- The Washington Times - Thursday, May 31, 2012

Mayor Vincent C. Gray and D.C. officials are girding for a legal battle over a highly touted law that ensures city residents are hired to work on projects that receive public assistance from the District.

Mr. Gray and the city’s attorney general, Irvin B. Nathan, declared their intent to defend the District’s First Source Employment Act after a builders’ association, two contractors and four laborers filed an eight-count lawsuit in federal court Friday that decries the law’s “harmful discriminatory requirements.”

“For employers, it creates an expensive and unworkable caste system in which some of their employees must be denied the right to work on certain projects because of where they live,” the Metropolitan Washington Chapter, Associated Builders and Contractors Inc. and its fellow plaintiffs said in their complaint.

The trade group — a construction-related nonprofit with more than 500 member organizations in the District, Maryland and Virginia — wants the court to declare the law unconstitutional and unenforceable for a number of reasons, including that it violates their right to free speech by forcing them to espouse a view that is not their own so they can obtain benefits from the city.

The D.C. Council buttressed an existing first-source law in December by passing the ponderously named Workforce Intermediary Establishment and Reform of First Source Amendment Act. Among its reforms, it issued D.C. hiring requirements on nonconstruction projects that receive more than $5 million in government assistance, instituted more stringent reporting requirements on contractors’ efforts to hire from within the District, and established a pilot program that links job-seekers to projects with openings.

Plaintiffs who brought the lawsuit contend the new law is“more far-reaching, intrusive, and unlawful than its predecessor.”

City leaders have put a premium on putting D.C. residents to work through a revamped Department of Employment Services as it contends with an unemployment rate that tops 20 percent in parts of the city east of the Anacostia River. Their emphasis on homegrown labor and contractors has led to contentious disputes in the past, including a lawn-mowing contract that garnered headlines in October when the city appeared to favor a minority-owned business in the District instead of renewing its contract with a Maryland company that offered better rates, yet had not hired any city residents.

Council member Michael A. Brown, at-large independent who led efforts to reform the first-source law last year with council Chairman Kwame R. Brown, said Thursday that the reforms offered a “carrot-and-stick” system of incentives for businesses instead of emphasizing the punitive aspect of failing to comply with first-source laws.

“If you’re going to use public dollars, then yes, we feel we have every right to say, ‘We think you should have to hire a minimum requirement of D.C. residents,’ ” he said.

In a joint statement with the city’s top lawyer, Mr. Gray said he supports “using every appropriate measure to put District residents to work.” Mr. Nathan said the law is “fully constitutional” and he expects the courts to uphold it.

Plaintiffs in the lawsuit argue that out-of-District laborers are unfairly passed over in favor of city residents on a “first-source list” that contractors must consult when filling vacancies on government-assisted projects; a 51 percent-D.C. hire requirement on projects receiving more than $300,000 in public assistance makes it difficult to find qualified, long-lasting employees; “target-hiring contracts” that set hiring goals in specific job categories violate the builders group’s philosophy that employees should be rewarded based on merit; and extensive reporting requirements under the law are arduous and costly.

Mr. Brown said the lawsuit was not a surprise, but emanates from a contingent of firms that are not reflective of the overall business community. He said contractors on projects such as the convention center hotel are happy to use D.C. residents, while others rely on the “myth” that the District does not produce qualified workers.

But plaintiffs argue that the law creates “intrusive red tape” and skews the job market in a way “that ultimately hurts District residents.” The law holds contractors hostage to D.C. officials’ demands and keeps them in fear of the outcry that would result from challenging a law aimed at putting city residents to work, according to their complaint.

“The First Source Employment Act has never created a single job — and never will,” the plaintiffs said. “Instead, it infringes on the fundamental American right to pursue employment free from discrimination.”