Armco Drainage & Metal Products, Inc. v. Moore

Breitel, J. In this article 78 proceeding, petitioner seeks to annul the determination of the State Industrial Commissioner fixing prevailing rate of wages pursuant to section 220 of the Labor Law. Petitioner is a contractor who was engaged, under written contract, to build a tunnel in Broome County as part of a State project. Involved is the classification and rate of pay of men who worked in digging the tunnel. The contractor has contended that the men were used as common laborers and were so paid, in accordance with the schedule attached to the specifications. The State Industrial Commissioner has found that the nature of the work was that of skilled tunnel work and fixed prevailing rates of wages in several classifications and at several rates ranging from miner to tunnel laborer. In our view, the determination must be annulled because the procedure followed did not conform to the statute and the matter should be remitted to the State Industrial Commissioner for such further proceedings as may be appropriate. As a consequence, it will not be necessary to consider the nature of the work involved in this project. Section 220 of the Labor Law provides that, in connection with all public works, the prevailing rate of wage paid to a majority of workmen in the same trade or occupation in a locality shall be paid to workers on public projects. ‘ ‘ Locality ’ ’ is defined as “ the town, city, village or other civil division of the state wherein the physical work is being performed ”. (Subd. 5, par. b.) It is further provided that, where there are no such workmen in the locality, the first larger civil division in which such workmen are employed shall be used as a base. It is then provided as follows: “ The first larger civil division shall be determined in the following order: (1) city or village, (2) township, (3) county, (4) the contiguous counties to the county in which the physical work is to be performed.” In this proceeding, the State Industrial Commissioner found no workmen engaged in the same trade or occupation in Broome County nor, he asserted, did he find such anywhere in the State except in the city of New York in connection with two projects in Queens and Bronx Counties. He, therefore, used Queens and Bronx Counties as the base. But he was powerless to so do. The statute is quite clear. It permits-the State Industrial Commissioner to use a ring of contiguous counties, as part of a larger civil division of the State, in which to ascertain the existence of a prevailing rate of wage. It does not, however, permit him to rove through ever-widening circles of nonadjoining counties, and, by no means, does it permit him to use the [239] entire State as an area for making Ms determination. The use of familiar and constrictive terms like “ locality ”, “ civil division ”, and “ contiguous ” is completely inconsistent with and contradictory of the notion that it was contemplated that a prevailing rate of wage should be determined, in any instance, on a State-wide unit basis. For this reason the determination should be annulled. The State Industrial Commissioner used a further procedure for wMch there is no basis in the statute. Evidently recogMzing that wage levels in Queens and Bronx Counties might not be comparable to those in Broome County, he used a proportional method for determining the prevailing rate of wage to apply to the Broome County tunnel workers. He first determined what was the prevailing rate of pay in the several counties for common laborers. He then took the wage differential in Queens and Bronx Counties between common laborers and tunnel workers and applied that differential proportionately to the Broome County figure for common laborers. There is no authority for application of such a method and its use perhaps suggests the artificiality of the approach by the State Industrial Commissioner in reaching his conclusion in tMs proceeding. It has been suggested that the determination should be annulled and the rate-of-wage proceeding finally dismissed because of another circumstance that existed in tMs case. Under section 220 of the Labor Law, the department having jurisdiction of a public work project has the responsibility for annexing to the specifications a schedule of classification of workers, together with the respective prevailing rates of pay. In the instant proposals, the schedule did not refer to tunnel workers, although it did contain a classification of common laborers. It was only after the project was well under way and, of course, after the contract-letting, that the rate-of-wage proceeding was initiated to reclassify the tunnel workers and fix the Mgher rate of pay.* It is urged that the statute does not authorize any such proceeding once the contract has been let and executed. The contract is not included in the record, but the statute requires that it contain the provision that the contractor undertakes to pay the prevailing rate of wage (Labor Law, § 220, subd. 3). In any event, the statute is for the benefit of workmen and those affected may have a remedy against the contractor. (Cf. Fata v. Healy Co., 289 N. Y. 401; Filardo v. Foley Bros., 297 N. Y. 217, 225, and Schlein v. Metzger, 275 App. Div. 340, 343.) [240] Hence, if the workmen have a cause of action it would remain inchoate unless there were a procedure for fixing the prevailing rate of wage. Under the statute an administrative procedure is mandated. There need be no infirmity in permitting such determination after the contract-letting rather than before, albeit, in the first instance the only proper and the required procedure is to annex the prevailing rate of wage schedule to the specifications. But the question is whether the workmen for whose benefit the statute was written should be debarred from relief because of the failure of the State Industrial Commissioner or of the department of jurisdiction — the State Department of Public Works. Moreover, in some circumstances the contractor may very well be responsible, either deliberately or unintentionally, in misleading the State Department of Public Works as to the necessary classification of workmen to be used on the project. For all we know, that may or may not have been the case here. There is precedent for such classification and prevailing-rate-of-wage determination to be made after the contract-letting. A case in point is that of Building Chemicals Corp. v. State of New York (164 Misc. 407). In that case, the classification and prevailing rate of pay was determined by the State Industrial Commissioner pursuant to section 220 of the Labor Law after the letting and execution of the contract. The Court of Claims held that the employer was entitled to recover from the State for the labor costs it sustained in excess of the rates of pay fixed in the schedules attached to the specifications. Before disposing of this matter we should note that the statute contemplates that classifications of jobs and the fixing of prevailing wages will be determined in advance of letting the contract, and for the very good reason that the governmental unit and the contractor should know where they stand before the commitment for the work. These arrangements should not be disturbed except for compelling reasons. But the jurisdiction necessarily exists to correct inequities. The statute, of course, makes distinct and separate provision for the classification of workmen and for the fixing of the prevailing rate of wage. In the first instance, the department of jurisdiction, in this case the Department of Public Works, makes the classification of workmen and files it with the Industrial Commissioner, together with a statement of the work to be performed by each such classification (Labor Law, § 220, subd. 3-a). Thereupon, and from such statement, it is the duty of the Industrial Commissioner to make a proper classification and to fix the wages. The statute, therefore, confers upon two agencies the [241] duty of making classifications. The initial duty rests in the department of jurisdiction, and then, evidently, it is subject to review by the Industrial Commissioner who is obligated to make “ proper ” classifications. (Classification is a process essential to the fixing of a prevailing rate of wage. While the Constitution refers to “ rate of wages prevailing in the same trade or occupation ” [art. I, § 17], and does not use the term “ classification ”, a determination of “ same trade or occupation ” is a process of classification, essential and preliminary to determining the prevailing rate of wage in such trade or occupation. A prevailing rate of wage would be meaningless unless it is fixed as a characteristic of a classified trade or occupation.) It is clearly contemplated, and it is their duty, that the public departments effect classifications and fix wages in advance of the letting of the contract, but these precautions and requirements, designed to protect the contractor, among others, should not act as a bar to remedies of workmen in effecting reclassification, payment and recovery of the prevailing rate of wage to which they are entitled by law. Moreover, in the absence of any clear requirement of statute, we should not inject a rigidity, which does not now exist, in the power of administrative agencies to perform the duties incumbent upon them. This case presents a situation in which a balance of inconvenience must be struck. On the one hand, there is dislocation to a contractor who faces a greater financial burden than he anticipated, and, on the other hand, there is the loss to workmen who have been deprived of their proper classification and pay. The deprivation to the workmen may be accomplished just as facilely by an erroneous classification as it can be by an erroneous determination of the prevailing rate of wage. Since the record shows that there were other tunnel projects in counties adjacent to Broome County, which may or may not be relevant, but which the State Industrial Commissioner excluded from consideration for various reasons, it would be desirable that this prevailing-rate-of-pay proceeding be remitted to him for re-examination in accordance with the views expressed herein. We cannot say at this time that the dismissal of the rate-of-wage proceeding should be final. Accordingly, the petition to annul the determination of the State Industrial Commissioner should be granted and the matter remitted to him for such further proceedings as may be appropriate, consistent with the views expressed in this opinion. Settle order. Footnotes [*] There is evidence in the record that the schedules provided that classifications could be added at a later time.