November 12, 2012
McGuireWoods recently obtained dismissal of a constitutional challenge to a contract awarded to McGuireWoods' client Manpower. Manpower won a contract from the State of South Dakota which designated Manpower as the exclusive staffing provider to South Dakota’s WINS program. The WINS program is designed to attract out of state workers to South Dakota, where there is a shortage of skilled labor. South Dakota businesses who qualify for the program are permitted to use Manpower to search for out of state workers for a state-subsidized placement fee. The state also provides Manpower with a stipend to start up the program.
A group of local staffing companies sued the governor, his chief of staff and Manpower, claiming that the contract violated several provisions of the South Dakota and US Constitutions, state and federal antitrust laws and the state’s procurement laws. The plaintiffs claimed that, without proper authority from the Legislature and without following competitive bidding procedures, the governor had created an illegal monopoly for staffing services in South Dakota, excluding them and other local businesses from the market.
McGuireWoods worked with the governor’s general counsel and the South Dakota Attorney General’s office to file a motion to dismiss all of the plaintiffs’ claims as legally insufficient. The plaintiffs responded by moving for partial summary judgment. After oral argument in July, the District Court issued an opinion on October 31 dismissing all of the claims and denying the plaintiff’s motion for partial summary judgment. The Court found that the contract is not unconstitutional and that the state’s procurement laws were not violated. This decision allows Manpower to remain the exclusive provider for the WINS program and gain inroads into a potentially lucrative staffing market.