonprofit Corporation, Respondents, v. STATE of Washington ; Jay Inslee, Governor; Joel Sacks, Director of Washington State Department of Labor and Industries; and Jim Christensen, Washington State Department of Labor and Industries Program Manager and Industrial Statistician, Prevailing Wage Program; in their official capacities, Petitioners.
• Court: Washington Supreme Court

518 P.3d 639

ASSOCIATED GENERAL CONTRACTORS OF WASHINGTON, a Washington Nonprofit Corporation; Associated Builders and Contractors of Western Washington, Inc., a Washington Nonprofit Corporation; Inland Pacific Chapter of Associate Builders and Contractors, Inc., a Washington Nonprofit Corporation; and Inland Northwest AGC, Inc., a Washington Nonprofit Corporation, Respondents,

v.STATE of Washington ; Jay Inslee, Governor; Joel Sacks, Director of Washington State Department of Labor and Industries; and Jim Christensen, Washington State Department of Labor and Industries Program Manager and Industrial Statistician, Prevailing Wage Program; in their official capacities, Petitioners.

No. 100258-1

Supreme Court of Washington, En Banc.

Filed: October 13, 2022

Anastasia R. Sandstrom, Paul Michael Weideman, Wash. State Attorney General's Office, 800 5th Ave., Ste. 2000, Seattle, WA, 98104-3188, for Petitioner.

Darren Anthony Feider, Jennifer Ann Parda-Aldrich, Sebris Busto James P.S., 15375 Se 30th Pl. Ste. 310, Bellevue, WA, 98007-6500, for Respondent.

Jacob H. Black, Attorney at Law, 18701 120th Ave., Ne, Bothell, WA, 98011-9501, for Amicus Curiae on behalf of Local 302 International Union of Operating Engineers.

Kristina Marie Detwiler, Robblee Detwiler PLLP, 2101 4th Ave., Ste. 1000, for Amicus Curiae on behalf of Wa. State Building & Construction Trades Council.

Danielle Elizabeth Franco-Malone, Benjamin Daniel Berger, Barnard Iglitzin & Lavitt LLP, 18 W. Mercer St., Ste. 400, Seattle, WA, 98119-3971, for Amicus Curiae on behalf of Wa & Nothern Idaho District Council of Laborers.

WHITENER, J.

¶1 This case concerns whether Substitute Senate Bill (SSB) 5493,¹ constitutes an unconstitutional delegation of legislative authority. SSB 5493 amended RCW 39.12.015 to modify how the Department of Labor and Industries (L&I) industrial statistician calculates prevailing wage rates for public works projects. The revised statute requires the industrial statistician to adopt the prevailing wage from whichever collective bargaining agreement (CBA) covering work in a particular county has the highest wages, if such a CBA exists.

¶2 Associated General Contractors of Washington, Associated Builders and Contractors of Western Washington Inc., Inland Pacific Chapter of Associate Builders and Contractors Inc., and Inland Northwest AGC Inc. (collectively AGC), filed suit against the State of Washington; Governor Jay Inslee; the director of L&I, Joel Sacks; and the industrial statistician, Jim Christensen, in their official capacities (collectively State), for declaratory and injunctive relief, arguing that requiring the industrial statistician to use the wages from CBAs constitutes an unconstitutional delegation of legislative authority. Both parties moved for summary judgment.

¶3 The superior court granted the State's cross motion for summary judgment, holding that SSB 5493 is constitutional, and dismissed the case. The Court of Appeals reversed and held that SSB 5493 is an unconstitutional delegation of legislative authority holding that the amendments have neither the standards nor adequate procedural safeguards as required by the two-part test set forth in Barry & Barry, Inc. v. Department of Motor Vehicles , 81 Wash.2d 155, 163-64, 500 P.2d 540 (1972).

¶4 We reverse the Court of Appeals. SSB 5493 is not an unconstitutional delegation of legislative authority because it provides standards and procedural safeguards under the test in Barry & Barry . The legislature has made a policy decision to adopt the highest CBA wage rate and has directed the L&I industrial statistician to identify the highest CBA wage rate and adopt it as the prevailing wage. In addition there are procedural safeguards in related statutes and inherent in the collective bargaining process that protect against arbitrary administrative action or abuse of discretionary power. Accordingly, we remand to the Court of Appeals for consideration of the remaining issue not addressed because of its disposition in this case.

FACTS AND PROCEDURAL HISTORY

I. Prevailing Wage Calculations

¶5 "The prevailing wage act was designed to protect employees on public works projects and preserve local wages." Silverstreak, Inc. v. Dep't of Lab. & Indus. , 159 Wash.2d 868, 880, 154 P.3d 891 (2007) (plurality opinion). "Thus, ‘it is the worker, not the contractor, who is the intended beneficiary of the’ act." Id . (quoting Heller v. McClure & Sons, Inc. , 92 Wash. App. 333, 338, 963 P.2d 923 (1998) ).

¶6 "All determinations of the prevailing rate of wage shall be made by the industrial statistician of the department of labor and industries." RCW 39.12.015(1). Under RCW 39.12.010(1), "prevailing rate of wage" is defined as

the rate of hourly wage, usual benefits, and overtime paid in the locality, as hereinafter defined, to the majority of workers, laborers, or mechanics, in the same trade or occupation. In the event that there is not a majority in the same trade or occupation paid at the same rate, then the average rate of hourly wage and overtime paid to such laborers, workers, or mechanics in the same trade or occupation is the prevailing rate. If the wage paid by any contractor or subcontractor to laborers, workers, or mechanics on any public work is based on some period of time other than an hour, the hourly wage is mathematically determined by the number of hours worked in such period of time.

¶7 The "locality" is "the largest city in the county wherein the physical work is being performed." RCW 39.12.010(2). Further, "[i]n establishing the prevailing rate of wage under RCW 39.12.010, 39.12.015, and 39.12.020, all data collected by the department of labor and industries may be used only in the county for which the work was performed." RCW 39.12.026(1).

¶8 Under this original framework the industrial statistician and his team conducted wage surveys by sending surveys to all businesses engaged in the work in Washington State. The surveys were used "to gather ... market data regarding the wages paid to workers in various classifications and the hours of their labor." Clerk's Papers (CP) at 1839. Then they would systemize the data from wage survey responses and CBAs and check the data for accuracy, looking for any outliers or data that raised questions. The industrial statistician would then determine the majority or average rate by statistical estimation. See WAC 296-127-019 (detailing current survey and statistical estimation process). The industrial statistician posts the prevailing wages online twice per year. CP at 2119. According to the most recent survey in 2010, a "union Laborer wage was reported to be paid for the majority of hours in 38 of Washington's 39 counties." Id . at 2122.

¶9 In 2018 the legislature passed SSB 5493, which modified RCW 39.12.015 and the process by which the industrial statistician determines the prevailing wage. Under the amendments,

(2) Notwithstanding RCW 39.12.010(1), the industrial statistician shall establish the prevailing rate of wage by adopting the hourly wage, usual benefits, and overtime paid for the geographic jurisdiction established in collective bargaining agreements for those trades and occupations that have collective bargaining agreements. For trades and occupations with more than one collective bargaining agreement in the county, the higher rate will prevail.

(3) For trades and occupations in which there are no collective bargaining agreements in the county, the industrial statistician shall establish the prevailing rate of wage as defined in RCW 39.12.010 by conducting wage and hour surveys. In instances when there are no applicable collective bargaining agreements and conducting wage and hour surveys is not feasible, the industrial statistician may employ other appropriate methods to establish the prevailing rate of wage.

LAWS OF 2018, ch. 248, § 1 (underlining omitted). Accordingly, under the amendments, the industrial statistician is required to adopt as the prevailing wage the highest rate as set forth in a CBA, regardless of the number of employees covered or the hours worked under the CBA, and will engage in wage surveys only in counties/occupations where there are no applicable CBAs.

II. Procedural History

¶10 AGC filed a complaint for declaratory judgment and injunctive relief, alleging that SSB 5493 is unconstitutional because it violates the nondelegation doctrine, violates due process, violates the equal protection clauses, and violates article II, section 37 of the Washington Constitution. The trial court denied the motion for a preliminary injunction.

¶11 AGC and the State filed cross motions for summary judgment. The court granted the State's motion for summary judgment. AGC appealed.

¶12 The Court of Appeals held that SSB 5493 violates the nondelegation doctrine because it does not contain adequate standards or guidelines or adequate procedural safeguards as required in Barry & Barry .² Associated Gen. Contractors of Wash.v. State , 19 Wash. App. 2d 99, 102, 112, 494 P.3d 443 (2021) ( AGC ). The court found the statute unconstitutional and reversed the order granting summary judgment in favor of the State. Id . The State appealed, and this court granted review.³ 198 Wash.2d 1032, 501 P.3d 145 (2022).

ANALYSIS

I. Standard of Review

¶13 When reviewing a summary judgment order, "[w]e engage in the same inquiry as the superior court." Lakehaven Water & Sewer Dist. v. City of Federal Way , 195 Wash.2d 742, 752, 466 P.3d 213 (2020). "Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law." Id . (citing CR 56(c) ).

¶14 We presume that statutes are constitutional, and the party challenging the constitutionality of the statute bears the burden of proving unconstitutionality beyond a reasonable doubt. Amalg. Transit Union Local 587 v. State , 142 Wash.2d 183, 205, 11 P.3d 762 (2000). "This standard is met if argument and research show that there is no...