Burgio & Campofelice, Inc. v. NYS Dep't of Labor

107 F.3d 1000
CourtCourt of Appeals for the Second Circuit
DecidedMarch 4, 1997
DocketNo. 233, Docket 96-7210
StatusPublished
Cited by1 cases

This text of 107 F.3d 1000 (Burgio & Campofelice, Inc. v. NYS Dep't of Labor) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burgio & Campofelice, Inc. v. NYS Dep't of Labor, 107 F.3d 1000 (2d Cir. 1997).

Opinion

FEINBERG, Circuit Judge:

Defendants New York State officials (collectively defendants or the State), responsible for enforcing the state labor statute under challenge here, appeal from a judgment of the United States District Court for the Western District of New York, John T. Cur-tin, J., granting the motion of plaintiff-appel-lee Burgio and Campofeliee, Inc. (Burgio) for summary judgment. Burgio and Campofelice, Inc. v. New York Dep’t of Labor, 914 F.Supp. 931 (W.D.N.Y.1996). Burgio, a general contractor, brought this action (1) to enjoin the State from enforcing New York Labor Law §§ 220, 223 (McKinney 1986 ed. and Supp.1997) (the prevailing wage law), against Burgio for wage supplements that Burgio’s subcontractor allegedly failed to pay its employees; and (2) to declare the prevailing wage law preempted by federal law. - Relying on our decision in General Electric Co. v. New York State Dep’t of Labor, 891 F.2d 26 (2d Cir.1989) (GE I), the district court held that the state law was preempted under the Supremacy Clause of the United States Constitution, art. VI, cl. 2, and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq. The State unsuccessfully argued that it had substantially revised those aspects of its enforcement strategy that, according to GE I, subjected the prevailing wage law to ERISA preemption. The judge rejected this assertion. Because we disagree with the district court’s treatment of the State’s claims regarding its enforcement strategy, we vacate and remand for further proceedings consistent with this opinion.

I. Background

A. The Prevailing Wage Law

Section 220 of the New York Labor Law was originally designed to insure that employees on public works projects were paid wages equivalent to the prevailing rate of similarly employed workers in the locality. Because the statute made no reference to fringe benefits, bidders on public works contracts who provided no such benefits were in a position to underbid those who did. Accordingly, section 220 was amended in 1966 to require that all bidders on public works contracts assume the cost of prevailing wage supplements in the locality, N.Y.Lab. Law § 220(3), thus presumably putting all bidders on an even footing. GE I, 891 F.2d at 28.

Wage supplements are defined to include “all remuneration for employment paid in any medium other than cash, or reimbursement for expenses, or any payments which are not Vages’ within the meaning of the law, including, but not limited to, health, welfare, non-occupational disability, retirement, vacation benefits, holiday pay, life insurance, and apprenticeship training.” N.Y.Lab. Law § 220(5)(b). A fiscal officer, who in most cases is the Commissioner of Labor, is authorized to ascertain and determine the prevailing rates of wages and wage supplements for all public works. N.Y.Lab. Law § 220(3) (third undesignated paragraph). Those prevailing rates are determined by reference to collective bargaining agreements between labor organizations and employers, provided such agreements cover at least 30 percent of the workers in the same trade or occupation in the locality where the work is to be performed. N.Y.Lab. Law §§ 220(5)(a), 220(3) (second undesignated paragraph), 220(5)(c).

The statute makes the prime contractor on a public works project financially responsible for a subcontractor’s failure to comply with the requirements of § 220, and authorizes the fiscal officer to bring an action to enforce its provisions. N.Y.Lab. Law § 223.

Exactly how the wage supplements requirement is applied is a crucial matter in dispute between the parties. When we decided GE I, it appears that the State followed a “line-item” approach whereby the Commissioner of Labor prescribed prevailing benefits levels for each individual type of wage supplement. In each instance where the cost of a supplement provided for in an employment contract, did not correspond with the cost of a similar prevailing local benefit, section 220 required the employer either to bring the cost of its prescribed benefit into equivalence with the cost of the local prevailing one or to pay the additional cost directly to the employee-beneficiaries. The employer was not permitted to substitute one form of [-580]*-580supplement for another, and received no credit under the statute for the cost of providing benefits not deemed to be “prevailing benefits” by the Commissioner. 891 F.2d at' 27. The Commissioner’s position was in accord with the New York Supreme Court, Appellate Division, which held that “the statute indicates that the Legislature intended that the Commissioner of Labor, not the contractor, determine the supplements to be provided and that the employee receive either the listed benefits or equivalent cash (or a combination of both).” A.L. Blades & Sons, Inc. v. Roberts, 136 A.D.2d 926, 927, 524 N.Y.S.2d 912 (4th Dept.1988) (mem.) The court in GE I concluded that the prevailing wage law applied in this manner was preempted by ERISA.

Burgio argues that the State’s enforcement procedure during 1992-93, the time-frame relevant here, did not differ from the enforcement procedure used in GE I. The State counters that it abandoned its “line-item” policy in response to GE I, and adopted what it calls a “total package” policy.1 Under this “new” approach, the State claims that it “simply requires employers to match the total cost of all prevailing supplements. Employers are no longer required to match one-for-one the specific prevailing rate for each prevailing supplement, or even to provide each type of prevailing supplement.” Thus, according to the State, the total package approach avoids those requirements that led the GE I court to find preemption. The State claims that it used this “total package” approach in conducting its investigations in this ease.

The district court did not make an explicit finding on whether the approach claimed by the State was in fact used during the relevant period, believing that the point, even if established, would not sufficiently distinguish this case from GE I. Burgio & Campofelice, 914 F.Supp. at 936.

B. The Public Works Contract

In February 1992, Burgio entered into a public works construction contract with the Williamsville Central School District in the amount of $8,130,273 to construct a new middle school. The following month, Burgio subcontracted with another company (the subcontractor) to perform the masonry on the project, at a cost of $2,398,000. Masonry work commenced shortly thereafter and continued through mid-December 1992, when the subcontractor informed Burgio that certain union-related benefits had not been paid. Burgio was subsequently served with a notice of levy by the Internal Revenue Service listing the subcontractor and another company.

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Burgio And Campofelice, Inc. v. Nys Dep't Of Labor
107 F.3d 1000 (Second Circuit, 1997)

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