On July 6, 2012, the Fourth Department Appellate Division held that the 2008 amendments to the Wicks Law, including a requirement that contractors and subcontractors participate in apprentice training programs approved by the Department of Labor in order for a project labor agreement ("PLA") to qualify for an exemption from the Wicks Law, are valid and constitutional.
The Wicks Law requires that governmental entities in New York prepare separate bid specifications and award separate contracts for the plumbing, heating and ventilation, and electrical components of those publicly-funded construction projects that exceed their monetary cost threshold. This requirement is often fiscally and administratively burdensome to the public entity.
In 2008, to alleviate some of that stress, the formerly uniform monetary threshold was modified to a three-tier system with trigger amounts of $3,000,000 for the five New York City counties, $1,500,000 for Nassau, Suffolk and Westchester, and $500,000 for all other counties. Labor Law Section 222 was adopted at the same time, providing for a full exemption from the Wicks Law requirements where the project is covered by a qualifying PLA. The statute defines a PLA as:
a pre-hire collective bargaining agreement between a contractor and a bona fide building and construction trade labor organization establishing the labor organization as the collective bargaining representative for all persons who will perform work on a public project, and which provides that only contractors and subcontractors who sign a pre-negotiated agreement with the labor organization can perform project work.
In order for the PLA to qualify the project for exemption, it must provide that each contractor and subcontractor participate in apprentice training programs approved by the Department of Labor.
In Empire State Chapter of Associated Builders and Contractors v. M. Patricia Smith, both the three-tier threshold and the apprentice training program requirement were challenged as unconstitutional. The three-tier threshold was attacked, in part, upon the premise that it was enacted with procedural deficiencies that violated the home rule provisions of the New York State Constitution. However, the Court held that the enactment bore a direct and reasonable relationship to a substantial State concern, and was a valid exercise of legislative power under Article IX of the Constitution.
The apprentice training program requirement was challenged as exclusionary. According to the plaintiffs, it unfairly burdened contractors and subcontractors by requiring them to maintain apprentice training programs of their own, for all public projects meeting the new thresholds. They argued that the legislation served to disqualify out-of-state contractors from large public construction projects, and inhibited a disproportionate number of minority-owned and women-owned businesses from qualifying for work on such projects. The Court disagreed with the plaintiffs’ interpretation of Labor Law Section 222. The Court held that the apprentice training requirement is not universal, and applies only to those projects where the government entity has elected to utilize a PLA. Further, the Court also held that any contractor or subcontractor entering into a qualifying PLA is deemed to be participating in an apprentice training program. The individual contractors and subcontractors need not maintain an apprentice training program of their own.
In the aftermath of the Fourth Department’s decision, it would be economically prudent for governmental entities to examine the feasibility of a PLA that complies with Labor Law Section 222 for their next public construction project.