It’s Getting Harder and Harder to be a Concrete Supplier in California

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In 2015, the California state legislature passed AB 219, which amended the state’s prevailing wage law to add Labor Code section 1720.9, which requires the payment of prevailing wages to “ready-mixed concrete” drivers on state and local public works projects.

Ready-mixed concrete suppliers filed suit in Allied Concrete and Supply Co. v. Baker (September 20, 2018) U.S. Court of Appeals for the Ninth Circuit,  challenging the law on the ground that, because AB 219 singled out ready-mixed concrete drivers but not other drivers of materials on state and local public works projects, the law violated the Equal Protection Clause of the U.S. Constitution.

The District Court Decision

While in the trial court, the ready-mixed concrete suppliers filed a motion for preliminary injunction to prevent the California Labor Commissioner from enforcing the law, which was granted by the trial court.

Later, the ready-mixed concrete suppliers filed a motion for permanent injunction to permanently prevent the California Labor Commissioner from enforcing the law, which was also granted by the trial court, on the ground that AB 219 treated “ready-mixed concrete drivers differently than other materials drivers.” According to the trial court, the law did not pass scrutiny under the rational basis test under the Equal Protection Clause because AB 219 treated “ready-mixed concrete drivers differently than other material drivers,” and this was “arbitrary” rather than “rationally related” to a legitimate state interest.

The state appealed.

The Ninth Circuit Court of Appeals Decision

On appeal, the Court of Appeals for the Ninth Circuit noted that under the rational basis test of the equal protection clause, a statute does not “run afoul of the Equal Protection Clause if there is a rational relationship between the disparity of treatment and some legitimate government purpose.”

The California Supreme Court, explained the Ninth Circuit, has stated that the goals of the state’s prevailing wage law include:

  1. Generally protecting employees on public works projects;
  2. Benefitting the public through the superior efficiency of well-paid employees; and
  3. Permitting union contractors to compete with nonunion contractors.

And, here, explained the Ninth Circuit, the California state legislature could have “rationally” concluded that ready-mixed concrete drivers should become subject to the state’s prevailing wage laws because:

  1. Ready-mixedconcrete, since it is mixed according to a specific recipe, is more directly integrated into the construction process than materials delivered by other drivers;
  2. Ready-mixed concrete drivers, because they operate specialized trunks with a rotating tank and control the amount of water added to the rotating tank, as well as the speed at which the tank spins, are more skilled than other drivers and should be paid accordingly; and
  3. Ready-mixed concrete drivers are more likely to be unionized and are, therefore, more vulnerable to underbidding by nonunion contractors.

While acknowledging that these factors are debatable, the Ninth Circuit noted that the Equal Protection Clause’s rational basis test applies a “high burden,” requiring a challenger to show that the legislative facts underlying a statute  could not reasonably be conceived to be true by the governmental decisionmaker.”

Conclusion

At present AB 219 appears to be the law of the land, or at least the law of the Golden State. The read-mixed concrete suppliers have ninety (90) days to file a petition for certiorari with the U.S. Supreme Court for review.

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