Eugene district favored in labor ruling.

Byline: Anne Williams The Register-Guard

A Lane County Circuit Court judge has ruled in favor of the Eugene School District in a long-running dispute with the Oregon Bureau of Labor and Industries over the prevailing wages paid to construction workers on four recent projects.

In an eight-page opinion issued earlier this month, Judge Karsten Rasmussen found that the district and its general contractors were in accordance with the law by setting prevailing wages at the time the first advertisements ran requesting proposals for construction and general contracting services for the projects.

The Bureau of Labor and Industries, meanwhile, had asserted that the prevailing wages should have been set at a later date, based on when primary contractors advertised for subcontractors - more than a year later.

Initially, BOLI filed a claim against the district on behalf of only one trade union which, if the district had paid, would have amounted to no more than $4,000, including damages, said Bill Hirsh, the district's director of facilities. But soon thereafter, Hirsh said, BOLI sent a letter saying wages for all trade groups needed to be reviewed according to its own interpretation of the prevailing wage.

BOLI was unwilling to negotiate, Hirsh said, prompting the district to request a motion for declaratory judgment in circuit court.

The district has estimated that back wages on all four projects - Cesar Chavez and Bertha Holt elementary schools and major remodeling projects at both North Eugene and South Eugene high schools - could have added up to nearly $600,000, not including possible additional damages and fees.

Marsha Ohlemiller, BOLI's legal policy adviser, said the agency hasn't yet decided whether to appeal. BOLI has 30 days from the date of Rasmussen's ruling to do so.

"It's a rather detailed opinion and we're still in the process of reviewing it," she said.

Ohlemiller didn't know whether BOLI has filed any similar claims against other public agencies that have used the same kind of bidding process, known as Construction Manager/General Contractor (CM/GC). The BOLI official who would know whether that was the case was out of the office and unavailable until Monday, she said.

Through the CM/GC process, which is becoming more common for large public projects, the agency typically issues a request for proposals from general contractors and settles on one, who in turn hires subcontractors. The contract includes a negotiated guaranteed maximum price for the project.

Hirsh said that, while public agencies tend to follow the conventional, low-bid process for smaller projects, the CM/GC process is increasingly popular for larger projects.

Hirsh estimated that the district has spent about $70,000 in legal fees. The district, which was responsible for including applicable prevailing wages in the contracts, indemnified its general contractors, McKenzie Commercial Contractors and Chambers Construction Co., against the claim.