Court Battles

Federal court rules against Labor Department in wage case

The nation’s second most powerful court ruled against the Department of Labor Tuesday in a case challenging when construction workers are entitled to prevailing wages on public projects.

The U.S. Court of Appeals for the D.C. Circuit said the workers who built CityCenterDC, a mixed-use development in the heart of the city, were not entitled to prevailing wages under the Davis-Beacon Act.

The federal law applies to construction contracts that cities enter into for public works projects.

In affirming the lower court’s decision, the D.C. Circuit, however, said CityCenterDC, which features upscale retail stores like Louis Vuitton, high-end restaurants, a large private law firm and luxury residences, is not a “public work.”

“To qualify as a public work, a project must possess at least one of the following two characteristics: public funding for the project’s construction or government ownership or operation of the completed facility, as with a public highway or public park,” Judge Brett Kavanaugh wrote in the court’s decision. “Here, CityCenterDC’s construction was not publicly funded and CityCenterDC is not a government-owned or government-operated facility. So CityCenterDC is not a public work.”

The court also said the law did not apply because D.C. was not party to the construction contracts since it rents the land to private developers.

President Obama’s Supreme Court nominee Merrick Garland was a member of the court panel when the case was argued, but did not participate in the opinion.

If the court had ruled in favor of the Labor Department, Kavanaugh argued that workers on future privately funded, privately owned, and privately operated projects would have to be paid local prevailing wages if the city had some hand in leasing the property or approving how it’s used.

“We are unwilling to green-light such a massive, atextual, and ahistorical expansion of the Davis-Bacon Act,” the court said. “The concept of a public work may well be elastic. But it cannot reasonably be stretched to cover a Louis Vuitton.”

Tags Davis–Bacon Act Prevailing wage

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