Attorney General Kevin Clarkson released an opinion Thursday evening saying the state’s “Alaska Hire” statute was unconstitutional.

Clarkson’s opinion came after a lawsuit was filed in July against the state by construction firm Colaska, the state subsidiary of Colas USA, which operates nationally. Colaska is being represented in this case by former Alaska attorney general Michael Geraghty.

The lawsuit challenged the validity of Alaska Hire, prompting the governor and Clarkson to review the law.

That statute says that in certain circumstances companies must give preferences to Alaska residents when hiring for state public works projects.

“We took a hard look at it,” Clarkson said in a press conference with reporters Friday. “There was no way for the statute to survive a constitutional challenge.”

Rather than spend limited state resources fighting a losing battle, Clarkson said, the governor decided to settle with the company.

Clarkson said that Coalaska will be repaid the $50,000 the company incurred in fines in 2019 for violating Alaska Hire. Issuing an opinion on the law was also a condition of the settlement, Clarkson said. He stressed that the content of the opinion was not dictated as a term of the settlement, only that an opinion would be issued.

The fines were issued to Coalaska from February to May of 2019 but were given for violations dating back to 2017.

“(Coalaska) wouldn’t dismiss their lawsuit unless they had a court ruling or an attorney general’s opinion,” Clarkson said. “We gave them their $50,000 and the opinion, but made no promise as to what the opinion would say.”

In his opinion submitted to Gov. Mike Dunleavy, Clarkson said that Alaska Hire violated the Privileges and Immunities Clause of the U.S. Constitution and the Equal Rights, Opportunities and Protection Clause of the Alaska Constitution.

Those provisions say that all citizens receive equal protection under the law even when crossing state lines.

“Alaska Hire’s primary purpose is and always has been protectionism,” Clarkson wrote in his opinion. “Protectionism is not a valid purpose under the Privileges and Immunities Clause.”

But critics say that Alaska Hire is narrowly tailored in such a way as to not violate either the U.S. or state constitutions.

Alaska Hire only applies to state projects operating in a previously defined “zone of underemployment, according to the language of the statute. The statute says that zones of underemployment must be identified by the commissioner of labor and workforce development and be in areas that fulfill a number of requirements, including an unemployment rate higher than the national average.

“There’s been a law on the books since 1986,” said Rep. Zach Fields, D-Anchorage, “and Mike Dunleavy, as soon as someone files a lawsuit, he caves.”

Clarkson said the Department of Law had reviewed several other cases regarding Alaska Hire and in each of those cases provisions of the statute had been struck down.

But Fields disagrees. He said that those cases involved the private sector and there was a Supreme Court case out of New Jersey which established a state’s right to local hire requirements. Fields said that previous administrations had found ways to defend Alaska Hire.

“I’m just blown away that a law that has received such broad support for so long is just being abandoned by this governor,” Fields said.

Joelle Hall, Director of Operations at the Alaska AFL-CIO, said that Alaska Hire had been the law of the land since 1986.

“They found a way in the Cooper administration to pass constitutional muster and every administration has done so for 33 years,” she said. “This has certainly not been a partisan issue.”

But Clarkson said he’s not the first to be skeptical about Alaska Hire.

“We’re not the first attorney general who’s taken a sideways glance at this statute,” Clarkson told reporters. “Looking at it in context of three separate cases, it’s not empowered to say it’s unconstitutional.”

Fields and Hall both said that this was a pattern coming out of the Dunleavy administration of attacking workers rights. Fields noted that Clarkson’s opinion came on the same day a Superior Court Judge issued a temporary restraining order against an Administrative Order issued by the governor which was widely criticized by labor groups.

Clarkson said that the governor and his administration did not disagree with the goals of Alaska Hire and encouraged businesses to hire Alaska residents. A law which mandates they do so was “clearly unconstitutional,” Clarkson said.

• Contact reporter Peter Segall at 523-2228 or psegall@juneauempire.com.

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• Contact reporter Peter Segall at 523-2228 or psegall@juneauempire.com.

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