City and Borough of Sitka v. Construction and General Laborers Local 942, 5774

Citation644 P.2d 227
Decision Date07 May 1982
Docket NumberNo. 5774,5774
CourtSupreme Court of Alaska (US)
Parties26 Wage & Hour Cas. (BNA) 360, 100 Lab.Cas. P 55,436 CITY AND BOROUGH OF SITKA, State of Alaska, and Alaska Lumber and Pulp Co., Inc., a Corporation, Appellants, v. CONSTRUCTION AND GENERAL LABORERS LOCAL 942, International Unions of Operating Engineers Local 302, and Teamsters Local 959, State of Alaska, Appellees. /5811.

James F. Clark, Robertson, Monagle, Eastaugh & Bradley, Juneau, and Peter S. Hallgren, Sitka, for appellants.

Bruce Monroe and Paul L. Dillon, Birch, Horton, Bittner, Monroe, Pestinger & Anderson, Juneau, for appellees.

Before BURKE, C. J., and RABINOWITZ, CONNOR, MATTHEWS and COMPTON, JJ.

OPINION

COMPTON, Justice.

This is an appeal from the judgment of the superior court which held that a timber sale contract executed between Alaska Lumber and Pulp Co., Inc. (ALP) and the City and Borough of Sitka (Sitka) was subject to the provisions of Alaska's "Little Davis-Bacon Act," AS 36.05.010.110. The logging and related clearing took place on land Sitka owned and upon which the Green Lake Hydroelectric Project, a dam, was to be built. The superior court further held that pursuant to a stipulation negotiated by the parties, the Unions were entitled to an award of damages. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

During 1974 Sitka began planning the Green Lake Project as a source of hydroelectric power. In 1977 the State of Alaska withdrew land needed for the Project from federal ownership pursuant to its statehood land acquisition rights. It then conveyed the land to Sitka on March 16, 1979.

In March 1979, Sitka published its intent to receive sealed bids through May 1 for the construction of the Green Lake Project. The bid offering, Contract No. 3, originally set out all the specifications for the construction of the dam, including the timber clearing specifications. 1

On April 19, 1979, ALP submitted an irrevocable offer to pay Sitka two million dollars for the right to remove the commercial timber and to accomplish the clearing in accordance with the pertinent specifications set forth in Contract No. 3.

Sitka promptly published Addendum No. 2 to Contract No. 3 in order to notify prospective bidders that Sitka would award a separate contract for substantially all of the reservoir clearing. Sitka stated that to be awarded this separate contract, the bidder would have to offer more than ALP offered. Addendum No. 2 noted that ALP had offered to pay $2,000,000.00 to perform the reservoir clearing pursuant to the requirements of Contract No. 3.

The bids were opened on May 15. Sitka awarded the dam construction contract to S. J. Groves and Company and the timber sale contract to ALP. Sitka and ALP signed on June 13, 1979 an agreement entitled "Timber Sale Contract." The ALP-Sitka contract provided that Contract No. 3 was incorporated by reference. The original bid offering, Contract No. 3, stipulated that Little Davis-Bacon was applicable. 2 All parties agree that the dam construction contract is subject to the Act. The parties dispute, however, whether Addendum No. 2 exempted from the wage provision employees engaged in the severed logging and clearing activities, the work ultimately performed by ALP. 3 The ALP-Sitka contract did not contain any express wage stipulations.

The Alaska Department of Labor has the authority pursuant to AS 36.05.030 to determine whether a contract is subject to Little Davis-Bacon. 4 In April 1979, Sitka received a form letter from the Wage and Hour Division of the Department stating that the proposed timber sale contract would be subject to the Act. Sitka disagreed with that conclusion, and persuaded the Director of the Division, Dale Cheek, to investigate the matter further. The Director subsequently stated his tentative opinion that the Act did not apply to the timber sale contract. An advisory memorandum issued by the Office of the Attorney General reached a similar result. 5

The Department of Labor declined, however, to issue a formal determination of Little Davis-Bacon coverage. 6 As a result, in June 1979 two workers filed a complaint in superior court containing two causes of action against Sitka and ALP (hereafter collectively referred to as Sitka). The first cause of action set forth various charges against the proposed Sitka-ALP timber contract. The second cause of action alleged, in effect, that the workers had received less than the prevailing wage in violation of Little Davis-Bacon.

In August 1979 all parties entered into a stipulation which was then filed with the superior court and signed by the judge. Pursuant to the stipulation, the Construction and General Laborers Local 942, the International Union of Operating Engineers Local 302 and the Teamsters Local 959 (hereafter collectively referred to as the Unions) were substituted as plaintiffs. Both the Unions and Sitka gave up certain rights in the stipulation. The Unions agreed not to seek a preliminary injunction or other injunctive relief. Sitka agreed not to raise procedural defenses. The parties also stipulated as follows:

5. Plaintiffs seek declaratory relief in this case. In the event the court rules in Plaintiffs' favor, on those issues raised in Plaintiffs' Second Cause of Action, it is agreed that Plaintiffs' remedy will be in the form of damages to be paid to workers doing the work, which is the subject matter of this lawsuit, in accordance with Alaska law. Damages shall be paid to the workers as ordered by the Court, but in no event shall the sum ordered paid to the workers exceed the gross amount of Fifty One Thousand Dollars ($51,000.00).

After entering into the stipulation, both parties moved for summary judgment. The sole issue disputed was whether the Sitka-ALP timber contract was for "public construction" and thus covered by Little Davis-Bacon. The superior court ruled that the timber contract was for public construction. Accordingly, the court granted summary judgment to the Unions on November 3, 1980.

One portion of the judgment awarded the Unions as damages the back wages which the workers would have received if ALP had paid them the prevailing wage. On April 6, 1981, the United States Supreme Court held that the federal Davis-Bacon Act, 40 U.S.C. § 276a (1969), (hereafter referred to as Davis-Bacon), does not provide workers a private cause of action for back wages under a contract which administratively has been determined not to call for Davis-Bacon work. Universities Research Association, Inc. v. Coutu, 450 U.S. 754, 101 S.Ct. 1451, 67 L.Ed.2d 662 (1981). Relying on Universities Research, ALP filed a motion in superior court on April 24 to set aside the portion of the judgment which awarded the Unions damages. ALP argued that Little Davis-Bacon does not give the Unions a private right of action to recover back wages. ALP also contended that the award of damages should be set aside because no evidence on damages existed in the record. Sitka filed on May 8 a memorandum in support of ALP's motion. The superior court denied the motion on June 1, 1981, holding that paragraph 5 of the stipulation, quoted above, precluded consideration of the issue.

Sitka and ALP appeal. They submit (1) that the court erred in holding that the timber contract concerned public construction subject to Little Davis-Bacon coverage, and (2) that it was improper for the court to award the Union damages. For the reasons discussed below, we affirm the superior court judgment.

II. TIMBER SALE CONTRACT

The principal issue presented on appeal is whether the work performed pursuant to the ALP-Sitka contract was "public construction" subject to the wage protections afforded by Little Davis-Bacon. 7 AS 36.05.010 provides in part:

A contractor or subcontractor who performs work on public construction in which the state, as defined by AS 36.95.010(3), shall pay not less than the current prevailing rate of wages for work of a similar nature in the region in which the work is done.

Public construction is defined in AS 36.95.010(3) as "the on-site field surveying, erection, rehabilitation, alteration, extension or repair, including painting or redecorating of buildings, of highways or other improvements to real property under contract for the state, a political subdivision of the state; ..."

All parties properly agree that a timber sale contract is typically not subject to the Act. Sitka, accordingly, labels the disputed contract a "timber sale contract," arguing that any site preparation work was incidental to the dominant purpose of the contract, the sale of timber. The Unions, on the other hand, argue that the sale of merchantable timber was incidental to the site preparation necessary for the construction of the Green Lake Project, and thus characterize the contract as a "clearing contract." The labels employed by the parties are merely the conclusions of a more substantive analysis. The dispositive issue in our view is whether a contract, which may independently be outside the scope of Little Davis-Bacon, may nonetheless be subject to the Act where the specified work is substantially related to "public construction."

No prior Alaska court has addressed this issue. We turn, therefore, to federal authorities pertaining to the federal Davis-Bacon Act, 40 U.S.C. § 276a (1969), the model of the Alaska statutory scheme. See Fowler v. City of Anchorage, 583 P.2d 817, 821 (Alaska 1978); 1961 Op. Att'y Gen. No. 17 at 4 (Alaska, August 8, 1961). 8

The federal regulations, 29 C.F.R. §§ 4.116(b)(1), 5.2(f) and 5.2(g) (1980), clearly indicate that clearing done at a dam site in preparation for the dam's construction is "construction" within the purview of Federal Davis-Bacon. 9 Section 5.2(g) defines construction under Davis-Bacon as "all types of work done on a particular building or work at the site thereof." "Building" or "work" is defined in section 5.2(f) as including: 10

without limitation, buildings, structures, and...

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