Appeals court decides in favor of UCLA in wage, labor
dispute
To keep housing costs down, workers won’t receive higher
wages
By Lia Ramsey
Daily Bruin Contributor
A lengthy court battle between the University of California and
the California Department of Industrial Relations drew to a close
last month, when a state appeals court ruled that UCLA does not
have to pay prevailing wages to construction workers building UCLA
housing projects.
The court decided that the law does not apply to the "core
educational functions" of the university.
The suit accused UCLA of violating state wage laws in two
low-cost housing projects – the Westchester Bluffs staff and
faculty housing development, and the family housing in Mar
Vista.
The university paid workers salaries below local wages – usually
based on union wages – in its public works contracts. Union
officials claimed that as a public agency, UCLA was required to pay
the higher salaries.
However, UCLA lawyers argued that paying contractors prevailing
wages would defeat the purpose of providing affordable housing. The
UCLA Real Estate Department claimed that paying the higher wages
would drive up the cost of housing, raising raise rent costs to a
level that would make it impossible for some students to attend
UCLA.
The court agreed.
"Ensuring access to qualified students who otherwise could not
attend, and securing the services of outstanding faculty and staff
… is at the heart of UC’s educational function," Justice Reuben
Ortega wrote in the ruling.
The Department of Industrial Relations had argued that the costs
of housing construction could not affect education. The university
is capable of making housing more affordable by paying subsidies to
students and employees, they continued.
The department said that the lower wages are detrimental to
their workers and may have negative consequences for UCLA as
well.
Richard Slauson, executive secretary of the Los Angeles Building
and Construction and Trades Council said the decision "also affects
the incomes of workers and their families who are trying to raise
children and maybe send them to UCLA."
Slauson said the university’s decision further hurts the
construction workers, whom he said are already suffering 30 to 40
percent unemployment rates.
"Everyone in this area loses. There might be a short term gain
or a lower price for UCLA, but we don’t even know that that
occurs," Slauson said.
While UCLA focused on the educational consequences of the
lawsuit, the university’s opponents focused on the
constitutionality of the university as a public establishment. They
argued they were exempt from a regulation that was created to apply
to all public agencies statewide.
"The university system is an arm of the State of California, the
property was owned by the university, and the student housing rents
will go to pay off the so-called private loans that were retained
… How the courts could decide this project was excluded because
of the funding mechanism was a mystery to all of us here," Slauson
said.
In a previous court case, Los Angeles Superior Court Judge
William Huss agreed with Slauson’s argument, and ruled against
UCLA.
But the appeals court unanimously overruled Huss’s opinions,
pointing to earlier court decisions that the university was a
sufficiently independent entity to avoid paying prevailing
wages.
The UC system is classified as an independent body under the
state Constitution.
Brad Erickson, UCLA’s Associate Director of Real Estate, cited
other reasons why the university is exempt from prevailing wage
guidelines. He explained that the university is not required to pay
prevailing wages on projects like the housing facilities in
question because these projects are not state funded, but rather
paid for through private investment and loans.
But until recently, the university paid prevailing wages on all
of its projects, regardless of the funding source. That changed
when officials examined the Westchester Bluffs project.
The university realized they could offer the housing for a much
lower price if they took advantage of their exemption from the
prevailing-wage law.
"We looked at the details and found that the requirement of
prevailing-wages adds 15 to 30 percent in additional costs,"
Erickson said.
UCLA officials said they were satisfied with the case’s outcome,
and the precedent they hope it will set for the university’s
autonomy.
"I’m very pleased … The case is essentially an evaluation of
the university’s understanding of it’s constitutional authority …
The outcome validates the role of the university," Erickson
said.
The court ruled that the law does not apply to the "core
educational functions" of the university.Comments to
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