State settles lawsuit over Alaska Hire law

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The administration of Gov. Mike Dunleavy has settled a lawsuit seeking to have the Alaska Hire law declared unconstitutional.

The company Colaska Inc. sued the state’s Department of Labor and Workforce Development in July over the law. Colaska lawyer Michael Geraghty said the state would pay Colaska interest and other costs related to past citations against the company. Those citations no longer exist.

“They were dismissed as part of the settlement,” Geraghty said.

The state agreed to pay Colaska $50,000. Geraghty said each side will pay its own legal fees.

The settlement comes less than two months after Alaska Attorney General Kevin Clarkson issued a legal opinion that the law is unconstitutional.

The law requires private contractors working on state-funded projects to hire qualified Alaskans as a percentage of their workers.

Clarkson said in October that Dunleavy encourages hiring Alaskans for jobs in the state. But he said the federal and state constitutions prohibit laws that mandate hiring Alaskans in preference over others. He cited previous court decisions against earlier versions of the law.

Anchorage Sen. Bill Wielechowski said he was disappointed with the settlement. He’s concerned that the state will no longer enforce the Alaska Hire law.

“It’s shocking and disappointing,” Wielechowski said. “This is a law that’s been on the books for over 30 years. It’s been a law that probably six or eight different governors have followed and probably eight or 10 attorney generals have followed, Republicans and Democrats and independents.”

Wielechowski is a Democrat. Dunleavy is a Republican.

Wielechowski said the state Legislature should hold hearings on whether the administration is following the law.

“The Legislature has the right at any time to go ahead and urge the governor to reconsider his position, and if he refuses to do that, then ultimately the Legislature could bring a lawsuit and compel the enforcement of the law,” he said.

A spokesperson for Dunleavy referred questions to the Department of Law.

Department spokesperson Cori Mills said in a written statement: “Like any settlement, this represents a negotiated compromise on both sides.”