Prevailing Wage Law Applies Only to Work Performed on the Site of a Public Improvement Project
2008-0780. Sheet Metal Workers’ Internatl. Assn., Local Union No. 33 v. Gene’s Refrigeration, Heating & Air Conditioning, Inc., Slip Opinion No. 2009-Ohio-2747.
Medina App. No. 06CA0104-M, 2008-Ohio-1005. Judgment of the court of appeals reversed, and judgment of the trial court reinstated.
Moyer, C.J., and Lundberg Stratton, O'Connor, O'Donnell, Lanzinger, and Cupp, JJ., concur.
Pfeifer, J., dissents.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2009/2009-Ohio-2747.pdf 
Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion released by the Court, but only for those cases considered noteworthy or of great public interest. Opinion summaries are not to be considered as official headnotes or syllabi of Court opinions. The full text of this and other Court opinions from 1992 to the present are available online from the Reporter of Decisions. In the Full Text search box, enter the eight-digit case number at the top of this summary and click "Submit."
(June 17, 2009) The Supreme Court of Ohio ruled today that the state’s “prevailing wage” statute applies only to persons whose work is performed directly on the site of a public improvement project.
In 6-1 decision authored by Justice Evelyn Lundberg Stratton, the Court also held that a labor organization that obtains written authorization to represent one employee of a contractor on a public improvement project does not have standing as an “interested party” under R.C. 4115.03(C) to pursue violations of prevailing-wage law on behalf of any other employee on the project.
Ohio’s prevailing wage law, set forth in Ohio Revised Code Sections 4115.03 through 4115.16, generally requires that workers employed in the construction of government buildings and other public improvement projects must be paid according to a wage scale that approximates the hourly rates received by union workers doing similar work in that area of the state.
In this case, Gene’s Refrigeration, Heating and Air Conditioning was awarded the contract to install the HVAC system in a new fire station being constructed in Medina County. The fire station project qualified as a public works improvement subject to the prevailing wage law.
Elie Cherfan was an employee of Gene’s who worked in a fabrication shop not located on or adjacent to the fire station site. His primary job was to fabricate sheet metal into duct work that was subsequently installed in buildings for which Gene’s served as the heating and air conditioning contractor, including the fire station. Gene’s paid Cherfan and other employees at its off-site fabricating shop at hourly rates that were lower than the prevailing wage rates the company paid other employees for work they performed at the fire station site.
In July 2005, Cherfan signed a form authorizing Sheet Metal Workers’ Union Local 33 to file a prevailing wage complaint and enforcement action on his behalf with the Ohio Department of Commerce. In the complaint, the union alleged that Gene’s had committed multiple prevailing wage violations on the entire project, including failing to pay Cherfan at the prevailing wage rate for hours he worked at the off-site fabricating shop fabricating duct work that was subsequently installed at the fire station. Pursuant to state law, when there was no disposition of the administrative complaint after 60 days, Local 33 filed a prevailing wage lawsuit in the Medina County Court of Common Pleas. The trial court granted a motion for summary judgment in favor of Gene’s. It based its ruling on findings that: 1) the off-site fabrication of building materials for a public works project is not work for which an employer is required to pay the prevailing wage, and 2) Local 33 did not have standing to file a prevailing wage claim against Gene’s as an “interested party” in this case because the only employee of Gene’s who had authorized the union to intervene (Cherfan) had never worked at the fire station building site and therefore was not covered by the prevailing wage statute.
The court of appeals reversed and remanded, concluding that Cherfan’s written authorization for Local 33 to represent him was sufficient to impute standing to the union with respect to the entire project and all of Gene’s employees. The court also concluded that the prevailing wage law expressly provides for payment to off-site employees, in particular, those who fabricate materials to be used in or in connection with a public work. The court attempted to narrow its interpretation to those workers having an “intimate connection” to the jobsite.
Gene’s sought and was granted Supreme Court review of the 9th District’s rulings. In today’s decision the Court reversed the 9th District and reinstated summary judgment in favor of Gene’s.
With regard to the extent of Local 33’s standing as an interested party, the Court held that Cherfan’s individual authorization does not convey carte blanche authority to pursue claims on behalf of persons who have not agreed to such actions, and therefore Local 33 had standing as an “interested party” to pursue prevailing wage claims on behalf of Cherfan only.
Justice Stratton wrote that the court of appeals erred by giving too broad an interpretation to the Supreme Court’s 1999 decision in Sheet Metal Workers’ Internatl. Assn., Local Union No. 33 v. Mohawk Mechanical, Inc., in which this Court held that the authorizations of three employees working on a public improvement project was sufficient to give a union standing to pursue a prevailing wage complaint. Noting that the three authorizing employees in the Mohawk case were employed on the public improvement job site, Justice Stratton wrote: “Here, Cherfan is employed in an off-site shop and has not established that he is entitled to the prevailing wage. Thus, his ability to represent the interests of other employees on the project is even more tenuous.”
“The definition of ‘interested party’ in R.C. 4115.03(F)(3) refers to an ‘organization of labor which … is authorized to represent employees of a person mentioned in division (F)(1) or (2),’ … Thus, the union is an interested party for and may act on behalf of the employee who expressly authorized the union to act,” wrote Justice Stratton. “In addition, the text of Cherfan’s authorization expressly designates Local 33 to represent only Cherfan … Cherfan’s authorization does not confer interested-party status upon Local 33 to pursue prevailing-wage violations on a project-wide basis for employees other than Cherfan. Cherfan’s authorization does not convey carte blanche authority to the union to pursue claims on behalf of persons who have not agreed to such actions. Therefore, we hold that a labor organization that obtains written authorization to represent one employee does not have standing as an ‘interested party’ under R.C. 4115.03(F) to pursue violations of the prevailing-wage law of behalf of any other employee on the project, and we reverse the judgment of the court of appeals on this issue. Local 33 has standing to pursue prevailing-wage claims on behalf of Cherfan only.”
With respect to off-site employees, the Court approved and followed Clymer v. Zane, a 1934 case that held that persons who worked off-site in a gravel pit were not employees on a public improvement highway project even though the project’s contractor owned and operated the gravel pit and its materials were used on the project. The Court concluded that Clymer had not been legislatively overruled by subsequent statutory amendments.
“R.C. 4115.05 does not specifically refer to persons whose work is conducted away from or off the project site. Other paragraphs within R.C. 4115.05 and elsewhere in the prevailing-wage statutory scheme, however, provide insight into the scope of the law,” wrote Justice Stratton. Quoting from multiple subsections of the prevailing wage statute, she pointed to specific wording in each applying that provision to work performed “on” or “upon” a public improvement. She also noted that in 1990 the Ohio Department of Commerce adopted administrative regulations, Ohio Adm.Code 4101:9-4 et seq., to facilitate administering the prevailing-wage laws. “These regulations were adopted following extensive hearings in which both industry employers and organized labor had opportunities to voice their concerns,” wrote Justice Stratton. “They likewise refer to work performed on the job site and do not refer to off-site workers as being entitled to prevailing-wage rates.”
“Statutes and regulations that relate to the same general subject matter may be read in pari materia (in combination with each other) in order to discover and carry out legislative intent. … Construing the language of the entire prevailing-wage statutory scheme along with related regulations, we conclude that the General Assembly did not overrule Clymer, and R.C. 4115.05 does not mandate that prevailing wages be paid to persons who work off-site even if they are working on materials to be used on or in connection with the project. ‘[A]ny material to be used upon or in connection with’ within R.C. 4115.05 must be interpreted as referring to materials on the job site.”
The Court noted that the appellate court’s interpretation overturned more than 70 years of industry custom and practice and created a new standard for off-site workers which was contrary to the entire prevailing wage statutory scheme. Justice Stratton wrote that “Such a departure from current prevailing-wage law, custom, and practice properly belong in the legislative domain as a matter of public policy.” Thus, the majority concluded, R.C. 4115.05 applies only to persons whose work is performed directly at the site of the public improvement project.
The majority opinion was joined by Chief Justice Thomas J. Moyer and Justices Maureen O’Connor, Terrence O’Donnell, Judith Ann Lanzinger and Robert R. Cupp.
Justice Paul E. Pfeifer entered a dissenting opinion stating that, in his view, the majority’s reliance on the words “on” and “upon a public improvement project” to limit application of the prevailing wage law ignored plain language in the statute indicating that work on materials intended for use in a public works project must be paid at a prevailing wage. “Under the majority’s unique application of prepositions, working ‘on’ a judicial opinion would require the writer to perch atop his or her computer screen while crafting an opinion,” wrote Justice Pfeifer. “The majority’s locus focus is hocus pocus.”
Justice Pfeifer also disagreed with the majority’s holding that Cherfan’s authorization of Local 33 to file a complaint gave the union standing only to pursue a prevailing wage claim on behalf of Cherfan. He wrote: “Being ‘authorized to represent employees’ makes a labor organization an ‘interested party’ under R.C. 4115.03(F). Then, we proceed to R.C. 4115.16(B). As an ‘interested party,’ that labor organization pursuant to R.C. 4511.16(B) ‘may file a complaint in the court of common pleas of the county in which the violation is alleged to have occurred.’ No statute limits a labor organization’s standing to the person or persons who authorize the labor organization to represent employees. ... The labor organization itself, upon filing, becomes the party in the lawsuit ... It is filing the complaint on behalf of itself; it is raising the issue of an employer’s failure to pay the prevailing wage, in the same way a contractors’ association could file a complaint pursuant to R.C. 4511.03(F)(4).”
Contacts
Joseph M. D’Angelo, 419.244.8989, for Sheet Metal Workers Int’l Assn. Local Union No. 33.
Alan G. Ross, 216.447.1551, for Gene’s Refrigeration, Heating & Air Conditioning.