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Cleveland Challenges Law Striking Down Residency Requirement


Posted on August 29, 2016

Last month, this blog discussed Ohio Governor John Kasich’s approval of House Bill 180, a law prohibiting local governments from imposing residency requirements on contractors and design professionals, or giving preference to contractors that employ a certain number or percentage of local laborers. One municipality that is directly affected by the Bill is Cleveland, whose “Fannie Lewis” law requires that local residents perform 20 percent of work on all city construction projects costing $100,000 or more.

Now, however, Cleveland is fighting back against the Bill, filing a lawsuit against the State alleging that the Bill is unconstitutional. Specifically, Cleveland argues that the Bill’s provisions violate the Ohio Constitution’s Home Rule Amendment, which confers the “authority to exercise all powers of local self-government and to adopt and enforce within their limits such local police, sanitary and other similar regulations, as are not in conflict with the general laws” upon municipalities.

According to Cleveland Mayor Frank Jackson, “The city has the right to preserve our local authority and both protect and provide Clevelanders with support to work on construction jobs where there is city investment.” Jackson stated, “We have facilitated billions — billions — of dollars in development and wealth in this city, and all we ask is that a small portion of that come to the benefit of the people we represent. Whether they are in the building trades or contractors or the constituents who live in our neighborhoods.”

Despite Jackson’s claim that “Fannie Lewis” law benefits the construction industry, many contractors, particularly those specializing in skilled trades, have long criticized these types of ordinances as impractical, i.e. it is impossible to garner a large percentage of highly skilled employees from particular locality.  Many others claim such residency requirements are costly to taxpayers because they discourage out of town bidders or force contractors to increase their bids in anticipation of having to train unskilled local workers.

The Bill is set to go into effect on August 31, 2016, but Cleveland’s lawsuit asked for a temporary restraining order, preliminary and permanent injunction in order to block the Bill from becoming active. The Cuyahoga County Common Pleas Court heard evidence and arguments on August 26, 2016, and will likely rule on Cleveland’s request today or tomorrow.

For questions regarding the provisions of HB 180, the City of Cleveland’s challenge to the Bill, or any other aspect of Ohio’s construction law, please contact the attorneys at Harpst Ross, Ltd. – Business Lawyers for the Construction Industry®, at (330) 983-9971.

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