Associated Builders & Contractors, Inc. v. San Francisco Airports Commission

Opinion

We granted review in this case to decide whether the project stabilization agreement (PSA) executed by defendant San Francisco Airports Commission (the Commission) and real party in interest San Mateo County Building and Construction Trades Council, AFL-CIO (the Trades Council), in order to accomplish the $2.4 billion expansion and renovation of the San Francisco International Airport, violates competitive bidding laws or certain other statutory or constitutional provisions.

The PSA involved in the present case exacts from the signatory unions over the expected 10-year life of the project a no-strike pledge, an agreement to arbitrate jurisdictional disputes among crafts, and a promise to continue work on the project despite the expiration of any applicable collective bargaining agreements. In exchange, the Commission agrees to require all contractors to accept the terms of the PSA, to abide by each craft’s labor-management grievance procedure in cases of discipline or discharge, and to

Bids for the international terminal contract, the largest contract in the airport expansion project, were due July 11, 1996. On that day, Associated Builders and Contractors, Inc., Golden Gate Chapter, and the Asian American Contractors Association, Inc. (AACA) (collectively, ABC), appeared in the San Francisco County Superior Court seeking a writ of mandate to strike the PSA requirement from the bid specifications, arguing the PSA is unconstitutional and violates state competitive bidding statutes. Following a hearing on the merits, the superior court denied the petition, ruling that the PSA is not unconstitutional and finding no inconsistency between the PSA and the competitive bidding laws. The Court of Appeal affirmed. That court held: the decision to use a PSA for the airport expansion project is a matter of local concern governed by San Francisco’s Administrative Code rather than the California Public Contract Code; regardless of whether state or local law applied, the PSA does not violate competitive bidding laws; the PSA does not violate ABC’s constitutional rights; and ABC lacks standing to assert violations of its workers’ rights under the Labor Code.

We granted ABC’s petition for review.

Standard of review

On appeal from the denial of a writ of mandate, courts generally review an administrative agency’s action under the substantial evidence test. We do not inquire whether, if we had the power to do so, we would have taken the action taken by the agency. (Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559 , 573-574 [ 38 Cal.Rptr.2d 139 , 888 P.2d 1268 ] (WSPA); Fullerton Joint Union High School Dist. v. State Bd. of Education (1982) 32 Cal.3d 779 , 786 [ 187 Cal.Rptr. 398 , 654 P.2d 168 ] (Fullerton).) Rather, our authority is limited to determining whether the Commission’s quasi-legislative action in adopting the PSA bid specification (see 20th Century Ins. Co. v. Garamendi (1994) 8 Cal.4th 216 , 275 [8 Cal.4th 440d, 32 Cal.Rptr.2d 807 , 878 P.2d 566 ]) was arbitrary, capricious, entirely lacking in evidentiary support, or procedurally unfair (WSPA, supra, at p. 574; Fullerton, supra, at p. 786; see also Domar Electric, Inc. v. City of Los Angeles (1994) 9 Cal.4th 161 , 174 [ 36 Cal.Rptr.2d 521 , 885 P.2d 934 ] (Domar) [applying deferential standard of review]). We exercise independent judgment, however, in determining whether the PSA is consistent with applicable law, such as the competitive bidding statutes. (See Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1 , 11, fn. 4 [ 78 Cal.Rptr.2d 1 , 960 P.2d 1031 ]; California Assn. of Psychology Providers v. Rank (1990) 51 Cal.3d 1 , 11 [ 270 Cal.Rptr. 796 , 793 P.2d 2 ].)

Whether ABC has standing to challenge the PSA under competitive bidding laws

Preliminarily, the Commission maintains ABC lacks standing to challenge the legality of the PSA under the competitive bidding laws. The Commission acknowledges it did not raise below all the arguments regarding standing it now presents in its brief, but observes that “ ‘contentions based on a lack of standing involve jurisdictional challenges and may be raised at any time in the proceeding.’ (Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432 , 438 [ 261 Cal.Rptr. 574 , 777 P.2d 610 ].)” We therefore proceed to consider whether ABC has standing to assert such a challenge on behalf of its members.

To establish associational standing, ABC must demonstrate that its members would otherwise have standing to sue in their own right. (Brotherhood of Teamsters & Auto Truck Drivers v. Unemployment Ins. Appeals Bd. (1987) 190 Cal.App.3d 1515 , 1522 [ 236 Cal.Rptr. 78 ].) To have standing to seek a writ of mandate, a party must be “beneficially interested”

ABC predicates its allegation of standing on a declaration by John Robinson, the Executive Director of the Golden Gate Chapter of Associated Builders and Contractors, Inc., stating that seven named members of Associated Builders and AACA refused to bid on the airport project due to the PSA specification. ABC also appears to rely on an allegation that, as citizens and taxpayers of this state, ABC’s members have a beneficial interest in ensuring that no worker is denied access to employment on a public works project by the operation of the union hiring hall provisions of the PSA.

The Commission contends ABC’s claim of associational standing must fail, because the Robinson declaration does not establish that ABC’s members have bid in the past or have the necessary qualifications, such as a proper license, to submit a valid bid in the future. (See Cornelius v. Los Angeles County etc. Authority (1996) 49 Cal.App.4th 1761 , 1771-1772, 1773 [ 57 Cal.Rptr.2d 618 ].) Further, ABC fails to allege its members would bid on contracts of the requisite size, since San Francisco’s competitive bidding law applies only to contracts over $50,000 (S.F. Admin. Code, § 6.1), and its state counterpart applies only to contracts in excess of $4,000 (Pub. Contract Code, § 20121). ABC’s claim of taxpayer standing similarly fails, the Commission argues, for lack of the requisite allegation the plaintiff is a “citizen resident [in the city or county], or ... a corporation, who is assessed for and is liable to pay, or, within one year before the commencement of the action, has paid, a tax therein.” (Code Civ. Proc., § 526a.) Finally, ABC’s claim of public interest standing fails, according to the Commission, because no statute authorizes ABC to bring this suit on behalf of nonunion contractors or their employees, and ABC has made no showing that nonunion

ABC responds that its standing stems from the injury visited on its members by being precluded from competing for airport contracts on an equal basis with union contractors. (See Bras v. California Public Utilities Com’n (9th Cir. 1995) 59 F.3d 869 , 873 [to demonstrate standing, challenger of minority business enterprise quotas need only show it is forced to compete on an unequal basis].) As will appear, because the PSA excludes no qualified contractor from bidding, it does not deny ABC’s members equal opportunity to seek airport contracts. If, however, ABC could demonstrate that the PSA specification has the effect of infringing its members’ rights of association or expression, or that it has an anticompetitive impact on them, then ABC might legitimately claim a beneficial interest within the meaning of Code of Civil Procedure section 1086 and cases interpreting that statute. Thus, although ABC’s allegations on the issue of standing are rather scanty, we conclude they suffice to confer standing to challenge the PSA on behalf of its members. (See Adarand Constructors, Inc. v. Pena (1995) 515 U.S. 200 , 211 [ 115 S.Ct. 2097 , 2104-2105, 132 L.Ed.2d 158 ].) (In a later part of this opinion addressing ABC’s claim that the PSA violates certain provisions of the Labor Code, we discuss the Commission’s contention that ABC lacks standing to assert the interests of its members’ employees.)

Whether state or local competitive bidding law applies

As a charter city, San Francisco enjoys autonomous rule over municipal affairs pursuant to article XI, section 5 of the California Constitution, “subject only to conflicting provisions in the federal and state Constitutions and to preemptive state law.” (Domar, supra, 9 Cal.4th at p. 170; Johnson v. Bradley (1992) 4 Cal.4th 389 , 397 [ 14 Cal.Rptr.2d 470 , 841 P.2d 990 ]; California Fed. Savings & Loan Assn. v. City of Los Angeles (1991) 54 Cal.3d 1 , 12 [ 283 Cal.Rptr. 569 , 812 P.2d 916 ].) ABC argues the size and scope of the airport expansion renders the project a matter of statewide concern. It asserts that the airport is located outside the city limits of San Francisco, in San Mateo County, the project is funded with state and federal money and is subject to state prevailing wage laws, and the airport itself is projected to serve 51,000,000 passengers per year by 2006. These circumstances, ABC argues, necessarily remove the project from the category of purely municipal affairs. ABC contends, therefore, that the legality of the PSA specification in the airport expansion project bid must be determined with reference to Public Contract Code section 20128, rather than San Francisco Administrative Code section 6.1 (respectively the state and local competitive bidding laws).

The Commission’s argument appears the better supported by authority, but we need not resolve the question, because the parties point to no substantive difference in the outcome of this case dependent on the application of state or local competitive bidding law. In resolving whether state or local law applies, the court must first determine whether a genuine conflict between those laws in fact exists. (Johnson v. Bradley, supra, 4 Cal.4th at pp. 400-401.) Only if the court concludes an actual conflict exists should it go on to analyze whether the state law addresses a matter of statewide concern. (California Fed. Savings & Loan Assn. v. City of Los Angeles, supra, 54 Cal.3d at pp. 16-17.)

Whether the PSA is consistent with competitive bidding law

Because the relevant language of the state and local competitive bidding laws, quoted in the immediately preceding paragraph, does not dispositively address the question before us, our analysis must focus on whether the PSA is consistent with the general principles underlying the competitive bidding law. As will appear, because the PSA requirement does not bar or substantially discriminate against a class of contractors, we conclude in the affirmative. Given that determination, in the next part of this opinion we address whether the record contains substantial evidence that the PSA furthers a legitimate governmental interest that is consistent with the competitive bidding law and thus supports the Commission’s decision to require agreement to the PSA as a condition of contractors’ participation in the project.

Recently, in Domar, supra, 9 Cal.4th 161 , we enumerated the purposes of competitive bidding: “ ‘to guard against favoritism, improvidence, extravagance, fraud and corruption; to prevent the waste of public funds; and to obtain the best economic result for the public’ [citations], and to stimulate advantageous market place competition [citation].” (Id. at p. 173.) We went on to observe: “As one leading treatise explains: ‘The provisions of statutes, charters and ordinances requiring competitive bidding in the letting of municipal contracts are for the purpose of inviting competition, to guard against favoritism, improvidence, extravagance, fraud and corruption, and to secure the best work or supplies at the lowest price practicable, and they are enacted for the benefit of property holders and taxpayers, and not for the benefit or enrichment of bidders, and should be so construed and administered as to accomplish such purpose fairly and reasonably with sole reference to the public interest. These provisions are strictly construed by the courts, and will not be extended beyond their reasonable purpose. Competitive bidding provisions must be read in the light of the reason for their enactment, or they will be applied where they were not intended to operate and thus deny municipalities authority to deal with problems in a sensible, practical way.’ (10 McQuillin, Municipal Corporations (3d rev. ed. 1990) § 29.29, p. 375, fns. omitted.)” (Ibid.)

As ABC expressly acknowledges, the PSA, by its terms, excludes no contractor, union or nonunion, from bidding on the airport project. Further, the PSA exacts from contractors no commitment toward the unions on any other project, has no effect on a contractor’s parent companies, subsidiaries or affiliates, and does not apply to a contractor’s managerial, supervisorial, executive or clerical employees. ABC relies on Neal Publishing Co. v. Rolph (1915) 169 Cal. 190 , 196-198 [ 146 P. 659 ], in which we held that a specification restricting bids for printing jobs to union shops was anticompetitive and unlawful. Neal Publishing, however, is distinguishable; here, nonunion contractors are in no way excluded from bidding on the airport project. Nothing in the Neal Publishing decision supports ABC’s assertion that the printer in that case could simply have “joined the union” for the duration of the contract, as may a contractor, in order to qualify for work on the airport project, choose to agree to the PSA. Indeed, the Neal decision notes the union, for reasons not revealed, had revoked the printer’s union status. {Id. at p. 192.) ABC asserts there is not, and could never be, sufficient record evidence to justify a public body’s excluding every nonunion construction contractor from working on a public works project. This assertion has no relevance to the PSA at issue here.

Similarly unavailing is ABC’s reliance on Assoc. Gen. Contr. of Cal. v. City & County of S.F. (9th Cir. 1987) 813 F.2d 922 , 925-927, in which the federal Court of Appeals for the Ninth Circuit invalidated an ordinance creating mandatory set-asides and bid preferences for women and minority contractors, on the ground such accommodations lessened competition by narrowing the range of acceptable bidders based solely on their membership in a particular class. Here, by contrast, no bidder is disqualified for being a “nonunion” contractor. Provided the contractor submits a responsive bid, i.e., agrees to abide by the terms of the PSA, its bid stands on an equal footing with all others.

As for the PSA’s requirement that contractors engage new employees through the union hiring hall, it must be recalled that the PSA permits a

As ABC acknowledges, the prevailing wage law, not the PSA, is the source of the applicable wage rates. (See S.F. Charter, appen. A, § A7.204 [“Every contract for any public work or improvement. . . must provide: [^] . . . [ID (b) that any person performing labor thereunder shall be paid not less than the highest general prevailing rate of wages in private employment for similar work; . . .”].) We have observed that prevailing wage laws are designed in part to permit union and nonunion contractors to compete on an even footing for public contracts. (Lusardi Construction Co. v. Aubry (1992) 1 Cal.4th 976 , 987 [ 4 Cal.Rptr.2d 837 , 824 P.2d 643 ].) ABC fails to explain persuasively how the wage and benefit requirements in the PSA place ABC or its members at a competitive disadvantage. It suggests its workers prefer to receive the value of benefits directly, and thus to obtain a larger paycheck, rather than participate in union benefit plans; this circumstance, ABC urges, means it will be unable to attract its preferred workers. ABC fails entirely to establish, however, that union contractors will thereby enjoy an advantage over ABC in attracting these or any other available workers, or in the bidding process generally. The same reasoning compels rejection both of ABC’s complaint that the PSA makes it more difficult to attract desired employees, because it forces nonunion workers to pay union dues, and of its assertion, raised for the first time in this court and supported by no citation to authority, that at the conclusion of the project ABC would be unfairly subjected to withdrawal liability pursuant to the Multiemployer Pension Plan Amendments Act of 1980 ( 29 U.S.C. § 1381 et seq.). Any such features of the PSA and of federal pension law would apply to all prospective bidders equally and result in the exclusion of none. Hence, the PSA is not anticompetitive merely because certain bidders would see some of its features as less attractive.

As the Court of Appeal aptly observed, “If ABC chooses not to bid, that is its right, the exercise of which is strictly within its control.” ABC members’ election not to bid on the airport project, out of a desire to avoid dealing with unions or for whatever other reasons, does not make the PSA anticompetitive.

Judicial decisions in other jurisdictions are largely in accord with this conclusion, and those few that invalidate project labor agreements either do so under competitive bidding laws that, unlike those applicable to this case, emphasize “unfettered competition” over more generalized public interest considerations, or employ a less deferential standard of review of agency decisionmaking than obtains in this state.

In Enertech Elec., Inc. v. Mahoning County Com’rs (6th Cir. 1996) 85 F.3d 257 , for example, the Ohio competitive bidding law, similar to that applicable in the present case, aimed “ ‘ “to provide for open and honest competition in bidding for public contracts and to save the public harmless, as well as bidders themselves, from any kind of favoritism or fraud in its varied forms.” ’ [Citation.]” (Id. at p. 260.) The federal court of appeals concluded the county did not abuse its discretion by determining the “best” bidder would be one willing to ratify a project labor agreement designed to secure labor harmony on the project, such a requirement being consistent with the Ohio competitive bidding policy. Thus, although the contractor challenging the requirement was the lowest bidder, it was determined not to be the “best” bidder due to its refusal to agree to the project labor agreement. (Ibid.) An Ohio intermediate appellate court likewise upheld a project labor agreement in State ex rel. v. Jefferson Cty. Bd. (1995) 106 Ohio App.3d 176 [ 665 N.E.2d 723 ], reasoning the agreement did not conflict with the purpose of

Similarly, a federal court rejected a challenge to a project labor agreement under Minnesota’s competitive bidding laws, which required contracts be awarded to the “lowest responsible bidder.” (Minn. Chapter of Assoc. Builders v. St. Louis Cty. (D.Minn. 1993) 825 F.Supp. 238 .) The court noted: “The county has an interest in avoiding delays resulting from labor difficulties, and the Project Labor Agreement is a rational way to address this interest. Furthermore, there is no evidence before the court that the project would cost less without the requirement that contractors sign the Project Labor Agreement. Contractors presumably would have to pay the prevailing wage with or without the labor agreement, so the cost to the state might not prove to be more as a result [of] the Project Labor Agreement. It might be that the avoidance of delays guaranteed by the Project Labor Agreement would ultimately save county money.” (Id. at p. 244.) The same considerations supported the adoption of the PSA in this case.

The Alaska Supreme Court reached the same conclusion in rejecting a challenge to a project labor agreement under local procurement laws, which enunciated a policy of “maximum practicable competition.” (Laborers Local No. 942 v. Lampkin (Alaska 1998) 956 P.2d 422 .) The court broadly interpreted “practicable” to encompass other factors besides cost, such as the need to complete the project (the renovation of a high school) with a minimum of disruption. (Id. at p. 434.)

In N.Y. State Chapter v. Thruway Authority (1996) 88 N.Y.2d 56 [ 643 N.Y.S.2d 480 , 666 N.E.2d 185 ] (Thruway), the New York Court of Appeals considered competitive bidding law challenges to project labor agreements on two projects, one a four-year project to improve the Tappan Zee Bridge and the other a five-year project to modernize the facilities of a cancer institute. The New York high court observed that project labor agreements are neither absolutely prohibited nor absolutely permitted in public construction contracts under New York procurement law. Rather, such agreements are valid in New York “where the record supporting the determination to enter into such an agreement establishes that the PLA was justified by the interests underlying the competitive bidding laws.” (Id. at p. 65 [666 N.E.2d at pp. 187-188].) The court concluded the project labor agreement for the bridge project did not violate competitive bidding laws because it was directly tied to competitive bidding goals: “The Thruway Authority’s detailed focus on the public fisc—both cost savings and uninterrupted revenues—the demonstrated unique challenges posed by the size and complexity of the project, and the cited labor history collectively support the

In contrast, the court concluded the project labor agreement for the cancer institute project ran afoul of the principles underlying the competitive bidding laws because the responsible agency failed to show any “cost savings . . . or any unique feature of the project which necessitated a PLA.” (Thruway, supra, 88 N.Y.2d at p. 74 [666 N.E.2d at p. 193].) Something more was required, according to the New York Court of Appeals, than a generalized desire for labor stability. (Id. at p. 74 [666 N.E.2d at pp. 193-194].)

In the Thruway case, the New York Court of Appeals evidently employed a standard of review that placed the burden on the agency to demonstrate the appropriateness of the project labor agreement as a bid. specification, rather than (as under our law) on the party challenging the specification to show the agency acted arbitrarily and capriciously in adopting the requirement. (Compare 88 N.Y.2d at p. 69 [666 N.E.2d at p. 190] [the agency operating under a competitive bidding law “bears the burden of showing that the decision to enter into the PLA had as its purpose and likely effect the advancement of the interests embodied in the competitive bidding statutes”] with WSPA, supra, 9 Cal.4th at p. 574.) The Thruway decision, therefore, must be read with this significant distinction in mind.

The only other cases ABC cites in which courts have held a project labor agreement to violate competitive bidding laws arise under New Jersey law. In George Harms Const. v. Turnpike Auth. (1994) 137 N.J. 8 [ 644 A.2d 76 ] (George Harms), the New Jersey high court acknowledged that project labor agreements serve important purposes on major long-term construction projects, including preventing the expiration of collective bargaining agreements of different crafts during the term of the construction contract or resolving disputes among the several crafts, and for this reason have been used on such projects as the Cleveland sports complex in northern Ohio, Minneapolis’s Glenwood Bridge, the Massachusetts Central Artery/Third Harbor Tunnel, and the Boston Harbor sewage treatment facility construction. Nevertheless, the court concluded the project labor agreement at issue in that case was inconsistent with New Jersey’s “paramount policy” of fostering “unfettered competition” in public contracts, a policy it could not reconcile with what it viewed as the agreement’s “sole-source” restriction on labor. (Id. at p. 44 [644 A.2d at p. 95].) The latter restriction allegedly precluded the contractor from using its own employees, who belonged to a union not affiliated with the local Building and Construction Trades Council

More recently, the Supreme Court of Nevada upheld the validity, under state competitive bidding laws, of the imposition of a project labor agreement in connection with the Southern Nevada Water Authority’s capital improvement plan. (Associated Bldrs. v. So. Nev. Water Auth. (Nev. 1999) 979 P.2d 224 .) The Nevada high court determined the agreement at issue in that case served the purposes of the state’s competitive bidding laws by providing equal access to projects to both union and nonunion contractors and indirectly saving public funds by protecting the project from costly delays due to labor unrest. (Id. at p. 229.) ABC observes that the language of the Nevada competitive bidding statute differs from that of both the San Francisco ordinance and the state competitive bidding laws, but we note that the Nevada Supreme Court identifies as the purposes underlying the Nevada statute the same ones we, interpreting California law, identified in Domar, to secure competition, save public funds, and guard against favoritism, improvidence and corruption. (See Domar, supra, 9 Cal.4th at p. 173; cf. Associated Bldrs. v. So. Nev. Water Auth., supra, 979 P.2d at p. 229.) We therefore conclude the Nevada high court’s decision is relevant and persuasive.

ABC complains that, contrary to the argument of the Trades Council, a contractor may not necessarily be able to comply with the PSA requirement if that contractor’s employees have previously rejected the pertinent union in an election, or if the contractor either has signed a collective bargaining agreement or is in negotiation with a different labor organization, as in George Harms, supra, 137 N.J. 8 [ 644 A.2d 76 ]. The contractor’s compliance with the PSA in such circumstances, ABC contends, would constitute an unfair labor practice, because it would interfere with its workers’ right to choose their bargaining representative pursuant to section 7 of the NLRA ( 29 U.S.C. § 157 ). The merits of ABC’s contention are difficult to assess, as it cites no authority on point or clearly mandating such a conclusion. Nothing in the record, moreover, suggests such a scenario potentially exists in this case, and ABC cites no example of such a problem among its membership,

ABC argues the Commission could not properly act on such concerns absent evidence of labor unrest on prior projects at the airport or without considering narrower solutions, such as requiring only union contractors to agree to no-strike clauses. ABC does not persuade us the Commission’s discretion was so constrained. We rejected an analogous argument in Domar, supra, 9 Cal.4th at page 174, that a minority/women outreach program imposed as a bid requirement had to be shown actually to promote competition or reduce prices. “Despite the lack of empirical evidence,” we said, “it is not unreasonable for the Board to conclude that, in the absence of mandated outreach, prime contractors will tend to seek out familiar subcontractors when bidding for projects, and that therefore their bids may or may not reflect as low a price had reasonable outreach efforts been made. Indeed, Domar is unable to cite to anything in the record that might detract from

Second, ABC’s argument lacks merit under state law. The California statutes that declare and protect workers’ rights to self-determination in matters of labor organization cannot reasonably be construed to invalidate project labor agreements. Courts have held that even agency shop agreements are lawful in this state; a fortiori, project labor agreements, which restrict workers’ freedom to a lesser degree, must also be lawful. (Petri Cleaners, Inc. v. Automotive Employees, etc., Local No. 88 (1960) 53 Cal.2d 455 , 474-475 [ 2 Cal.Rptr. 470 , 349 P.2d 76 ] [“[C]losed or union shop agreements and concerted activities to achieve them are lawful in this state whether or not a majority of the employees directly involved wish such agreements.”]; Rae v. Bay Area Rapid Transit Supervisory etc. Assn. (1980) 114 Cal.App.3d 147 , 154 [ 170 Cal.Rptr. 448 ] [“The right to work guaranteed by the California Constitution is not absolute, but may be limited by an agreement that union membership is a condition for employment.”]; see also Boston Harbor, supra, 507 U.S. at p. 230 [113 S.Ct. at pp. 1197-1198] [federal law permits construction industry employers to enter into agreements providing for union recognition, compulsory union dues or equivalents, and mandatory use of hiring halls before hiring any employees];

Whether the PSA requirement infringes ABC’s constitutional rights of association and equal protection

Relying chiefly on O’Hare Truck Service, Inc. v. City of Northlake (1996) 518 U.S. 712 [ 116 S.Ct. 2353 , 135 L.Ed.2d 874 ] (O’Hare), ABC contends the imposition of the PSA as a bid specification violates its First Amendment rights to free association and free expression, because it compels contractors to abandon their “merit shop philosophy” and embrace union agreements in order to obtain work on the airport project. O’Hare, however, does not support the contention. In that case, the United States Supreme Court held a city may not, consistently with the First Amendment, retaliate against an independent contractor by terminating his contract because of his refusal to contribute to the mayor’s reelection campaign and his support for the mayor’s opponent. (Id. at pp. 715, 721 [116 S.Ct. at pp. 2355-2356, 2358-2359].) Here, the PSA requirement in no way prevents ABC or its members from freely expressing their “merit shop philosophy” and opposition to unions, nor does it coerce “pro-union” expressions or associations. Nothing in the PSA stops ABC or its members from, or punishes them for, engaging in whatever political action or advocacy they wish. Although ABC members’ election not to bid on the project might result in some loss of revenues to them, the First Amendment does not oblige the government to minimize the financial repercussions of such a choice. (Lyng v. Automobile Workers (1988) 485 U.S. 360 , 368 [ 108 S.Ct. 1184 , 1190-1191, 99 L.Ed.2d 380 ] [statute barring grant or increase of food

Even if we could conclude the PSA somehow burdens ABC’s political views, we observe that the high court in O’Hare recognized: “Cities and other governmental entities make a wide range of decisions in the course of contracting for goods and services. The Constitution accords government officials a large measure of freedom as they exercise the discretion inherent in making these decisions. [Citation.] Interests of economy may lead a governmental entity to retain existing contractors or terminate them in favor of new ones without the costs and complexities of competitive bidding. A government official might offer a satisfactory justification, unrelated to the suppression of speech or associational rights, for either course of action. The first may allow the government to maintain stability, reward good performance, deal with known and reliable persons, or ensure the uninterrupted supply of goods or services; the second may help to stimulate competition, encourage experimentation with new contractors, or avoid the appearance of favoritism. These are choices and policy considerations that ought to remain open to government officials when deciding to contract with some firms and not others, provided of course the asserted justifications are not the pretext for some improper practice.” (O’Hare, supra, 518 U.S. at pp. 724-725 [116 S.Ct. at p. 2360].)

As discussed above, the Commission could reasonably determine the PSA would further the aims of the competitive bidding law and the public interest. To whatever extent the PSA specification might be seen to burden ABC’s political expression, the Commission, in the words of the O’Hare court, could properly conclude the specification is “ ‘an appropriate requirement for the effective performance’ of the task in question.” (O’Hare, supra, 518 U.S. at p. 725 [116 S.Ct. at p. 2361].) Moreover, as the Trades Council observes, employers do not have a constitutional right to operate “nonunion” shops or “associate” only with unorganized employees. Federal labor law gives employees the right to organize and requires their employer to bargain collectively. (See 29 U.S.C. § 158 (a)(5); see also Lab. Code, § 923.)

In passing, ABC asserts the PSA violates state and federal constitutional guarantees of equal protection (U.S. Const., Amend. XIV; Cal. Const., art. I, § 7 and art. IV, § 16) in discriminating against contractors and their employees based on their political beliefs. ABC abandoned these contentions by failing to raise them in its arguments before the Court of Appeal. (Cal. Rules of Court, rule 29(b)(1).) In any event, as noted, the PSA excludes no

Conclusion

The judgment of the Court of Appeal is affirmed.

George, C. J., Mosk, J., Kennard, J., Baxter, J., Chin, J., and Brown, J., concurred.