Ohio Statute Prohibits Public Authorities From Requiring Contractors to Hire as Laborers Individuals Resident in the Public Authority’s Jurisdiction
The Ohio General Assembly has enacted a statute, effective Aug. 31, 2016, that prohibits any public authority in Ohio from requiring construction contractors or design professionals to hire as laborers individuals resident in the public authority’s jurisdiction. The statute also prohibits a public authority from giving incentives to contractors to hire as laborers individuals resident in the public authority’s jurisdiction.
The Ohio Chamber of Commerce supported enactment of the statute. The mayor of the city of Cleveland opposed enactment of the statute. The city of Cleveland had in force before the enactment of the statute an ordinance requiring that 20 percent of construction hours worked on public construction projects in the city of Cleveland be worked by residents of the city of Cleveland. Four percent of those hours had to be worked by low income laborers.
On Aug. 23, 2016, the city of Cleveland filed suit against the state of Ohio seeking a declaratory judgment that the statute violated Article XVIII, Section 3 of the Ohio Constitution (the “Home Rule Amendment”). The city also requested a temporary restraining order prohibiting enforcement of the statute while the suit proceeds and a permanent injunction prohibiting enforcement of the statute. On Aug. 30, 2016, the Court of Common Pleas for Cuyahoga County, Ohio, enjoined enforcement of the statute until the court holds a hearing on the city of Cleveland’s motion for a permanent injunction. That hearing is scheduled for Nov. 7, 2016.
In issuing the preliminary injunction, the court found that the city of Cleveland would likely succeed on the merits of the case. The Home Rule Amendment provides that “[m]unicipalities shall have authority to exercise all powers of local self-government and to adopt and enforce within their limits such local police, sanitary and other similar regulations, as are not in conflict with general laws.” The General Assembly was aware of the obstacle that the Home Rule Amendment presented to the statute because it included a finding that enactment of the statute was the state’s exercise of its police power on a matter of general concern for the state.
While the trial court may decide the suit in the city of Cleveland’s favor, that decision will be reviewable by the Ohio Court of Appeals and ultimately by the Supreme Court of Ohio. At this time, whether the Supreme Court will uphold the statute is not certain.
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