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Department of Labor and Industry v. Union Paving and Construction Co.

Decided: April 12, 1979.

DEPARTMENT OF LABOR AND INDUSTRY, DIVISION OF WORKPLACE STANDARDS, PLAINTIFF-RESPONDENT,
v.
UNION PAVING AND CONSTRUCTION COMPANY, INC., DEFENDANT-APPELLANT



On appeal from final decision of Commissioner of Labor and Industry.

Lora, Michels and Larner. The opinion of the court was delivered by Lora, P.J.A.D.

Lora

Union Paving and Construction Company, Inc. (Union) appeals from the decision of the Commissioner of Labor and Industry to place appellant's name on a list of firms ineligible for public works contracts for failing to pay prevailing wages, pursuant to the debarment provisions of the Prevailing Wage Act, N.J.S.A. 34:11-56.25, et seq.

The act provides in pertinent part that any contractor or subcontractor "engaged in public works" contracts who is determined to have failed to pay its employees the prevailing wage, shall be listed by the Commissioner as ineligible for the award of any public contract during a three-year period from the date of listing. N.J.S.A. 34:11-56.37, 34:11-56.38. Union contends that this "blacklisting" is inapplicable and unlawful as to it because no "intentional violations" were committed. Alternatively, it argues that if the statute is applicable to unintentional acts, then it violates due process under State and Federal Constitutions. Lastly, Union contends that the Commissioner's action was arbitrary and an abuse of discretion.

Testimony adduced at an administrative hearing before a hearing officer indicated that Union had not paid the prevailing wage to certain employees on each of six projects. Union's president, Carmine Burdi, conceded that these violations had occurred.

The record shows that in September 1968 the City of Rahway awarded a contract to Union in the amount of $147,744 for the construction of a culvert. Examination revealed that six employees had been underpaid a total of $1,224.36, according to the then prevailing wage rates for their respective job classifications. A copy of this audit (or

"Statement of Amounts Indicated as Due Employees") was sent to appellant on June 9, 1972 with an accompanying request for payment to the Division. Union did not send its check to cover the deficiency until November 1973. On March 10, 1970 the Township of Union awarded a contract to Union in the amount of $103,077 for paving and reconstruction work on Oakland Avenue. A field audit in 1972 revealed that 24 employees on the project had been underpaid a total of $3,778.42, which deficiency was paid by Union in October 1974.

On August 21, 1975 the City of Linden awarded a contract to Union in the amount of $57,000 for the deepening and widening of Westbrook. A routine inspection and audit of the payroll records disclosed that three employees on the project had been underpaid a total of $1,577.25. Payment of the deficiency was made within a reasonable amount of time after the November 12, 1975 audit was sent to appellant.

On October 14, 1975 the Town of Westfield awarded a contract to Union in the amount of $105,000 for the construction of a detention basin at Fairview Cemetery. Routine inspection and subsequent examination of payrolls for that project revealed that three employees were due gross wages totalling $2,464.40. An audit dated August 26, 1976 was sent to Union and payment of the underpaid wages was received on September 8, 1976.

On May 18, 1977 the Township of Union awarded a contract to Union in the amount of $398,250 for the construction of a reinforced concrete flume and a detention basin. An onsite audit conducted incident to a routine inspection on October 23, 1977 disclosed that five workmen had been underpaid a total of $1,820.40. The audit was presented to appellant at his office that day, and payment made immediately to the field examiner.

The Union County Board of Freeholders on June 30, 1977 awarded Union a $158,669 contract for the replacement of an existing bridge over Westbrook in the City of Linden. Again, an on-site inspection of payroll records disclosed that

three employees on the project had been underpaid a total of $1,791.25. Payment of the deficiency was made at the time of the December 1977 audit.

Carmine Burdi, Union's president, testified that he had been the principal owner and operator of the company for about 26 years. During that time the company had principally been involved in construction work for private clients and governmental bodies. He admitted that there had been violations of the Prevailing Wage Act in each of the six aforementioned public projects. He conceded also that at all relevant times he was aware of the requirements of the act. The delays in meeting the demands for deficiency payments on the first two projects were attributed to the "bad shape" of the company's finances. The violations came about because "we turned over office help three or four times up to now" and "you just can't watch everything," although he knew that the company was responsible for full compliance with prevailing wage laws. From 1968 to 1971 appellant had 10 to 15 regular employees, which number fell to two employees over the last three to four years due to declining business. Furthermore, the bad bookkeeping system which contributed to the wage law infractions had since been corrected. He maintained that none of the violations had been intentional, and that the "blacklisting" of Union would put it out of business.

The New Jersey Prevailing Wage Act, N.J.S.A. 34:11-56.25 et seq. , was intended by the Legislature to protect both employees and employers:

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.

By ยง 3 (N.J.S.A. 34:11-56.27) the act is made applicable to every contract in excess of $2,000 ...


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