State lawmakers had the authority to enact a law invalidating the city of Cleveland’s ordinance that required public works construction project contractors to hire city residents, the Ohio Supreme Court ruled today.

A Supreme Court majority rejected Cleveland’s claim that a state law could not prevent the city from enforcing a mandate that public construction contracts over $100,000 include a provision requiring city residents to perform 20 percent of the total construction hours on the project. In the Court’s lead opinion, Justice Sharon L. Kennedy wrote that the General Assembly has broad power under Article II of the Ohio Constitution to legislate for the welfare of working people, and the 2016 state law blocking the Cleveland requirement “protects all employees engaged in construction trades.”

Justices Judith L. French and Patrick F. Fischer joined Justice Kennedy’s opinion.

Justice R. Patrick DeWine concurred in judgment only with a separate written opinion that was joined in part by Justice Melody J. Stewart.

In a dissenting opinion, Chief Justice Maureen O’Connor wrote the state law does not supersede Cleveland’s ordinance under the Ohio Constitution.

Justices Michael P. Donnelly and Stewart joined the chief justice’s dissent.

Cleveland Seeks to Promote Local Hiring
In 2003, Cleveland City Council determined that the city’s expenditures on public improvement projects had created few employment opportunities for city residents. It enacted the Fannie M. Lewis Cleveland Employment Law (Ordinance Chapter 188) to require public construction contracts in the amount of $100,000 or more to include a provision ensuring city residents perform 20 percent of the construction hours on the project. If a contractor failed to meet the residency quota, the city could reduce payment to the contractor by up to 2.5 percent of the contract’s price. The local ordinances also allowed the city to withhold payments, terminate the contract, or disqualify contractors from bidding on future contracts if they failed to meet the hiring standard.

State Reacts to City Policy
In 2016, the Ohio General Assembly passed what is now R.C. 9.75, which provides that no public authority shall require a contractor to employ a certain number or percentage of laborers who reside within the public authority’s territory. And the law does not allow a public authority, such as Cleveland, to award a bonus or preference to a contractor whose bid included the use of laborers from within the public authority’s boundaries.

In passing R.C. 9.75, lawmakers stated that “it is a matter of statewide concern to generally allow the employees working on Ohio’s public improvement projects to choose where to live.” The bill said it was the legislature’s intent to “provide for the comfort, health, safety, and general welfare” of public improvement employees by prohibiting public authorities from setting aside a number of jobs for local residents.

The city of Cleveland filed a lawsuit in Cuyahoga County Common Pleas Court seeking an injunction to block the state law from taking effect and asking that the law be declared an unconstitutional violation of the city’s home-rule authority, which allows Cleveland to pass certain laws that affect local self-government.

The trial court agreed with the city’s arguments and enjoined the law. The state appealed to the Eighth District Court of Appeals, which affirmed the trial court’s decision, and the state then appealed to the Supreme Court.

Portions of State Constitution Analyzed
Justice Kennedy explained that if R.C. 9.75 falls within the legislative power vested in the General Assembly by Article II, Section 34 of the Ohio Constitution, then the state law prevails over local laws such as the Fannie Lewis Law.

Article II, Section 34 states: “Laws may be passed fixing and regulating the hours of labor, establishing a minimum wage, and providing for the comfort, health, safety and general welfare of all employes; and no other provision of the constitution shall impair or limit this power.”

The lead opinion pointed out that Section 34 was adopted by the people of Ohio following the 1912 constitutional convention, and it has been recognized that the language is “so clear and unequivocal” that there is no need to examine any sources such as the constitutional debates to understand what Article II, Section 34 means.

The lead opinion explained that “[t]he purpose of our written constitution is to define and limit the powers of government and secure the rights of the people,” so that it is the duty of Ohio courts to enforce its provisions as written. And in giving undefined words in the constitution their usual, normal, or customary meaning, the Court has relied on their dictionary definitions.

To interpret the meaning of “comfort” and “welfare,” the opinion cited the 1911 edition of Webster’s New International Dictionary, which would have been in print when the drafters wrote Article II, Section 34. And it noted that the definitions of “comfort” as “assistance” or “support” and “welfare” as “well-being” and “prosperity” persist today in the current Webster’s Third New International Dictionary.

The lead opinion determined that the constitutional power to “pass laws advancing employees’ comfort and general welfare ... includes laws providing for the assistance, support, well-being, and prosperity of Ohio’s working people.” This encompasses “the authority to regulate public-improvement contracts that impose terms directly affecting the employment of Ohio workers,” including city-specific conditions of employment, the opinion stated. And the power to advance the general welfare of employees granted by Section 34 is not limited by other sections of the state constitution, including the home-rule provisions in Article XVIII, Section 3.

The lead opinion rejected the Eighth District’s conclusion that R.C. 9.75 was intended to restrict local governments’ business transactions with contractors rather than to protect workers as authorized by Article II, Section 34. The lead opinion explained that the city ordinance regulates eligibility for employment because it dictates through city contracts who may be hired for public works projects.

“By reserving work for Cleveland’s residents, the Fannie Lewis Law directly impacts hiring, the most basic condition of employment, for workers on public-improvement projects,” the opinion stated. “In doing so, the city of Cleveland has legislated within a field subject to regulation by the General Assembly pursuant to Article II, Section 34.”

The Court remanded the case to the common pleas court to dissolve the injunction and enter a judgment in the state’s favor.

Concurrence Cautions against Broad Interpretation
In his concurring opinion, Justice DeWine wrote that the lead opinion “dangerously misreads Article II, Section 34” to conclude that as long as a legislative act affects the “welfare of the working people in Ohio,” it does not have to comply with any other provision of the state constitution. However, without relying on Article II, Section 34, Justice DeWine maintained the legislature still had the authority to pass a state law that invalidated the Fannie Lewis Law.

He wrote that based on the textual context, the general structure of the constitution, and the historical record, Article II, Section 34 only empowers the General Assembly to regulate work hours, set a minimum wage, and establish rules regarding the workplace environment.

The concurring opinion noted that under the lead opinion’s view, lawmakers could ignore other provisions of the constitution in the name of benefitting workers. For example, the legislature could change the constitutional requirement that proceeds from the state lottery go to support schools, and instead shift the money to some plan to benefit workers.

The concurring opinion disagreed with the lead opinion’s reading, by which “the legislature is given carte blanche to disregard all other constitutional safeguards anytime it can plausibly say that something promotes the welfare of working Ohioans.”

But the concurring opinion noted that the legislature has the power to pass a “general law” that overrules a local law in certain circumstances. While the city argued R.C. 9.75 does not qualify as a general law, the concurring opinion concluded that, based on the original understanding of that term, it is a general law because it would regulate an entire group, “public authorities,” which were “distinguished by characteristics sufficiently marked and important to make them a class by themselves.”

Dissent Finds Law Unconstitutional
In her dissenting opinion, the chief justice wrote that Article II, Section 34 pertains to laws about wages, hours, and workplace conditions or hazards. R.C. 9.75 does not regulate those areas, she stated.

The opinion noted that this case was distinguishable from the Court’s 2009 Lima v. State decision, which found Article II, Section 34 of the Ohio Constitution allowed the legislature to prohibit a local law that imposed a residency requirement on local government employees. Here, the dissent stated, “R.C. 9.75 does not exclude or regulate workers,” but instead affects “how a public authority does business with contractors.”

“The Fannie Lewis Law says nothing about workers shouldering any burden, being paid less, or being subjected to different hours or working conditions. And it does not restrict workers’ choice of residency,” the dissenting opinion stated.

The dissent also concluded that R.C. 9.75 violated local home-rule authority under Article XVIII, Section 3 of the Ohio Constitution because it is not a general law with which Cleveland’s local law is in conflict. The opinion noted the Court established a four-part test in its 2005 Canton v. State decision to determine if a state law is a general law that overrides a local law. Part of the test requires that the state law “sets forth police, sanitary, or similar regulations, rather than purporting only to grant or limit legislative power of a municipal corporation,” and must prescribe “a rule of conduct upon citizens generally.”

The dissent stated R.C. 9.75 does not meet any of those requirements, but only prescribes the specific contract terms between a public authority and a contractor, which makes it an invalid limitation on the city’s authority.

2018-0097. Cleveland v. State, Slip Opinion No. 2019-Ohio-3820.

View oral argument video of this case.

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