Davis-Bacon Act

Brazier Construction Co., Inc., v. Reich
IJ and Minority-Owned Contracting Firms Challenged Davis-Bacon Act as Barrier to Economic Liberty

Tyrone Dash of Seattle owned and operated his own company, T&S Construction, from 1984 to 1990.  But he was forced into bankruptcy because of a law passed in 1931 that requires him to pay his workers a set amount, the “prevailing wage,” on nearly all federally funded construction projects, regardless of the workers’ individual skill levels or the nature of the job.  Most often, the “prevailing wage” corresponds directly to the union wage, giving large union shops an inherent advantage over small entrepreneurial start-ups.

The law, the Davis-Bacon Act, was passed with the specific intent of preventing non-unionized black and immigrant laborers from competing with unionized white workers for scarce jobs during the Depression.  And the devastating discriminatory effects persist, as minorities tend to be vastly underrepresented in highly unionized skilled trades and over-represented in the pool of unskilled workers who would have greater access to work if the prevailing wage laws were abolished.

In 1993, the Institute for Justice filed a constitutional challenge to the Davis-Bacon Act on behalf of Dash and other small, minority-owned contracting firms.  In 2002, nearly 10 years after the challenge was filed and six years after briefing in the case, the U.S. District Court for the District of Columbia ruled against the contractors.  The decision was not appealed.