April 07, 2017 11:47 ET

Interpipe Contracting and Associated Builders & Contractors of California Cooperation Committee Continue Lawsuit Against California

Appeals filed with Ninth Circuit Court allege SB 954 violates right to free speech and is preempted by federal law

SAN DIEGO, CA--(Marketwired - April 07, 2017) - Interpipe Contracting, Inc. (Interpipe) and Associated Builders & Contractors of California Cooperation Committee (ABC-CCC) announced today they have filed appeals from the decision of the federal District Court in San Diego to the Ninth Circuit regarding Senate Bill (SB) 954 (Hertzberg, D-Van Nuys). The appeals argue that SB 954 violates their constitutional rights to free speech and equal protection and that SB 954 is preempted by the U.S. Constitution's Supremacy Clause, which establishes federal law under the National Labor Relations Act as the supreme law of the nation.

The National Labor Relations Act, enacted in 1935 by Congress, covers activity by all employees in an industry, whether represented by a union or not. Interpipe and ABC-CCC argue that SB 954 violates this act by restricting activities of the non-union construction workforce that works on publicly funded construction projects.

"Our employees continue to choose to be part of the more than 85 percent of the construction workforce in California to work free of union representation," said Mary Smith, owner of Interpipe, a woman owned and operated company. "SB 954 encroaches on their right to protect their interests, a right guaranteed to them under federal law."

California labor law mandates that all contractors for public projects must pay their workers prevailing wage -- a pre-determined rate set by the Department of Industrial Relations. Contractors can meet prevailing wage requirements by paying a combination of wages, vacation time and other benefits. Formerly, contractors could satisfy the requirement, in part, by donating to an organization that advocates for the industry. SB 954 limits the types of contributions that qualify towards the prevailing wage requirement to only those donations made pursuant to a collective bargaining agreement, ie. donations made to advocacy groups that are pro-union.

"A core value of the National Labor Relations Act is the protection of non-coercive labor speech for all organizations working to advance the construction industry," said John Loudon, Executive Director of ABC-CCC. "SB 954 is the latest example of California lawmakers using the legislative process to encroach on this value and tip the scales in favor of labor unions."

ABC-CCC is an organization that advocates on behalf of contractors who do not require their employees to join a union, also known as open-shop contractors.

SB 954 is one of three new laws passed by the California legislature that has faced challenges in federal court for harming non-union businesses.

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