International Union of Operating Engineers v. Dan Wannemacher Masonry Co.

Moyer, C.J. The sole issue presented by this appeal is whether a sole proprietor who personally performs physical work as a laborer, workman, or mechanic in the construction of a public improvement and who pays his employees prevailing wages, is himself subject to Ohio’s prevailing wage law, R.C. 4115.03 through 4115.16. For the reasons stated below, we hold that such a sole proprietor is not subject to the law and, accordingly, affirm the judgment of the court of appeals. Our holding in this case is expressly limited to an employer who is a sole proprietor. The primary provisions of the prevailing wage law applicable to this case are R.C. 4115.03(C) and (F), 4115.05, 4115.10(A) and 4115.16. R.C. 4115.10(A) is a general provision prohibiting the payment of less than the prevailing wage for workers on certain public improvement projects. R.C. 4115.10(A) provides: “No person, firm, corporation, or public authority that constructs a public improvement with its own forces the total overall project cost of which is fairly estimated to be more than four thousand dollars shall violate the wage provisions of sections 4115.03 to 4115.16 of the Revised Code, or suffer, permit, or require any employee to work for less than the rate [76] of wages so fixed, or violate the provisions of section 4115.07 of the Revised Code. Any employee upon any public improvement who is paid less than the fixed rate of wages applicable thereto may recover from such person, firm, corporation, or public authority that constructs a public improvement with its own forces the difference between the fixed rate of wages and the amount paid to him and in addition thereto a sum equal in amount to such difference. The employee may file suit for recovery within sixty days of the director of industrial relations’ determination of a violation of sections 4115.03 to 4115.16 of the Revised Code or is barred from further action under this division. Where the employee prevails in a suit, the employer shall pay the costs and reasonable attorney’s fees allowed by the court.” R.C. 4115.05 mandates the use of locally prevailing wages to determine the minimum wages on public projects. R.C. 4115.05 states in part: “The prevailing rate of wages to be paid for a legal day’s work * * * to laborers, workmen, or mechanics upon public works shall not be less at any time during the life of a contract for the public work than the prevailing rate of wages then payable in the same trade or occupation in the locality where such public work is being performed, under collective bargaining agreements or understandings, between employers and bona fide organizations of labor in force at the date the contract for the public work, relating to the trade or occupation, was made, and collective bargaining agreements or understandings successor thereto. “Every contract for a public work shall contain a provision that each laborer, workman, or mechanic, employed by such contractor, subcontractor, or other person about or upon such public work, shall be paid the prevailing rate of wages provided in this section.” R.C. 4115.163 authorizes interested parties, defined in R.C. 4115.03 [77] (F),4 to include a bona-fide labor organization, such as Local 18, to file a complaint with the Director of Industrial Relations alleging a violation of the prevailing wage law, and to pursue such complaint in common pleas court either by appeal if the director determines no violation has occurred or by a new complaint if the director fails to rule on the merits of the complaint within sixty days after its filing. Local 18 contends that the courts below erred in concluding that because the prevailing wage law only applies to employees and Daniel Wannemacher, as a sole proprietor, was not an employee, the law did not apply to him even though he performed work as a “laborer,” “workman,” or “mechanic.” We disagree. R.C. 4115.10(A) states that “[a]ny employee upon any public improvement who is paid less than the * * * [prevailing wage] may recover * * * the difference between the fixed rate of wages and the amount paid to him and in addition thereto a sum equal in amount to such difference. The employee may file suit for recovery * * *. Where the employee prevails in a suit, the employer shall pay the costs and reasonable attorney’s fees allowed by the court.” (Emphasis added.) R.C. 4115.05 provides that “[e]very contract for a public work shall contain a provision that each laborer, workman, or mechanic, employed by such contractor, subcontractor, or other person about or upon such public work, shall be paid the prevailing rate of wages provided in this section.” (Emphasis added.) We must assume that the General Assembly intended to make a distinction between employers and employees in drafting R.C. Chapter 4115. “Words and phrases shall be read in context and construed according to the rules of grammar and common usage. Words and phrases that have acquired a technical or particular meaning, whether by legislative definition or otherwise, shall be construed accordingly.” R.C. 1.42. In Home Indemn. Co. v. Plymouth (1945), 146 Ohio St. 96, 32 O.O. 30, 64 N.E. 2d 248, paragraph one of the syllabus, this court gave the following definition of “employee”: “An employee is a person who works for another for salary and wages, and the term is usually applied only to clerks, workmen and laborers, and rarely to the higher officers of a corporation or government or to domestic servants.” Other statutes clearly distinguish between employers and employees. See, e.g., R.C. 3309.01, 4101.01 and 4111.01. See, also, Section 152, Title 29, U.S. Code. Black’s Law Dictionary (5 Ed. 1979) 471, defines “employee” as follows: “A person in the service of another under any contract of hire, express or implied, oral or written, where the employer has the power or right to control and direct the employee in the material details of how the work is to be performed. * * * [Citation omitted.] One who works for an employer; a person working for salary or wages. “Generally, when person for whom services are performed has right to control and direct individual who performs services not only as to result to be accomplished by work but also as to details and means by which result is accomplished, individual subject to direction is an ‘employee.’ ilifi * * “* * * ‘[E]mployee’ must be distinguished from ‘independent contractor,’ ‘officer,’ ‘vice-principal,’ ‘agent,’ etc.” “Employer” is defined as “[o]ne [78] who employs the services of others; one for whom employees work and who pays their wages or salaries. The correlative of ‘employee.’ ” Id. Clearly, then, an employer is not an employee. Given the common usage of the terms “employer” and “employee” and the absence of any statutory incorporation of the term “employer,” we conclude that the use of “employee” in R.C. Chapter 4115 does not encoirtpass the term “employer” when the employer is a sole proprietor who has not used his status as a sole proprietor to gain an unfair advantage in bidding on public improvement projects. Our conclusion is not contrary to the purpose of the prevailing wage law. “The prevailing wage law evidences a legislative intent to provide a comprehensive, uniform framework for, inter alia, worker rights a-yd remedies vis-a-vis private contractors, subcontractors and materialmen engaged in the construction of public improvements in this state. * * * Above all else, the primary purpose of the prevailing wage law is to support the integrity of the collective bargaining process by preventing the undercutting of employee wages in the private construction sector.” (Emphasis added.) State, ex rel. Evans, v. Moore (1982), 69 Ohio St. 2d 88, 91, 23 O.O. 3d 145, 147, 431 N.E. 2d 311, 313. Here, there is no allegation that Daniel Wannemacher formed his business as a sole proprietorship to circumvent the reach of the prevailing wage law. All his employees were paid the prevailing wage for their services. Indeed, Local 18’s only allegation is that Daniel Wannemacher failed to list himself on the certified payroll records, a requirement for all employees under R.C. 4115.071(C), and failed to pay himself the prevailing wage. However, as a sole proprietor, he was not required to list himself on the records or pay himself the prevailing wage. As an employer, he did not receive and did not expect any wages. Instead, any income he received would be derived from the profits of the business. And, unlike an employee of the business, Daniel Wannemacher was not required to withhold social security or income tax from his profits. Given the statutory and common-law distinctions between employers and employees and the common usage of those terms, we hold that a sole proprietor who personally performs physical work as a laborer, workman, or mechanic in the construction of a public improvement is not subject to Ohio’s prevailing wage law, R.C. 4115.03 through 4115.16. Accordingly, the judgment of the court of appeals is affirmed. Judgment affirmed. Holmes, Wright and H. Brown, JJ., concur. Sweeney, Locher and Douglas, JJ., dissent. Footnotes [3] R.C. 4115.16 provides in part: “(A) An interested party may file a complaint with the director of industrial relations alleging a violation of sections 4115.03 to 4115.16 of the Revised Code. The director, upon receipt of a complaint, shall investigate pursuant to section 4115.13 of the Revised Code. If the director determines that no violation has occurred, the interested party may appeal the decision to the court of common pleas of the county where the violation is alleged to have occurred. “(B) If the director has not ruled on the merits of the complaint within sixty days after its filing, the interested party may file a complaint in the court of common pleas of the county in which the violation is alleged to have occurred. The complaint may make the contracting public authority a party to the action, but not the director. Contemporaneous with service of the complaint, the interested party shall deliver a copy of the complaint to the director. Upon receipt thereof, the director shall cease investigating or otherwise acting upon the complaint filed with him pursuant to division (A) of this section. The court in which the complaint is filed pursuant to this division shall hear and decide the case, and upon finding that a violation has occurred, shall make such orders as will prevent further violation and afford to injured persons the relief specified under sections 4115.03 to 4115.16 of the Revised Code. The court’s finding that a violation has occurred shall have the same consequences as a like determination by the director. The court may order the director to take such action as will prevent further violation and afford to injured persons the remedies specified under sections 4115.03 to 4115.16 of the Revised Code. Upon receipt of any order of the court pursuant to this section, the director shall undertake enforcement action without further investigation or hearings.” [4] See footnote 1.