Drake v. Molvik & Olsen Electric, Inc.

726 P.2d 1238, 107 Wash. 2d 26

• Court: Washington Supreme Court
• Decided: October 16, 1986
• Docket: 51398-8, 51399-6
• Status: Published

Opinions

Brachtenbach, J.

The question is whether a state statute, RCW 39.12, which mandates payment of prevailing wages on public works, applies to a federally funded construction project by the Seattle Housing Authority (SHA). The trial court granted summary judgment for the SHA. We reverse.

Resolution of the issue involves interpretation of several state statutes and possible federal preemption.

First, the factual setting. The SHA is a housing authority created pursuant to RCW 35.82. The SHA decided to build an apartment complex for low income elderly persons. The project was entirely funded by federal money administered by the United States Department of Housing and Urban Development (HUD). 42 U.S.C. § 1437 et seq. Plaintiffs were employees of a subcontractor. They were paid less than the prevailing wages which would have been required by the state statute, RCW 39.12.

Now, the law. In 1945, the Legislature mandated that wages paid to laborers, workmen or mechanics upon all public works of the state, county, municipality or political subdivision shall not be less than the prevailing rate in the same trade or occupation in the locality. RCW 39.12.020. The statute provides a methodology for determination of the various elements of the prevailing wage rate, but these are matters not here in dispute. RCW 39.12.

The first issue is whether the SHA is within the scope of the prevailing wages statute. There is no doubt that a housing authority entity is within the statutory scope of the statutory scheme. RCW 39.04.010, dealing with public works, is so inclusive as to include every governmental body.

However, the triggering condition of the statute is that a public work exists only if the work is at "the cost of the state [or other covered entity] or which is by law a lien or charge on any property therein". RCW 39.04.010.

The SHA argues that since the project was totally funded by the federal government and the contractor and the subcontractor complied with the federal minimum wage law, cited hereafter, the state law does not apply. The federal law is the Davis-Bacon Act, 40 U.S.C. § 276a.

The clear answer is that the federal law provides that the wages shall not be less than those determined under the Davis-Bacon Act. 42 U.S.C. § 1437j (1978). It does not prohibit wages which are more than required by the Davis-Bacon Act.

In fact the contract between HUD and the SHA recognizes the very possible obligation to pay wages higher than required by the Davis-Bacon Act. The contract provides that if the contractor or any subcontractor finds it necessary to exceed the contracted wages, such excess shall not increase the contractual amount due. Thus the contractor or the subcontractor and finally the SHA may have to pay more than the federally funded contract amount. That is a legislative problem, not one for judicial resolution.

To summarize to this point, we conclude that the SHA is within the ambit of the public works prevailing wage statute. The Legislature was very specific in a 1977 amendment when it stated "[a] 11 public works . . . shall comply with . . . RCW 39.12.020." Laws of 1977, 1st Ex. Sess., ch. 177, § 1.

Our result is consistent with an opinion of the Attorney General on this precise issue. AGO 2 (1983). That analysis is correct and we incorporate it by reference. The source of funding does not determine the applicability of the prevailing wage statute. We recognize the practical difficulties of the conflict between federal funding and the consequences of the state wage law. However, that is a problem which must be solved by the Legislature and/or Congress.

The SHA concedes with candor that this is not a preemption issue so that question is not addressed.

We concur with the Attorney General who appeared as amicus curiae that the Davis-Bacon Act and the state statute serve a similar purpose, and both should be enforced. United States v. Binghamton Constr. Co., 347 U.S. 171, 98 L. Ed. 594, 74 S. Ct. 438, reh'g denied, 347 U.S. 940, 98 L. Ed. 1089, 74 S. Ct. 625 (1954).

Reversed.

Dolliver, C.J., and Utter, Dore, Pearson, Andersen, Goodloe, and Durham, JJ., concur.