State Ex Rel. Departments of Transportation & Labor v. Enserch Alaska Construction, Inc.

787 P.2d 624, 1989 Alas. LEXIS 162

• Court: Alaska Supreme Court
• Decided: December 18, 1989
• Docket: S-2693, S-2694, S-2731 and S-2736
• Status: Published

Opinions

OPINION

MOORE, Justice.

This appeal involves the constitutionality of AS 36.10.160 which provides a hiring preference to residents of economically distressed zones for certain employment on public works projects. The superior court, Judge Douglas J. Serdahely, declared the law unconstitutional under Alaska’s equal protection clause. We affirm the superior court’s decision on the unconstitutionality of the regional preference law and its rulings concerning waiver, intervention, and standing. We reverse the superior court’s ruling on the right to seek damages for the state’s enforcement of the unconstitutional law.

I. FACTS

In January 1986, we held that the state’s local hire law, AS 36.10.010, violated the privileges and immunities clause of article IV, section 2 of the United States Constitution. Robison v. Francis, 713 P.2d 259 (Alaska 1986). In May 1986, the Legislature enacted a new statute creating four hiring preferences on public works projects.¹ The first is a preference for eligible individuals residing within a zone of underemployment. AS 36.10.150. The second is a preference for eligible residents of an economically distressed zone. AS 36.10.160. This is the preference at issue in this appeal. The third is a preference for eligible economically disadvantaged minority residents of a zone. AS 36.10.170. The fourth is for eligible economically disadvantaged female residents of a zone. AS 36.10.175.

These employment preferences are not self-executing. To trigger application of the employment preference provisions, the Commissioner of the Department of Labor (“the Commissioner”) must determine that a zone is economically distressed. AS 36.-10.160(a).² An economically distressed zone is an area in which: (1) zone residents have per capita income less than 90 percent of the United States per capita income, or zone unemployment exceeds national unemployment by at least five percent; (2) the lack of employment opportunities substantially contributes to social or economic problems; and (3) employment of nonresident workers is a peculiar source of unemployment for resident workers.³

In 1987, the state and Enserch Alaska Construction, Inc. (“Enserch”) entered into a contract for the construction of a fifty-five mile road from the Bering Sea coast to the proposed Red Dog Mine in the Northwest Arctic Borough (“the Borough”).⁴ The contract required Enserch to “comply with all applicable laws and regulations regarding the hiring of Alaska residents now in effect or that may subsequently take effect....”

When Ensereh started work on the project, the Commissioner had not yet designated any area of the state as an economically distressed zone. However, in 1987, the Borough asked the Commissioner to declare the Borough an economically distressed zone. The Department of Labor (“DOL”) gathered the information necessary to evaluate whether the Borough was eligible for such a designation. After reviewing this information, the Commissioner issued emergency regulations declaring the Borough an economically distressed zone.⁵

As a result of the Borough’s designation as an economically distressed zone, the road project was subject to the employment preference provisions. AS 36.10.160. Thus, Ensereh was required to fill at least fifty percent of the positions available in certain designated crafts⁶ with eligible, qualified Borough residents. After implementation of the preference, employment of the Borough residents on the project increased from fifteen percent to forty-two percent.

II. PROCEEDINGS

In November 1987, Ensereh filed suit against the state seeking (1) a declaration that AS 36.10.160 violated state and federal equal protection guarantees and the federal privileges and immunities clause, and (2) damages for its increased costs in complying with the law. In December 1987, En-sereh moved for partial summary judgment.

The superior court permitted the Borough, NANA Regional Corporation, Inc. (“NANA”), Daniel Harvey, and Melvin Morena to intervene as defendants. The court also allowed Kenneth L. Opel and Ralph C. LaRose, Jr. to intervene as plaintiffs. Ensereh moved for partial summary judgment that the employment preference deprived it of equal protection of the laws and the privileges and immunities of national citizenship. The state cross-moved for summary judgment on the ground that Ensereh expressly had waived its right to recover damages. NANA moved to dismiss the complaint on the grounds of standing, ripeness, waiver of Enserch’s right to challenge the constitutionality of the law, and failure to state a claim upon which relief may be granted.

The superior court entered partial summary judgment for Ensereh. The court held that Ensereh did not waive its right to challenge the constitutionality of the regional preference law. The court held that Opel, LaRose, and Ensereh had citizen-taxpayer standing to challenge the preference law on equal protection grounds; however, they lacked standing to assert a federal privileges and immunities challenge.⁷ The court then concluded that the preference law violated the equal protection provision of the Alaska Constitution. Finally, the court ruled that the state was not entitled to summary judgment on the issue whether Ensereh waived its right to seek damages for the state’s enforcement of the law because evidence in the record presented genuine issues of material fact. The court entered partial final judgment pursuant to Civil Rule 54(b).

The state and NANA appeal. They argue that: (1) Enserch waived its right to challenge the constitutionality of the regional preference law; (2) the superior court abused its discretion in permitting LaRose and Opel to intervene as plaintiffs; (3) Enserch, LaRose, and Opel lack standing to raise an equal protection challenge; (4) the regional preference law does not deny equal protection; and (5) Enserch waived its right to recover damages for the state’s enforcement of the law. The Borough appealed, arguing that AS 36.10.160 is constitutional. Enserch cross-appealed, arguing that it had not waived its right to recover damages as a matter of law.

III. WAIVER

As a threshold matter, the state and NANA argue that the superior court erred in concluding that Enserch did not waive its right to challenge the constitutionality of AS 36.10.160. Enserch contends that, as a matter of law, it did not waive its right to challenge the law.

The state relies on Section 17 of its contract with Enserch which provides in part, “The Contractor shall comply with all applicable laws and regulations regarding the hiring of Alaska residents now in effect or that may subsequently take effect during the term of this contract.” Enserch argues that the contract provision only applies to constitutional laws. It asserts that the state’s enforcement of a condition requiring compliance with an unconstitutional law would constitute a breach of the implied covenant of good faith and fair dealing. Thus, Enserch concludes that it was entitled to summary judgment because the provision is unenforceable as a matter of law.

We conclude that Enserch did not waive its right to challenge the constitutionality of the regional preference law. The superor court correctly held that Enserch could maintain its action for declaratory relief. In Salla v. County of Monroe, 64 A.D.2d 437, 409 N.Y.S.2d 903 (1978), aff’d, 48 N.Y.2d 514, 423 N.Y.S.2d 878, 399 N.E.2d 909 (1979), cert. denied, 446 U.S. 909, 100 S.Ct. 1836, 64 L.Ed.2d 262 (1980), a contractor accepted a county contract which required compliance with all local and state laws, including local hire provisions. 409 N.Y.S.2d at 905. The contractor sued the state, seeking a declaration that a local hire law violated the state constitution. The court held that a “public contract should not be conditioned on a waiver of constitutional rights.” 409 N.Y.S.2d at 907. In a similar case, a New York appellate court explained:

The fact that the petitioner has signed contracts with the Department which set forth the debarment policy [for failure to comply with state affirmative action programs] should not work a waiver of petitioner’s right to challenge the Department’s authority to establish such a policy. Otherwise, an agency could create by contract authority ... which has not been delegated by the Legislature.

Callahan Industries, Inc. v. White, 118 A.D.2d 167, 503 N.Y.S.2d 930, 933 n. * (1986) (citations omitted).

As a matter of public policy, we conclude that a provision in a public contract requiring compliance with state laws does not prevent the contractor from challenging the law as unconstitutional. As we noted in Lynden Transport, Inc. v. State, 532 P.2d 700, 717 (Alaska 1975), “[although most constitutional rights are subject to waiver, they must be knowingly and voluntarily waived. In civil cases (no less than in criminal), the courts must indulge every reasonable presumption against their waiver.”

Enserch did not explicitly waive its right to challenge the constitutionality of the regional preference law. The contract only required compliance “with all applicable laws and regulations regarding the hire of Alaska residents now in effect or that may subsequently take effect....” Enserch’s promise to comply with the regional preference law and its implementing regulations is not a promise to refrain from challenging its constitutionality. Accordingly, we conclude that the superior court was correct in ruling that Enserch did not waive its right to challenge the constitutionality of the regional preference law or its implementing regulations.

IV. INTERVENTION BY OPEL AND LaROSE

The State and NANA argue that the superior court abused its discretion in allowing Opel and LaRose to intervene in this action because their motion was filed six days before the scheduled motions for summary judgment. Enserch contends that the court acted within its discretion by permitting intervention and continuing oral argument for a week. The grant or denial of a motion for permissive intervention is subject to review for abuse of discretion. State v. Weidner, 684 P.2d 103, 113 (Alaska 1984).

Anyone may intervene in an action when the applicant has a claim sharing common questions of law or fact with the main action. Alaska R.Civ.P. 24(b).⁸ In addition, the motion to intervene must be timely and should not unduly delay or prejudice the adjudication of the rights of the original parties. Id.

The state concedes that Opel and LaRose raise the same constitutional issues asserted by Enserch. However, the state and NANA contend that they were unduly prejudiced by Opel and LaRose’s late intervention and the superior court’s refusal to extend time for discovery on the inter-venors’ claims beyond the seven days granted. We first note that Opel and La-Rose did not raise any issues not already raised by Enserch. Second, the state and NANA were able to depose the intervenors before argument on the summary judgment motion. In light of these facts, we conclude that the superior court did not abuse its discretion by permitting Opel and LaRose to intervene.

V. STANDING

The state and NANA argue that Opel, LaRose, and Enserch lack standing to assert the equal protection claim. The superior court ruled that Opel, LaRose, and Enserch had citizen-taxpayer standing to challenge the regional preference law on equal protection grounds.

“Standing in our state courts is not a constitutional doctrine; rather, it is a rule of judicial self-restraint based on the principle that courts should not resolve abstract questions or issue advisory opinions.” The “concept of standing has been interpreted broadly in Alaska.” Trustees for Alaska v. State, 736 P.2d 324, 327 (Alaska 1987).

Citizen-taxpayer standing cannot be claimed as a matter of right when challenging government conduct. 736 P.2d at 329. Instead, the party asserting citizen-taxpayer standing must meet the following criteria:

First, the case in question must be one of public significance. One measure of significance may be that specific constitutional limitations are at issue_ Second, the plaintiff must be appropriate in several aspects. For example, standing may be denied if there is a plaintiff more directly affected by the challenged conduct in question who has or is likely to bring suit. The same is true if there is no true adversity of interest, such as a sham plaintiff whose intent is to lose the lawsuit and thus create judicial precedent upholding the challenged action. Further, standing may be denied if the plaintiff appears to be incapable, for economic or other reasons, of competently advocating the position it has asserted.

736 P.2d at 329-30 (footnotes omitted).

Opel and LaRose are construction workers who do not reside in the Borough. Opel is a resident of Anchorage and a heavy equipment operator. He was employed by Enserch on the road project during the fall of 1987 until the project shut down for the winter. He asserts that because of the regional preference law it is uncertain whether he will be rehired by Enserch in the spring.

LaRose is an electrician and a resident of Fairbanks who was turned away from the job site the day that Enserch received notice of the emergency order implementing the employment preferences. Several weeks later, LaRose was hired to work on the project. He claims that he lost at least five weeks of wages because of the preference.

We agree with the superior court that LaRose and Opel have citizen-taxpayer standing to challenge the preference under the Alaska equal protection clause. Initially, we note that the constitutionality of the regional preference - law is clearly a question of public significance. As we noted in Trustees, one measure of significance is that a specific constitutional limitation is at issue. Here Opel and LaRose argue that the regional preference law violates the specific guarantee of “equal opportunity” for all Alaskans found in article I, section 1 of the Alaska Constitution.

Second, we believe that both individuals are appropriate parties to bring this suit. Opel and LaRose are construction workers who have earned their livelihood in part from working on public works projects. Each intends to continue his employment with Enserch but is concerned that the resident hiring preferences may deny him an opportunity to do so. As a result, there is no doubt that Opel and LaRose meet the basic requirement of adversity necessary for standing. See Trustees, 736 P.2d at 327. They are not sham plaintiffs; no one has questioned the sincerity of their belief that the regional preference law is unconstitutional. They are represented by competent counsel who have forcefully presented their position. Nor do we believe that there are other persons more directly affected who have or are likely to bring suit. Consequently, we affirm the superior court on the issue of Opel and LaRose’s standing to challenge the regional preference law under the Alaska Constitution.

The state and NANA contend that Enserch lacks standing since it cannot assert the constitutional rights of a third party such as an applicant denied employment due to the employment preference law.⁹ We need not reach the question of third party standing because we believe that Enserch itself possesses a sufficient interest to confer interest-injury standing.

Interest-injury standing requires “an interest adversely affected by the conduct complained of.” Trustees, 736 P.2d at 327. As we noted in Trustees:

Such an interest may be economic, or it may be intangible, such as an aesthetic or environmental interest. The degree of injury to the interest need not be great; “[t]he basic idea ... is that an identifiable trifle is enough for standing to fight out a matter of principle; the trifle is the basis for standing and the principle supplies the motivation.”

Id. (citations omitted).

Enserch alleges that the enforcement of the preference law caused it economic injury of $1,000,000. Because Enserch alleges injury from the state’s enforcement of an unconstitutional law, we conclude that En-serch satisfies the basic requirement of adversity for standing in our state courts. We fail to see a valid justification for denying Enserch standing to challenge the preference law simply because the law’s alleged constitutional infirmity involves discrimination between Alaska employees.

VI. EQUAL PROTECTION

The state argues that the superior court erred in entering summary judgment because (1) the evidence presents genuine issues of material fact, and (2) as a matter of law, the regional preference law does not violate the equal protection clause.

Enserch accepted for purposes of its summary judgment motion the defendants’ statement of facts. The superior court concluded that the development of a factual record with respect to the equal protection claim was unnecessary insofar as the analysis of such claim was essentially legal rather than factual in nature. The state and NANA have failed to present in their arguments on appeal any disputed issues of material fact which preclude summary judgment.¹⁰

We conclude that the record before us provides ample evidence of the legislature’s justifications for adopting the regional preference law as well as the economic and sociological data supporting the Commissioner’s findings as to the conditions in the Borough. In addition, the State and En-serch have supplemented the record on appeal with subsequent DOL preference determinations and reports concerning the economic effects of non-residents working in Alaska. We conclude that the superior court did not err in finding that no genuine issues of material fact were in dispute and that an evidentiary hearing was not necessary in order to resolve the equal protection claim.

Article I, section 1 of the Alaska Constitution provides in part that “all persons are equal and entitled to equal rights, opportunities, and protection under the law.” We have interpreted the language of article I, section 1 to require analysis using a sliding scale approach instead of the tiered approach of federal equal protection analysis. State v. Erickson, 574 P.2d 1, 12 (Alaska 1978). We refined this approach in State v. Ostrosky, 667 P.2d 1184, 1192-93 (Alaska 1983) and Alaska Pacific Assurance Co. v. Brown, 687 P.2d 264, 269-70 (Alaska 1984). In applying the sliding scale analysis, we have noted on a number of occasions that our state constitution often provides greater protection to individual rights than does the U.S. Constitution.¹¹

Under Brown, we first determine the importance of the individual interest impaired by the challenged enactment. We then examine the importance of the state interest underlying the enactment, that is, the purpose of the enactment. Depending upon the importance of the individual interest, the equal protection clause requires that the state’s interest fall somewhere on a continuum from mere legitimacy to a compelling interest. Finally, we examine the nexus between the state interest and the state’s means of furthering that interest. Again depending upon the importance of the individual interest, the equal protection clause requires that the nexus fall somewhere on a continuum from substantial relationship¹² to least restrictive means. 687 P.2d at 269-70. The equal protection clause thus requires that all enactments be substantially related to a legitimate state interest. Some enactments are held to higher standards, and may even need to be the least restrictive means of achieving a compelling state interest.

We first examine the nature of the interest impaired by the regional preference law. Enserch argues that the right to seek and obtain gainful employment in one’s craft is a very important one. The Borough responds that, while the general “right to work” may be important, the right to work on a public job in a particular craft in a particular location is much less critical. Similarly, the state argues that we should consider the degree to which a law impairs the right at issue before assigning the right a weight. See Brown, 687 P.2d at 271 (impairments of the right to travel). Because the preference applies to only 50 percent of certain craft positions on a public works project in a particular area, the State argues for the application of a low level of scrutiny.

Our cases have acknowledged the importance of the opportunity to work. For purposes of the federal privileges and immunities clause, the right to pursue a living in a particular line of work is a fundamental right. Sheley v. Alaska Bar Association, 620 P.2d 640, 643 (Alaska 1980). As we observed in Robison v. Francis, 713 P.2d 259, 265 (Alaska 1986), “employment in the construction industry must be considered a fundamental right entitled to the protection of the privileges and immunities clause.” ¹³

While the right to earn a living is not a fundamental right under the federal equal protection clause, Massachusetts Bd. of Retirement v. Murgia, 427 U.S. 307, 96 S.Ct. 2562, 49 L.Ed.2d 520 (1976), we have noted that the right to engage in an economic endeavor within a particular industry is an “important” right for state equal protection purposes. Commercial Fisheries Entry Comm’n v. Apokedak, 606 P.2d 1255, 1266 (Alaska 1980).

At issue in Apokedak was whether the Limited Entry Act restricting commercial fishing in Alaskan waters was consistent with the equal protection clause of the Alaska Constitution. The Limited Entry Act barred commercial fishing in Alaska fisheries without an entry permit. Entry permits only could be obtained from the state if the applicant held a gear license before January 1, 1973. In Apokedak, as here, the right in question was the right to work in a particular industry.

The state argues that the regional preference law is entitled to greater deference because it applies only to certain crafts in state construction projects in certain areas. However, that the local hire law is limited to public works construction projects does not significantly reduce its impact since “public works account for the majority of commercial construction activity in Alaska.” ¹⁴ By restricting the number of public works construction jobs available to non-zone residents, the regional preference law will impose significant limitations on construction workers’ overall employment opportunities. The unemployed electrician from Bethel and the unemployed heavy equipment operator from Dillingham seeking a job on the Enserch project will find little solace in the fact that other occupations or private jobs are not covered by the preference.

We acknowledge that the resident preference applies to at least fifty percent of the positions available in a particular craft. Thus, we are not necessarily confronted with a total deprivation of employment opportunities for nonresidents of a zone.¹⁵ However, we also were not faced with a total deprivation of employment in Apokedak where we announced that the right to engage in economic endeavor is an important one. In Apokedak, we noted that while those without gear licenses “are deprived of some opportunities of changing their status in the fishing industry ... they may secure an entry permit through transfer, purchase or inheritance.” 606 P.2d at 1266. Therefore, that the restriction on employment opportunities may not be total does not diminish the importance of the right asserted.¹⁶

We conclude that the right affected by the regional preference law is an important one. Therefore, we will closely scrutinize the law. Patrick v. Lynden Trans., Inc., 765 P.2d 1375, 1379 (Alaska 1988). Close scrutiny of enactments impairing the important right to engage in economic endeavor requires that the state’s interest underlying the enactment by not only legitimate, but important, and that the nexus between the enactment and the important interest it serves be close.¹⁷

We next turn to an examination of the state’s interest in adopting the regional preference law.¹⁸ The State, NANA, and the Borough argue that the preference in AS 36.10.160 has a number of important goals. We agree. The legislative findings explain that the act was enacted to “reduce unemployment among residents of the state, remedy social harms resulting from chronic unemployment, and assist economically disadvantaged residents.” Ch. 33, § 1, SLA 1986. Thus, the statute represents an attempt to preserve the social structure in an economically distressed zone by providing employment opportunities for qualified workers on state-funded construction projects there.

While these goals are important, they conceal the underlying objective of economically assisting one class over another. We have held that this objective is illegitimate. In Lynden Transport, Inc. v. State, 532 P.2d 700, 710 (Alaska 1975), we ruled that “discrimination between residents and nonresidents based solely on the object of assisting the one class over the other economically cannot be upheld under ... the ... equal protection clause[ ].” While that case involved discrimination between state residents and nonresidents, the principle is equally applicable to discrimination among state residents. We conclude that the disparate treatment of unemployed workers in one region in order to confer an economic benefit on similarly-situated workers in another region is not a legitimate legislative goal.¹⁹

This conclusion essentially ends our inquiry. That the legislature also hoped to preserve the social structure of economically distressed areas cannot be viewed as a purpose separate from that of aiding the residents of such areas. It would not make sense to conclude that a statute may not discriminate between residents of two areas in order to aid the residents of the more disadvantaged area, but that such a statute could discriminate between residents of two areas in order to aid the communities in the more disadvantaged area. The communities are merely the collective sum of the residents. Our constitution guarantees the rights of “persons,”²⁰ not communities viewed separately from the people who constitute the communities.

Even if we were to find that community aid is an important objective separate from the goal of benefitting the residents of a given area, we would hold the statute unconstitutional because the fit between that objective and the preference law is not close. The law is seriously over- and un-definclusive because it does not prioritize relief for those areas most affected by nonresident employment. Residents of less distressed zones may be unfairly advantaged compared to residents of more distressed zones. This means that nonresident workers will be unfairly disadvantaged in less distressed zones. Indeed, while the Commissioner selected the Borough as the first place to invoke the preference law, his own report showed that the Borough had the lowest percentage of nonresident workers in the twenty-nine zones surveyed. Because the economic criteria for designating an economically distressed zone are very broad given Alaska’s historically high unemployment rate compared to the rest of the nation,²¹ the Commissioner at any time could designate many regions within the state as distressed zones. The regional preference law thus has a potential for pervasive over- and underinclusiveness. Given the law’s lack of prioritization together with its broad eligibility require-' ments, we would hold that the law’s classification scheme is not closely related to its purpose.²²

For the above reasons, we affirm the decision of the superior court that AS 36.-10.160 violates the Alaska Constitution.-

VII. DAMAGES

The state and NANA argue that the superior court erred in concluding that En-serch did not waive its right to seek damages from the state for its enforcement of the regional preference law. We reverse the superior court’s determination without deciding the waiver issue because Enserch does not have the right to seek damages for the enforcement of an unconstitutional law. In the sequel to Robison, we denied Francis’s claim for nearly $31,000 in wages he would have earned but for the state’s enforcement of AS 36.10.160’s predecessor. Robison v. Francis, 777 P.2d 202 (Alaska 1989) (“Robison II”). In Robison II, we held that “the state may not be held liable for damages arising from the passage of unconstitutional legislation.” 777 P.2d at 204. We explained the sound reason for this holding in Vest v. Schafer, 757 P.2d 588 (Alaska 1988):

For a court to hold a state liable for unconstitutional legislation would introduce a profound conservative tilt into the lawmaking process. Legislators would become reluctant to. legislate, knowing that money damages were at stake if a court ultimately disagrees with their own appraisal of the constitutionality of a bill.

757 P.2d at 595. For these reasons, we hold that neither Enserch, Opel, nor La-Rose is entitled to seek damages for the state’s enforcement of AS 36.10.160.²³ Therefore, we need not consider whether the superior court was correct in concluding that Enserch did not waive its right to seek such damages from the state.

VIII. CONCLUSION

We affirm the superior court’s ruling that Enserch did not waive its right to challenge the constitutionality of the regional preference law, and that Enserch, Opel, and LaRose have standing. We conclude that the court did not abuse its discretion in allowing the individual plaintiffs to intervene. We hold that AS 36.10.160 and the implementing regulations and orders contravene the equal protection provision of the state constitution. Finally, we conclude that Enserch has no right to seek damages for the state’s enforcement of the unconstitutional law. The judgment of the superior court is AFFIRMED in part and REVERSED in part.

MATTHEWS, C.J., joins, and BURKE, J., joins in part.

BURKE, J., concurs.

COMPTON, J., dissents.

RABINOWITZ, J., dissents joined by COMPTON, J.

1 . AS 36.10.150-.180. AS 36.10.180 sets forth the projects subject to preference:

(a) The preferences established in AS 36.10.-150-36.10.175 apply to work performed

(1) under a contract for construction, repair, preliminary surveys, engineering studies, consulting, maintenance work, or any other retention of services necessary to complete a given project that is let by the state or an agency of the state, a department, office, state board, commission, public corporation, or other organizational unit of or created under the executive, legislative or judicial branch of state government, including the University of Alaska and the Alaska Railroad Corporation, or by a political subdivision of the state including a regional school -board with respect to an educational facility under AS 14.11.020:

(2) on a public works project under a grant to a municipality under AS 37.05.315;

(3) on a public works project under grant to be named recipient under AS 37.05.316;

(4) on a public works project under a grant to an unincorporated community under AS 37.05.317; and

(5) on any other public works project or construction project that is funded in whole or in part by state money.

2 . AS 36.10.160(a) provides:

Immediately following a determination by the commissioner that an economically distressed zone exists, and for the next two fiscal years after the determination, qualified residents of the zone who are eligible under AS 36.10.140 shall be given preference in hiring for at least 50 percent of employment on each project under AS 36.10.180 that is wholly or partially sited within the zone. The preference applies on a craft-by-craft or occupational basis.

3 . AS 36.10.160(b). AS 36.10.160(b) provides:

The commissioner shall determine that an economically distressed zone exists if the commissioner finds that

(1) the per capita income of residents of the zone is less than 90 percent of the per capita income of the United States as a whole, or the unemployment rate in the zone exceeds the national rate of unemployment by at least five percentage points;

(2) the lack of employment opportunities in the zone has substantially contributed to serious social or economic problems in the zone; and

(3) employment of workers who are not residents is a peculiar source of unemployment of residents of the zone.

The employment of nonresidents is a "peculiar source of unemployment” in an area when “more than 10 percent of the residents of an area who are trained or experienced in a craft or occupation are unemployed and more than 10 percent of the total number of workers employed in that area in that craft or occupation are not residents of the area.” 8 AAC 30.069.

4 . The Red Dog Mine is a private venture to extract zinc and lead from the DeLong Mountains. A transportation corridor, including a road and a harbor facility, had to be developed to extract and transport the ore. Recognizing both the lack of private capital and the project’s anticipated economic benefit to the region, the Alaska Legislature appropriated 1132,000,000 in loans and $12,000,000 in cash to enable the Alaska Industrial Development and Export Authority (AIDA) to secure bonds to finance this transportation corridor. Ch. 67, SLA 1985.

5 . In support of this determination, the Commissioner found that: (1) the Borough had a 12-month unemployment rate of 15.7 percent compared to the national 12-month average of 6.9 percent; (2) lack of employment in the Borough had substantially contributed to its economic and social problems; and (3) more than 10 percent of the qualified or trained resident workers in 12 different crafts were unemployed while more than 10 percent of those employed in the Borough in the 12 crafts were not Borough residents.

6 . The Commissioner’s findings covered the following crafts or occupations:

Airline Pilots and Navigators

Carpenters

Construction Laborers

Construction Managers

Electricians and Power Transmission Installers

Equipment Operators

Plumbers, Pipefitters and Steamfitters

Receptionists

Survey Crews

Truck Drivers

Vehicle and Mobile Equipment Mechanics and Repairers

Welders and Cutters

Ensereh only was required to hire qualified local residents. AS 36.10.070(b). If qualified local residents are not available, DOL may grant a waiver to allow nonresidents to be hired. Id. In this case, DOL processed 14 waiver requests covering 47 employees. DOL granted waivers for 43 employees and denied four.

7 .Ensereh did not appeal the privileges and immunities ruling.

8 . Civil Rule 24(b) provides:

(b) Permissive Intervention. Upon timely application anyone may be permitted a intervene in an action when an applicant's claim or defense and the main action have a question of law or fact in common_ In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.

9 . Generally, a litigant lacks standing to assert the constitutional rights of another. Falcon v. Alaska Pub. Officers Comm’n, 570 P.2d 469, 475 n. 20 (Alaska 1977); see Wagstaff v. Superior Court, 535 P.2d 1220, 1225 (Alaska 1975). A corporation can only assert its own rights and not the rights of its employees. Virginian Ry. v. System Fed’n No. 40, 300 U.S. 515, 558, 57 S.Ct. 592, 604, 81 L.Ed. 789 (1937).

Exceptions to the general rule exist. For example, we have allowed third party standing where a special relationship exists between the plaintiff and the third party. See, e.g., Bonjour v. Bonjour, 592 P.2d 1233, 1241 n. 15 (Alaska 1979) (parent has standing to assert child’s constitutional rights). Moreover, standing may be conferred on a third party when the interested party’s attempt to vindicate his rights would forfeit these very rights. Falcon, 570 P.2d at 475. The United States Supreme Court has allowed a third party to assert an interested party’s equal protection claims when the interested party is unable to assert his own rights. Barrows v. Jackson, 346 U.S. 249, 73 S.Ct. 1031, 97 L.Ed. 1586 (1953).

10 . Instead, the state and NANA rely on the United States Supreme Court’s opinion in United Building and Construction Trades Council v. Mayor and Council of Camden, 465 U.S. 208, 104 S.Ct. 1020, 79 L.Ed.2d 249 (1984), for the proposition that an evidentiary hearing or trial should be held before Enserch’s equal protection claim can be adjudicated. We note that the procedural posture of the Camden case was very different from this case, and therefore find it unpersuasive as support for a remand in this case. In Camden, the Supreme Court concluded that it could not evaluate the plaintiffs federal privileges and immunities challenge to the Camden municipal ordinance on the record before it since the case had been decided by the New Jersey Supreme Court on "direct appeal after the brief administrative proceedings that led to approval of the ordinance by the State Treasurer.” 465 U.S. at 223. Thus, the U.S. Supreme Court concluded that ”[i]t would not be appropriate for the Court either to make factual determinations as an initial matter or to take judicial notice of Camden’s decay.” Id.

11 . See, e.g., Patrick v. Lynden Transp., Inc., 765 P.2d 1375, 1377 (Alaska 1988); Schafer v. Vest, 680 P.2d 1169, 1172 (Alaska 1984) (Burke, C.J., concurring); Commercial Fisheries Entry Commission v. Apokedak, 606 P.2d 1255, 1267 (Alaska 1980).

12 . In stating this minimum level of scrutiny of the nexus between the state’s interest in the enactment and the state’s chosen means, we have sometimes suggested that the classification must be “reasonable, not arbitrary" and rest “upon some ground of difference having a fair and substantial relation to the object of the legislation.” Patrick v. Lynden Transp., Inc., 765 P.2d 1375, 1377 (Alaska 1988); Herrick’s Aero-Auto-Aqua Repair Service v. State, Dept. of Transp., 754 P.2d 1111, 1114 (Alaska 1988); State v. Ostrosky, 667 P.2d 1184, 1193 (Alaska 1983). This language comes originally from F.S. Royster Guano Co. v. Virginia, 253 U.S. 412, 415, 40 S.Ct. 560, 561-62, 64 L.Ed. 989 (1920) and was subsequently quoted in our decisions in State v. Wylie, 516 P.2d 142, 145 (Alaska 1973) and Isakson v. Rickey, 550 P.2d 359, 362 (Alaska 1976). The requirement that the classification be reasonable and not arbitrary predates our Erickson sliding scale analysis. Since it is a requirement imposed upon the state’s chosen means rather than the state’s interest or the nexus between the state’s interest and the means, the imposition of this requirement is a fourth level of equal protection analysis not required by our opinion in Brown. This requirement need not be part of our equal protection analysis because due process already requires that enactments be reasonable and not arbitrary. Concerned Citizens of South Kenai Peninsula v. Kenai Peninsula Borough, 527 P.2d 447, 452 (Alaska 1974); Mobile Oil Corp. v. Local Boundary Comm’n, 518 P.2d 92, 101 (Alaska 1974). If an enactment requiring only the minimum level of scrutiny could ever be substantially related to a legitimate state interest and still be unreasonable or arbitrary, we would find that it denied due process, not equal protection.

13 . The local preference law here like the state preference law at issue in Robison is subject to the federal privileges and immunities clause. United Bldg. and Constr. Trades Council v. Mayor and Council of Camden, 465 U.S. 208, 104 S.Ct. 1020, 79 L.Ed.2d 249 (1984) (local hire preference law for city public works projects is subject to scrutiny under the privileges and immunities clause even though it discriminated against state residents as well). The superior court ruled that the plaintiffs in this action being Alaska residents and an Alaska corporation are not protected in this case by the federal privileges and immunities clause. Enserch did not appeal this ruling.

14 . Robison, 713 P.2d at 262. Even in good economic times, public construction "accounts for approximately sixty to seventy percent or more of the total construction dollar outlay within the state.” Id.

15 . See Robison, 713 P.2d 259 (Alaska 1986) (all positions on state public works projects closed to non-resident workers); Gilman v. Martin, 662 P.2d 120, 125 (Alaska 1983) (non-borough residents prohibited from participating in borough land lottery); Sheley v. State Bar Ass’n, 620 P.2d 640 (Alaska 1980) (30-day residency requirement for bar admission).

16 . The impact of the 50 percent preference is compounded by the cumulative effect of other preferences which also might apply in a particular zone. For example, the preference for economically disadvantaged minority residents in AS 36.10.170 provides for a preference of the greater of 25 percent or a percentage representative of the civilian minority residents in a zone. Consequently, in some zones the economically disadvantaged minority preference is as high as 80 percent. See Resident Hire Preference Determination, June 20, 1988 at 58, 62.

The law is not saved by the Commissioner’s power to waive a preference when eligible zone residents are unavailable. AS 36.10.070. First, there is no guarantee that the Commissioner will grant a waiver for a particular position. Moreover, in situations where qualified residents are available, these waivers are of no value to non-resident unemployed workers.

17 .In Apokedak, we noted that "[biased on the nature of the right, a greater or lesser burden is placed on the state to show that the classification has a fair and substantial relation to a legitimate governmental objective.” 606 P.2d at 1264. This was a correct statement of the rule we announced in Erickson, 574 P.2d at 12. However, this formulation led us to require that an enactment impairing an important right bear only a fair and substantial relationship to the state’s interest in the enactment. Apokedak, 606 P.2d at 1266. This result is at odds with our holding in Brown, 687 P.2d at 269-70, that the nexus between an enactment and the state’s interest must be more than merely substantial when more important rights are impaired. We now state the proper inquiry for enactments impairing rights as important as the right to engage in economic endeavor. We do not question the fundamental nature of our state equal protection analysis: it remains a single, flexible test and not a rigid, tiered approach like that employed in interpreting the equal protection clause of the U.S. Constitution. Enactments impairing rights more or less important than the right to engage in economic endeavor shall receive more or less scrutiny when challenged under the equal protection clause of the Alaska Constitution.

18 . The superior court first looked to AS 36.10.-006 to discern the purpose of the statute. However, this statement of purpose was adopted as part of AS 36.10.010, the resident hire law overturned in Robison. Thus, this provision is of little value in determining the purposes of the regional preference law.

19 . Similarly, we have observed that excluding "non-residents from public construction jobs so that more jobs will be available to Alaskans ... is not a permissible justification for discrimination under the privileges and immunities clause." Robison v. Francis, 713 P.2d 259, 267 (Alaska 1986). Although the Alaska Constitution does not have a privileges and immunities clause, it is our view that the equal rights, opportunities and protection clause of art. I, § 1 affords at least as much protection intrastate to fundamental rights that the privileges and immunities clause affords interstate. See Lynden Trans., Inc. v. State, 532 P.2d 700, 710 (Alaska 1975); Robison, 713 P.2d at 264 & n. 5, 271. The present statute discriminates against out-of-state residents as well as Alaska residents who do not reside in a given zone. It would be anomalous to conclude that out-of-state residents are afforded a higher degree of constitutional protection than in-state residents who are also discriminated against.

20 .For example, article I, section 1 provides: Inherent rights. This constitution is dedicated to the principles that all persons have a natural right to life, liberty, the pursuit of happiness, and the enjoyment of the rewards of their own industry; that all persons are equal and entitled to equal rights, opportunities, and protection under the law; and that all persons have corresponding obligations to the people of the state.

21 . Under the regional preference law, a region may be declared economically distressed if the unemployment rate within that region exceeds the U.S. unemployment rate by five percentage points. AS 36.10.160(b)(1). State studies indicated that the entire State of Alaska could have been designated an economically distressed zone in 1985. See also Robison, 713 P.2d at 265 n. 6 (setting forth unemployment rates in the U.S. and Alaska from 1970-1983).

22 . Enserch argued that there was not a sufficiently close means-ends fit on the grounds that the law will not effectively achieve the legislature’s purpose and it may have undesirable economic consequences. These arguments, which sound in substantive due process, are unrelated to the question whether the preferences are sufficiently tailored to the purposes of the law.

23 .Enserch also is not entitled to recover damages for breach of contract since it promised to “comply with all laws and regulations regarding the hiring of Alaska residents now in effect or that may subsequently take effect." While this clause does not amount to a waiver of Enserch's right to challenge the constitutionality of the regional preference law, the clause is a promise to comply with the law and its implementing regulations. By agreeing to comply with the Kotzebue hiring preference, Enserch waived its right to seek contract damages for increased costs due to its imposition.