SAN FRANCISCO — The California First District Court of Appeal recently ruled that the construction of a movie theater in Hesperia was a "public works" according to the state's minimum wage law.
On June 30, the appeals court affirmed a lower court's ruling that plaintiff Cinema West LLC's movie theater qualifies as a public work, which would force the company to pay employees working on the property minimum wage.
The case stems from a 2004 disagreement when the City of Hesperia started purchasing property for a Civic Plaza. In 2010, the city and Cinema West entered into an agreement that the theater would purchase some property at a fair market value of $102,529. The agreement included the construction of 12-screen, 36,000-square-foot movie theater with a parking lot that would operate for a minimum of 10 years with 40 employees.
When the project was nearly complete in 2013, the International Brotherhood of Electrical Workers Local 477 requested a public works coverage determination by Christine Baker, the director of the State Department of Industrial Relations, who determined it was a public work matter, resulting in prevailing wage requirements.
Filing an appeal, Cinema West requested a hearing to develop a factual record for judicial review, but Baker denied.
“She addressed the new factual assertions raised by Cinema West, accepting some and rejecting others that were contradicted by the evidence,” according to the appeals court decision, noting that Cinema West challenged with a petition to the Superior Court of Sonoma County.
Superior Court Judge Gary Nadler sustained Baker's objections to Cinema West‘s extra-record evidence, “finding Cinema West should have presented the evidence in the administrative proceedings and 'did not avail itself of the opportunity to do so,'” according to the appeals court decision.
Discussing the case, the court of appeals addressed Cinema West's argument that the project was not a public work because the “private construction is not subject to prevailing wage merely because other related construction is publicly funded,” and “the construction of the parking lot did not transform the private theater into a public work."
The appeals court affirmed the lower court's ruling and awarded the respondents the costs of the appeal.