On July 23, the California Department of Industrial Relations established "prevailing wages," by examining the pay of workers in specific industries. For materials sorters at the SMaRT Station, that set wage is almost $4 more than the $8-an-hour they currently make. Green Team/Zanker—who is under contract with the city to run the station—refused to increase the pay, even though their contract specifically states that should a prevailing wage be determined, they must pay it—even if the wage is set after the contract's signing.

SMaRT Station manager Todd Storti would not comment on the issue.

Robert Morales, secretary treasurer for the Local 250 Sanitary Truck Drivers and Helpers Union, said that because the city has not chosen to enforce the contract yet, they are giving in to pressure from Green Team's lawyers.

"Franchise rights demand that the employers—in this case Green Team/Zanker—pay the prevailing wage," Morales said. "In my opinion, the city of Sunnyvale is afraid that the lawyers for Green Team/Zanker are going to sue them."

Sunnyvale Communications Officer John Pilger said the city is not stalling, but it is reviewing the process in which the Department of Industrial Relations set the prevailing wage. But beyond this, Pilger said the city is staying out of the labor dispute because it is between an employer and their employees.

"We have found Green Team/Zanker to apparently be in breach of their contact, but we do have a concern right now that the Department of Industrial Relations information is sound," Pilger said. "But if a contractor is found in breach of a contract with the city, the first option normally is to give them time to cure the breach, and if they don't, one of our other options is to re-bid the contract and get another contractor in who will do it."

Morales said members of city staff had told him the city was going to put the contract out to bid, but Pilger could not confirm that any such actions had been taken.

"We've been fighting, and it took us so long to get the prevailing wage set, and after we got it set in July, the city assured us that we were going to get it," Morales said. "The city is acting out of fear; we've been waiting, and they've been leading us on."

The city is concerned about the dispute because on Nov. 9, a closed council session was held to discuss "anticipated litigation and exposure to significant legislation," related to the SMaRT Station operating agreement.

Last week—as he has done several times throughout the negotiations—Morales said the union was considering possible legal action, but at this time, he is waiting for the city's ruling on the Department of Industrial Relations findings.

"I'll do whatever it takes in my power—on a legal basis—to make sure that this city does what is right."