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Court Overturns Ordinance Restricting Bidding On City Projects

AIA Contract Documents A Massachusetts Federal District Court Oct. 4 ruled against a “responsible employer ordinance (REO)” in Fall River, Mass., that contained provisions favoring city residents. The ordinance also contained requirements that employers must provide group health insurance and a pension plan or annuity, and maintain an apprenticeship program before being eligible to work on city projects. 

“The Fall River ordinance eliminated qualified contractors from competing for public construction projects by mandating that all contractors abide by specific provisions from union collective bargaining agreements, which the vast majority of contractors are not party to,” said Greg Beeman, president and CEO of the ABC Massachusetts Chapter.  “ABC members are certainly responsible contractors but, as merit shops, they do not believe in a ‘one-size- fits- all’ model for employee benefits and training.” 

The suit was filed in June 2010 by the Utility Contractors Association of New England, Inc., a general contractor and one of its employees against the City of Fall River, alleging the REO violated federal and state laws. 

During the course of trial, the city council repealed the contested REO and reverted back to a prior similar version with somewhat less-restrictive provisions, in an attempt to circumvent an unfavorable ruling. 

In its decision, the court found all contested provisions unlawful, including the residency requirements. In addition, recognizing Fall River had attempted to evade litigation, the court also ordered the city not to re-enact the same or a similar REO.

According to ABC General Counsel, Maurice Baskin, a partner with Venable, LLP, the decision is precedent-setting and applicable to similar ordinances throughout the country. 

“This decision is a win for taxpayers and sends a clear message to other communities that have either enacted or are considering similar proposals,” Beeman said. 

The full decision is available here.


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