California law requires contractors on public projects to pay employees the “prevailing wage” (generally equal to a union wage) through a combination of cash wages and other benefits, including making donations to “industry advancement” advocacy organizations. A new law allows only pro-union organizations to receive such donations, eliminating the ability of organizations that promote open-shop policies to receive the same funding. Associated Builders and Contractors-California Cooperation Committee (ABC-CCC) used to receive contributions that qualified toward the prevailing wage requirement, but because of the organization’s viewpoint, it is now ineligible. A federal district court and the Ninth Circuit Court of Appeals upheld the law.
In California, contractors for public works projects are required to pay their workers the “prevailing wage.” Under that law, however, wages don’t necessarily just include money. Wages also include other benefits, like contributions to healthcare and pension funds, and donations to “industry advancement” advocacy organizations. Until recently, contractors had a wide array of organizations to support, representing viewpoints on unionization and labor issues across the political spectrum. ABC-CCC, which advocates from an “open-shop” viewpoint, was one such organization.
That changed with Senate Bill 954. Under that law, the only organizations entitled to receive prevailing wage donations are those who receive them under a union-negotiated collective bargaining agreement. Unsurprisingly, unions have a narrow view of “industry advancement” that not coincidentally reflects the union’s own priorities. And that means that ABC-CCC, which advocates contrary to union preferences, is cut off from any opportunity to receive prevailing wage donations. In sum, SB 954 effectively allows unions to cut off funding to speech that they don’t like.
ABC-CCC and Interpipe Contracting, a public contractor, sued on the basis that SB 954 violates their First Amendment speech rights and the Equal Protection Clause. The district court rejected their claims on the theory that the donations were a “neutral” government subsidy of speech. However, the donations do not involve allocation of government funds; instead the law limits the ability of one set of disfavored private speakers to raise funds as compared to another set of favored speakers. It therefore discriminates against private speech based on the speaker’s viewpoint.