State settles lawsuit over Alaska Hire employment statute

JUNEAU — The state of Alaska has agreed to pay $50,000 in a settlement with a company that sued to have an employment law declared unconstitutional, records said.

Colaska Inc. sued the state Department of Labor and Workforce Development in July over the Alaska Hire law, KTOO-FM reported Tuesday.

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

The state is expected to pay Colaska interest and other costs related to citations that were dismissed as part of the settlement, Colaska attorney Michael Geraghty said.

Alaska Attorney General Kevin Clarkson issued a legal opinion in October saying Alaska Hire is unconstitutional, citing previous court decisions against earlier versions of the law.

Republican Gov. Mike Dunleavy encourages hiring Alaskans for jobs in the state, but the federal and state constitutions prohibit laws that mandate hiring Alaskans in preference over others, Clarkson said.

A spokesperson for Dunleavy referred questions to the Department of Law, which issued a statement that said the settlement with Colaska was a negotiated compromise by both sides.

Anchorage Democratic Sen. Bill Wielechowski was disappointed with the settlement and concerned the state will no longer enforce the Alaska Hire law. The state Legislature can urge the governor to reconsider and, if he refuses to act, "bring a lawsuit and compel the enforcement of the law," he said.

“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.”