Alaska Attorney General Kevin Clarkson declared the state’s Alaska-hire laws unconstitutional last Thursday. The Department of Law said the decision was prompted by a lawsuit filed in July by Coalaska, the parent company of Secon, contractor for the Haines Highway project.
Alaska-hire statutes require private companies contracting with the state to hire a fixed percent of Alaskan residents. Hiring too many non-residents can lead to fines or imprisonment.
In July, Coalaska filed a lawsuit to challenge Alaska hire laws.
Coalaska’s lawsuit prompted the state to investigate. “We were alerted that a lawsuit had been filed challenging the Alaska local-hire provision, which is what prompted us to look further into it,” said the Department of Law in an official written statement.
While the Department of Law claimed they had long been concerned about the constitutionality of the Alaska-hire laws, they also stated that legal fees impacted their decision. “The Attorney General recognized the potential for a costly and unnecessary legal battle,” they said.
Still, the lawsuit settlement requires the state to refund Coalaska $50,000, according to the Department of Law.
Since statehood, Alaska enacted three versions of Alaska-hire statutes. In his opinion, Clarkson said the statutes violate U.S. and state constitutions by discriminating against non-residents.
“Because the purpose of (Alaska hire) is to economically benefit Alaska residents at the expense of nonresidents—and because it is not sufficiently tailored to the problem it seeks to address—the current version of Alaska Hire is unconstitutional and should not be enforced.”
He cited three cases that struck down Alaska hire as unconstitutional.
Secon refused to comment beyond its official written statement. “Secon is part of an Alaska-based company that works throughout the state of Alaska. Secon credits its success to its large workforce which is well-over 85 percent Alaska residents. We believed the State’s local hire scheme was unconstitutional, and we are pleased that, after a lengthy analysis, the State has acknowledged our position is correct,” read Secon’s statement.
Attorney General opinions are not law. Rather, they advise State officials about enforcing law. In this case, the opinion advises the State to cease enforcing Alaska hire laws.
Looking forward, it is unclear how the lack of penalization for hiring non-residents will impact the Haines community.
Roger Schnabel of Southeast Roadbuilders, a subsidiary of Coalaska and Secon, declined to comment.
Borough manager Debra Schnabel said the borough has a history of contractors violating Alaska hire laws. In the last two years, multiple contractors were penalized by the state, though she did not disclose the names of companies.
Schnable said she recognizes the challenges contractors face when hiring local Alaskans. “Sitting here in the borough we are aware of the challenges contractors have to find Alaskan residents to fill the quota in specialized positions.”
Schnabel said she is also confident that contractors strive to hire local, with or without the laws. “I believe that contractors do use the local work-force to the best of their ability,” she said.