Union Defends Law to Protect Workers in Public Transit and Waste Management Contracts

In a recent California appellate court case, a local union asserted the City of Monterey Park did not follow State law in awarding a service contract and the Court ruled for the Union. The law says that when a public agency contracts for transit systems or waste management services, it must give a 10-percent preference to bidders who agree to retain the employees of the prior contractor for a period of at least 90 days.  The purpose of this law is to prevent workers from losing their jobs when a contract changes hands.  The court said this law has been effective in stabilizing the industry and allowing drivers to retain work.

In this case, the city gave the 10 percent preferences to both a bidder who committed to retain the workers in its bid, but the city also gave the 10 percent to another bidder who did not agree to retain workers.  The city then proceeded to award the contract to the bidder with no commitment to retain the workers.  The city argued to the court that it had done what the law required by giving a 10-percent preference to the bid that committed to retain the workers, and that therefore the city  had “discretion” to also give a 10-percent preference to the other bid.

The Union contended that only a contractor who agrees to retain the workers for at least 90 days should receive the 10 percent preference.  The court agreed with the Union.  The court said the city’s interpretation would undermine the purpose of providing an incentive to retain the employees. The court held that a bidder must state in its bid whether it will retain the employees of the prior contractor for 90 days, and if it does not, it cannot get the 10 percent preference..  International Brotherhood of Teamsters, Local 848 v. City of Monterey Park (2019) 30 Cal.App.5th 1105.

By Ann Yen | February 28, 2019

Legal Developments