Metro. Movers Ass'n, Inc. v. Liu

• Decision Date: 15 May 2012
• Docket Number: 6850 112694/10
• Citation: 2012 NY Slip Op 03756
• Parties: In re Metropolitan Movers Association, Inc., et al., Petitioners-Respondents, v. John C. Liu, etc., Respondent-Appellant, Teamsters Joint Council 16, Service Employees International Union - Local 32-B-J, Amicus Curiae.
• Court: New York Supreme Court — Appellate Division

2012 NY Slip Op 03756

In re Metropolitan Movers Association, Inc., et al., Petitioners-Respondents,

v.John C. Liu, etc., Respondent-Appellant, Teamsters Joint Council 16, Service Employees International Union - Local 32-B-J, Amicus Curiae.

6850 112694/10

Appellate Division of the Supreme Court of the State of New York

ENTERED: MAY 15, 2012

Andrias, J.P., Saxe, Acosta, Freedman, Richter, JJ.

Michael A. Cardozo, CorporationCounsel, New York (Drake A. Colley of counsel), for appellant.

Kostelanetz & Fink, LLP, New York (Claude M. Millman of counsel), for respondents.

Cohen, Weiss and Simon LLP, New York (Bruce S. Levine of counsel), for amicus curiae.

Judgment, Supreme Court, New York County (Alice Schlesinger, J.), entered May 6, 2011, which, to the extent appealed from, granted the petition pursuant to CPLR article 78 to annul respondent Comptroller's July 1, 2010 prevailing wage schedule for building service employees engaged as furniture movers and remanded the matter to the Comptroller to determine a new prevailing wage schedule, unanimously affirmed, without costs.

Petitioners, a group of companies providing moving services and a not-for-profit advocate for the New York City moving industry, brought this Article 78 proceeding against respondentJohn C. Liu, Comptroller of the City of New York, seeking to set aside his July 1, 2010 prevailing wage schedule for furniture movers engaged on building service contracts with the City.Petitioners maintained that the methodology used by the Comptroller to set the wage schedule was irrational, arbitrary and capricious, and resulted in wages inordinately higher than those prevailing in the industry.The Comptroller opposed the petition, asserting that his method for determining the prevailing wages was sound and within his broad discretion.The motion court granted the petition to the extent of annulling the wage schedule and remanding the matter to the Comptroller to determine a new schedule.The Comptroller appeals and we now affirm.

Article 9 of the Labor Law sets forth the prevailing wage requirement for building service employees, including furniture movers (seeLabor Law § 230[1]).Specifically, Labor Law § 231(1) provides that "[e]very contractor shall pay a service employee under a contract for building service work a wage of not less than the prevailing wage in the locality for the craft, trade or occupation of the service employee.""Prevailing wage" is defined as "the wagedetermined by the fiscal officer to be prevailing for the various classes of building service employees in the locality"(Labor Law § 230[6]).¹

Each year, the Comptroller publishes a schedule setting forth the prevailing wage rates for various trade classifications engaged in work on City contracts.The purpose of the schedule is to establish the wage rate that employers must pay their employees when contracting to provide services to the City.On April 28, 2010, in order to determine the July 2010 prevailing wage schedule for furniture movers, the Comptroller mailed surveys to all known New York State licensed commercial moving industry employers operating in the City.The surveys sought information about how many employees worked with the company, the hourly wages for those employees, and the employees' labor union affiliations, if any.

Approximately 95 moving companies responded to the survey, representing about 2,241 employees.According to the petition, all statistical indicators in the data collected by the Comptroller showed that the wages that actually prevailed in the region were between $10 and $20 per hour.The average wage received by movers surveyed was $19.19; the median wage was $15.00; and the mode (i.e., the most commonly paid wage) was $12.00.

On July 1, 2010, the Comptroller published the final prevailing wage schedule for building service employees for the 2010-2011 fiscal year.The hourly wage rates for furniture movers in the Comptroller's schedule are significantly higher than those reflected in the survey results.They range from $30.63 to $38.90, based on the worker's status as a "driver" or "helper," as well as the worker's seniority ² .Instead of looking to the survey results to determine the prevailing wage, the Comptroller simply used the wages earned by workers covered under the collective bargaining agreement of Local 814 of the International Brotherhood of Teamsters (Local 814).The Comptroller maintains that he used Local 814's agreement because the union represented at least 30% of the moving industry's work force,³ and that this methodology was permitted under the prevailing wage provisions of the Labor Law.

The motion court properly granted the petition to annul the Comptroller's prevailing wage schedule.In an article 78 proceeding, an administrative action can be set aside if it was affected by an error of law, was made in violation of lawful procedure, or was arbitrary, capricious or an abuse of discretion (CPLR 7803).An action is arbitrary if it "is without sound basis in reason and is generally taken without regard to the facts"(Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale and Mamaroneck, Westchester County, 34 NY2d 222, 231[1974]).Although deference is normally given to an administrative agency's determination, where such determination "runs counter to the clear wording of a statutory provision, it should not be accorded any weight"(Roberts v Tishman Speyer Props., L.P., 13 NY3d 270, 285[2009][quotation marks omitted]).

We find that the Comptroller's use of Local 814's collective bargaining agreement as the sole basis for determining the prevailing wage schedule was arbitrary, capricious, and lacked a rational basis.There is no question that the survey results show that workers in the moving industry received much lower wages than those listed on the Comptroller's schedule.The data compiled by the Comptroller indicates that wages of between $10 and $20 per hour were prevailing in the moving industry, roughly half of the $31 to $39 range that he adopted.According to the survey results, over 70% of the workers received less than $20.63 per hour, a wage that is a full $10 less than...