Busker v. Wabtec Corp.
| Decision Date | 16 August 2021 |
| Docket Number | S251135 |
| Citation | 11 Cal.5th 1147,282 Cal.Rptr.3d 333,492 P.3d 963 |
| Parties | John BUSKER, Plaintiff and Appellant, v. WABTEC CORPORATION et al., Defendants and Respondents. |
| Court | California Supreme Court |
Donahoo & Associates, Richard E. Donahoo, Tustin, William E. Donahoo; Foley, Bezek, Behle & Curtis, Thomas G. Foley, Jr., Santa Barbara, Kevin D. Gamarni; Esner, Chang & Boyer, Stuart B. Esner, Los Angeles, and Holly N. Boyer, Pasadena, for Plaintiff and Appellant.
Neyhart, Anderson, Flynn & Grosboll and Benjamin K. Lunch, San Francisco, for International Brotherhood of Electrical Workers, Local Union No. 6, as Amicus Curiae on behalf of Plaintiff and Appellant.
Bush Gottlieb, Lisa C. Demidovich, Pasadena, and Jason Wojciechowski, Glendale, for International Brotherhood of Electrical Workers Local 11 as Amicus Curiae on behalf of Plaintiff and Appellant.
Altshuler Berzon, Eileen Goldsmith and Zoe Palitz, San Francisco, for International Association of Sheet Metal, Air, Rail & Transportation Workers, Sheet Metal Workers’ Local Union No. 104 as Amicus Curiae on behalf of Plaintiff and Appellant.
Jones Day, Craig E. Stewart, San Francisco, Eric Tung, Los Angeles, Shay Dvoretzky ; K&L Gates and Todd L. Nunn for Defendants and Respondents.
Lewis Brisbois Bisgaard & Smith and Lann G. McIntyre, San Diego, for California State Association of Counties, League of California Cities, California Association of Sanitation Agencies, California Special Districts Association and American Public Transportation Association as Amici Curiae on behalf of Defendants and Respondents.
Hanson Bridgett, Adam W. Hofmann and Josephine M. Petrick, San Francisco, for Southern California Regional Rail Authority as Amicus Curiae on behalf of Defendants and Respondents.
California's prevailing wage law ( Lab. Code,1 § 1720 et seq. ) is a minimum wage provision that generally applies to those employed on "public works." This case involves two questions: (1) Does publicly funded work on rolling stock, like train cars, fall under the statutory definition of "public works"? (2) Alternatively, does the work on rolling stock in this case qualify as "public work" because it is integral to other activity that itself qualifies as public work? The answer to both questions is no.
The Southern California Regional Rail Authority operates a large train system known as Metrolink. In 2010, it entered into the prime contract with Parsons Transportation Group, Inc. (Parsons) to design, furnish, and install a comprehensive communications network called Positive Train Control (PTC) to prevent collisions and other dangerous train movement.
The project was publicly funded and cost over $216 million. The expansive undertaking included wayside signals, systems on locomotives and rail cars, back office servers, a communications network, and a centralized dispatching system, along with software development and installation. The system required integration of various components located on trains, at wayside sites along tracks, and at centralized control centers. While the undertaking was done under a public contract , not all aspects of the enterprise necessarily qualify as a public work . "Public works" is a term of art defined by statute.2 (See § 1720 et seq. )
Only two aspects of the project are at issue here: field work and onboard work.3 Field work included building and outfitting radio towers on land adjacent to train tracks. The labor required trenching, driving forklifts, operating cranes, and welding. Onboard work primarily involved installing electronic components on the train cars and locomotives themselves.
Defendant Wabtec Corporation (Wabtec) subcontracted to install system components on locomotives and rail cars. The subcontract incorporated various provisions of the prime contract, including compliance with applicable prevailing wage laws. Wabtec performed no field work.
Plaintiff John Busker was one of over 100 Wabtec workers assigned to the project. For approximately two years, he did traditional electrical onboard installation. Wabtec did not pay prevailing wages to any of its employees.
Busker filed a prevailing wage complaint against Wabtec with the Division of Labor Standards Enforcement (DLSE), a division of the Department of Industrial Relations (Department) that enforces California's labor laws. (See Alvarado v. Dart Container Corp. of California (2018) 4 Cal.5th 542, 555, 229 Cal.Rptr.3d 347, 411 P.3d 528.) In 2015, the DLSE issued a civil wage and penalty assessment of $6,468,564 against Wabtec for failure to pay prevailing wages.4 Wabtec requested review by the Labor Commissioner, arguing that the prevailing wage law does not apply to the onboard work because the law covers only work performed on or to real property, not "rolling stock"5 like locomotives and buses.
After review, the DLSE vacated the assessment and took no further action. In this case, a DLSE officer testified his superior directed him to vacate the assessment because, historically, work performed on rolling stock is not covered by the prevailing wage law. The Department never formally determined whether the prevailing wage law covers onboard work.
While the review of the assessment was pending, Busker sued Wabtec and the project manager6 in state court for failing to pay prevailing wages. Wabtec removed the action to federal district court and sought summary judgment urging Wabtec's onboard work was not subject to prevailing wage requirements. The court granted the motion, reasoning that only workers "employed on [a] project involving fixed works or realty" are entitled to prevailing wages. It also rejected Busker's other argument that the onboard work fell within the scope of the prevailing wage law under section 1772 as work done "in the execution" of the overall project to install the PTC system. The court concluded that section 1772 still requires the applicable contract to be one for "public work," and the Wabtec subcontract, limited to rolling stock, did not qualify.
Busker appealed and we accepted a request from the United States Court of Appeals for the Ninth Circuit to decide a question of state law. ( Cal. Rules of Court, rule 8.548(a).) That court posed the question as follows: "Whether work installing electrical equipment on locomotives and rail cars (i.e., the ‘onboard work’ for Metrolink's PTC project) falls within the definition of ‘public works’ under California Labor Code § 1720(a)(1) either (a) as constituting ‘construction’ or ‘installation’ under the statute or (b) as being integral to other work performed for the PTC project on the wayside (i.e., the ‘field installation work’)."
Economic conditions in the Great Depression prompted the passage of prevailing wage laws designed to ensure that workers employed on public building programs would be paid daily wages commensurate with those prevailing in the local area for work of a similar character. (See Universities Research Assn. v. Coutu (1981) 450 U.S. 754, 773–774, 101 S.Ct. 1451, 67 L.Ed.2d 662 ; Azusa Land Partners v. Department of Industrial Relations (2010) 191 Cal.App.4th 1, 14–15, 120 Cal.Rptr.3d 27.) The goal was to give local contractors and labor a fair opportunity to work on public building projects that might otherwise be awarded to contractors who hired cheaper out-of-market labor. ( Universities Research Assn. v. Coutu, at p. 774, 101 S.Ct. 1451.)
The prevailing wage law was enacted in 1931 as an uncodified measure. (1931 Act; Stats. 1931, ch. 397, p. 910.) A federal counterpart, the Davis-Bacon Act, was enacted the same year. ( 40 U.S.C. § 3141 et seq. ) In 1937, California's prevailing wage law was codified as part 7 of the newly established Labor Code.
(Stats. 1937, ch. 90, pp. 185, 241.)
"The overall purpose of the prevailing wage law is to protect and benefit employees on public works projects." ( Lusardi Construction Co. v. Aubry (1992) 1 Cal.4th 976, 985, 4 Cal.Rptr.2d 837, 824 P.2d 643 ( Lusardi ).) "This general objective subsumes within it a number of specific goals: to protect employees from substandard wages that might be paid if contractors could recruit labor from distant cheap-labor areas; to permit union contractors to compete with nonunion contractors; to benefit the public through the superior efficiency of well-paid employees; and to compensate nonpublic employees with higher wages for the absence of job security and employment benefits enjoyed by public employees." ( Id. at p. 987, 4 Cal.Rptr.2d 837, 824 P.2d 643.) Courts liberally construe the law to fulfill its purpose. ( City of Long Beach v. Department of Industrial Relations (2004) 34 Cal.4th 942, 949–950, 22 Cal.Rptr.3d 518, 102 P.3d 904 ( City of Long Beach ).)
Generally, those employed on public works must be paid at least the prevailing rate of per diem wages paid locally for work of a similar character.7 ( § 1771.) A contractor or subcontractor that does not pay the prevailing rate is liable for the deficiency and subject to a penalty. (§ 1775.) The obligation to pay prevailing wages has a statutory basis independent of any contractual requirement. ( Lusardi , supra , 1 Cal.4th at pp. 981–982, 4 Cal.Rptr.2d 837, 824 P.2d 643.) A contractor must pay prevailing wages when required, even if it has not contractually agreed to do so. ( Id . at p. 988, 4 Cal.Rptr.2d 837, 824 P.2d 643.)
The first question is whether the onboard work done exclusively on locomotives and rail cars (rolling stock) falls under the definition of "public work." An examination of the relevant statute establishes that it does not.
The prevailing wage law has its roots in the Depression Era. Then, as now, when a governmental entity decided to build a courthouse in the town square, a great many aspects of that project would come into play. Architects in Los Angeles might...
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