Salla v. County of Monroe, 48 N.Y.2d 514 (1979)

A state law requiring preferential employment of state residents on public works projects violates the Privileges and Immunities Clause of the U.S. Constitution if it unduly infringes on the right of non-residents to pursue a livelihood and the discrimination is not closely related to a substantial state interest.

Summary

The New York Court of Appeals held that Section 222 of the New York Labor Law, which mandated preferential employment of New York citizens on public works projects, violated the Privileges and Immunities Clause of the U.S. Constitution. Two Pennsylvania residents employed by a Pennsylvania contractor were terminated from a Monroe County sewer project due to the statute’s enforcement. The court applied the two-prong test from Toomer v. Witsell, finding that the state’s asserted interest in combating unemployment was not closely related to the discrimination against non-residents, and the statute was not narrowly tailored to address the specific problem.

Facts

David S. Salla and Robert W. Keppley, Pennsylvania residents, were employed as equipment operators by Lisbon Contractors, Inc., a Pennsylvania corporation. Lisbon was awarded a contract to construct a sanitary sewer line for Monroe County, New York, with 75% of the funding from federal sources. Salla and Keppley were assigned to the project and leased local living quarters. Their employment was terminated when Monroe County insisted on strict enforcement of Section 222 of the New York Labor Law, which required preference in employment to New York residents on public works projects.

Procedural History

Salla, Keppley, and Lisbon brought an action seeking a declaration that Section 222 was unconstitutional and an injunction against its enforcement. The Attorney General intervened on behalf of the state to defend the statute. Special Term granted summary judgment in favor of the plaintiffs, finding the statute unconstitutional under the Privileges and Immunities Clause, the Commerce Clause, and the Equal Protection Clause. The Appellate Division affirmed, relying on the Privileges and Immunities and Commerce Clauses. The New York Court of Appeals then reviewed the case.

Issue(s)

Whether Section 222 of the New York Labor Law, mandating preferential employment of New York citizens on public works projects, violates the Privileges and Immunities Clause of the U.S. Constitution.

Holding

Yes, because Section 222’s potentially absolute barrier to out-of-state contractors and workers conflicts with the national policy of economic unity, and the state’s interest in allocating funds to its citizens is insignificant in comparison to the constitutional concern for the right of a citizen of one state to pursue their vocation in another.

Court’s Reasoning

The court applied the two-part test from Toomer v. Witsell. First, the court acknowledged that the right to pursue one’s trade in any state is a fundamental right protected by the Privileges and Immunities Clause, citing Hicklin v. Orbeck. The court then examined whether there were “perfectly valid independent reasons” for the disparate treatment. The state argued that a high rate of unemployment justified preferring New York residents for public works jobs. However, the court found no evidence to connect nonresident employment on public works projects with unemployment rates in New York. The court found the statute was not precisely tailored to address unemployment, as it did not prefer unemployed residents over employed residents and made no distinction between supervisory and non-supervisory employees. The court noted the statute’s “blunderbuss overbreadth.” The court rejected the argument that the “public ownership exception” applied, stating that the modern jurisprudence, stemming from Toomer, requires a balancing of local and national priorities. The court stated that the increasing interdependence of states outweighs the state’s interest. Ultimately, the court concluded that Section 222 created a potentially absolute barrier to out-of-state contractors and workers, conflicting with the national policy of economic unity. The court stated that it does not outweigh “the constitutional concern for the right of a citizen of one State to pursue his vocation in another.”