9th Circuit Upholds Constitutionality of AB 219

In a recently published opinion, the 9th Circuit Court of Appeals upheld the constitutionality of California Assembly Bill 219. Enacted in 2015 as Labor Code, section 1720.9, it amended California’s prevailing wage law to include delivery drivers of ready-mix concrete. The opinion brings to a close, or at least a temporary halt to, the protracted litigation challenging the constitutionality of the law.

Shortly after section 1720.9 was enacted, a group of ready-mix concrete suppliers filed suit in the U.S. District Court, Central District, alleging that the law violated the Equal Protection Clause of the 14th Amendment of the U.S. Constitution and that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) preempted the state law.

The District Court granted summary judgment in favor of the ready-mix suppliers on their claim that section 1720.9 violated the Equal Protection Clause, ruling that there were no legally relevant differences between ready-mix drivers and other delivery drivers. As such, the trial court concluded there was no legitimate justification for singling out the ready-mix suppliers for the application of prevailing wage laws.

The 9th Circuit reversed the granting of summary judgment in favor of the ready-mix suppliers. The appellate panel noted that the prevailing wage laws further goals such as (1) generally protecting employees on public works projects, (2) benefitting the public through superior efficiency of well-paid employees, and (3) permitting union contractors to compete with nonunion contractors.

The appellate panel then held that the California State Legislature could have rationally concluded that extending the prevailing wage law to ready-mix drivers ahead of other drivers would further these respective goals because ready-mix drivers (1) are more integrated into the construction process than other materials drivers and should be paid accordingly, (2) are more skilled than other drivers and provide material that is more important to public works projects than other materials such that paying the prevailing wage will attract superior drivers and improve public works and (3) are more likely to be unionized and, therefore, vulnerable to underbidding.

Incidentally, the trial court had dismissed the claim of the ready-mix suppliers of FAAAA preemption. The 9th Circuit upheld this aspect of the trial court’s ruling, noting that prevailing wage law was not related to prices, routes, and services within the meaning of the FAAAA’s preemption clause.

Labor Code, section 1720.9 (AB 219) remains in effect. Concrete ready-mix drivers are subject to California’s prevailing wage laws. The question is: Whose next?