Federal judge dismisses labor-backed lawsuit against Branstad

U.S. District Court Judge John Jarvey dismissed a lawsuit yesterday challenging Governor Terry Branstad’s executive order setting aside project labor agreements for two partly state-funded projects.

The lawsuit stemmed from Branstad’s executive order banning project labor agreements for any state-funded projects, which he signed immediately after his inauguration in January. Branstad also set aside project labor agreements that had already been signed for a University of Iowa medical clinic and for the Iowa Veterans Home expansion in Marshalltown. Both projects had received funding from Governor Chet Culver’s I-JOBS infrastructure bonding initiative.

The Cedar Rapids/Iowa City Building Trades Council and the Central Iowa Building and Construction Trades Council challenged the legality of Branstad’s action on several grounds:

In its lawsuit, the unions argued that Branstad’s executive order was pre-empted by the National Labor Relations Act; that it violated the unions’ federal rights; that it breached contracts on the two state projects; and that it violated the Iowa State Constitution by improperly performing a legislative function.

But as Rick Smith reported yesterday, Judge Jarvey wasn’t convinced:

Jarvey stated that Branstad’s executive order would be in violation of the National Labor Relations Act if the order is “regulatory” in nature. However, Jarvey concluded that Branstad’s action in issuing the executive order prohibiting project labor agreements is not regulatory, but is allowed because the governor and the state of Iowa are the proprietors of state construction projects.

“The State, as the proprietor of its construction projects, can make the decision not to pay union wages or operate under union conditions,” Jarvey concluded.

“This is a business decision that does not come in conflict with the NLRA because it is not designed to have a broad social impact, rather, the stated purpose is to administer proprietary projects more efficiently,” he said.

President George W. Bush nominated Jarvey as U.S. District Court judge for the southern district of Iowa in 2007, on the recommendation of Senator Chuck Grassley. Before that, Jarvey had served for 20 years as a U.S. magistrate judge in the district.

Jarvey’s ruling suggests that the city of Cedar Rapids would not have prevailed in a federal lawsuit challenging Branstad’s demand to set aside a project labor agreement for its Convention Complex project. Cedar Rapids Mayor Ron Corbett and the city council instead struck a deal that involved rescinding the project labor agreement for the convention center. I still wonder whether Cedar Rapids officials could have made a case in state court that Branstad overstepped local government authority with his executive order. We’ll never know the answer.

UPDATE: Todd Dorman sees the main legal question as one of legislative versus executive power:

Clearly, the state has the power to regulate PLAs on public projects. But in this case, is that power being properly and lawfully wielded through an executive order, or should it actually be expressed through a statute passed by the Legislature and signed by the governor. Is Branstad improperly exercising legislative authority? We’ll never know.

My issue from the beginning was not that I think the state can’t ban PLAs. It can. My prolems is with a sweeping order that looks and reads like legislation, applies to scores of local, not just state, projects, and really should have been debated and passed like legislation, not issued by gubernatorial edict. Republicans applauding today will feel differently when this precedent is someday in the hands of a Democratic governor.

A challenge on those grounds in state court never came. Instead, we get a federal lawsuit that was doomed from the start.

I see why state legislators would have reason to challenge Branstad’s executive order on those grounds, but I also think the state shouldn’t be able to ban local governments from signing project labor agreements if they so choose, especially since the PLAs in question were signed before Branstad took office.

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