J.A. Croson Co. v. J.A. Guy, Inc.

81 Ohio St. 3d 346
Ohio Supreme Court·Decided April 8, 1998·No. Nos. 96-2578 and 97-14·Published·Cited by 29 cases

Opinion

Cook, J.

JOB TARGETING

The legal dispute in this case centers on Local 189’s use of a job targeting program. Job targeting is a strategy employed nationwide by construction unions, with the cooperation of unionized contractors, in response to declining union membership and the expanding market penetration of nonunion construction. See Northup & White, Subsidizing Contractors to Gain Employment; Construction Union “Job Targeting” (1996), 17 Berkeley J. Employment & Labor L. 62. The aim of job targeting programs is clear: unions want union contractors to bid successfully on construction projects so that the jobs created by those projects will go to union members. Typically, unions carry out their job targeting programs by selecting projects to target and guaranteeing subsidies to union contractors that submit successful bids. The result is to lower union [349] contractors’ overall costs required to complete targeted projects, enabling union contractors to submit competitive bids.

Local 189 carries on job targeting through its Industry Advancement Program. The union pays its grants to unionized contractors on targeted jobs from a fund specifically created for the program. The fund is maintained through union members’ voluntary contributions, which are deducted from employee gross earnings at a rate of two percent and remitted to Local 189 pursuant to the dues checkoff clause of the union’s collective bargaining agreements with its unionized contractors. The collective bargaining agreements label the two percent deduction as a “Market Recovery Assessment” and state that the assessment is additional to the 1 3/4 percent deduction for regular checkoff dues. The Market Recovery Assessment is 'subject to the periodic approval of union members.

Accordingly, whether working on a targeted job or not, Local 189 union members have two percent of their gross earnings deducted and remitted to the union for placement in the Industry Advancement Program fund. The union chooses which jobs to target. A unionized contractor may request that the union target a particular job, but the ultimate decision of whether to target a job and how much to pay in grants is made by Local 189 officials.

OHIO’S PREVAILING WAGE LAW

The prevailing wage statutes, R.C. 4115.03 through R.C. 4115.16, require contractors and subcontractors for public improvement projects to pay laborers and mechanics the so-called prevailing wage in the locality where the project is to be performed. “[T]he primary purpose of the prevailing wage law is to support the integrity of the collective bargaining process by preventing the undercutting of employee wages in the private construction sector.” (Plurality opinion.) State ex rel. Evans v. Moore (1982), 69 Ohio St.2d 88, 91, 23 O.O.3d 145, 147, 431 N.E.2d 311, 313.

Two prevailing wage provisions are at issue. The first is Ohio Adm.Code 4101:9-4-07, a regulation that was adopted by the Administrator of the Bureau of Employment Services pursuant to R.C. 4115.12. Ohio Adm.Code 4101:9-4-07(B)(6) makes it a violation of R.C. 4115.07 to deduct union fines or special assessments from employee wages.1 J.A. Croson seeks to demonstrate that the [350] Market Recovery Assessment withheld by J.A. Guy from its employees’ wages pursuant to its collective bargaining agreement with Local 189 is prohibited as a special assessment under the regulation. Also under J.A. Croson’s theory, J.A. Guy’s deduction of the Market Recovery Assessment reduces employee wages below the prevailing wage, constituting a violation of the prevailing wage law.

The second provision at issue is R.C. 4115.10(D), which prohibits any person from demanding, requesting, or receiving any part of a worker’s wages upon the statement, representation, or understanding that failure to comply with such demand or request will prevent the worker from procuring or retaining employment.2 The statute contains an exception for any agent or representative of a labor organization acting in the collection of dues or assessments of that organization. J.A. Croson seeks to demonstrate that J.A. Guy’s receipt of job targeting funds violates R.C. 4115.10(D).

PREEMPTION UNDER THE NLRA

In any case concerning preemption, congressional purpose must be the ultimate focus. Malone v. White Motor Corp. (1978), 435 U.S. 497, 504, 98 S.Ct. 1185, 1189-1190, 55 L.Ed.2d 443, 450. The National Labor Relations Act (“NLRA”) contains no express preemption provision. “Where the pre-emptive effect of federal enactments is not explicit, ‘courts sustain a local regulation “unless it conflicts with federal law or would frustrate the federal scheme, or unless the courts discern from the totality of the circumstances that Congress sought to occupy the field to the exclusion of the States.” ’ ” Metro. Life Ins. Co. v. Massachusetts (1985), 471 U.S. 724, 747-748, 105 S.Ct. 2380, 2393, 85 L.Ed.2d 728, 745, quoting Allis-Chalmers Corp. v. Lueck (1985), 471 U.S. 202, 209, 105 S.Ct. 1904, 1910, 85 L.Ed.2d 206, 213-214. In determining whether state regulation should yield to subordinating federal authority, the United States Supreme Court has been concerned with potential conflict regarding substantive law, remedies, and administration. The potential for conflict arises when two [351] law-enforcing authorities, with the disharmonies inherent in two systems, one federal the other state, are required to apply inconsistent standards of substantive law and/or differing remedial schemes. Garmon, 359 U.S. at 241-242, 79 S.Ct. at 778, 3 L.Ed.2d at 781.

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J.A. Croson Co. v. J.A. Guy, Inc., 81 Ohio St. 3d 346 (Ohio 1998).

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