Mendoza v. Fonseca McElroy Grinding Co.

• Decision Date: 15 January 2019
• Docket Number: No. 17-15221,17-15221
• Citation: 913 F.3d 911
• Parties: Leopoldo Pena MENDOZA; Jose Armando Cortes; Elviz Sanchez, Plaintiffs-Appellants, v. FONSECA MCELROY GRINDING CO., INC.; Granite Rock Company, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

913 F.3d 911

Leopoldo Pena MENDOZA; Jose Armando Cortes; Elviz Sanchez, Plaintiffs-Appellants,

v.FONSECA MCELROY GRINDING CO., INC.; Granite Rock Company, Defendants-Appellees.

No. 17-15221

United States Court of Appeals, Ninth Circuit.

Filed January 15, 2019

ORDER CERTIFYING QUESTION TO THE CALIFORNIA SUPREME COURT

This appeal requires us to resolve whether offsite mobilization work conducted in connection with a public works project is performed "in the execution of [a] contract for public work" such that it entitles workers to prevailing wages pursuant to the California Labor Code. Cal. Lab. Code §§ 1771 – 72. Whether the scope of the prevailing wage law is expanded or limited, the answer to this question could have a significant impact on California workers.

We find no controlling precedent in the decisions of the California Supreme Court or Courts of Appeal, see Cal. R. Ct. 8.548(a)(2), and "considerations of comity and federalism suggest that the court of last resort in California, rather than our court, should have the opportunity to answer the question in the first instance." Busker v. Wabtec Corp. , 903 F.3d 881, 882 (9th Cir. 2018). We therefore respectfully ask the Supreme Court of California to exercise its discretion to decide the certified question set forth in Part I of this order.

I. Certified Question

Pursuant to Rule 8.548 of the California Rules of Court, we request that the California Supreme Court answer the following question of state law:

Is operating engineers' offsite "mobilization work"—including the transportation to and from a public works site of roadwork grinding equipment—performed "in the execution of [a] contract for public work," Cal. Lab. Code § 1772, such that it entitles workers to "not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is performed" pursuant to section 1771 of the California Labor Code ?

The Court may reformulate our question, and its exposition of the issues involved should not be limited by the question's phrasing. Cal. R. Ct. 8.548(f)(5). We will accept and follow the Court's decision. Cal. R. Ct. 8.548(b)(2).

II. Background

Plaintiffs-Appellants Leopoldo Pena Mendoza, Elviz Sanchez, and Jose Armando Cortes (Plaintiffs) are operating engineers and members of Operating Engineers Local No. 3. They worked on grinding crews, using milling equipment to break up and crush asphalt roadbeds so that new roads could be constructed. At times, their work duties included what they referred to as "mobilization" work, which

entailed loading milling machines, which w[ere] stored at [a] permanent yard or in offsite storage locations, onto a lowbed trailer; tying down or otherwise securing the heavy equipment onto the lowbed trailer; performing a light, brake, and fluid level check of a semi-truck used to transport the heavy equipment; driving a transport truck transporting the milling machine to a construction jobsite; and driving the transport truck transporting the milling machine back to [the] permanent yard.

As part of this mobilization process, Plaintiffs reported to a designated yard where the equipment was housed, and then performed the maintenance and transportation work. Neither the permanent yard nor the offsite storage locations depended on any public works project for their existence.

Defendant-Appellee Fonseca McElroy Grinding Co. Inc. (FMG), a roadwork construction company, was acquired by Defendant-Appellee Granite Rock Company (Granite Rock, and together with FMG, Defendants) in 2014. FMG and Granite Rock were both signatory parties to the Operating Engineers Local No. 3 Master Agreement for Northern California (Master Agreement). In 2010, FMG entered into an additional Memorandum of Agreement (MOA) with Local No. 3, which provided for a "Lowbed Transport" wage rate for mobilization work; this rate for offsite work was lower than the Master Agreement rates for onsite construction. Granite Rock was also a signatory to the MOA.

Plaintiffs worked for FMG and then Granite Rock, including on public works construction projects, and received compensation based on the Master Agreement and MOA. Accordingly, although they received a prevailing wage for onsite construction on public works projects, they were not paid a prevailing wage for offsite mobilization work. Plaintiffs estimate that "[t]he ballpark difference between the two overtime rates in August [ ] 2012 was $67.72 (prevailing wage) and $23.89 (lowbed transportation) for an underpayment of $38.38 in the base pay." Defendants note that "[t]he public works contracts under which Plaintiffs worked did not specify the daily schedule for Granite Rock's workers," and "[t]hus Granite Rock determined whether [they] would report directly to the construction jobsite or its yard" and "what tasks, if any, [they] would perform after completing their jobsite work."¹

On November 9, 2015, Mendoza brought claims under the Fair Labor Standards Act and California labor laws for nonpayment of wages. Three months later, he, along with Sanchez and Cortes, filed an amended complaint.

The parties addressed the dispute that forms the basis of this appeal through cross-motions for partial summary judgment, which the district court heard on October 26, 2016. On November 28, 2016, the court entered an order in which it concluded that the offsite mobilization of equipment was not "in the execution" of a public works contract. Mendoza v. Fonseca McElroy Grinding Co. , No. 15-cv-05143-WHO, 2016 WL 6947552, at *1 (N.D. Cal. Nov. 28, 2016). Following this determination, the parties settled all remaining issues, except the dispute now before us.

A timely appeal to this court followed, raising the question of California law posed in Part I.

III. Explanation of Request for Certification

Under California law, "not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is performed ... shall be paid to all workers employed on public works." Cal. Lab. Code § 1771. This prevailing wage requirement applies to "[w]orkers employed by contractors or subcontractors in the execution of any contract for public work ." Id. § 1772 (emphasis added).

The California Supreme Court has explained that

[t]he 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, 4 Cal.Rptr.2d 837, 824 P.2d 643, 649 (1992). It has also emphasized that the prevailing wage law should be construed liberally. City of Long Beach v. Dep't of Indus. Relations , 34 Cal.4th 942, 22 Cal.Rptr.3d 518, 102 P.3d 904, 908 (2004).

On appeal, we are asked to determine whether Plaintiffs were employed "in the execution of" a public works contract when they performed offsite mobilization work, including maintenance and transportation of equipment.

A. Related Precedent

We note, as did the district court, that California courts have not previously addressed the applicability of the prevailing wage statute to offsite mobilization work performed by workers employed on public works projects. See Mendoza , 2016 WL 6947552, at *1. However, the analytical framework developed in two California Court of Appeal decisions— Williams v. SnSands Corporation , 156 Cal.App.4th 742, 67 Cal.Rptr.3d 606 (2007), and Sheet Metal Workers' International Association, Local 104 v. Duncan , 229 Cal.App.4th 192, 176 Cal.Rptr.3d 634, 650 (2014) —might provide guidance.

In Williams , the Court of Appeal addressed whether a material subcontractor's truck drivers who hauled materials away from a public works site were employed "in the execution of" a public works contract or, like bona fide material suppliers, were exempt from the prevailing wage requirement. 67 Cal.Rptr.3d at 610, 613–14. To resolve this issue, the court explained that it needed to determine "the role the transport of the materials plays in the performance or ‘execution’ of the public works contract." Id. at 613. It noted that

[t]he familiar meaning of "execution" is "the action of carrying into effect (a plan, design, purpose, command, decree, task, etc.); accomplishment"; "the act of carrying out or putting into effect"; "the act of carrying out fully or putting completely into effect, doing what is provided or required." Therefore, the use of "execution" in the phrase "in the execution of any contract for public work," plainly means the carrying out and completion of all provisions of the contract.

Id. at 611 (citations omitted) (first quoting 5 Oxford English Dictionary 521 (2d ed. 1989); then quoting Black's Law Dictionary 405 (8th ed. 2004); and then quoting Webster's 10th New Collegiate Dictionary 405 (2001) ). Borrowing from a previous material supplier exemption case, O.G. Sansone Co. v. Dep't of Transp. , 55 Cal.App.3d 434, 127 Cal.Rptr. 799 (1976),² the court distilled three factors to consider: (1) "whether the transport was required to carry out a term of the public works contract"; (2) "whether the work was performed on the project site or another site integrally connected to the project site"; and (3) "whether work that was performed off the actual construction site was nevertheless necessary to accomplish or fulfill the contract." Williams , 67 Cal.Rptr.3d at 613. Applying these factors, the court concluded that the truckers' off-hauling work was "unrelated" to the public works contracts and that the truckers, who were not otherwise employed...