Labor Day Hope: Transparency in Public Works Contracts

With the power to award public works contracts, local governments can help workers make a living wage. But the ability to improve living conditions depends on information included in the public bids a government receives being accurate and verifiable. A recent fraud complaint filed in Los Angeles against a Canadian-owned company shows what can be at stake for workers and cities.

Jobs to Move America, a Los Angeles-based coalition of more than 40 academic, civil rights, environmental, faith, labor and philanthropic groups, filed a complaint against New Flyer, a leading bus manufacturer, after it presented a proposal to the L.A. County Metropolitan Transportation Authority to build up to 900 buses, and pay workers from $11 to $50 an hour. However, according to a recent article in The New York Times by reporter Noam Scheiber, “The company did not pay the wages it said it would and misrepresented the value of the benefits it was providing, according to pay stubs and corporate reports recently unsealed in the fraud case.”

A New Flyer bus on display in downtown Los Angeles.

State Senate Bill 749, introduced by Sen. Maria Elena Durazo (D-Los Angeles), would amend the Government Code (California Public Records Act) to include specific employment information from firms that contract with state and local agencies, and to make accessible to the public the information applicants provide in their bids for public works contracts. The law would still protect corporate proprietary information, including trade secrets. However, private contractors working for public agencies would no longer be able to claim that employment information related to those contracts constituted trade secrets.

Under California law, a trade secret in part “derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use.”

“SB 749 is a common-sense measure that will ensure all information supplied by companies about job creation, job access, and job quality to win state and local contracts and subsidies is transparent and accessible to the public,” Sen. Durazo told Capital & Main via email. “We need to increase access to public information about public contracts and provide transparency in how hundreds of millions in taxpayer dollars are being spent.”

As communities across the U.S. are learning, companies often fail to deliver high-quality employment. That’s where more robust laws can turn that trend around. SB 749 would compel a company such as New Flyer to deliver the employment that it promised. “Detailed information about our public contracts in California are difficult to track down,” said Abhilasha Bhola, California senior policy coordinator at JMA, in an email. “That’s why bills like SB 749 are so important—the public needs to have access to information about how our dollars are spent if we want to see real return on our shared investments.”

The Alliance for Community Transit, California Labor Federation, Communication Workers of America International, Association of Machinists, Jobs to Move America and Los Angeles Alliance for a New Economy all back SB 749. According to the California Labor Federation, accessing occupational information is crucial to ensuring that the Golden State’s buying power reflects “our values and that employers are held accountable to the promises they make for good job creation when they receive public subsidies.”

The bill is opposed by state business organizations, including the California Chamber of Commerce, which has criticized the proposed law’s disclosure of employee names because, it says, that “jeopardizes [the] constitutional right to privacy.” So far, however, CalChamber has not added SB 749 to its Job Killer list of bills that it lobbies against in Sacramento. Repeated requests for comment from the group were unanswered by press time.

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