Attacks on attorney general for local hire decision are unfair

Attorney General Kevin Clarkson took an oath when he assumed office to defend the Alaska and U.S. Constitutions. His recent opinion declaring Alaska’s “local hire” scheme to be unconstitutional, and therefore not enforceable, is consistent with that oath of office.

The response to this opinion has been a raft of partisan attacks against the attorney general which are undeserved and uninformed. One legislator claimed a similar law from New Jersey had been upheld by the U. S. Supreme Court. This is not true. That case dealt with a municipal ordinance enacted by Camden, New Jersey, to require contractors doing business with the city to hire 40% city residents. In fact, the court in that case did not pass judgment on the law and remanded the case for further fact-finding — but there was no stamp of approval.

Other commentators have argued that the law is narrowly crafted because it only applies in a “zone of underemployment.” What they don’t tell you is that since 2015, the Alaska Department of Labor has determined the entire state of Alaska to be a “zone of underemployment!"

As the attorney who filed the case on behalf of a contractor unfairly penalized by Alaska’s local hire scheme, I know something about this subject.

The state law we challenged required contractors working on state-funded projects to hire 90% Alaskans on a project-by-project and per-craft basis. For example, on a project utilizing a 50-person crew, including five equipment operators, if two of the operators were non-residents, my client would be in violation of the law and subject to a fine — even if the remainder of the crew were all Alaskans.

We challenged the law because it was wrong for one overriding reason: Non-residents do not take jobs from Alaskans.

According to statistics published by the Alaska Department of Labor, for the past 20 years, non-residents have consistently accounted for approximately one-fifth of Alaska’s workforce. Industries like tourism, seafood processing, metal mining and oil rely heavily on non-residents.

These industries share certain characteristics: They tend to be seasonal, they often require remote, camp-supported worksites, and the jobs typically demand special skills.

The fact is, Alaska’s small and widely dispersed population cannot provide the skilled labor necessary to fulfill all the needs of these industries.

We should acknowledge that non-residents make it possible for several of our key industries to grow and prosper which, in turn, generates development and economic activity throughout the state. Non-residents also pay rent, they shop in our stores and eat at our restaurants.

By the same token, any business owner in Alaska would agree that hiring Alaskans to fill jobs in this state is good for their business. There is nothing in the attorney general’s opinion that discourages this sound business practice.

However, over the past 40 years, Alaska’s efforts to compel businesses in this state to hire only Alaska residents has been rejected by both the U.S. Supreme Court and the Alaska Supreme Court. Beginning with the ramp-up to building the trans-Alaska oil pipeline, the state mandated that oil and gas companies hire Alaska residents in preference to non-residents. In 1978, the U.S. Supreme Court struck that law down, finding that the major cause of Alaska’s higher unemployment was inadequate education and training, geographical boundaries, or both — but not an influx of non-residents.

Subsequent efforts by the Legislature to cure this basic infirmity have been rejected by the Alaska Supreme Court — twice. The reason? There has never been any proof that non-residents are taking jobs from Alaskans, and therefore the court has refused on constitutional grounds to give “preferential treatment to residents who do not need it.”

That basic premise has not changed. Non-resident employees play an essential role in several of our key industries. More training and education will result in the hiring of more Alaska residents — not the imposition of hiring quotas against employers who need experienced and skilled workers to meet their obligations.

The attorney general’s opinion recognized this reality, and his legal analysis was thorough and unsparing. He deserves credit for not squandering scarce state resources defending a law that was fatally flawed and of dubious efficacy. More importantly, he was true to his oath.

Michael Geraghty is a partner in Oles Morrison Rinker & Baker, LLP. He served as attorney general for the state of Alaska from 2012–2014.

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