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Department of Labor v. Berlanti

Decided: June 8, 1984.

DEPARTMENT OF LABOR, PETITIONER-RESPONDENT,
v.
SAMUEL BERLANTI, RESPONDENT-APPELLANT, AND SUFFOLK COUNTY CONTRACTORS, INC., RESPONDENT



On appeal from Final Decision of the Commissioner of Labor.

Ard, Morton I. Greenberg and Trautwein. The opinion of the court was delivered by Trautwein, J.A.D.

Trautwein

Appellant, Samuel Berlanti, president of Suffolk County Contractors, Inc., appeals from a final decision of the Commissioner of Labor placing him on a list of contractors and subcontractors (including Suffolk) debarred from bidding for public works contracts for a period of three years because he failed to pay his workers the prevailing wage pursuant to N.J.S.A. 34:11-56.37 and 34:11-56.38, while completing a public works contract for the construction of a sanitary sewer collector system for Wall Township.

The main question in this appeal is novel. Does the debarment provision of the New Jersey Prevailing Wage Act, N.J.S.A. 34:11-56.25, et seq., apply to individuals who are the corporate officers of the offending corporate contractor or subcontractor? In this connection appellant raises five issues: Whether there is statutory authority to support the debarment of corporate officials responsible for paying the prevailing wage; whether the commissioner's interpretation of the statute so as to permit corporate official debarment constitutes an improper amendment of the prevailing wage act; whether the commissioner's debarment of a corporate officer was invalid

because no administrative regulations cover such a proceeding; whether Berlanti's right to due process was violated by the debarment procedure and whether the "proven facts" support Berlanti's debarment.

The facts in this case are undisputed.

On June 15, 1978 Newark Construction, Inc., was awarded a public works contract in the amount of nearly one and a half million dollars by the governing body of Wall Township for the purpose of constructing a sanitary sewer collector system. United States Fidelity and Guarantee Company (USFG) was the surety on the contract and it executed a performance bond for the contract amount. Respondent Suffolk County Contractors, Inc. (Suffolk) was a subcontractor of Newark Construction, Inc. which worked on the project in January 1980. When Newark Construction defaulted on the contract, USFG was required to complete the job. Suffolk completed the project acting as USFG's subcontractor. Suffolk's employees worked on the project in June and July 1980. USFG paid Suffolk on a time and material basis, plus 20%.

An investigation of Suffolk's payment practices was instigated by a complaint made by one of Suffolk's employees to the public contracts section of the office of wage and hour compliance of the New Jersey Department of Labor. Michael McCarthy, a field representative with the public contract section, asked Suffolk for its payroll records on the Wall Township sewer collector system project. He compared the wage rates listed on the payroll records with the prevailing wage rate determinations for Monmouth County as of March 1, 1979, issued by the Department of Labor, and found that twenty workers were underpaid. According to McCarthy's calculations, Suffolk owed these employees a total of $5,418.43 in unpaid wages. On January 9, 1981 Suffolk was sent a "Statement of Amounts Indicated as Due Employees" which reflected McCarthy's calculation.

On February 25, 1982 Rodger Bodman, New Jersey Commissioner of Labor, filed a complaint against Suffolk and USFG on behalf of Suffolk's employees in the Superior Court, Law Division, seeking payment of the unpaid prevailing wages due those employees with respect to the Wall Township project. Samuel Berlanti was not individually named as a defendant in the commissioner's suit. Cross-motions for summary judgment were made by the parties. Based on the pleadings, briefs and affidavits submitted to the court, Judge Yaccarino entered an order for summary judgment in petitioner's favor on February 14, 1983 finding Suffolk and USFG jointly liable to the commissioner in the amount of $5,418.43; denied USFG's cross-motion for summary judgment and directed that USFG indemnify Suffolk for any and all payments made with respect to this action.

Both USFG and Suffolk appealed to the Appellate Division. These separate appeals were consolidated and by decision dated October 18, 1983 we affirmed Judge Yaccarino's order as set forth above. Roger Bodman, Commissioner of Labor v. Suffolk County Contractors, Inc. and United States Fidelity & Guaranty Company; Roger Bodman, Commissioner of Labor, State of New Jersey v. Suffolk County Contractors, Inc. and United States Fidelity & Guaranty Company; Appellate Division Docket Nos. A-3192-82T3' A-3355-82T3 (Consolidated).

In the meantime, in a letter dated August 18, 1982, Leonard Katz, supervisor of the public contract section, informed Berlanti that the investigation revealed that Suffolk had failed to pay prevailing wages to employees who performed work on six different public works projects, one of which was the Wall Township sewer collector system. Katz informed Berlanti that both his name and Suffolk's name would be placed on a list of debarred contractors and subcontractors pursuant to N.J.S.A. ...


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