The U.S. Court of Appeals for the District of Columbia Circuit ruled against the U.S. Department of Labor (DOL) concluding the workers who built CityCenterDC were not entitled to prevailing wages under the Davis-Bacon Act. The Court ruled the project was not a "public work" because it was not publicly funded and is not a government-owned or government-operated facility.
On April 5, Judge Brett Kavanaugh affirmed judgment of the U.S. District Court for the District of Columbia’s 2014 decision in District of Columbia v. Department of Labor. The lower court granted summary judgment to the District of Columbia and private developer CCDC Office LLC.
In that decision, Judge Amy Berman Jackson, who was appointed to the bench by President Obama, rejected the U.S. Department of Labor’s (DOL) ruling that the Davis-Bacon Act can be expanded to include privately funded and constructed projects such as CityCenterDC.
Associated Builders and Contractors (ABC) applauded a decision to stop an unprecedented expansion of the 1931 Davis-Bacon Act onto a private construction project. ABC filed an amicus brief in the case arguing against forcing contractors to pay inaccurate government-determined wage and benefits rates on the CityCenterDC project in Washington, D.C.
“The decision is expected to save the District an estimated $20 million in costs that would have been incurred had the court ruled the project was subject to the archaic Davis-Bacon Act,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “More importantly, the court’s rejection of the Obama administration’s increasingly overreaching Department of Labor will benefit the public, developers and construction industry by reinforcing the 85-year precedent that privately-funded projects, including projects developed via non-traditional arrangements on land owned by municipalities, are not subject to Davis-Bacon wages.”
The DOL’s Administrative Review had concluded that CityCenterDC, a privately funded, occupied and maintained mix-use project of condominiums, apartments, offices and retail stores that presently sit on a plot of land owned by the District of Columbia constituted a “public work” within the meaning of the Davis-Bacon Act.
Judge Kavanaugh’s ruling found the CityCenterDC project is not subject to the Davis-Bacon Act for two independent reasons: 1) the District was not a party to the construction contracts for the project; and 2), CityCenterDC is not a “public work” because its construction was not publicly funded and it is not a government-owned or government-operated facility.
ABC’s General Counsel, Maury Baskin, represented the plaintiff developer in the case and argued successfully to the district and appeals courts.