See You In Court: Contractors Sue Township Over Unlawful Union Contracting Privilege

A group of nonunion construction firms is suing Meridian Township in Ingham County court, claiming its officials are blatantly violating a state ban on local governments imposing prevailing wage mandates on contractors.

The lawsuit is the latest skirmish in a yearslong battle between organized labor and private contractors that are excluded from government contracts for not paying what unions assert to be the local going rate for various trades and tasks. It was filed last month by the Associated Builders and Contractors-Greater Michigan Chapter.

Critics of prevailing wage requirements argue that they result in significantly higher costs for the taxpayers and deny opportunities to nonunion companies and their employees.

After years of effort and multiple setbacks, nonunion contractors won a landmark victory in 2015 with passage of the Michigan’s Local Government Labor Regulatory Limitations Act. And in 2018, they prevailed again when legislators approved a measure, initiated by a petition, barring prevailing wage mandates in state contracts.

The lawsuit alleges that a township policy adopted in 2020 (revised and called “guideline” in March 2021) is “invalid on its face.” It says the township has “an illegal policy” under the 2015 statute, which prohibits a local government from requiring a contractor to “to pay ... a wage or fringe benefit based on ... rates prevailing in the locality.”

According to the official minutes from the township board’s March meeting, the ordinance was intended to demonstrate “solidarity with labor unions across the region and state (and a) commitment to support jobs that provide a living wage, secure retirement and good benefits.”

“It’s important to take a stand now because if we don’t fight now, it will spread,” said ABC-GMC President Angela Madarang. “We didn’t work so hard for so many years ... to give up now.”

William Fahey, an attorney for Meridian Township, said in an interview last week that ABC’s claim about the 2015 law is incorrect. The law prohibits prevailing wage requirements in private, but not public, contracts, he said.

Local units of government retain the right to require their contractors to pay “fair, not substandard” wages to their employees, he said.

The Michigan Supreme Court affirmed that right in a 2016 case involving the city of Lansing, Fahey said.

ABC attorney Kraig Schutter said the latest lawsuit does not address the legality of local prevailing wage ordinances adopted before 2015. But the 2015 statute clearly bars the ordinance Meridian Township enacted in 2020-21, he said. Meridian Township’s formal reply to the lawsuit is due in June.