Silverstreak v. State Dept. of Labor
| Decision Date | 29 March 2007 |
| Docket Number | No. 76695-9.,76695-9. |
| Citation | 159 Wn.2d 868,154 P.3d 891 |
| Parties | SILVERSTREAK, INC.; T-Max Construction; Stowe Construction; Gary McCann Trucking; and Buckley Recycling, Respondents, v. WASHINGTON STATE DEPARTMENT OF LABOR AND INDUSTRIES, Petitioner. |
| Court | Washington Supreme Court |
Anastasia R. Sandstrom, Amanda J. Goss, Attorney General's Office, Seattle, WA, for Petitioner.
John P. Ahlers, Ahlers & Cressman PLLC, Anne-Marie E. Sargent, Connor & Sargent PLLC, Seattle, WA, for Respondents.
Lawrence H. Vance, Jr, Winston & Cashatt, Spokane, for Amicus Curiae Associated General Contractors of Wash., The Inland Northwest Associated General Contractors.
¶ 1 In this case, we are asked to determine whether a group of workers who drove end-dump trucks for the respondents, five suppliers of fill materials (Suppliers), on the first phase of construction of a runway at Sea-Tac Airport is entitled to be paid prevailing wages.1 Division One of the Court of Appeals concluded that the end-dump truck drivers' activities at the work site did not involve participation in the incorporation of the delivered materials into the project under construction. Thus, the Court of Appeals held that the workers did not qualify to be paid prevailing wages under Washington's prevailing wage act and the governing regulation, WAC 296-127-018.
¶ 2 We hold that the Court of Appeals erred in applying the canon of ejusdem generis to limit the scope of the prevailing wage act's coverage to only those activities similar to spreading, leveling, or rolling. Consequently, we uphold the Department of Labor and Industries' (the Department) broader construction of the governing regulation and conclude that the end-dump truck drivers did participate in the incorporation of fill material into the project. However, because the Department's present position on the applicability of the prevailing wage act to the end-dump truck drivers' activities is inconsistent with the position it adopted in its 1992 policy memorandum and with subsequent representations it made to the Suppliers, we conclude that the Department is estopped from enforcing its order. Therefore, we affirm, though on different grounds, the Court of Appeals' determination that the end-dump truck drivers employed by the Suppliers are not entitled to prevailing wages.
¶ 3 This case stems from work performed between May and December 1998 at the Sea-Tac third runway embankment (the Third Runway Project). The project involved construction of an embankment, using roughly 800,000 cubic yards of delivered fill material. City Transfer of Kent, Inc. (CTI) bid on the project, assuming payment of market wages for end-dump truck drivers.2 After being awarded the contract, CTI contracted with Suppliers to supply and deliver fill materials for the embankment. Suppliers paid all of their end-dump truck drivers market wages for delivering the fill.
¶ 4 In preparing their bid, Suppliers relied upon a 1992 department policy memorandum on "Delivery of Materials Under WAC 296-127-018," which explains which dumping activities trigger the requirements of the prevailing wage act. Administrative Record (AR) at 2372. Suppliers also insist they relied upon oral representations made by the head of the prevailing wage section of the Department concerning which dumping activities trigger prevailing wage requirements. Subsection (4) of the department policy memorandum provides, in pertinent part: "Delivery of materials using a method in which the truck does not roll while the material is placed, or rolls only enough distance to allow the materials to exit the truck, does not include incorporation of the materials into the job site." Id.
¶ 5 Roughly one year after completion of the project and after Suppliers had been paid, the Department issued a notice of violation under RCW 39.12.020, part of Washington's prevailing wage act, along with a letter stating that prevailing wages were owed to the end-dump truck drivers.
¶ 6 The prevailing wage act requires payment of prevailing wages for work "upon all public works." RCW 39.12.020. Prevailing wages are not based upon competitive prices of the marketplace, but are instead calculated by the Department as equal to the (higher) wages paid in the largest city of the county— here, Seattle. RCW 39.12.010(2). In this case, the difference between "prevailing wage" and wages actually paid to the end-dump truck drivers was approximately $500,000. Suppliers appealed the Department's violation notice administratively.
¶ 7 The administrative law judge held that the end-dump truck drivers were not entitled to prevailing wages because their method of delivery did not amount to "incorporation" as that term is used in WAC 296-127-018. The administrative law judge found that the end-dump truck drivers' activity was carefully orchestrated by CTI's employees to minimize their time on the site, and "amounted to nothing more than a method of delivery." AR at 3335. The Department appealed to the Department Director (Director).
¶ 8 The Director reversed, holding that the end-dump truck drivers were entitled to prevailing wages. The Director concluded that the end-dump truck drivers participated in incorporation of the fill materials into the project when they deposited the fill material directly onto the project site, rather than to a stockpile, at the direction of CTI employees who were blading and spreading the deposited fill materials. The Director also concluded that the drivers compacted fill materials by driving over the project site as they entered and exited. Each of these conclusions qualified the drivers for prevailing wages. Suppliers appealed to King County Superior Court.
¶ 9 The superior court reversed the Director's conclusion that the drivers compacted the fill materials by merely driving over them.3 The superior court did, however, sustain the Director's determination that the end-dump truck drivers required prevailing wages because they participated in the incorporation of fill materials into the project by dumping the fill directly onto the embankment, "resulting in greater efficiencies and cost savings." Clerk's Papers (CP) at 2. Suppliers appealed the superior court's latter ruling to the Court of Appeals.
¶ 10 Division One of that court reversed, holding that delivering fill materials directly onto the work under construction does not amount to "participat[ion] in any incorporation" as that phrase is used in WAC 296-127-018(2)(a). See Silverstreak, Inc. v. Dep't of Labor & Indus., 125 Wash.App. 202, 211-14, 104 P.3d 699, review granted, 155 Wash.2d 1001, 122 P.3d 185 (2005). It reasoned that "proper interpretation of the governing regulation requires that the participation of end-dump truck drivers in the incorporation of fill must be similar to one or more of the[] three limiting terms [in WAC 296-127-018(2)(a)]": spreading, leveling, or rolling. Id. at 213, 104 P.3d 699. The Court of Appeals noted there was no dispute that the end-dump truck drivers' activities consisted solely of dumping fill while remaining inside their trucks, they were on-site for approximately 5 to 15 minutes per delivery, and the fill was delivered directly onto the embankment. These actions, it ruled, did not constitute participation in the incorporation of the materials by means of spreading, leveling, rolling, or any similar activity. Id. at 217, 104 P.3d 699 ().
¶ 11 As a result of that holding, the Court of Appeals declined to reach Suppliers' claim that the Department should be estopped from requiring payment of the higher "prevailing wage" due to its 1992 policy memorandum and representations made by the wage division head prior to the Suppliers' bid. That court also denied Suppliers' request for attorney fees, finding the Department's actions reasonable and substantially justified. Suppliers were, however, awarded costs, to which the Department conceded they were entitled.
¶ 12 The Department sought review by this court. We granted its petition and also agreed to hear Suppliers' equitable estoppel claim and its request for fees on appeal.
¶ 13 The Washington Administrative Procedure Act (WAPA), chapter 34.05 RCW governs review of a final decision by the director of a department. RCW 34.05.510. A party will be afforded relief from an adverse administrative decision when the law is erroneously interpreted or applied by the agency or when the order is not supported by substantial evidence on the record. RCW 34.05.570(3)(d)-(e). In reviewing an administrative decision, this court sits in the same position as the Court of Appeals and the superior court, applying the WAPA standards directly to the record considered by the agency. Tapper v. Employment Sec. Dep't, 122 Wash.2d 397, 402, 858 P.2d 494 (1993). An agency's findings of fact and its regulatory interpretations are granted deference. Everett Concrete Prods., Inc. v. Dep't of Labor & Indus., 109 Wash.2d 819, 823, 748 P.2d 1112 (1988). However, questions of law are reviewed de novo. Whether the law was correctly applied to the facts as found by the agency is also a question of law that we review de novo. Tapper, 122 Wash.2d at 403, 858 P.2d 494.
¶ 14 The prevailing wage act provides that "[t]he hourly wages to be paid to laborers, workers, or mechanics, upon all public works ... of the state or any ... political subdivision ... shall be not less than the prevailing rate of wage for an hour's work in the same trade or occupation in the locality within the state where such labor is...
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