Bridgestone/Firestone, Inc. v. Hartnett

• Decision Date: 25 July 1991
• Citation: 572 N.Y.S.2d 770,175 A.D.2d 495
• Court: New York Supreme Court — Appellate Division
• Parties: , 30 Wage & Hour Cas. (BNA) 886 In the Matter of BRIDGESTONE/FIRESTONE, INC., et al., Petitioners, v. Thomas F. HARTNETT, as Commissioner of Labor of the State of New York, Respondent.

Page 770

572 N.Y.S.2d 770

175 A.D.2d 495, 30 Wage & Hour Cas. (BNA) 886

In the Matter of BRIDGESTONE/FIRESTONE, INC., et al., Petitioners, v. Thomas F. HARTNETT, as Commissioner of Labor of the State of New York, Respondent.

Supreme Court, Appellate Division Third Department.

July 25, 1991.

Herrick & Feinstein (Susan L. Meekins, of counsel), New York City, for petitioners.

Robert Abrams, Atty. Gen. (David C. Yamada, of counsel), New York City, for respondent.

Before MAHONEY, P.J., and CASEY, WEISS, LEVINE and HARVEY, JJ.

HARVEY, Justice.

Proceeding pursuant to CPLR article 78 (initiated in this court pursuant to Labor Law §§ 220 and 220-b) to review a determination of respondent which, inter alia, found that petitioner Laco Roofing, Inc. had underpaid its employees.

In August 1983, the Office of General Services (hereinafter OGS) contracted with Cowper Construction Company to reconstruct and repair the State Armory located in the City of Buffalo, Erie County. Cowper subcontracted with Grove Roofing Company to construct the roof on the Armory. Grove purchased the roofing material from the predecessor in interest of petitioner Bridgestone/Firestone, Inc. (hereinafter firestone). This material was purchased with a written 10-year warranty as was required in both the general contract and subcontract. The roofing system was thereafter installed pursuant to the contract specifications and Firestone's own installation manual.

Subsequently in late 1987 and early 1988, OGS found that the roof installed on the Armory was leaking. Grove returned to the site to make temporary repairs to the roof under the warranty and Firestone was also contacted. Firestone ultimately determined that the roof was defective and hired petitioner Laco Roofing, Inc. to replace the defective roofing material. Just prior to completion of the work, however, the Department of Labor's Bureau of Public Works received a complaint which alleged that Laco was not paying its workers the prevailing rates for the project. An investigation was conducted and, ultimately, Firestone and Laco received a notice from respondent charging, inter alia, that they had failed to pay prevailing wages or supplements to Laco's employees. After an administrative hearing, the Hearing Officer determined that the warranty work performed on the Armory roof was public work pursuant to Labor Law § 220 and, therefore, Firestone and Laco must pay the employees prevailing wages and supplements. Respondent confirmed the Hearing Officer's report and recommendation in its entirety. Firestone and Laco (hereinafter collectively referred to as petitioners) then commenced this proceeding challenging respondent's determination. ¹

Petitioners contend that a manufacturer's replacement of warranted goods used in a public works project cannot constitute a public works contract subject to the prevailing wage rate requirement of Labor Law § 220. We disagree. Although we are not required to afford deference to respondent's interpretation of the statutes (see, Matter of Stephens & Rankin v. Hartnett, 160 A.D.2d 1201, 1202, 555 N.Y.S.2d 208), we nevertheless must agree with conclusions arrived at by respondent in the case at bar. The Labor Law's prevailing wage requirement reflects a strong public policy in this State and the statute is to be liberally construed to effectuate its beneficent purposes (id.). As a general rule, the following two elements must be present before the statute applies: "(1) the public agency must be a party to a contract involving the employment of laborers * * * and (2) the contract must concern a public works project" (Matter of Erie County Ind. Dev. Agency v. Roberts, 94 A.D.2d 532, 537, 465 N.Y.S.2d 301, aff'd 63 N.Y.2d 810, 482 N.Y.S.2d 267, 472 N.E.2d 43).

With respect to the first element necessary for application of the statute, we reject petitioners' contention that because the State was not a named party to the sales contract of the roofing materials, respondent is precluded from applying Labor Law § 220 to Firestone's warranty work. Significantly, there is no statutory requirement that the State be a direct party to the challenged contract because the wage and supplement provisions apply broadly to "laborers, work[ers] or mechanics upon such public works" (Labor Law § 220[3]. The State's general contract required the roofing material to include a 10-year warranty. Accordingly, Firestone's 10-year warranty was an essential term of the State's general contract. Moreover, inasmuch as a warranty can be deemed to be a contract (see 77 CJS, Sales, § 302[c], at 1118-1119; see also, Caceci v. Di Canio Constr. Corp., 72 N.Y.2d 52, 55, 530 N.Y.S.2d 771, 526 N.E.2d 266), the State was a party to the warranty contract since it was issued to the State.

As for the question of whether the subject agreement (whether it be perceived as the general contract or the subsequent warranty contract) concerns a public works contract, we find that it does. The replacement of the roofing material on the Armory, a State-owned public building, for the benefit of public employees certainly constitutes a public works project (see, Matter of Twin State CCS Corp. v. Roberts, 72 N.Y.2d 897, 899, 532 N.Y.S.2d 746, 528 N.E.2d 1219). Notably, while a "public works" contract is not statutorily defined (see, Matter of Erie County Ind. Dev. Agency v. Roberts, supra, 94 A.D.2d at 537, 465 N.Y.S.2d 301), the phrase has been judicially defined to include a contract to repair a "public works" project (see, Matter of Sewer Environmental Contrs. v. Goldin, 98 A.D.2d 606, 469 N.Y.S.2d 339; see also, Matter of Stephens & Rankin v. Hartnett, supra). Petitioners point out, however, that this definition does not include contracts for the sale of goods used in public works projects (see, Bohnen v. Metz, 126 App.Div. 807, 810, 111 N.Y.S. 196,...