Judge won’t hear state wage dispute
State labor officials say they think a Douglas County judge’s refusal to hear a dispute over prevailing wages will encourage abuse of the law.
Judge Dave Gamble on Wednesday dismissed a complaint brought by the state against Douglas County, the county commission, the county redevelopment authority and three companies that are developing the North Valley Plaza shopping center at Jacks Valley Road and Highway 395. Gamble said the state, which alleged prevailing wage laws were violated, should address the issue through administrative channels, not the court.
“Clear your October calendar,” advised Deputy Attorney General Dianna Hegeduis, alluding to the possibility the defendants will face a hearing before the state labor board.
Hegeduis argued that the developers of the shopping center should be paying prevailing wages because the project is in the county’s redevelopment area and will benefit from $3.5 million worth of publicly-funded improvements to roads, sewers and water lines that will serve the project.
By law, public entities must pay the average local wage to workers, as opposed to what the market will bear. The prevailing wage is calculated based on a yearly survey of pay rates for each industry.
Hegeduis said the county and redevelopment authority should have required developer DGD Development Limited Partnership, JS Devco and Target, which is building the first store in the complex, to pay prevailing wage. The county and redevelopment authority never signed any agreements with the developers, and Hegeduis argued the absence of a signed agreement shows the parties knew they were skirting the law.
“If you allow them to do this … you then give every redevelopment agency a way out,” said Hegeduis. “You have now given them a loophole.”
Attorneys for Douglas County and the redevelopment authority said the timing of the redevelopment work and the private shopping complex was coincidental, and they can’t force the developers to pay prevailing wage because they never made any agreements. The county paid prevailing wage for all of the projects it ordered.
“She’s arguing that it’s illegal for a developer to build a project next to publicly-funded improvements without a development agreement, and that’s not against the law,” said redevelopment authority lawyer Mark Wasser. “We have the (labor) commissioner essentially trying to enforce a contract that doesn’t exist.”
“There’s nothing the court can do to put the genie back in the bottle, if there is a genie,” said Deputy District Attorney Tom Perkins. “I think they’ve asked you to do something that’s beyond the court’s power.”
Gamble agreed. Hegeduis had asked for a court order to either stop the project or require the developers to pay prevailing wages, but Gamble said the appropriate venue for the hearing is before the state labor commissioner.
Issuing the order “would call on me to order or force the government entity to do something they cannot do,” Gamble said.
He noted the denial does not address the alleged wrongdoing with the prevailing wages, an issue Hegeduis and Gail Maxwell, chief compliance investigator for the labor commission, said could be addressed in an administrative hearing.
They could also appeal Gamble’s decision to the Supreme Court, but weren’t certain which action they would take.
“This is an issue for the whole state,” said Maxwell, who was the acting labor commissioner when the suit was filed in July. “As far as I’m concerned, they’re not in compliance with (the law), and that’s what we’re going to fight.”