Board of Com'rs of Allen County v. Jones

• Decision Date: 15 December 1983
• Docket Number: No. 414,No. 103,P,No. 213,No. 3-1282A347,213,103,414,3-1282A347
• Citation: 457 N.E.2d 580
• Court: Indiana Appellate Court
• Parties: 26 Wage & Hour Cas. (BNA) 921 BOARD OF COMMISSIONERS OF the COUNTY OF ALLEN, Defendant-Appellant, v. Ernie JONES, in his official capacity as president of the Indiana State AFL- CIO; Fred Rice, in his official capacity as a member of the Committee for a Prevailing Wage Scale; Laborers Local Union; Operating Engineers Local; and Teamsters Local Unionlaintiffs-Appellees.

Page 580

457 N.E.2d 580

26 Wage & Hour Cas. (BNA) 921

BOARD OF COMMISSIONERS OF the COUNTY OF ALLEN, Defendant-Appellant, v. Ernie JONES, in his official capacity as president of the Indiana State AFL- CIO; Fred Rice, in his official capacity as a member of the Committee for a Prevailing Wage Scale Laborers Local Union No. 213; Operating Engineers Local No 103; and Teamsters Local Union No. 414, Plaintiffs-Appellees.

No. 3-1282A347.

Court of Appeals of Indiana Third District.

Dec. 15, 1983.

G. William Fishering, III, Allen County Atty., Fort Wayne, for defendant-appellant.

William R. Groth, Fillenwarth Dennerline & Groth, Indianapolis, for plaintiffs-appellees.

GARRARD, Judge.

This is an appeal from an order granting an injunction against the Board of Commissioners of Allen County ("Board").

The controversy began April 16, 1982. The Board was preparing to award contracts for the demolition of thirty-four structures in Allen County. As the executive agency for the county, the Board is authorized to award contracts for county improvements. IC 36-2-2-1; IC 36-2-3.5-1; IC 36-2-3.5-4(b)(9) and (10). The demolition contracts involved public works subject to the provisions of the Prevailing Wage Statute, IC 5-16-7-1 to IC 5-16-7-5. ¹ IC 5-16-7-1 describes "prevailing wage" and the procedure for its ascertainment:

"Any firm, individual, partnership or corporation which is hereafter awarded a contract by this state, or by any political subdivision thereof, or by a municipal corporation, for the construction of any public work, and any subcontractor thereon, shall be required to pay for each class of work on such project a scale of wages which shall in no case be less than the prevailing scale of wages being paid in the immediate locality for such class of work as hereinafter to be determined. For the purpose of ascertaining what the prevailing wage scales are in such immediate locality, the awarding governmental agency, prior to advertising for such contract, shall set up a committee of three (3) persons; one (1) representing labor, to be named by the president of the state federation of labor; one (1) representing industry, to be named by the awarding agency, and a third member to be named by the governor. As soon as appointed said committee shall meet and shall fix and determine in writing as follows: A classification of the labor to be employed in the performance of the contract for such project, into three (3) classes: skilled, semiskilled and unskilled labor, and the wage per hour to be paid each of such classes: Provided, That the rate of wages so to be fixed and determined shall not exceed the prevailing wage scales being at the time paid in such locality for such class of work: Provided further, That the provisions of this chapter shall not apply to contracts let by the department of highways for the construction of highways, streets and bridges. The provisions of IC 8-13-5-8 do apply on state highway projects. Such determination shall be made and filed with such awarding agency at least two (2) weeks prior to the date fixed for such letting, and a copy thereof shall be furnished upon request to any person desiring to bid on such contract. Said schedule shall be open to the inspection of the public. If such committee fails to act and to file such determination at or before the time hereinbefore provided, the awarding agency shall make such determination, and its finding shall be final. It shall be a condition of such contract that the successful bidder and all of his subcontractors shall comply strictly with such determination made as above provided. None of the provisions of this section, however, shall be interpreted as permitting the payment of wages for skilled, semiskilled or unskilled labor on any such public project in this state the letting of which is subject to the provisions hereof which are less than the minimum provided for in the applicable national code of fair competition, or regional agreement approved by the president of the United States if there be any such: Provided further, That the provisions of this chapter shall not apply to any such public projects in this state the letting of which would otherwise be subject to the provisions hereof, and which are to be paid for in whole or in part with funds granted by the federal government, unless the department of the federal government making such grant shall consent in writing that the provisions of this chapter shall be applicable to such project."

A committee was created: Sue Stone, an employee of the Division of Labor, was the governor's appointee. Fred Rice, business manager of the Allen County Building Trades Council, was the AFL-CIO's representative. There was a third member representing the Board. The committee met on April 16, 1982. Stone presided. The Board's representative presented three letters. The letters were from three county demolition contractors, Earth Construction & Engineering, Inc., Martin Enterprises, Inc., and Griffin Enterprises, Inc. Each letter set forth the wage rates used in demolition projects. The rates were presented as being representative of the rates prevailing in the area. Rice submitted wage scales being paid in the area "pursuant to privately-negotiated collective bargaining agreements."

Stone concluded that Rice's submission most accurately represented the prevailing wage for area construction workers. Although she considered the contractors' letters, she found each inapposite: Earth Construction's rates were from a two year old contract and, as such, dated. Martin Enterprises' rates were from a State Highway Department project. Since the Highway Department is not subject to the prevailing wage statute, Stone found this submission inapplicable. And Griffin Enterprises' submission was based upon what it considered "rates ... more realistic ... than the union wages ... which we [now] pay." Based partly upon her knowledge of wages in the construction industry and "partly upon the personal knowledge that this same wage scale had been paid on numerous other public work projects in the locality," Stone adopted Rice's submitted wage rates. Rice concurred. The remaining member of the committee, the Board's appointee, voted against adopting Rice's wage rates.

On April 23, 1982 the Board met and declared the prevailing wage adopted by the committee void. According to the Board, the wage was void for several reasons:

1. It was not concurred upon by all three (3) committee members.

2. There was no basis in fact for "[the] determination, ... making [it] arbitrary and capricious."

3. The committee failed to comply with the Indiana "Open Door Law."

4. The statute is unconstitutional.

The Board then proceeded to establish its own wage determinations for the demolition projects. The Board's wage determinations were made "a part of the specifications for the demolition projects" and included in the advertisements for bids.

On May 14, 1982 several parties joined in filing a complaint for "temporary restraining order, preliminary and permanent injunction and declaratory judgment." The plaintiffs were three Allen County labor organizations and Ernie Jones, in his capacity as president of the Indiana AFL-CIO. The complaint sought to prevent the Board from awarding contracts based upon the Board's prevailing wage. In this regard, the complaint asked that the Board be enjoined from awarding any contracts for demolition, and asked that the Board's wage determination be declared "null, void, and ... in violation of IC 5-16-7-1." The Board answered, and raised as an affirmative defense its contention that IC 5-16-7-1 was unconstitutional. The Board also counterclaimed. It asserted that the committee met "and continues to meet in violation of the Indiana 'Open Door Law' IC 5-14-1.5-1 et seq." Therefore, the Board asked "that all decisions made by the prevailing wage committee ... [in meetings] in violation of the Indiana 'Open Door Law' be declared void, and ... that said committee be enjoined from meeting in violation of said law." ²

The cause was heard May 20, 1982. On July 7, 1982 the court entered judgment for Jones and the labor organizations: "The Court ... grants the injunctive relief prayed, and defendants herein are enjoined from awarding any contract or contracts for ... demolition ... containing the defendant's wage specifications at variance with the statutory committee's recommendations." The court also entered findings of fact, among them the following:

"7) The wage determinations made by a majority of the three members of the prevailing wage committee were arrived at after due consideration of all evidence presented before said committee, including evidence submitted by defendant Board's representative from three local contractors who have performed projects of a similar nature, and the evidence submitted by plaintiff Rice, consisting of the wage rates paid to certain classifications of workers pursuant to collective bargaining agreements negotiated by and between certain contractors and various local labor organizations. Defendant Board based its incorporated wage scales on data and information solicited by it from area demolition firms."

The court also entered the following conclusions:

"1) As stipulated by the parties at trial, plaintiffs Jones and Rice have standing to maintain this action for declaratory and injunctive relief.

2) The prevailing wage determinations made by two of the three members of said prevailing wage committee were binding upon defendants Board and Commissioners pursuant to I.C. 5-16-7-1, were not made arbitrarily or capriciously, and were made after an investigation of the facts as they existed in the locality in which the contracts were to be awarded.

3) The action by defendants Board and Commissioners in making their own wage determinations for said demolition projects notwithstanding the wage determinations by said prevailing wage committee, is hereby...