By: WBG, LLP Published: July 2013

Wicks Law

The highest court in New York, the Court of Appeals, recently issued an important decision affecting what is often referred to as the "Wicks Law". Prior to 2008, the Wicks Law required that public entities throughout New York obtain separate specifications for plumbing, electrical and HVAC scopes of work on construction projects in excess of $50,000.00. In 2008, the New York Legislature increased this threshold to $3 million for projects in Kings, Queens, Bronx, Richmond and New York Counties, $1.5 million for projects in Nassau, Suffolk and Westchester counties, and $500,000.00 in every other county within the State.

In Empire State Chapter of Associated Builders and Contractors, Inc. v. Smith, 2013 N.Y. Slip. Op. 04038 (2013), the increase in the monetary thresholds was challenged as unconstitutional. The plaintiffs argued, in part, that the varying threshold amounts between counties rendered the legislation unconstitutional under the New York State Constitution's "Home Rule".

The Home Rule is designed to prohibit the State Legislature from passing "special laws" (in this case, laws that would apply to some, but not all, counties) which intervene in a localities' laws affecting the localities' property, affairs or government. However, the Home Rule is not a blanket prohibition, as the State Legislature is permitted to intervene where there is a substantial degree of State concern. In this case, the Court of Appeals needed to determine whether the State Legislature's imposition of differing monetary thresholds among counties was in furtherance of a matter of substantial State concern.

The Court of Appeals held that bidding on public construction contracts was a matter of substantial State concern, and that the Home Rule was only designed to prevent unjustified State interference in issues of pure local concern. Id. Here, the State's interference was determined to be justified.

Plaintiffs also challenged the legislation on several other grounds, many of which are not addressed here, as the Court of Appeals affirmed the dismissal of a majority of them. However, the Court determined that one ground had merit. The legislation added a section to the New York Labor Law, that states that the public entity must require bidding contractors to participate in apprentice training programs that have been approved by the New York Department of Labor. The claimed problem with this is that such apprentice training programs are not available to out-of-state contractors. Therefore, the plaintiffs argued, out-of-state contractors are not able to work on Wicks Law projects, which is a violation of the Privileges and Immunities Clause and the Commerce Clause of the United States Constitution.

These two clauses limit states from giving favored treatment to their citizens over non-citizens. Here, the apprenticeship requirement appears to give New York contractors the advantage over out-of-state contractors. The Court of Appeals therefore reversed the lower court's rejection of this argument, and sent the case back down to the lower court for litigation as to the issue.

In conclusion, public works contractors and governmental entities should be aware that the differing monetary thresholds in the Wicks Law will remain, although the apprenticeship portion of the legislation may not. In addition, New York contractors will face increased competition for Wicks Law projects if the apprenticeship provision is struck down.

If you have any questions about the information set forth herein, call us at 914-428-2100.

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