Associated General Contractors Of Washington, V. Jay Inslee

Court of Appeals of Washington·Decided April 18, 2023·No. 54465-2·Unpublished

Opinion

Filed

Washington State

Court of Appeals

Division Two

April 18, 2023

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

DIVISION II

ASSOCIATED GENERAL CONTRACTORS No. 54465-2-II OF WASHINGTON, a Washington Nonprofit Corporation; ASSOCIATED BUILDERS AND CONTRACTORS OF WESTERN WASHINGTON, INC., a Washington Nonprofit Corporation; INLAND PACIFIC CHAPTER OF ASSOCIATE BUILDERS AND CONTRACTORS, INC., a Washington Nonprofit Corporation; and INLAND NORTHWEST AGC, INC., a Washington Nonprofit Corporation,

Appellants,

v.

STATE OF WASHINGTON; JAY INSLEE, UNPUBLISHED OPINION Governor; JOEL SACKS, Director of Washington State Department of Labor & Industries; and JIM CHRISTENSEN, Washington State Department of Labor and Industries Program Manager and Industrial Statistician, Prevailing Wage Program; in their official capacities,

Respondents.

LEE, J. — Appellants Associated General Contractors of Washington, Associated Builders and Contractors of Western Washington, Inc., Inland Pacific Chapter of Associate Builders and Contractors, Inc., and Inland Northwest AGC, Inc. (collectively AGC) appealed the superior court’s summary judgment order stating that Substitute Senate Bill (SSB) 5493,1 codified at RCW

1 SUBSTITUTE S.B. (S.S.B.) 5493, 65th Leg., Reg. Sess. (Wash. 2018).

39.12.015(3), did not violate the non-delegation doctrine, due process, equal protection, or article II, section 37 of the Washington Constitution. Associated Gen. Contractors of Wash. v. State, 19 Wn. App. 2d 99, 108, 494 P.3d 443 (2021) (AGCW I). We reversed the superior court, holding that RCW 39.12.015(3) violated the non-delegation doctrine and declined to address article II, section 37 in light of our holding regarding the non-delegation doctrine.2 Id. at 112. The Supreme Court reversed, holding there was no violation of the non-delegation doctrine, and remanded to this court to address “the issue not reached because of its disposition of the case.” Associated Gen. Contractors of Wash. v. State, 200 Wn.2d 396, 416, 518 P.3d 639 (2022) (AGCW II). We now address whether RCW 39.12.015(3) violates article II, section 37.

Because RCW 39.12.015(3) renders a straightforward determination of the scope of rights or duties under RCW 39.12.026(1) erroneous, RCW 39.12.015(3) violates article II, section 37 of the Washington Constitution. Accordingly, we reverse the superior court’s summary judgment order on the issue of article II, section 37 and remand for further proceedings.

FACTS

A. PREVAILING WAGES ON PUBLIC WORKS ACT Under Washington’s Prevailing Wages on Public Works Act (Act), chapter 39.12 RCW, employers must pay the “prevailing rate of wage” to employees who perform work on public projects. See RCW 39.12.010. The Department of Labor and Industries (L&I) Industrial Statistician determines the prevailing wage rates for all public works contracts twice a year. RCW 39.12.015(1); WAC 296-127-011(1). The “prevailing rate of wage” is defined:

2 We also declined to address due process and equal protection arguments based on insufficient briefing. AGCW I, 19 Wn. App. 2d at 101 n.3.

The “prevailing rate of wage” is the rate of hourly wage, usual benefits, and overtime paid in the locality, as hereinafter defined, to the majority of workers, laborers, or mechanics, in the same trade or occupation. In the event that there is not a majority in the same trade or occupation paid at the same rate, then the average rate of hourly wage and overtime paid to such laborers, workers, or mechanics in the same trade or occupation is the prevailing rate. If the wage paid by any contractor or subcontractor to laborers, workers, or mechanics on any public work is based on some period of time other than an hour, the hourly wage is mathematically determined by the number of hours worked in such period of time.

RCW 39.12.010(1). A “locality” is the largest city in a county where work is performed. RCW 39.12.010(2). The industrial statistician may establish the prevailing wage county by county through wage and hour surveys, among other methods. WAC 296-127-019(1). “In establishing the prevailing rate of wage . . . all data collected by the department of labor and industries may be used only in the county for which the work was performed.” RCW 39.12.026(1). B. SUBSTITUTE SENATE BILL 5493 In 2018, the Washington State Legislature amended the Act through SSB 5493.

Specifically, the amendment revised RCW 39.12.015 by modifying the way in which the industrial statistician calculates the prevailing wage rates for public works projects. S.S.B. 5493. SSB 5493/amended RCW 39.12.015 states:

Except as provided in RCW 39.12.017, and notwithstanding RCW 39.12.010(1), the industrial statistician shall establish the prevailing rate of wage by adopting the hourly wage, usual benefits, and overtime paid for the geographic jurisdiction established in collective bargaining agreements for those trades and occupations that have collective bargaining agreements [CBAs]. For trades and occupations with more than one collective bargaining agreement in the county, the higher rate will prevail.

RCW 39.12.015(3)(a).3 If multiple CBAs exist within a county, the industrial statistician must adopt the highest rate. RCW 39.12.015(3)(a). If no CBA exists for a particular trade or occupation, then the industrial statistician establishes the prevailing wage as defined in RCW 39.12.010(1)— the original method prior to the amendment of RCW 39.12.015 by SSB 5493. RCW 39.12.015(3)(b). C. PROCEDURAL HISTORY In January 2019, AGC filed suit against the State of Washington, Governor Jay Inslee, L&I Director Joel Sacks, and L&I Industrial Statistician Jim Christensen, in their official capacities (collectively the State), challenging the constitutionality of SSB 5493. AGC sought declaratory and injunctive relief, and moved for a preliminary injunction. AGC argued that SSB 5493 was (1) an unconstitutional delegation of legislative authority, (2) violated due process, (3) violated equal protection, and (4) violated article II, section 37 of the Washington State Constitution.

The trial court denied AGC’s motion for a preliminary injunction. Both parties then moved for summary judgment.

During the summary judgment hearing, AGC argued that the language of SSB 5493 conflicted with RCW 39.12.010 and RCW 39.12.026, making it unconstitutional. The State, on the other hand, argued no conflict existed between SSB 5493 and RCW 39.12.010 or RCW 39.12.026. In regard to RCW 39.12.026, the State asserted, “[T]hat doesn’t have anything to do with this case because it has—it’s about wage surveys . . . this isn’t a wage survey issue here. We

3 In 2019, the legislature again amended RCW 39.12.015. H.B. 1743, 66th Leg., Reg. Sess. (Wash. 2019). The pertinent language from the 2018 amendment remained the same in the 2019 amendment. The parties refer to the numbering of the current statute. Therefore, this opinion will also refer to the numbering of the current statute.

have collective bargaining agreements which are at issue. So that statute just simply doesn’t apply.” Verbatim Rep. of Proc. (VRP) (Dec. 27, 2019) at 17-18. The trial court granted the State’s motion for summary judgment “for the reasons articulated by the [State]” and denied AGC’s motion for summary judgment. VRP (Dec. 27, 2019) at 20. The trial court’s order stated, “SSB 5493 does not violate . . . article II, section 37 of the Washington Constitution.” Clerk’s Papers at 2538. AGC appealed to this court.

We reversed the trial court, holding that SSB 5493, codified at RCW 39.12.015(3), violated the non-delegation doctrine because “it mandate[d] the use of schedule wage rate lists in CBAs after its enactment to establish prevailing wages.” AGCW I, 19 Wn. App. 2d at 109. We declined to address AGC’s claim that the statute violated article II, section 37 of the Washington Constitution in light of our holding that the statute violated the non-delegation doctrine. Id. at 101 n.4.

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