Mendoza v. Fonseca Mcelroy Grinding Co.
| Decision Date | 28 November 2016 |
| Docket Number | Case No. 15-cv-05143-WHO |
| Court | U.S. District Court — Northern District of California |
| Parties | LEOPOLDO PENA MENDOZA, et al., Plaintiffs, v. FONSECA MCELROY GRINDING CO., INC, et al., Defendants. |
Re: Dkt. Nos. 26, 30
Defendant Granite Rock paid plaintiffs the California prevailing wage rate for work performed at various public works sites. Pursuant to an agreement with the local union, however, Granite Rock paid plaintiffs less than the prevailing wage rate for "mobilization work," including loading and transporting the milling machine from Granite Rock's permanent yard to the public works sites, and back. The parties cross moved for summary judgment on plaintiffs' claim that they were entitled to the prevailing wage rate for the mobilization work.
California cases have not addressed this specific issue. I conclude that the mobilization work involved here is not an integrated aspect of the flow process of construction for the public works involved, and accordingly must GRANT Granite Rock's motion for partial summary judgment and DENY plaintiffs' cross-motion.
Granite Rock is a closely-held construction materials company that provides asphalt, concrete, and other building materials for public and private commercial and residential construction projects. Statement of Undisputed Material Facts ("UMF") (Dkt. No. 28) ¶ 1. Defendant Fonseca McElroy Grinding Co., Inc. ("FMG") was a construction company specializing in road work. In or about April 2014, FMG was acquired by and merged with Granite Rock. Id. ¶ 2. At all relevant times, FMG and Granite Rock were signatory to the Operating Engineers Local No. 3 Master Agreement for Northern California ("Master Agreement"). Id. ¶ 3; see also id., Ex. 1.
In or about September 2010, FMG entered into a Memorandum of Agreement ("MOA") with Operating Engineers Local No. 3, that provided for a "Lowbed Transport" wage rate for mobilization work lower than the wage rate in the Master Agreement for operating engineers engaged in on-site construction. Id. ¶ 4. Granite Rock was a signatory to the MOA. Id. The MOA supplemented the Master Agreement and applied to the mobilization work performed by plaintiffs. Id. The MOA contained a provision stating, "If during the term of this Agreement, the DIR determines that these rates are not in compliance with the law, the parties shall immediately meet to address these classifications and wage rates." Id., Ex. 2.
Plaintiffs Leopoldo Pena Mendoza, Elviz Sanchez, and Jose Armando Cortes worked for FMG and then Granite Rock as union operating engineers. Id. ¶¶ 5-7. At various times during their employment, Granite Rock employed plaintiffs on "public works" construction projects as defined in Labor Code Section 1720(a)(1).1 Id. ¶ 8.
Granite Rock paid plaintiffs a prevailing wage rate as published by the California Department of Industrial Relations ("DIR") for the classification determination of operating engineer for all work performed at the public works project sites, including the operation of a milling machine used in breaking up asphalt and concrete on streets, roads, and pavement. Id. ¶ 9. The public works contracts did not specify the daily schedule for Granite Rock's workers or their place of reporting for work. Id. ¶ 10.
Plaintiffs were not paid a prevailing wage rate for the DIR classification determination of operating engineer while performing offsite "mobilization work" covered by the MOA because neither defendant considered the work subject to the California Labor Code's prevailing wage requirements. Id. ¶ 11. Mobilization work consisted of loading milling machines, which were stored at FMG's or Granite Rock's permanent yard or in offsite storage locations, onto a lowbed trailer; performing a light, brake, and fluid level check of a semi-truck used to transport the heavy equipment; driving a transport truck with the milling machine to a construction jobsite; and driving the transport truck with the milling machine back to FMG's or Granite Rock's permanent yard. Id. The offsite storage locations where plaintiffs performed mobilization work do not depend on any particular public works project for their existence. Id. ¶ 12.
Plaintiffs assert four claims: (1) failure to pay overtime in violation of the Federal Labor Standards Act, 29 U.S.C §§ 207, 216(B), 225(A); (2) failure to pay overtime and the prevailing wage rate in violation of California Labor Code §§ 1194, 1194.2, 510, 1771, 1774; (3) a penalty for failure to pay wages owed at time of termination under California Labor Code § 203; and (4) unfair business practices in violation of California Business and Professions Code § 17200. The parties cross-moved for summary judgment on Claim 2 for violations of California Labor Code sections 1171 and 1774 (). Granite Rock's Brief re Motion for Partial Summary Judgment ("Granite Rock MSJ") (Dkt. No. 27); Plaintiff's Brief re Motion for Partial Summary Judgment ("Plaintiffs' MSJ") (Dkt. No. 31). I heard argument on October 26, 2016.
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). In order to prevail, a party moving for summary judgment must show the absence of a genuine issue of material fact with respect to an essential element of the non-moving party's claim, or to a defense on which the non-moving party will bear the burden of persuasion at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the movant has made this showing,the burden then shifts to the party opposing summary judgment to identify "specific facts showing there is a genuine issue for trial." Id. The party opposing summary judgment must then present affirmative evidence from which a jury could return a verdict in that party's favor. Anderson v. Liberty Lobby, 477 U.S. 242, 257 (1986).
On summary judgment, the court draws all reasonable factual inferences in favor of the non-movant. Id. at 255. In deciding a motion for summary judgment, "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge." Id. However, conclusory and speculative testimony does not raise genuine issues of fact and is insufficient to defeat summary judgment. See Thornhill Publ'g Co., Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979).
I must decide whether the mobilization work performed by plaintiffs is covered work under California's prevailing wage law. This determination turns on a question of statutory interpretation: whether such offsite work is "in the execution of a public works contract. Cal. Labor Code §§ 1772, 1774.
When interpreting state statutes, federal courts are bound by an interpretation of the law given by the state's highest court. Dyack v. Commonwealth of N. Mariana Islands, 317 F.3d 1030, 1034 (9th Cir. 2003). Where a state's highest court has not addressed an issue, the federal court "must predict how that court would interpret the statute." Id. "The object that a statute seeks to achieve is of primary importance in statutory interpretation." Lusardi Constr. Co. v. Aubry, 1 Cal. 4th 976, 987 (1992). Mt. Hawley Ins. Co. v. Lopez, 215 Cal. App. 4th 1385, 1396 (Cal. Ct. App. 2013) (internal punctuation and citations omitted). The second and third steps are only taken when the meaning of the words is not clear. Id. at 1397.
The California Labor Code requires "all workers employed on public works" be paid the prevailing wage rate determined by the DIR Director. Cal. Labor Code §§ 1770, 1771. "Workers employed by contractors or subcontractors in the execution of any contract for public work are deemed to be employed upon public work." Cal. Labor Code § 1772. A public works contractor must pay "all workmen employed in the execution of the contract" no less than the prevailing wage rate. Cal. Labor Code § 1774.
California courts addressing the scope of the prevailing wage law have found that, from the statutory language itself, the legislature's "intent concerning geographical limitations on the application of the prevailing wage law is ambiguous." Sheet Metal Workers' Int'l Ass'n, Local 104 v. Duncan, 229 Cal. App. 4th 192, 204 (2014), review denied (Nov. 19, 2014).
The California Supreme Court has explained:
The overall purpose of the prevailing wage law . . . is to benefit and protect employees on public works projects. 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.
Lusardi Constr. Co. v. Aubry, 1 Cal. 4th 976, 987 (1992).
Additionally, the California Labor Code provides that "[i]t is the policy of this state to vigorously enforce minimum labor standards in order to ensure employees are not required or permitted to work under substandard unlawful conditions or for employers that have not secured the payment of compensation, and to protect employers who comply with the law from those who attempt to gain a competitive...
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