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Legal Research Digest 59 national Cooperative highway researCh program April 2013 TRANSPORTATION RESEARCH BOARD OF THE NATIONAL ACADEMIES enforceability of local hire preference programs This report was prepared under NCHRP Project 20-6, âLegal Problems Arising Out of Highway Programs,â for which the Transportation Research Board is the agency coordinating the research. The report was prepared by Jennifer D. Cantrell, Esq., and Suparna Jain, Esq., Atkinson, Andelson, Loya, Ruud & Romo. James B. McDaniel, TRB Counsel for Legal Research Projects, was the principal investigator and content editor. the problem and its solution State highway departments and transportation agen- cies have a continuing need to keep abreast of operat- ing practices and legal elements of specific problems in highway law. This report continues NCHRPâs practice of keeping departments up-to-date on laws that will affect their operations. applications Some public agencies are requiring contractors that work on public construction projects to hire local resi- dents or use local businesses to perform the work. Local hire programs are generally defined as programs that re- quire contractors and developers using public funds to hire local residents. These local hire requirements can be statutory, regulatory, or a function of agency policy. Numerous jurisdictions have enacted local hire prefer- ence laws and policies, usually to reduce local unem- ployment. Another strategy public agencies use is to re- quire contractors to establish a jobs training program or to hire participants of existing jobs training programs. Such programs are often characterized by a few com- mon characteristics, namely a percent of jobs set aside or reserved for local labor, designation of a target area, thresholds, a definition of compliance, and provisions governing monitoring and enforcement protocols. These programs are potentially subject to legal challenge or federal funding restrictions. Local hire programs have been written about from either a legal perspective or as a tool of economic de- velopment. Previous literature has analyzed the consti- tutionality of local hire programs as well as the shift from traditional statutes and ordinances to the use of contract-based tools as a means of improving the em- ployment opportunities of local residents. This digest is designed to build on the previous research and serve as a comprehensive and practical guide to legal practitioners, community groups, and individuals interested in utiliz- ing and implementing local hire programs. This digest includes discussions of: 1) the Constitu- tional issues; 2) case law and other legal authority asso- ciated with such programs; 3) representative examples of entities that have implemented such programs and have included information regarding program challenges; 4) steps that would be advisable for an agency to take to ensure that its program will pass judicial scrutiny; 5) issues associated with federal funding; and 6) remedies available to an agency if the contractor fails to comply with the requirements. Given the issues confronting the enforceability of local hire programs, this digest pro- vides considerations that public agencies and commu- nity groups ought to take into account when contemplat- ing what may be the best course of action when deciding whether to implement local hire programs. It should be useful to attorneys, administrators, board members, leg- islatures, planning officials, human resources personnel, and contracting officials. LRD59 FINAL.indd 1 4/9/13 2:35 PM
