In the Matter of M.G.M. Insulation, Inc., et al., Appellants,v.Colleen C. Gardner,, Respondent.BriefN.Y.January 2, 2013App. Div. Third Dept. No. 510657 Court of RlppeaIs IN THE MATTER OF THE APPLICATION OF M.G.M. INSULATION, INC.; JOSEPH 0. WELSEY; KENNEDY MECHANICAL PLUMBING AND HEATING, INC.; DIANE SHUTTER; LEHMANN CONSTRUCTION CONSULTANT, INC.; FINGER LAKES SERVICE GROUP, INC.; KENNETH R. HATHAWAY; RMS CONTRACTORS, LLC; BALTZ CONCRETE CONSTRUCTION, INC.; THOMAS F. BALTZ; GOFORTH ELECTRIC, INC.; LAWRENCE C. GOFORTH; J&S PROTECTION SYSTEMS, INC.; DAVID JENNINGS; FINGER LAKES PAINTING AND WALLCOVERING, LLC; RICHARD MILHAM; CUTAIATILE, INC . ; ANGEL0 CUTAIA; ARK GLASS AND GLAZING CORP . ; RICHARD W. KOZYRA; W.R. DRAKE & SONS, INC.; WILLIAM R. DRAKE; MCCLAIN ASSOCIATES, INC.; NICK MCCLAIN; RAYDO, INC.; RAYMOND L. DOYLE; BILLONE MECHANICAL CONTRACTORS, INC.; THOMAS F. BILLONE; PROWIDENZA CONTRACTING, INC.; VINCENT PROWIDENZA, JR.; R-J TAYLOR GENERAL CONTRACTORS, INC. AND JAMES D. TAYLOR, P e t i t i o n e r s - A p p e l l a n t s , -AGAINST- COLLEENC. GARDNER, AS COMMISSIONEROFLABOR, STATE OFNEWYORK, Respondent -Respondent . AMICUS BRIEF IN SUPPORT OF RESPONDENT Jan S. Kublick, Esq. McMahon, Kublick & Smith, P.C. 500 S. Salina Street, Suite 800 Syracuse, New York 13202 Tel: (315) 424-1105 Fax: (315) 424-3793 November 21, 2012 Table of Contents Preliminary Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest of the Amicus Curiae 1 Statement of Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Argument 4 Point I: The Functional Equivalence Test would not result in a high level of uncertainty . . . . . . 4 Point 11: The Functional Equivalence Standard is needed in an increasingly complicated . . . . . . . . . . . . . . . . . . . . . . . contracting environment 8 Point 111: Empire ABC's and AGC NYS claims that Prevailing wage requirements significantly . . . . . Increase Construction costs are unfounded 10 Point IV: Prevailing wage is an essential policy for . . . . . . . . . . . . . . . . . . . . Local Economic development 14 Point V: Empire ABC's and AGC NYS' claim that Prevailing wage is discriminatory is not empirically supported and is not a . . . . . . . . . . . . . . reason to weaken prevailing wage, 17 Point VI: Acceptance of prevailing wage extends well . . . . . . . . . . . . . . . . . . . . . . . . . . . beyond labor unions 18 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 TABLE OF AUTHORITIES CASES PAGE Griffis Local Development Corpora tion vs. State of New York Budget Office, 85 A.D.3d 1402 (LV to Appeal Denied 17 NY 3rd 714) 8 Matter of New York Charter Schools Assn v. Smith, 15 N.Y.3d 403 (2010) 10 Bucci v. Village of Port Chester, 22 N.Y. 2d 195, 201 (1968) 22 STATE STATUTES PAGE N. Y Labor Law $220 passim NYS Constitution Article I $17 10, 21 MISCELLANEOUS PAGE The Center for Government Research, 2008, Prevailing Wage in New York State: The Impact on Project Costs and Competitiveness, prepared by the New York State Economic Council, Rochester, New York, Center for Government Research. 11 Duncan, Kevin C., 2011. An Analysis of Davis- Bacon Prevailing Wage Requirements: Evidence from Highway Resurfacing Projects in Colorado. - 12 Kelsay, Wray, and Pinkham, 2004. The Adverse Economic Impact of the Prevailing Wage Law in Missouri. 13 Phillips, Magnum, Waitzman, and Yeagle, 1995. Losing Ground: Lessons from the Repeal of Nine "Little Davis-Bacon" Acts. 13, 16 Duncan, Philips, and Prus, 2012. Using Stochastic Frontier to Estimate the Construction Cost Inefficiency of Prevailing Wage Laws. 13 ii Duncan, Kevin C., 2012. Economic, Fiscal and Social Impacts of Prevailing Wage in San Jose, California. 14 Kessler and Katz, 1999. Prevailing Wage Laws and Construction Labor Markets. 16 Citizens Housing and Planning Council, 2008. Prevailing Wisdom: The Potential Impact of Prevailing Wages on Affordable Housing. 17 Belman and Phillips, 2005. Prevailing Wage Laws and Minority Employment in Construction. - 17 Epi Briefing Paper "Prevailing Wages and Governmental Contracting Costs, A Review of the Research, by Nooshin Mahlia Economic Policy Institute, July 8, 2008 11, 14 iii The significant contribution to the research for this Brief by Mathew O'Neil, a law student at Cornell Law School is gratefully acknowledged. PRELIMINARY STATEMENT The New York State Council of National Electrical Contractors Association Chapters (NYS NECA) hereby offers this Brief as Amicus Curiae in support of the Court's affirmation of the Decision and Order of the Appellate Division, Third Department in the above-captioned matter. The unanimous Decision below is both consistent with the legal history of Labor Law 5220 and a needed clarification of the statute's application in instances where a public entity attempts to use a third party to try to avoid its clear statutory obligation. Moreover, paying prevailing wage promotes economic development at no significant cost to taxpayers. In contrast to the portrayal of the impact of prevailing wage requirements found in the opposing Amici Briefs, support for prevailing wage requirements extends well beyond organized labor to many contractors employers and project owners. The claims made by the opposing Amici that compliance with Labor Law s 2 2 0 causes project costs to greatly increase rest predominately on research with serious methodological problems, and better, more sound research concludes to the contrary. INTEREST OF THE AMICUS CURIAE NYS NECA is a council of the nine New York chapters of the national electrical contractor trade association and represents 873 electrical contractor employers in New York. Working closely with the International Brotherhood of Electrical Workers (IBEW), NYS NECA contractors perform a significant amount of the electrical contracting in New York State in both the public and the private sectors. In 2011 wages alone paid by NYS NECA contractors exceeded $600,000,000.00. NYS NECA chapters seek to improve quality of electrical services within the construction industry by accumulating and disseminating management and technical information regarding the industry. Also, the vast majority of electrical contracting apprenticeship opportunities available in New York are through the IBEW and NECA affiliated contractors. NECA apprenticeships emphasize emerging technology in addition basic skills and safety training. This commitment to workforce development, quality of construction, and contractor support has allowed NYS NECA to become a preeminent organization in its industry. By comparison, the opposing Amici, Empire State Chapter of Associated Builders and Contractors, Inc. (Empire ABC) and the Associated General Contractors of New York State LLC (AGC NYS) represent fewer construction employers, as many of those groups1 members are not contractors. Empire ABC's 2011 Membership Directory lists 550 different firms, but almost 30% of those firms were not contractors or subcontractors. Many were law firms, accounting firms, banks, suppliers, and architects. There are 527 firms from New York listed in the online directory for the National AGC. Forty-five percent of those firms listed were not contractors or subcontractors. Reaching out to so many companies outside of its industry allows a trade association to raise money for its advocacy, but it does not per se make the association an authoritative representative of the industry in New York. By contrast NYS NECA's membership of 873 employers consists solely of electrical contractors. The member contractors of NYS NECA are involved daily with estimating, bidding, and constructing public work projects. NYS NECA's perspective on the challenges of doing so stand in sharp contrast to those offered by the opposing Amici, and therefore provide the Court with a valuable and fuller perspective on the effects of 5220 of the Labor Law and on the application of the functional equivalency test articulated by the Court below in the modern contracting environment. STATEMENT OF FACTS NYS NECA adopts the Respondent's summary of facts as set forth in the Respondent's Brief. ARGUMENT POINT I: The Functional Equivalence Test would not result in a high level of uncertainty, and offers much needed guidance. The opposing Amici are largely concerned with the negative consequences of uncertainty that contractors might face regarding the application of the "functional equivalency" test, as they characterize the holding of the Court below. In making this claim, AGC misses how the "functional equivalence" test lends clarity to the often murky waters of bidding where not for profit corporations, public/private partnerships, and a plethora of quasi-public entities are the norm. A "functional equivalence" concept is needed, as a public entity may seek to avoid 5220 by placing a third party entity in between itself and the construction contract. In many of these cases the separation of the public entity from the contractor is artificial. Therefore, determining when "functional equivalence" applies must be based on the relationship between the public entity and the project being contracted, rather than the mere legal identities of the public entity and the third party contracting agency. If the public entity relates to the project being contracted in much the same way it would had it entered into the contract itself, then the third party is operating as a functional equivalent. The third party is a functional equivalent not by its nature, but by its behavior, by the act of standing in between the public entity and the contractor, and acting in the stead of the public entity. The case at hand provides a clear example of this distinction. The Village of Bath increased its payments to the Bath VFD for the purpose of funding the building project. Additionally, the fire department intended to turn over ownership of the building to the Village after completion. The relationship between the Village and the firehouse was such that the Village was paying for the new building and it would become the owner of the building. The Bath VFD owned the building in the meantime, which it believed would prevent 5220 from applying. The long term outcome for the village in this situation is the same as it would have been had it entered into the contract itself. The apparent separation between the Village and the contractor is clearly superficial, one of self-serving artifice. AGC claims that the existence of a standard by which to judge whether "functional equivalence" exists is not enough to relieve uncertainty. Contractors may be unaware of funding streams or the intended owner of the building. Therefore, the contractor is put at risk of circumstances that might not be known by the contractor. AGC's contention has contractors taking a convenient stance of "pure heart, empty head," where they willfully do not seek information that would allow a sound judgment as to whether prevailing wage applies. Given the significant consequences of violating 5220, it is prudent for a contractor to ask the contracting agency if the construction project is being funded by a public entity and in what ways the construction project would benefit a public entity. This information is available. These types of questions would only need to be asked in situations when the public nature of the project is unclear. The irony of this argument is that it applies not at all to this case. Here the public nature of the project was obvious, and the application of Labor Law 5220 was so clear that the Village and the BVFD engaged in a legal fiction to try to evade it. Moreover, the Record is clear that the Counsel's Office of the Respondent provided definitive guidance in the matter, well before the work was commenced. For the Respondent's Counsel's Office to issue an opinion on June 8, 2006, the Petitioner would have been aware of the issue, and hence the risk, for many months. Definitive guidance was available to the Petitioners. That they did not like the guidance they received, and did not, at their risk, follow it, does not demonstrate uncertainty, but rather stubborn defiance . The New York State Legislature amended s220 in 2007 to apply prevailing wages to "any contract for public work entered into by a third party acting in place of, on behalf of and for the benefit of such public entity pursuant to any lease, permit or other agreement between such third party and the public entity.. . " This language appears to apply s220 to many of the same types of projects which the Third Department Decision describes as falling under "functional equivalence." Although this amendment came after the Bath VFD contracted to have a new firehouse built, the amendment language directly addresses the opposing organizations' alleged concerns about uncertainty in the future. New York State has in fact been operating under a system very similar to "functional equivalence" for five years now. As the 2007 Amendment has now been made a permanent part of Labor Law 5220 (Laws of 2012, Ch 389, 1 , eff Aug. 17, 2012), the Legislature has supplied a permanent statutory answer to many of the questions posed by the Petitioners and their like-minded Amici. By making the 2007 Amendment a permanent part of the statute, the Legislature has reiterated the position articulated by the Department of Labor as functional equivalency, the very position adopted by the Decision below. POINT 11: A Functional Equivalency Standard is needed in an increasingly complicated contracting environment. This case is indicative of several significant trends in the contracting industry. Members of NYS NECA routinely encounter projects bid by a wide array of public, quasi public, not for profit, and public/private entities. It is, in fact becoming uncommon to see large projects of any type that are entirely private. Payment in lieu of tax agreements, tax credits, direct and indirect grants and subsidies are increasingly the norm as developers seek more and more taxpayer support for their projects. In April of 2011 Comptroller DiNapoli published a paper entitled "Municipal Use of Local Development Corporations and other Prlvate Entities" which called attention to the (at that time) 279 Local Development Corporations in the State. The Report highlights the growing influence of such players in the world of construction, and the Comptroller's concern that such entities required stronger oversight and greater transparency, given their extensive public impact and responsibilities. Some of those very issues described in the paper were litigated in the Matter of Griffis Local Development Corporation vs. State of New York Budget Office in the Third Department (85 A.D.3d 1402) (Lv. to Appeal Denied 17 NY 3rd 714) . NYS NECA members have recently encountered several projects undertaken by SUNY Foundations on behalf of their SUNY creators. Notably in several of those projects the initial claim by the project sponsor was that the not for profit status of the foundation alone made it immune from Labor Law 522 0. It is not the purpose of this Amicus Brief to argue that every time a foundation or an LDC has any role whatsoever in a project, Labor Law 220 applies. Clearly, however, neither is the opposite true, as the Petitioners would prefer. The jurisprudence of Labor Law 5220 is clear that its application turns on fact specific details, the very details uncovered and well elaborated in the instant case by a factual hearing conducted by Department of Labor. However, NYS NECA urges the Court to consider that, abetted by greatly exaggerated claims of huge project cost increases, many project sponsors will attempt to avoid and evade their responsibilities under 5220. The existence of a wide array of quasi-public actors makes this avoidance and evasion all too common, and the need for a flexible standard all the more important. It is in fact a very hostile climate for the application of $220 of the Labor Law, one that threatens to undermine the broad purpose and policy of Article I, Section 17 of the New York State Constitution. This Court issued a narrowly crafted Decision in the New York Charter Schools Assn. v. Smith (15 N.Y. 3rd 403 (2010)). The majority took considerable pains to make it clear that the holding did not necessarily apply to all future projects undertaken even by a charter school. However since that decision many parties have repeatedly invoked it for the broadest possible purpose, asserting that it vastly cut back on the scope of Labor Law s220. The opposing Amici and the Petitioners do so here. NYS NECA urges the Court to be cognizant that this case appears to be part of a statewide effort to attack at every turn the application of Labor Law s220. The Petitioners and the opposing Amici seek a rigid bright line standard not better to comply with the'law's requirements, but to use it as a map to use quasi-public entities to evade its reach. POINT 111: Empire ABC's and AGC NYS claim that prevailing wage requirements significantly increase construction costs are unfounded. Both Empire ABC and AGC NYS support their claim that construction costs are significantly higher under prevailing wage requirements by citing a study conducted by the Center for Governmental Research (CGR), paid for by the New York State Economic Development Council. Inthe study, CGR finds labor costs in New York increase by 57% on average under prevailing wage requirements and total costs for construction increase by an average of 36%. These figures were arrived at by analyzing a hypothetical construction project which required a set number of labor hours and material costs. CGR then derived the cost of construction by multiplying the set number of labor hours by the prevailing wage and market wage in seven New York urban centers. This methodology is far too simplistic to constitute substantive and reliable research. It assumes, without justification, that the only variable impacted by prevailing wage is wages and does not examine any other aspect of the construction process. Consequently, the findings are dubious when compared to widely available data about the construction industry. In order for a 57% increase in labor costs to cause a 36% increase in total construction cost, labor costs must constitute well over half of total cost. However, the 2007 US Economic Census of Construction found that labor costs make up only 25.6% of total construction costs. In order for the 36% increase in total cost found by CGR to occur, labor costs 1 The Center for Government Research, 2008, Prevailing Wage in New York State: The Impact on Project Costs and Competitiveness, prepared by the New York State Economic Council, Rochester, New York, Center for Government Research. would have to rise 141% rather than 57%. This large error in CGR's report can be attributed to its use of a hypothetical model to derive its conclusions, rather than the use of real- world construction data. CGR calculates the total cost impact of prevailing wage by assuming that material costs and labor hours would be the same whether or not prevailing wage requirements applied. In doing so, CGR fails to consider the impact of prevailing wage' on other aspects of the project, such as worker productivity and worker utilization. The preponderance of the prevailing wage studies which have accounted for these impacts have found that prevailing wage requirements do not increase the total costs of construction. For example, Kevin Duncan found that although Colorado does not have a prevailing wage law, highway construction projects contracted by the Colorado Department of Transportation do not cost less per mile than federal highway projects in the state that are done under Davis-Bacon. In the same study, Duncan found that prevailing wage did not lower the number of bids on highway projects in Colorado. 2 Researchers at the University of Missouri concluded that the cost of public sector construction per square foot in prevailing wage states is not significantly greater than in 2 Duncan, Kevin C., 2011. An Analysis of Davis-Bacon Prevailing Wage Requirements: Evidence from Highway Resurfacing Projects in Colorado. states without prevailing wage. 3 When Utah repealed its prevailing wage law in 1981, bids for public projects did fall in price, from 91% of the engineers estimate to 89% of the estimated cost; however, the average cost overrun for bids accepted by the Utah Department of Transportation increased from 2.0% to 7.3%. 4 Higher labor costs under prevailing wage laws are mitigated because contractors are able to employ highly skilled workers, who are attracted by the increased wages. Highly skilled workers operate more effectively and efficiently, meaning that total labor hours are decreased. Kevin Duncan used regression analysis to track cost inefficiency in school construction projects in British Columbia before and after the province enacted a prevailing wage law. 5 He found that inefficiency initially rose after the law was implemented, but returned to the same level as before the law within a year and a half. These findings are consistent with the relationship between wage and worker productivity. Replacing less productive workers with highly skilled workers would take contractors some time, due to 3 Kelsay, Wray, and Pinkham, 2004. The Adverse Economic Impact of the Prevailing Wage Law in Missouri. 4 Phillips, Magnum, Waitzman, and Yeagle, 1995. Losing Ground: Lessons from the Repeal of Nine "Little Davis-Bacon" Acts. 5 Duncan, Philips, and Prus, 2012. Using stochastic Frontier to Estimate the Construction Cost Inefficiency of Prevailing Wage Laws. contracts with workers and time required to advertise and recruit for openings. For a comprehensive analysis of such studies, including that of the CGR report relied upon the opposing Amici, the Court's notice is directed to the 2008 paper published by the Economic Policy Institute, entitled "Prevailing Wages and Government Contracts Costs: A Review of the Research", by Nooshin Mahalia. This paper is also cited in the Respondent's Brief. POINT IV: Prevailing wages support local economic development. The opposing Amici incorrectly treat prevailing wage as simply a pro-labor policy, one that in their view imposes increased costs on tax payers. That argument is addressed above in Point 111. In actuality, prevailing wage requirements are also sound economic development policy. In his study of construction projects in Santa Clara County, California, Kevin Duncan found that projects under prevailing wage are significantly more likely to be performed by local contractor^.^ Without prevailing wage, contractors from areas with low wages can underbid contractors who must pay their workers a wage that reflects the higher cost of living. 6 Duncan, Kevin C., 2012. Economic, Fiscal and Social Impacts of Prevailing Wage in San Jose, California. Therefore, contractors from low cost areas of the country have significant advantages in the bidding process. Prevailing wage laws eliminate this advantage, so contractors must compete on other types of cost efficiency. Local contractors have an advantage, because they do not have the significant travel costs faced by outside firms. Therefore, Duncan's findings regarding Santa Clara County are not surprising. When outside contractors perform public construction, the taxpayer money spent on the project leaves the community when the worker returns home. Additionally, non-local contractors will often purchase materials and tools for a project from suppliers where the contractors are from, rather than in the community where the project takes place. Contractors are likely to purchase materials from a vendor with which they have a relationship and volume discounts. In these circumstances, much of the money spent on a project provides no additional benefit to the community. Under prevailing wage requirements, public projects benefit the financial well being of local construction workers and their families, the money is spent with local vendors, local stores, and the money returns to the municipality in the form of increased tax revenue. Taxpayer money that goes to local contractors benefits those taxpayers who spent the money. Since local taxpayers sacrificed their hard earned wages to fund the public project, the project should be conducted in a way that maximizes their benefit as a matter of fairness The economic benefits of prevailing wage laws have also been well documented in the nine states that have repealed their prevailing wage laws. Phillips - et - al. found that wages of construction workers in states where prevailing wage laws were repealed fell by 7.5% on average. Kessler and Katz discovered that the wages of these workers fell 2.5% in states that repealed their prevailing wage laws relative to construction workers in the rest of the nation. The repeal of Utah's prevailing wage law was associated with a fall in union membership in the construction industry. Consequently, fringe benefits such as healthcare, fell substantially among construction workers after the repeal of prevailing wage. 9 Families whose economic security is undermined by the repeal of prevailing wage are less able to make large purchases, are more likely to need public assistance, and more likely to receive healthcare for which they will be unable to pay. Therefore, pulling back on prevailing wage requirements may cost taxpayers dearly, as well as deny their community a 7 Phillips, Magnum, Waitzman, and Yeagle, 1995. Losing Ground: Lessons from the Repeal of Nine "Little Davis-Bacon" Acts. 8 Kessler and Katz, 1999. Prevailing Wage Laws and construction Labor Markets. 9 Phillips, Magnum, Waitzman, and Yeagle, 1995. Losing Ground: Lessons from the Repeal of Nine "Little ~ a v i s - ~ a c o n " ~ c t s . return on tax money spent on construction projects POINT V: Empire ABC's and AGC NYS' claim that prevailing wage is discriminatory is not empirically supported and is not a reason to weaken prevailing wage. ABC and AGC also contend that prevailing wage laws disadvantage minorities. Both groups cite a paper done by the Citizens Housing and Planning Council (CHPC) (2008) which argues that minorities are under-represented in New York City's 10 construction unions. Therefore, they argue prevailing wage requirements would weaken the position of minorities in the construction trade by strengthening the unions in which they are under-represented. The study uses anecdotal evidence to support this claim; however, empirical study on this issue does not confirm CHPC's conclusion. Belman and Phillips (2005) compared African American participation in the construction industry in states with .weak, medium and strong prevailing wage laws as well as states with no prevailing wage law. 11 Importantly, the authors compared African American participation in the construction industry to their participation in non-construction industries. If prevailing wage laws were discriminatory against minorities, it would be 10 Citizens Housing and Planning Council, 2008. Prevailing Wisdom: The Potential Impact of Prevailing Wages on Affordable Housing. 11 Belman and Phillips, 2005. Prevailing Wage Laws and Minority Employment in Construction. expected that the differences in participation in the construction industry compared to the non-construction industries would be greatest in states with strong prevailing wage laws and least in states without such laws. Conversely, they did not find a statistically significant connection between states without prevailing wage laws and states with prevailing wage laws of various strengths. Therefore, the correlation between prevailing wage laws and the exclusion of African Americans from the construction industry is empirically unsupported. The argument made by the opposing Amici regarding the racial implications of prevailing wage attempts to portray itself as an argument for fairness, but this rings flat. The New York State Constitution states "Labor of human beings is not a commodity nor an article of commerce and shall never be so considered or construed." Prevailing wage is the means by which this principle is upheld and it benefits hundreds of thousands of families across the state. POINT VI: Acceptance of prevailing wage extends well beyond labor unions. Because prevailing wage is a strongly advocated for policy among unions in the construction industry, Empire ABC and AGC NYS have wrongly construed the debate over prevailing wage as pitting unions against contractors, project owners, and taxpayers. The falsity of this view can be seen by the stance taken by NYS NECA, a trade organization with more employers in the construction industry than Empire ABC and AGC NYS combined. Further undermining the claim prevailing wage is supported only by labor is the wide spread use of Project Labor Agreements (PLA's) in both the public sector and the private sector. A PLA is an agreement negotiated by labor representatives and the project owner before contractors are hired. Any contractor hired for the project becomes a signatory to the PLA. PLA's often cover a wide range of issues, including work schedules, strikes, and recruitment of local workers, but a central component to every PLA is the application of union wages to the entire project.' Project owners are never obligated to use a PLA. If a private sector owner were hostile to union wages he would likely not enter into such an agreement. Therefore, were it the case that project owners were entirely against the application of union wages (on which prevailing wages are often based) because of cost, then we would not see their use in such a large number of major projects. CONCLUSION Empire ABC and AGC NYS claim to be authoritative representatives of the construction industry and that their opposition to prevailing wage laws, on the grounds that the policy is costly and destructive to the economy, is accepted throughout the industry. They depict the debate over prevailing wage as pitting labor unions against employers who have created jobs in the construction industry and descry what they claim is the destructive nature of Labor 5220. However, NYS NECA represents more electrical contractors alone than Empire ABC and AGC NYS combined represent contractors in all trades and NYS NECA strongly supports the use of prevailing wage in New York and in this Brief provides well documented research to the contrary. Research performed across North America has consistently concluded that prevailing wage does not raise construction costs. The policy attracts highly skilled workers who finish their tasks more quickly and with fewer mistakes. Prevailing wage contributes to the economic wellbeing of hundreds of thousands of families. Economically stable families are able to purchase more and are less likely to require public assistance. These economic benefits are felt locally under prevailing wage requirements. Prevailing wage results in local contractors winnlng more bids, keeping money spent on the project in the community where it can stimulate local business and return to local municipalities as tax revenue. NYS NECA also urges the Court to recognize the reality of construction bidding in New York, where many construction projects once directly undertaken by the State or municipalities are now undertaken by authorities, local development corporations, foundations and other not for prof its. Many of these projects are nevertheless public work, as they have real and unambiguous public purpose, and often enjoy generous public taxpayer support. To achieve the unambiguous purpose articulated in Article I Section 17 the Courts must continue to fashion rules for 5220 that have relevance in the constantly evolving construction environment of New York. To be effective, those rules must take into account the ever more complex nature of public work, and the varieties of entities that now undertake it. The case on appeal is not one in which uncertainty caused the contractors to err. The Department of Labor was investigating and rather than wait for and follow its guidance, the Petitioners hastily tried to restructure the project and then proceeded to undertake it at their risk, without complying with Labor Law $ 2 2 0 . The Petitioner and the opposing Amici cite uncertainty as the reason to overturn this Decision. In fact, it is not uncertainty they fear, but rather the articulation of a judicial standard that can be used to determine when $220 applies, and when it does not. The fundamental goal of the Petitioner is to narrow the application of 5220 to only the four entities named in 5220. For those opposed to $220 and the poiicy embodied in Article I Section 17 of the New York State Constitution, that would be a huge victory, since so much construction in the State is, at least nominally, now undertaken by a myriad of other entities. That has not been the law in New York. It could not be law in New York and still allow Labor Law $220 to have the beneficial effect intended by the Legislature and implement the policy articulated in Article I Section 17. This Court has clearly articulated a standard of "liberality necessary to carry out (the constitution's) beneficent purpose" B u c c i v. Village of Port Chester, 22 N.Y. 2d 195, 201 (1968). For these reasons, NYS NECA urges this Court to affirm the Decision below. Dated: November 21, 2012 Respectfully Submitted, McMahon, Kublick & Smith, P.C. 500 S. Salina Street, Ste 800 Syracuse, New York 13202