Male v. Ernest Renda Contracting Co., Inc.

• Decision Date: 21 February 1973
• Citation: 301 A.2d 153,122 N.J.Super. 526
• Parties: , 70 Lab.Cas. P 52,999 Raymond F. MALE, Commissioner, Department of Labor and Industry, State of New Jersey, Plaintiff-Appellant and Cross-Respondent, v. ERNEST RENDA CONTRACTING CO., INC., a corporation of the State of New Jersey, Defendant-Respondent, and Hillsborough Municipal Utilities Authority, Township of Hillsborough, County of Somerset, State of New Jersey, Defendant-Respondent and Cross-Appellant.
• Court: New Jersey Superior Court — Appellate Division

Page 526

122 N.J.Super. 526

301 A.2d 153, 70 Lab.Cas. P 52,999

Raymond F. MALE, Commissioner, Department of Labor and Industry, State of New Jersey, Plaintiff-Appellant and Cross-Respondent, v. ERNEST RENDA CONTRACTING CO., INC., a corporation of the State of New Jersey, Defendant-Respondent and Hillsborough Municipal Utilities Authority, Township of Hillsborough, County of Somerset, State of New Jersey, Defendant-Respondent and Cross-Appellant.

Superior Court of New Jersey,

Appellate Division.

Argued Oct. 17, 1972.

Decided Feb. 21, 1973.

Virginia Long Annich, Deputy Atty. Gen., for plaintiff-appellant (John P. Sheridan, Jr., Deputy Atty. Gen., on the brief; George F. Kugler, Atty. Gen., attorney).

Raymond P. DeMarco, Dunellen, for defendant-respondent Ernest Renda Contracting Co., Inc. (Romer & DeMarco, Dunellen, attorney).

William P. Westling, Bound Brook, for defendant-respondent, cross-appellant Township of Hillsborough Municipal Utilities Authority (Imbriani & Westling, Bound Brook, attorneys).

Thomas L. Parsonnet, Newark, filed a brief on behalf of amicus curiae New Jersey State A.F.L.--C.I.O. (Parsonnet, Parsonnet & Duggan, Newark, attorneys).

Anthony C. Meola, Newark, filed a brief on behalf of amicus curiae New Jersey Building and Construction Trades Council, A.F.L.--C.I.O. (Dunn & Pykon, Newark, attorneys).

Ronald L. Tobia, East Orange, filed a brief on behalf of amicus curiae Associated Independent Contractors.

Richard K. Rosenberg, Passaic, filed a brief on behalf of amicus curiae Utility Contractors Association of New Jersey, Inc. (Herbert R. Ezor, Newark, on the brief; Heller & Laiks, Passaic, attorneys).

Before Judges LABRECQUE, KOLOVSKY and MATTHEWS.

The opinion of the court was delivered by

MATTHEWS, J. A. D.

The Commissioner of Labor and Industry (Commissioner) instituted this action under N.J.S.A. 34:11--56.25 et seq., the Prevailing Wage Act (act), in the interest of employees of defendant Ernest Renda Contracting Co., Inc. (Renda), who performed work on a public works project contracted for by defendant Municipal Utilities Authority of the Township of Hillsborough, Somerset County (Authority).

The complaint alleged that defendants failed to pay the prevailing wage to employees of Renda on the aforementioned public works project and otherwise failed to fulfill the obligations under the act. The Commissioner sought judgment requiring defendants to pay to him, as trustee for the workmen involved, the difference between the amount actually paid to those workmen and the amount that should have been paid in compliance with the act. That amount was originally computed after preliminary audit at $3,288.64. Later, in August 1970, after the commencement of this action, the Commissioner caused an additional audit to be conducted which covered the entire period of the project which by then had been completed. The additional audit disclosed that the difference between the amount Renda's employees had actually been paid and the amount due under the prevailing wage schedule to be $57,685.16.

N.J.S.A. 34:11--56.25 et seq. was adopted in 1963. (L.1963, c. 150). Section 1 of the act (N.J.S.A. 34:11--56.25) provides:

It is declared to be the public policy of this State to establish a prevailing wage level for workmen engaged in public works in order to safeguard their efficiency and general well being and to protect them as well as their employers from the effects of serious and unfair competition resulting from wage levels detrimental to efficiency and well-being.

Under section 2 (N.J.S.A. 34:11--56.26) certain terms as used in the act are defined. These include subsection (4), 'public body':

(4) 'Public body' means the State of New Jersey, any of its political subdivisions, except municipalities having a population of less than 25,000, any authority created by the Legislature of the State of New Jersey and any instrumentality or agency of the State of New Jersey or of any of its political subdivisions.

and subsection (9), 'prevailing wage':

(9) 'Prevailing wage' means the wage rate paid by virtue of collective bargaining agreements by employers employing a majority of workmen of that craft or trade subject to said collective bargaining agreements, in the locality in which the public work is done.

Under section 3 (N.J.S.A. 34:11--56.27) it is stated that the act applies to every contract in excess of $2,000 for any public work and that every contract covering such work must contain a provision setting forth the prevailing wage to be paid as the same has been established by the Commissioner.

Section 6 of the act (N.J.S.A. 34:11--56.30) sets forth the method in which the Commissioner is to establish the prevailing wage rate in any locality. 'Locality' is defined in N.J.S.A. 34:11--56.26(2) as follows:

(2) 'Locality' means any political subdivision of the State, combination of the same or parts thereof, or any geographical area or areas classified, designated and fixed by the commissioner from time to time, provided that in determining the 'locality' the commissioner shall be guided by the boundary lines of political subdivisions or parts thereof, or by a consideration of the areas with respect to which it has been the practice of employers of particular crafts or trades to engage in collective bargaining with the representatives of workmen in such craft or trade.

The testimony adduced below disclosed that the Commissioner did not adopt any rules or regulations to implement the act because he concluded that it was sufficiently specific. A procedure was established, however, to facilitate ascertainment of the prevailing wage. First, the county was chosen as the 'locality' within which to determine the prevailing wage pursuant to N.J.S.A. 34:11--56--26(2) because he determined that political unit to be the most proper subdivision for practical determination of the prevailing wage. Second, the number of collective bargaining agreements covering a particular type of work within each county are ascertained. Third, if there exists more than one collective bargaining agreement covering a particular type of work, he determines which agreement covers the majority of workers for a particular craft or trade. Fourth, the wage rate set forth in that collective bargaining agreement becomes the prevailing wage rate for that craft or trade in the county concerned. Fifth, the prevailing wage rate is promulgated and filed in the office of the Secretary of State. It was explained at the trial that the Commissioner, to insure the accuracy of prevailing wage rate schedules, usually checked the collective bargaining contract rates against a building contractor's manual which is published monthly and, also, against bulletins received from the Associated General Contractors. It was noted that it has been the experience of the Department that any mistakes in a schedule are quickly brought to the Commissioner's attention by contractors.

In May and July of 1968 the Commissioner promulgated prevailing wage rate schedules for Somerset County for types of work which may be, for our purposes, classified as heavy and general construction, and operating engineers' work. Before these schedules were promulgated the Commissioner contacted the International Union of Operating Engineers, Local 825, and the Heavy and General Construction Workers, Local 472, and requested that he be provided with the contract of each with the Associated General Contractors. Only these unions were contacted because they were the only unions which were parties to collective bargaining agreements covering the aforementioned types of work within Somerset County. Thereafter, the pertinent prevailing wage schedules were prepared from those contracts and promulgated, as above described.

During the latter part of September 1968 the Commissioner was informed of the public works contract between defendants. The contract, on which work had commenced on September 1, 1968, provided for the construction of the Royce's Brook Interceptor Project at a cost of $624,775.40. Knowledge of this contract was gained through the Dodge Reports. A check of the commission records disclosed that no request had been received from defendant Sewer Authority for a copy of the prevailing wage rate which would be applicable to the contract. The Commissioner immediately caused an investigation to be conducted to determine whether the parties to the contract were complying with the act. When it was ascertained that there was a failure of compliance, the Commissioner ordered Renda to commence compliance and to pay up the difference required under the act. As heretofore indicated, no such payments were made and this action was instituted.

After a three-day trial the trial judge dismissed the complaint was prejudice and without costs for reasons expressed in an oral opinion. He found that the act applied to the contract in question. He also found the act 'as a whole' to be constitutional, but he viewed the statutory scheme under the facts presented, which disclosed that the collective bargaining contracts here involved were each the product of one union and one employer's group, and as interpreted by the Commissioner, as an unconstitutional delegation of legislative power to private individuals. He expressed concern for what he found to be significant potential for arbitrary, self-interested action inherent in the scheme as interpreted by the Commissioner; that this was improper since the parties to the collective bargaining agreement are not accountable to the public and because their actions are not subject to review. He also concluded that the action should be dismissed for the additional reason that the Commissioner failed to secure wage assignments from the employees on whose behalf the action was instituted. See N.J.S.A. 34:11--56.40. He also noted that had he not dismissed the complaint both defendants would have been found jointly liable to the Renda employees....