In a free market, public agencies should be able to choose to partner with superior apprenticeship programs. But what would the agency do, when lower performing programs cry “discrimination”?
The story begins over two years ago, when the San Diego Unified District adopted a Project Stabilization Agreement (PSA) to govern all projects on a $2.1 billion bond measure for repair and renovation of schools in San Diego. The agreement required contractors, both union and non-union, to use joint labor-management apprenticeship programs. At the hearing, Board member Richard Barrera stated:
“[W]e have an opportunity to partner with the best apprenticeship programs in this state to create real career opportunities for the kids who are coming out of our schools.”
In response to fierce opposition from non-union contractors who claimed that their apprenticeship programs were being “discriminated” against by unions that had only 15% of market share, Board member Barrera questioned the non-union commitment in actually graduating apprentices, and highlighted the track record of union programs:
“So whether that’s true or not, if 15 percent of the industry is producing 90 to a hundred percent of the graduates, that’s real commitment.”
During a five-year period 2002-07, labor-management joint apprenticeship programs in California graduated 27,500 journeymen, over 10 times the graduates from unilateral programs. (Center on Policy Initiatives, 2009)
So the school board approved the historic PSA on a vote of 3-2, and those two Board members that voted against the PSA failed to get re-elected. Board member Richard Barrera became a two-time President of the Board. But the political battle then moved to the courts. Even though federal courts have ruled that agencies can partner with apprenticeships as market participants, the Associated General Contractors (AGC) of San Diego filed a lawsuit in California Superior Court to stop the district from implementing its PSA, and to remove the requirement to use joint apprenticeship programs.
An interesting twist is that this lawsuit was filed immediately after AGC of San Diego claimed in early 2009 that race-based quotas in California transportation contracts discriminated against white people. The civil rights lawsuit was filed in partnership with the Pacific Legal Foundation, which is a champion of anti-affirmative causes in the nation.
“One of AGC San Diego’s primary aims is securing fair and nondiscriminatory competitive bidding practices for public construction projects,” said Jim Ryan, Executive Vice President of AGC San Diego. “But Caltrans’ 2009 DBE Program is not fair and it is not nondiscriminatory. It doesn’t allow all contracts to be considered on an equal basis, without regard to race or sex.”
Further, Caltrans’ 2009 DBE Program requires AGC San Diego’s members to choose subcontractors based on race or sex, and forces them to discriminate against businesses whose owners are not of the preferred groups. These members of AGC San Diego are placed at risk of liability for such discrimination.
(Associated General Contractors of America, San Diego Chapter, v. California Department of Transportation, California Eastern District Court, No. 2:2009cv01622)
To challenge the skewed nature of the “discrimination” complaint, the NAACP and a coalition of people of color intervened on behalf of CalTrans, against AGC of San Diego. The US District Court ruled against AGC of San Diego in March 2011, noting that CalTrans is within constitutional bounds in awarding 6.75 percent of construction and engineering contracts involving federal funds to companies owned by African Americans, Native Americans, Asian Pacific Americans or women. Not to be set-back in an ideological campaign, AGC of San Diego this month appealed the decision to the Ninth Circuit U.S. Court of Appeals.
So whilst AGC of San Diego was arguing in federal court that there was no race-based discrimination by contractors, they were crying wolf in state court arguing that there was a lot of union-based discrimination by workers. The trial court rejected AGC of San Diego’s creative interpretation of “discrimination”, ruling in January 2010:
“The district acted in its proprietary interest in adopting the PSA. The PSA is specific to the Proposition S projects, and does not discriminate against non-union contractors”.
(Associated General Contractors of America, San Diego Chapter v. San Diego Unified School District, California Superior Court, No. 09-00095057)
AGC of San Diego felt the judge got it all wrong, and appealed the decision, with this challenge:
“A three-judge panel will be looking into the case, and we are confident that they will find it [PSA] does discriminate”.
Well, a three-judge California appeals court did hear their novel argument, and rejected it last week, stating that whilst both union and non-union programs may meet state standards, these standards only set the floor, and a public agency or contractor could freely choose one which had superior quality.
Importantly, the statutes expressly permit approved apprenticeship programs to provide education and training which exceed the minimum standards required by the department. Because the governing statutes expressly contemplate differences among apprenticeship programs, we reject AGC’s contention that the district invaded the department’s regulatory power by making an agreement which favors one qualified program over another.
(Associated General Contractors of America, San Diego Chapter v. San Diego Unified School District, 4th Appellate District Division 1, No. D056530)
This decision sets a precedent in California, so that “discrimination” lawsuits are not used to intimidate public agencies from freely shopping for the best value in construction apprenticeships.