White v. Massachusetts Council of Construction Employers, Inc.

Background

In 1979 the Mayor of Boston issued an executive order requiring that on construction projects funded in whole or in part by city funds or by funds the city administers, at least 50% of worker hours be performed by bona fide Boston residents. Only the residency requirement was challenged. The Supreme Judicial Court of Massachusetts held the order unconstitutional under the Commerce Clause. The case reached the Supreme Court to decide whether the Commerce Clause prevents the city from enforcing the order.

Reasoning

The Court asked whether Boston was acting as a "market participant" (spending its own money) or as a market regulator. Relying on its earlier decisions, the majority said that when a government spends its own funds in the market it may favor its own citizens without triggering the Commerce Clause. The Court held that, as to contracts the city funded entirely with city money, Boston acted as a market participant. The Court also examined projects funded in part with federal grants (UDAG, CDBG, EDAG) and concluded that the applicable federal regulations permit recipient cities to give hiring preferences, so Congress had authorized similar local favoritism for those grant-funded projects.

Real world impact

On the record here, the ruling allows Boston to enforce its 50% residency hiring preference for city-funded construction and permits similar preferences when federal grant programs authorize them. The record also shows some nonresident workers could lose jobs and some out-of-state contractors may be discouraged from bidding. The Court reversed the Massachusetts court and remanded the case for further proceedings.

Dissents or concurrances

Justice Blackmun, joined by Justice White, agreed about the federal grants but dissented as to city-funded projects, arguing the order regulates private employers and should remain subject to Commerce Clause limits.