Enforceability of Local Hire Preference Programs (2013)

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31 Also, to a certain degree, negotiations cannot be effec- tive without a certain amount of leverage or working political capital.440 Additionally, such agreements often benefit from the negotiating community coalitions being well-financed and having the financial resources to re- tain attorneys and experts to assist in the negotiating process with the developer.441 CBAs also tend to rest on politics rather than on law to monitor and enforce im- plementation, which can be burdensome for community organizations.442 Like most contracts tied to development, CBAs gen- erally flourish under conditions of economic and urban growth.443 They depend upon the political leverage af- forded to community residents through the planning process.444 Thus, community actors can hold up this process, but only before the development is con- structed.445 Therefore, in the context of divestment and economic decline, CBAs are likely not as effective or viable. Los Angeles Sports and Entertainment District (Sta- ples) Community Benefits Agreement. The landmark Staples CBA was negotiated in 2001.446 It covered a development project adjacent to the downtown Los An- geles Staples Center Arena and contained unprece- dented community benefits, ranging from living wage jobs to affordable housing to recreational parks and residential parking.447 It specifically required manda- tory participation in a first source referral system for employers in the anticipated 4 million sq ft of enter- tainment, hotel, service, and retail development.448 More than 30 community organizations, unions, and affected individuals were involved in the organizing efforts in support of the Staples CBA.449 This particular CBA is considered the first full-fledged CBA that is a stand-alone, private agreement.450 Los Angeles Airport (LAX) Community Benefits Agreement. The 2004 LAX CBA is significant because it was the first CBA to be negotiated with a governmental entity.451 Additionally, at the time it was negotiated it was the largest CBA ever negotiated in terms of the benefits and resources committed to realizing those 440 Id. at 23. 441 Id. 442 Community Benefits Legal Dictionary, supra note 3; Parks & Warren, supra note 425, at 20–21. 443 Id. at 21. 444 Id. 445 Id. at 21–22. 446 Community Benefits Legal Dictionary, supra note 3, at 3; Parks & Warren, supra note 425, at 7; Gross, LeRoy & Janis- Aparicio, supra note 5, at 14. 447 Id. 448 Mulligan-Hansel, supra note 412, at 41. 449 Community Benefits Legal Dictionary, supra note 3; Parks & Warren, supra note 425, at 7; Gross, LeRoy & Janis- Aparicio, supra note 5, at 14. 450 Community Benefits Legal Dictionary, supra note 3; Parks & Warren, supra note 425, at 7. 451 Id. benefits.452 The benefits obtained through this CBA campaign have been valued at half a billion dollars.453 A coalition of 22 coalition groups negotiated this CBA with the Los Angeles World Airports, an independent government entity that operates the Los Angeles Inter- national Airport as part of its proposed modernization plan.454 The CBA included employment benefits, includ- ing $15 million for job training, as well as environ- mental protections for the largely low-income communi- ties of color that reside nearby.455 Because the developer was a public rather than pri- vate governmental entity, community groups pledged not to file lawsuits challenging the modernization pro- ject.456 The agreement covers a wide array of jobs at the airport, including approximately 300 retail and food service vendors, airline employees, service contractors, baggage handlers, and other jobs on the tarmac.457 Lo- cal hire requirements are incorporated into all new lease and contract agreements and are supposed to be applied to renewals when existing agreements expire.458 Language of the CBA requires airport employers to at- tempt to fill every position by first engaging with the first source referral system.459 V. RECOMMENDED STEPS FOR IMPLEMENTING A LOCAL HIRE PROGRAM A. Privileges and Immunities Clause Concerns and Recommendations To survive a Privileges and Immunities challenge, a public agency seeking to adopt a local hire program must show that out-of-state workers or nonresidents are the cause of a discrete, identifiable problem, such as unemployment.460 The public agency must also show that the local hire preference is directed at remedying those problems.461 Prior to enacting a local hire policy or program, a public entity should engage in a thorough assessment and documentation of economic development in the community.462 A disparity or disadvantage study should be commissioned to provide evidence justifying a public 452 Id. 453 Gross, LeRoy & Janis-Aparicio, supra note 5, at 15. 454 Id.; Community Benefits Legal Dictionary, supra note 3; Parks & Warren, supra note 425, at 7. 455 Gross, LeRoy & Janis-Aparicio, supra note 5, at 16; Community Benefits Legal Dictionary, supra note 3; Parks & Warren, supra note 425, at 7. 456 Gross, LeRoy & Janis-Aparicio, supra note 5, at 18; Community Benefits Legal Dictionary, supra note 3; Parks & Warren, supra note 425, at 7. 457 Mulligan-Hansel, supra note 412, at 5. 458 Id. 459 Id. at 46. 460 Toomer, 334 U.S. at 396. 461 Id. 462 Policylink.org, Local Hiring Strategies, supra note 7.

32 agency’s discrimination against nonresidents. The local hiring goal or percent set-aside should be based on the data and assessment carried out.463 Satisfying the high evidentiary burden may require that a significant amount of public resources be spent on gathering data. Moreover, because conditions change, and nonresidents may eventually stop posing a threat to the employment opportunities of local residents, a local hire policy or program should set up some procedural step or mecha- nism that would monitor later conditions, should they change.464 Thus, public agencies ought to include sunset provisions or provisions that require subsequent re- evaluation of the need for a local hire program. In addition to compiling sufficient evidentiary sup- port and documentation, a public agency must also en- sure that the local hire program’s discrimination against nonresidents bears a close relation to the public agency’s goal of decreasing local unemployment.465 To this end, the local hire program should be limited to those residents who are unemployed and whose unem- ployment was caused primarily by the employment of nonresidents and not by other conditions in the state or in the nation.466 Thus a local hire preference program should target qualified, unemployed resident workers, such as workers who have signed up for unemployment assistance, rather than targeting all residents, regard- less of their qualifications or employment status. To further ensure a local hire preference is closely related to remedying unemployment, it should establish a goal rather than a quota.467 Quotas may bear no rela- tion to the degree to which nonresidents constitute the “peculiar source of evil” of the unemployment that the preference seeks to remedy.468 The Sixth Circuit’s City of Cleveland v. Ohio469 deci- sion highlighted a method by which a municipality might be able to insulate a local hiring measure against a Privileges and Immunities Clause challenge.470 The City of Cleveland’s Lewis Law mandated contractors to ensure that 20 percent of the construction project’s work hours performed by Ohio residents be worked by Cleveland residents.471 By excluding all work performed by non-Ohio residents from the definition of construc- tion work hours, the City limited the impact of its local hire law to Ohio residents only.472 Thus if a contractor wished to employ Ohio residents, 20 percent of the hours had to be performed by Cleveland residents.473 463 Id. 464 Day, supra note 3, at 271, 293; Hicklin, 437 U.S. at 528. 465 Toomer, 334 U.S. at 396. 466 Day, supra note 3, at 271, 293; Hicklin, 437 U.S. at 526– 27. 467 Id. at 292. 468 Id. 469 508 F.3d 827 (6th Cir. 2007). 470 Id. at 848. 471 Id. 472 Id. 473 Id. However, if a contractor wished to employ all out-of- state labor, it could do so without employing any Cleve- land residents.474 In reaching its decision as to other issues, the Sixth Circuit asserted that the Lewis Law did not operate to discriminate against the employment of labor from another state.475 Thus, when drafting a municipal local hire measure, a public agency may want to look to the City of Cleveland as an example of a suc- cessful narrowly tailored local hire law. B. Commerce Clause Concerns and Recommendations When states or local municipalities buy their own goods or services in the marketplace, they are deemed “market participants” rather than regulators.476 A state or local municipality may still be able to enact a local hire program under the judicially created “market par- ticipant” exception to the Dormant Commerce Clause.477 If a governmental actor limits its local preference policy to projects in which it is acting as a proprietor, the pref- erence will likely withstand legal challenge on Com- merce Clause grounds. C. Equal Protection Clause Concerns and Recommendations As there is no fundamental right to a government job, hiring preferences are generally permissible as long as there is a rational relationship between the prefer- ence policy and the harm sought to be remedied by the policy.478 However, local hire programs should not con- tain a durational residency requirement, since they have been held unconstitutional under the Equal Pro- tection Clause.479 Contract award preferences or requirements for the use of local MBEs or WBEs have been challenged as violating the Equal Protection Clause. In largely minor- ity-populated cities, racially-neutral local hire programs may be susceptible to the argument that geographically targeted hiring violates the Equal Protection Clause on the basis that it serves as a proxy for race. Race-based preferences may only be used to serve a compelling state interest and the method chosen must be narrowly tailored to serve that interest.480 To ensure that a public agency has a strong basis in evidence to support its race-based remedy against past discrimination, the lo- cal hire measure must be supported by specific and tai- lored statistical evidence, such as a disparity index that determines the statistical disparities in the utilization of minority-owned businesses or minority residents in an industry.481 Pertinent anecdotal evidentiary support 474 Id. 475 Id. 476 See South-Central Timber Dev. Inc., 467 U.S. at 95–97. 477 See Reeves, 447 U.S. at 437. 478 See McCarthy, 424 U.S. at 647. 479 Dunn, 405 U.S. at 334–35, 338, 342. 480 Croson, 488 U.S. at 490–91, 493–94. 481 Id. at 509.

33 may also be used to supplement the government’s show- ing but is insufficient by itself to justify a racial prefer- ence.482 A local hire program that is without substantial evidentiary support is unlikely to survive an Equal Pro- tection Clause challenge. In addition to evidentiary support, a race-based pref- erence must be narrowly tailored.483 Race-neutral alter- natives should be considered and found ineffective prior to the implementation of a race-based preference.484 The preference should provide for flexibility in terms of pro- viding waivers of the race-based preference if good faith efforts are exerted, or it should include other means of affording individualized treatment to contractors.485 The race-conscious preference should only include racial groups in that particular geographic area that have actually suffered discrimination in the context of a par- ticular industry, like construction.486 In contrast, gender-based preferences can withstand an Equal Protection Clause challenge by establishing an “exceedingly persuasive justification” for the prefer- ence.487 A public agency should ensure it can support its preference on the basis of statistical and anecdotal evi- dence. In addition to evidentiary support, gender-based preferences for local women-owned businesses must be substantially related to the public agency’s goal, though the agency need not show that the preference is the least restrictive means or last resort.488 D. Concerns and Recommendations Pertaining to Local Hire Programs Applied to Projects Receiving Federal Funding The Sixth Circuit’s City of Cleveland decision made clear that while a city may mandate a certain percent- age of city residents as workers on a project receiving federal money funds, such a mandate is only permissi- ble so long as the local hire provisions do not violate federal law or regulations.489 Given the issue federal funding may pose to the viability of a local hire pro- gram, it is recommended that a state or governmental agency consult with the funding federal agency and work together to draft bid documents that comply with federal requirements. Alternatively, for projects that are either wholly or partially funded by federal funds, public agencies may want to include an exemption that local hire programs will not be applied where such resi- dent preferences are prohibited by federal law.490 482 Id. 483 Id. at 493–94. 484 Id. at 507–08. 485 Id.; H.B. Rowe Co., 615 F.3d at 253. 486 Contractors Ass’n of Eastern Pennsylvania, Inc., 6 F.3d at 009; Cone Corp., 908 F.2d at 917; H.B. Rowe Co., Inc., 615 F.3d at 254. 487 Virginia, 518 U.S. at 524. 488 See Craig, 429 U.S. at 197. 489 508 F.3d at 848–49. 490 Hirsch, supra note 4, at 1, 10. E. Considerations and Recommendations When Utilizing Contract-Based Tools to Implement Local Hire Programs The needs and resources of communities and public entities vary. Regardless of which contract-based tool is utilized by a public agency or community group, there are five general recommendations that should be con- sidered and followed to help ensure public agencies or community groups implement a local hire program that successfully channels employment opportunities to local residents. 1. General Recommendations Tailor to Community. It is important to assess the job skills, employment history, and educational attain- ment of local residents and to document local needs. Assessment and documentation allow policymakers to have a realistic understanding of the number of un- and under-employed residents who are in need of employ- ment assistance. Without a proper assessment unrealis- tic goals may be set and not met, which can frustrate both community members and program participants. Furthermore, an initial assessment provides public agencies and communities with the ability to craft local hire programs that target areas with the most demon- strated need and obtain evidence to support that deci- sion. Implementing a local hire program or policy that simply states city residents must be hired may be insuf- ficient to ensure that jobs go to those who most need employment or to withstand constitutional challenge.491 Build Partnerships and Consensus. In deciding which tool to pursue, there are many different consid- erations to take into account, such as consistency, flexi- bility, enforcement, long-term impact, political will, and community involvement. Ultimately, the decision rests on a community’s needs and its organizing capacity.492 With regard to consistency, an ordinance allows companies to know and understand local hiring re- quirements ahead of time. Threshold requirements are applied consistently and there is no need to engage in a new campaign for each development. However, as dis- cussed above, contract-based tools, such as DAs and CBAs, may provide for greater flexibility because they are negotiated on a case-by-case basis. As to long-term impact, ordinances are effective indefinitely, whereas contract-based tools are limited to the life of the project for which they were negotiated. However, contract- based tools do seek to incorporate provisions that speak to residential employment after construction is com- plete.493 491 Policylink.org, Local Hiring Strategies, supra note 7. 492 Id. 493 See Mulligan-Hansel, supra note 412, at 41. (The Staples CBA specifically required mandatory participation in a first source referral system for employers in the anticipated 4 mil- lion sq ft of entertainment, hotel, service, and retail develop- ment.)

34 Additionally political will and support behind the particular tool can be critical to whether a local hire initiative succeeds. Lastly, community involvement plays an integral role in negotiating contract-based tools. In contrast, garnering community support and involvement behind ordinances may be more difficult, as they may be initially more abstract to differing com- munity groups.494 Negotiate Carefully. Whatever contract-based tool is used to implement a local hire program, it must be care- fully structured to make sure its requirements are clear and achievable. Some basic components of most local hire initiatives include: percent set-asides, a designated target area, thresholds, a definition of compliance, and monitoring and enforcement protocols.495 Percent set-asides are the percentage of total hours worked or total employees hired that must be residents of the target area. The percent set-aside should match the needs determined in the assessment process. Goals that reflect documented community need are more likely to garner support and have a better chance of withstanding lawsuits. A target area is defined as the area whose residents qualify as local hires to fulfill the set-aside. Usually it will be the city or local municipal- ity, but it can also be a smaller area, a defined subset of a city, or a radius around a development. Thresholds are criteria used to determine which development pro- jects will be required to participate in a local hire pro- gram. For example, thresholds can be set for the size of a development, requiring projects of a certain size or greater to participate in a city’s local hire initiative, or they can be set for a particular amount a developer re- ceives in subsidy. Thus a particular level of public fi- nancing could trigger participation in a local hire pro- gram. Sometimes particular types of public contracts or public contracts exceeding a certain amount are re- quired to hire locally. Also, targeted hiring may be re- quired of companies receiving certain financial incen- tives, such as tax abatements or deferments.496 Implementation. The contract should contain provi- sions pertaining to how the local hire program is to be implemented and its goals achieved, such as through outreach programs, job training, referral systems, or preemployment screening and services.497 Monitoring Compliance and Enforcement. There are generally two ways of defining whether a business is complying with a set-aside requirement. One way is if a local hire initiative mandates a firm set-aside require- ment, then those who do not meet the hiring percentage lose their contract or subsidy from the public agency or suffer financial penalties. In contrast, if the set-asides are designated as a goal and compliance includes mak- ing a “good faith effort,” then those that do not hire the suggested percentage of local residents may be subject to scrutiny, but will not necessarily lose their contract. 494 Policylink.org, Local Hiring Strategies, supra note 7. 495 Id. 496 Id. 497 Edel, supra note 20, at 17–19. Thus, those that do not meet the prescribed goals can still be found to be in compliance with the policy if they have maintained good faith efforts and followed all other requirements.498 Effective enforcement requires a plan for monitoring business activities. Programs may require businesses to submit weekly or monthly reports of the firm’s job hires, allow for periodic site visits by the enforcement agency, or provide access to all the job announcements released by the firm. At a minimum, contractors and businesses should be required to submit payroll records and tallies of employee work hours, broken down by employee residency. Some enforcement mechanisms that can be considered to punish those who have failed to make a good effort or are not in compliance include fining a contractor or developer for every day it is out of compliance, revoking financial incentives, or revoking the contract.499 Even if a program has a good enforcement mecha- nism, public agencies and community advocates should continue to monitor the effectiveness of the program to ensure it is meeting its goals and suggest changes if improvements are necessary.500 2. First Source Hiring Agreement Considerations and Recommendations When designing a first source hiring program, issues that should be addressed include assessing employment opportunities in the designated target area, assessing the local population, securing partnerships with pre- employment service providers, securing partnerships with work support providers, assessing partner capac- ity, setting thresholds, defining compliance, determin- ing a reasonable enforcement policy, and creating a recruitment plan.501 Because first source hiring agreements are tied to development and to residents affected by development in their communities, it is important to assess current and future development plans as they affect economic opportunities.502 It is important for a public entity or community organizers to determine how many resi- dents in the targeted area need training, how many are job-ready, and how many will likely not pass employers’ preemployment screening tests.503 Additionally, secur- ing partnerships with preemployment service providers may be necessary because of a public agency’s limited capacity or resources to train residents for first source hiring jobs. Preemployment services, such as preem- ployment screening, are a key component of first source hiring agreements. It is more difficult for an employer 498 Policylink.org, Local Hiring Strategies, supra note 7. 499 Id. 500 Id. 501 Edel, supra note 20. 502 Id. at 15. 503 Id. at 17.

35 to deny employment to well-screened applicants and still demonstrate a good faith effort.504 It is also recommended that public agencies and community groups looking to implement a first source hiring agreement or program consider securing part- nerships with labor unions that play an active role in the referral process, outreach programs, and work sup- port providers—those who offer both preemployment and post-employment services like resume preparation, interviewing skills and conflict resolution classes, child- care, job coaching, budget management, and advance- ment strategies. These services can bolster resident job retention and employability.505 Another important component of a successful first source hiring agreement is setting thresholds. Thresh- olds are criteria used to determine which development projects will be required to participate in a local hire program. For example, thresholds can be set for the size of a development, a type of project, or a project that is over a certain financial amount. Thresholds should be based on employment opportunities, resident needs and skills, and partnership capacities to refer trained and screened employees.506 A public agency may consider the size of the development, the amount of subsidy, the type or size of a contract, or receipt of certain incentives when it comes to setting a threshold.507 Two of the most important components of a first source hiring agreement that need to be clearly articu- lated and defined are compliance and enforcement. A public agency or community group must decide between implementing a mandatory or good faith effort policy.508 If resources are tight, and a public agency or partner- ship organizations lack sufficient staff to monitor com- pliance, a first source program based on good faith ef- forts by employers might be a better fit. If a public agency or community decides to utilize a good faith pro- gram, it should clearly specify what constitutes a good faith effort.509 With regard to deciding on a monitoring and enforcement plan, local resources must be consid- ered. Fewer resources may mean less frequent spot compliance checks.510 Lastly, when a public agency or community opts to utilize or implement a first source agreement or pro- gram, it should devise a recruitment plan that will be able to reach local residents and ready them for first source hiring jobs.511 A strong recruitment plan will help residents learn of new jobs and employers learn of potential employees. 504 Id. 505 Id. at 18. 506 Id. 507 Id.; Policylink.org, Local Hiring Strategies, supra note 7. 508 Edel, supra note 20, at 18; Policylink.org, Local Hiring Strategies, supra note 7. 509 Edel, supra note 20, at 18. 510 Id. at 19. 511 Id. 3. Project Labor Agreement Considerations and Recommendations The negotiation process is critical to ensuring a suc- cessful PLA.512 Local hire provisions are typically writ- ten in one of two ways in a PLA. Either the parties agree that a specific number of skilled workers will be hired from the project’s local area or that the project will provide significant employment opportunities for qualified residents of the project area.513 Whether a PLA results in benefiting the community depends on turning the words in the agreement into actual deeds.514 The best way to ensure that the tar- geted low-income residents identified in the PLA enter into appropriate job training and then get project jobs is to have effective outreach and referral. To this end, a PLA should attempt to identify the use of a centralized system for conducting outreach and referral.515 Labor unions play an active role in the referral and outreach process. Also, provisions that speak to the creation and use of job training programs such as apprenticeship programs may be something public agencies and com- munity representatives should consider. Also important to helping PLAs achieve local hire goals is making sure the signatories to the PLA are held accountable through an appropriate monitoring system as discussed above.516 Thus, explicit language on sanc- tions for failing to attain local employment goals should be written into the PLA. 4. Development Agreement Considerations and Recommendations Unlike a CBA, which can be enforced by the signa- tory community organizations, a DA relies on the public agency to hold a developer accountable.517 As mentioned above, to be a successful mechanism for increasing local residential employment, the agreement should be tai- lored to local community needs. Entities and commu- nity groups utilizing DAs should be aware of who they are contracting with as local governments are limited in some respects. For example, because there are clear restrictions on local governmental action with regard to affirmative action programs, community benefits that potentially implicate such policies should not be in- cluded if contracting with a local governmental en- tity.518 5. Community Benefits Agreement Considerations and Recommendations As with other contract-based tools, a CBA that is closely tailored to the needs of the local residents and 512 GARLAND & SUAFAI, supra note 398, at 12. 513 Id. 514 Id. at 13. 515 Id. 516 Id. 517 Gross, LeRoy & Janis-Aparicio, supra note 5, at 9, 72. 518 Id. at 72.

36 community is more likely to be successful. First, given the variety of different community groups and coali- tions working together to negotiate a CBA with a devel- oper, it is recommended that these groups have ade- quate issue trainings so that each of the groups can become aware of the other’s various priorities.519 This helps limit coalition politics from taking over the nego- tiation process and allows for a more united front. Sec- ond, it is recommended that advisors be allowed to sit in during the negotiation process as observers who can advise and educate those negotiating on behalf of the community groups on technical issues.520 Given that successful CBAs generally result from carefully crafted organizing campaigns, it is important that the community groups involved be well organ- ized.521 Inadequate organizing could set poor prece- dents.522 Additionally, community benefits negotiations cannot be effective without a certain amount of leverage or political capital.523 Lastly, community groups should employ the services of an attorney to go over the fine print of the finalized CBA. F. Enforcement To ensure compliance with a local hire program, en- forcement mechanisms must be incorporated into the program. Financial Damages and Penalties as a Means of Achieving Compliance. The imposition of financial pen- alties has been a common way of seeking compliance with local hire requirements. For example, the City of Detroit’s Executive Order No. 2007-1 sets forth numerous remedies available to the City if a contractor fails to comply with its local resident workforce requirement. One remedy includes a monthly financial penalty scheme for failure to meet the Detroit resident workforce requirement, including project hours.524 Given the percentage range of project hours worked by Detroit residents, the monthly re- cruitment fee assessed by the City varies. For example, if 0 percent to 29 percent of the project hours are com- pleted by Detroit residents, a 15 percent monthly re- cruitment fee is assessed on the contractor. Whereas if Detroit residents account for 40 percent to 44 percent of the project work hours, then a monthly recruitment fee of 7 percent is assessed. The Executive Order also pro- vided that the failure to meet residential workforce re- quirements constitutes a breach of contract and may result in the immediate termination of the contract. In addition to financial penalties, the City of Detroit’s Ex- ecutive Order provides that the City retains the option to bar any developer, general contractor, prime contrac- tor, subcontractor, or lower-tier contractor that is defi- 519 Id. at 26. 520 Id. 521 Id. at 22; Parks & Warren, supra note 425, at 4. 522 Gross, LeRoy & Janis-Aparicio, supra note 5, at 22. 523 Id. at 23. 524 Exec. Order No. 2007-1, City of Detroit, Sept. 10, 2007. cient in the utilization of Detroit residents from doing business with the City of Detroit for 1 year. The Execu- tive Order also reserves the City’s right to re-bid the contract, in whole, or in part, or hire its own workforce to complete the work.525 The City of San Francisco’s ordinance establishing its Local Hiring Policy for Construction provides the awarding department and the Office of Economic Work- force and Development the authority to assess penal- ties, assess damages for other violations of the terms of the Local Hire Policy, and/or to seek penalties including the debarment of the violating contractor or subcontrac- tor.526 With regard to penalty amounts, the ordinance specifies: Any contractor or subcontractor who fails to satisfy local hiring requirements of this Policy applicable to project hours performed by local residents, shall forfeit; and in, the case of any subcontractor so failing, the contractor and subcontractor shall jointly and severally forfeit to the City an amount equal to the journeyman or apprentice prevailing rate…for the primary trade used by the con- tractor or subcontractor on the covered project for each hour by which the contractor or subcontractor fell short of the local hiring requirement.527 With respect to its first source hiring program, the City of Pasadena included language in its ordinance stating that upon a developer’s default or breach of its first source hiring agreement with the City, the City’s “financial assistance will be cancelled.”528 In a Buffalo, New York, PLA, failure to meet local hire employment goals resulted in contractors not re- ceiving their “draw-down payments,” which are early payments given to a contractor before the jobsite is completed.529 As to the LAX CBA, which negotiated lo- cal hire commitments as part of the LAX modernization project, certain sections of the agreement are subject to liquidated damages, and the Los Angeles Worldwide Airport is allowed to enforce such liquidated damages provisions in cases of noncompliance.530 In contrast, the Port of Oakland Maritime and Avia- tion PLA highlights a situation where the imposition of financial sanctions depends on whether the local hire program requires mandatory compliance or good faith efforts.531 The PLA articulated a goal that apprentices 525 Id. 526 SAN FRANCISCO, CAL., ADMINISTRATIVE CODE § 6.22(G)(7)(f)(i) (2011). 527 Id., § 6.22(G)(7)(f)(ii). 528 PASADENA, CAL., BUILDING AND CONSTRUCTION, ch. 14.80.040(C) (2004). 529 GARLAND & SUAFAI, supra note 398, at 15; Each jurisdic- tion should ensure that the sanction chosen does not conflict with prompt payment statutes. 530 Community Benefits Agreement: LAX Master Plan Pro- gram 33–34 (2004), http://communitybenefits.org/downloads /LAX Community Benefits Agreement.pdf (last accessed Oct. 15, 2012). 531 Port of Oakland Maritime and Aviation Project Labor Agreement 30–31 (2004), http://www.portofoakland.com/pdf /busi_maplaAgreement.pdf (last accessed Oct. 15, 2012).