As storm clouds gather over the San Diego City Council's minimum-wage hike — with promises by U-T San Diego publisher and megamillionaire developer Douglas Manchester of an "ugly" referendum battle against the move – his alma mater San Diego State University is facing its own fair-wage issue.
The highly politicized school — whose sports and public broadcasting operations are bankrolled by many of the city's richest power brokers, including Manchester, fellow hotel mogul Terry Brown, Qualcomm heir Jeff Jacobs, and his father, company founder Irwin Jacobs — is facing a six-figure breach-of-contract lawsuit from security provider Elite Show Services involving payment of a so-called living wage to its workers.
"In May through December 2012, Elite and SDSU entered into written agreements, whereby Elite agreed to provide event security staffing services to SDSU for the 2012 football season scheduled for Qualcomm Stadium," says Elite's complaint, filed in Superior Court on July 15.
"Specifically, Elite would provide services for the SDSU home games at Qualcomm Stadium in San Diego, California. These events occur every year as part of regularly scheduled intercollegiate football games.
“Elite has consistently provided its security services for the aforementioned football games for the 2010, 2011, and 2012 seasons."
But in 2012, the security vendor charges, the university, which had honored prior agreements, failed to ante up.
"Following the 2012 football season, Elite submitted its invoices and billing statements in the net amount due of $236,057.79 to SDSU for payment of the security services provided," the document says, adding that SDSU "refused to pay the amount owed under the contracts and continues to refuse to make payment.
“To date, the said amount remains due and payable."
Says the complaint: "Elite's invoice for services was reasonable in light of the new Living Wage Ordinance imposed by the City of San Diego….
"By failing to pay under the contracts even after SDSU was informed that the new Living Wage Ordinance would cause the amount to increase, SDSU unfairly refused Elite's right to receive the benefit of the contract."
Whether the law referred to in the complaint is the so-called Living Wage ordinance adopted by the San Diego City Council in 2005 that provided for subsequent salary boosts is not specified.
That measure mandated increased pay and medical benefits for employees of contractors at city facilities. The ordinance's leading foe, the San Diego Regional Chamber of Commerce, argued that stadium jobs and others at city-owned facilities could disappear as a result of the ordinance.
Attempts over the years to kill off the law have failed, but doubts about whether contractors are in full compliance have festered, leading to demands from council Democrats to spend $230,000 on two staffers to monitor the situation, according to a June 9 account in U-T San Diego.
Questions about the cost and methods of policing wage payments have subsequently become a key talking point for foes of the city's minimum-wage law, adopted this month by the council's Democratic majority.
"The long arm of the city’s enforcement team will be able to demand compliance even from businesses based outside San Diego if any of the employees do work inside city limits — a provision that one business person at the hearing said would be an 'operational nightmare,'" argued a July 15 U-T editorial.
"Expect hardball," threatens a July 30 editorial by Manchester's U-T. "It can get ugly."
All of which may thrust Elite's complaint against San Diego State into the coming political battle to repeal the minimum wage.
Is SDSU making sure its contractors are paying legal wages?
The school's athletic office referred questions regarding Elite’s complaint to the office of president Elliot Hirshman, where a spokeswoman said she would look into the matter and get back with an answer.
We're also submitting a request for documents under the California Public Records Act.
Elite did not return calls.