WASHINGTON -- The Supreme Court yesterday left intact a federal appeals court ruling that allowed construction workers on some projects in New York City to use a federal civil rights law to sue the city for not paying prevailing wages.
However, the impact of the high court's action is muted because the justices did not issue an opinion in the case. Under Supreme Court rules, refusal to hear a case does not set a national precedent. Rather, the lower court's ruling is binding only within its jurisdiction.
Yesterday's case came out of the U.S. Court of Appeals for the Second Circuit, which covers New York State, Vermont, and Connecticut.
Moreover, the lower courts in the dispute. City of New York v. Chan, have so far only reviewed whether the workers have a right to sue, not whether they are entitled to relief
The dispute arose after New York City entered into contracts with the Chinese-American Planning Council for construction and rehabilitation work on several city-owned properties. Under the contracts, the council was responsible for hiring and paying workers to perform the work, while the city agreed to pay the council up to $95 per worker per day.
The contracts were part of a city effort both to preserve and develop housing and to provide training and employment opportunities for people at high risk for unemployment, such as recent immigrants.
The contracts were funded with federal community development grants provided under the Housing and Community Development Act of 1974. The law includes extensive labor provisions. One is a requirement that workers on projects financed at least in part with federal grant money be paid wages "at rates not less than those prevailing on similar construction in the locality."
Workers hired by the planning council filed suit claiming that the council had failed to pay them prevailing wages. They sued under the theory that the housing law gave them an implied right to sue for prevailing wages. Separately, they asserted a right to sue under the Civil Rights Act of 1871.
A federal magistrate in early 1992 recommended that the suit be dismissed.
But on June 5, 1992, a federal district court decided to dismiss claims arising from the implied right to sue under the federal housing law, but not to dismiss claims made under federal civil rights law.
The Second Circuit Court of Appeals affirmed the district court's holding on July 26, 1993. The court found that the housing law gives workers a right to receive prevailing wages that is enforceable through the civil rights law.
Yesterday's decision by the Supreme Court not to review the matter now sends the case back to the district court, where the workers will have to prove that the city's act of placing a per worker, per day funding cap on wages prevented the council from paying prevailing wages.
In other action yesterday, the court declined to review two insider trading cases that resulted in convictions of individuals who traded on nonpublic information.
In one case, Francis R. Sablone had received bootleg, advance copies of Business Week and made trades based on "Inside Wall Street," a regular column. He made about $36,000 in profits from his activities, and was subsequently found guilty of insider trading.