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Electronically Filed Supreme Court SCWC-XX-XXXXXXX 18-SEP-2025 10:03 AM Dkt. 34 OP
IN THE SUPREME COURT OF THE STATE OF HAWAI‘I
---o0o---
ECKARD BRANDES, INC., Respondent/Appellant-Appellee,
vs.
DEPARTMENT OF LABOR AND INDUSTRIAL RELATIONS, Respondent/Appellee-Appellee,
and
SCOTT FOYT, Petitioner/Intervenor-Appellant.
SCWC-XX-XXXXXXX
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (CAAP-XX-XXXXXXX; CASE NO. 1CC181000011)
SEPTEMBER 18, 2025
RECKTENWALD, C.J., McKENNA, EDDINS, AND DEVENS, JJ., AND CIRCUIT JUDGE VIOLA IN PLACE OF GINOZA, J., RECUSED *** FOR PUBLICATION IN WEST’S HAWAII REPORTS AND PACIFIC REPORTER ***
OPINION OF THE COURT BY RECKTENWALD, C.J.
I. INTRODUCTION
This case concerns a change in an agency’s
interpretation of a wage classification law, and whether an
employer, relying on the agency’s prior interpretation, may be
penalized for noncompliance with the agency’s subsequent
interpretation. We hold, under the circumstances of this case,
that the employer, Eckard Brandes Inc., may not be penalized.
Accordingly, we affirm the Intermediate Court of Appeals’ (ICA)
May 29, 2024 Judgment on Appeal.
II. BACKGROUND
Hawaiʻi Revised Statutes (HRS) chapter 104 governs
“Wages and Hours of Employees on Public Works” and regulates
labor practices for contractors and other entities that engage
in public works projects. HRS § 104-2(a) (2012) (“This chapter
shall apply to every contract in excess of $2,000 for
construction of a public work project[.]”). Like its federal
counterpart, the Davis-Bacon Act, 1 HRS chapter 104 requires every
laborer “performing work on the job site for the construction of
1 Originally enacted in 1931, the Davis-Bacon Act “set certain minimum labor standards for workers employed in federal contract construction.” Cong. Rsch. Serv., 94-408, The Davis-Bacon Act: Institutional Evolution and Public Policy (updated Nov. 30, 2007). Notably, the Act mandates that contractors must pay their employees no less than the locally prevailing wage. 40 U.S.C. § 3142(b).
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any public work project” to be paid “no less than [the]
prevailing wage[],” which is “established by the [Department of
Labor and Industrial Relations (DLIR)] director[.]” HRS § 104-
2(b).
DLIR regulations define “[c]onstruction of public
work” to include:
[W]ithout limitation new construction, reconstruction, development, improvement, alteration, repair, renovation, painting, decorating, dredging, shoring, simultaneous sewer inspection and repair, and any other activity performed by a laborer or mechanic employed at the site of a public work or at any property used by the contractor, dedicated for the performance of the contract, such as batch plants, borrow pits, fabrication plants, mobile factories, job headquarters, and tool yards. As used in this section, “other activity performed by a laborer or mechanic employed at the site” includes the following if the activity is an integral part of or is in conjunction with a construction contract, or if there is substantial construction activity involved in a supply, service, or other type of non- construction contract:
(1) Manufacturing or furnishing of materials, articles, supplies, or equipment on the job site;
(2) Warranty work except when done by the manufacturer on defective products or equipment;
(3) Demolition or excavation;
(4) Landscaping;
(5) Termite treatment; and
(6) Installation at the construction site of items or articles fabricated off-site, such as shelving, drapery, and communications equipment.
Hawaiʻi Administrative Rules (HAR) § 12-22-1 (eff. 1996). 2
2 HAR § 12-22-1 has since been amended effective July 23, 2018, but the definition of “[c]onstruction of public work” remains the same.
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Here, the underlying dispute centers around the wage
classification for cleaning and inspection of sewer pipes, and
the subsequent impact of the DLIR’s differing interpretations of
this question.
A. Factual Background
Since 1988, Eckard Brandes, Inc. has performed sewer
pipeline cleaning, closed-circuit television (CCTV) inspection
of pipes, and occasional repairs for various state, county, and
private projects in Hawaiʻi. Cleaning, inspection, and repairs
did not occur simultaneously. Eckard Brandes employees would
first operate a tandem axel Vactor truck with a high-pressure
pump to clean the pipe. Once cleaning was complete, Eckard
Brandes employees would then use CCTV cameras mounted on self-
propelled tractors to inspect the inside of pipes and identify
needed repairs. Eckard Brandes occasionally performed repair
work following cleaning and inspection. Such repair work
required specialized equipment and was a much more time
intensive process than cleaning and inspection.
Prior to 2005, Eckard Brandes paid every employee on
public works sewer projects the “Sewer Line Tele-Repairer”
classification regardless of whether employees completed
cleaning and inspection, or further undertook repairs. In 2005,
Nelson Befitel, then-Director of the DLIR, sent Eckard Brandes a
letter pertaining to wages on public works projects. The letter
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indicated the wage classification for “Sewer Line Tele-Repair”
would be discontinued because sewer cleaning and inspection were
not considered construction work under HRS chapter 104:
This is the time of year when the Department of Labor and Industrial Relations (DLIR) would usually request your assistance in determining the prevailing wages for the Sewer Line Tele-Repairer classification for the Chapter 104, Hawaii Revised Statutes (HRS), Wage Rate Schedule. This letter is to inform you that you will not receive a survey this year because the classification of Sewer Line Tele-Repairer will be discontinued as of the next Wage Rate Schedule, Bulletin Number 461, which will be issued in September 2005.
Input from the industry brought to our attention the distinction between inspection and cleaning versus repair. The inspection and cleaning function is not considered construction work as covered under Chapter 104, HRS, therefore it will not be included in the prevailing wage rate schedule. The repair work is same work that would be classified as Laborer I, a classification that already exists.
Additionally, under Section 104-2(b), HRS, the law states that “prevailing wages shall not be less than the wages payable under federal law to corresponding classes”. The U.S. Department of Labor does not include a separate classification for sewer line tele-repairer work for construction projects covered by the federal Davis-Bacon Act. Work of that nature is classified as Laborer I. Thus, maintaining the rate classification of Sewer Line Tele-Repairer creates a prevailing wage that is less than the wages payable under federal law to corresponding classes, and is contrary to the law.
(Emphasis added.)
Between November 2009 and January 2015, Eckard Brandes
was a subcontractor or general contractor on ten public works
sewer rehabilitation projects, performing pipe cleaning,
inspection, and repair for the State of Hawaiʻi and City and
County of Honolulu sewer lines. Eckard Brandes’s president
testified that whenever Eckard Brandes was conducting repairs on
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sewer pipes, it paid its employees at the Laborer I or II wage
classification rates pursuant to HRS chapter 104, depending on
the tools they used. On days where Eckard Brandes was
conducting cleaning and inspection work only, employees were
paid the regular company rate, as the work was no longer
considered a construction activity under HRS chapter 104. When
bidding on the ten public works projects at issue, Eckard
Brandes – relying on the 2005 Befitel letter – assumed their
employees would be paid at the lower company rate because
cleaning and inspection work was not covered by HRS chapter 104.
From May 2011 to July 2013, Petitioner Scott Foyt was
employed by Eckard Brandes and worked on the ten public works
projects at issue. Foyt primarily operated Eckard Brandes’s
Vactor truck, and occasionally drove a water truck and roll-off
debris truck to conduct Eckard Brandes’s cleaning work. Foyt
also occasionally assisted other Eckard Brandes employees with
CCTV inspection and repairs. Following the DLIR’s guidance
under the 2005 Befitel letter, Foyt was paid the Laborer I or
Laborer II rates when Eckard Brandes conducted repair work on
the project site, and was otherwise paid the lower company rate
when performing cleaning and inspection only, including
operating the Vactor truck. Had Foyt been classified as a
Laborer I for the cleaning and inspection work he performed at
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Eckard Brandes’s company rate, he would have been paid an
additional $29,719.07.
In 2012, the City and County of Honolulu requested
clarification from the DLIR on the proper wage classification
for workers who perform sewer pipe cleaning and inspection. The
City noted their understanding that “in previous determinations
from [DLIR],” cleaning and inspection work was determined not to
be subject to prevailing wages, but expressed their position
that it should be subject to the Laborer I rate as the work “is
an integral part of the construction project” under HAR
§ 12-22-1.
Nine months later, on September 6, 2013, DLIR
Administrator Pamela Martin responded, writing that while DLIR’s
position remained “unchanged for strictly CCTV inspection and
cleaning work only,” cleaning and inspection work would be
subject to HRS chapter 104 when it is required for the repair of
sewer pipes:
[U]nder Section 12-22-1, Hawai‘i Administrative Rules, the definition of “construction of a public work” includes without limitation new construction, reconstruction, development, improvement, alteration, repair, renovation, painting, decorating, dredging, shoring, simultaneous sewer inspection and repair, and any other activity performed by a laborer or mechanic employed at the site of a public work. City and County repair and/or rehabilitation of sewer pipe projects which require cleaning and CCTV inspection are covered under Chapter 104, HRS. The cleaning and CCTV inspection activities are deemed an integral part of or in
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conjunction with a construction contract subject to Chapter 104, HRS. Workers must be classified and paid the closest existing classification as published in the Wage Rate Schedule.
A few weeks later on September 23, 2013,
representatives from Eckard Brandes and DLIR met to clarify
DLIR’s position on the applicability of HRS chapter 104 to sewer
cleaning and inspection. Eckard Brandes representatives came
away from the meeting understanding that all cleaning,
inspection, and repair work would be classified at the Laborer I
rate effective the date of the meeting, September 23, 2013 —
“not retro-actively for contracts already awarded or work
performed on.” Thereafter, Eckard Brandes began paying its
employees the Laborer I rate on every public works project for
cleaning and inspection work, regardless of whether the cleaning
and inspection was performed simultaneous to the repairs. 3
B. DLIR Proceedings
On October 30, 2013, Foyt filed a complaint with the
DLIR Wage Standards Division, disputing his wage classification
3 On November 20, 2014, DLIR Director Dwight Takamine determined that workers who perform sewer line pipe cleaning and CCTV inspection work on public works projects were classified under HRS chapter 104 as Plumber, Laborer I, or Laborer II, depending the type of project and work performed. “[W]orkers who do cleaning and inspection of sewer lines” are classified as plumbers “when the work is within a building to the property line.” “[W]hen the work is through the public disposal system (sewer mains),” workers are classified Laborer I for “performing inspection, operating the CCTV equipment and performing cleaning with the use of power tools and equipment,” and Laborer II for “using non-powered hand tools to perform the cleaning.” Because the public works projects at issue pre-date 2014, these classifications are not applicable here.
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for the public works projects on which he performed sewer
cleaning and repair work as an Eckard Brandes employee.
Over one year later in January 2015, Foyt’s complaint
was assigned to Labor Law Enforcement Specialist Sheryl Lee
(Investigator Lee), who after investigating Foyt’s complaint,
recommended that Eckard Brandes be issued a Notification of
Violation because it should have paid Foyt the prevailing wage
for truck drivers regardless of whether he was performing sewer
cleaning and inspection or repair. Investigator Lee conferred
with representatives from the Operating Engineers Union,
Hawaiian Dredging, and the Laborers Union, and understood that
workers who drove trucks requiring a commercial driver’s license
(CDL) to and from the jobsite would be paid the truck driver
rate. Investigator Lee found that Foyt should have been paid
the prevailing wage as a “Truck Driver Tandem Dump Truck, over 8
cu. Yds. (water level); Water Truck (over 2,000 gallons)” (Truck
Driver) rather than the Laborer I or Laborer II prevailing wage
because Foyt was “one of few employees who would operate the
vacuum truck because a CDL is required.”
On May 4, 2017, then-DLIR Director Linda Chu Takayama
adopted Investigator Lee’s recommendations and issued Eckard
Brandes a Notification of Violation of HRS chapter 104. Because
Foyt should have been paid under the Truck Driver wage
classification rather than the Laborer I or Laborer II
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classifications, the DLIR assessed back wages due and a 10%
penalty totaling $60,131.12.
Eckard Brandes appealed the Notification of Violation
pursuant to HRS § 104-23(b) (2012), and a hearing was held in
August 2017. Eckard Brandes primarily argued that sewer
cleaning and inspection work was not covered under HRS chapter
104, and in any event, it relied on the 2005 Befitel letter,
which was consistent with the DLIR’s longstanding position that
cleaning and inspection work was not subject to wage
classification. It also emphasized that the Truck Driver
classification was not “industry practice,” and that there is no
reference in DLIR Adminstrator Martin’s 2013 letter to sewer
workers being classified as truck drivers.
In support of Eckard Brandes’s arguments, President
Jeff Iwasaki-Higbee, Mark Goodrowe, owner of Eckard Brandes’s
competitor Underground Services, Inc., and Eldon Franklin,
retired Wastewater Division Chief for the City and County of
Honolulu’s Department of Design and Construction testified at
the hearing. Iwasaki-Higbee testified about Eckard Brandes’s
work on public works projects, its reliance on the 2005 Befitel
letter, and its understanding that the Laborer I or Laborer II
wage classification would only apply to cleaning and inspection
work prospectively effective September 2013. Iwasaki-Higbee
recounted the September 23, 2013 meeting with DLIR
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representatives, and testified that he primarily sought to
ensure ongoing projects would not be impacted by the DLIR’s new
position that cleaning and inspection work be paid at the
Laborer I or Laborer II wage. Although there was no written
agreement, Iwasaki-Higbee testified that he walked away from the
meeting with the understanding that Eckard Brandes was not
required to retroactively adjust its wages for ongoing public
works projects.
Mark Goodrowe of Underground Services, Inc. testified
that from 2006 until DLIR Administrator Martin’s September 2013
letter, it similarly paid its employees conducting sewer
cleaning and CCTV inspection their lower company rate on public
works projects, regardless of whether an employee operated a
Vactor truck. Goodrowe further testified that at no time was he
or other Underground Services representatives informed that
their employees operating trucks needed to be paid the Truck
Driver wage.
Retired Wastewater Division Chief Eldon Franklin
testified about the confusion in 2012 and 2013 surrounding
whether sewer cleaning and inspection were subject to HRS
chapter 104 wage classification. Goodrowe and Franklin attended
the September 23, 2013 meeting with DLIR and Eckard Brandes, and
both testified that they also came out of the meeting with the
understanding that moving forward, workers performing sewer
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cleaning and inspection would be paid the Laborer I or II
classification.
In support of the DLIR’s Notification of Violation,
the Hearings Officer heard testimony from Investigator Lee,
Brandon Ili of the International Union of Operating Engineers,
Local 3, and Foyt. Both Investigator Lee and Ili testified that
under the work practices of the Operating Engineers, persons
driving and operating a vacuum truck would be compensated at the
higher truck driver wage classification. Ili further testified
that although workers such as Foyt may be cleaning sewer pipes
at a construction job site, the Truck Driver classification
would be appropriate because the operation and use of a Vactor
truck with vacuum and water capabilities requires the driver to
hold a CDL. Foyt testified in detail about the scope of work he
performed as an Eckard Brandes employee, noting his primary role
was to operate the Vactor truck and to drive it to and from the
jobsite, and on occasion, to assist other Eckard Brandes
employees with CCTV inspection and repairs.
In a December 6, 2017 written decision and order, the
Hearings Officer determined that the DLIR correctly classified
Foyt as a Truck Driver. “Based on a misclassification of work
as a [L]aborer I or [L]aborer II, rather than Truck Driver,” the
Hearings Officer concluded Foyt was owed $54,664.65 in back
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wages under the Truck Driver classification. 4 The Hearings
Officer reasoned that without Eckard Brandes employees like Foyt
“performing the cleaning and inspection, the general
contractor[s] would not be able to perform their repair or
replacement of the sewer pipe line,” and therefore concluded
that cleaning and inspection “was an integral part of or in
conjunction with a construction repair or replacement sewer pipe
project” and thus subject to HRS chapter 104.
The Hearings Officer determined that the 2005 Befitel
letter “appear[ed] to have confusing or conflicting information”
and “reflect[ed] disagreements in the prevailing practice that
were being resolving under different administrations.” However,
the Hearings Officer determined that while the “letter does not
address or clarify the workers classification [for an employee]
who drives the truck and operates the equipment of the job
site,” federal precedent “gives the International Operating
Engineers the authority to set the prevailing area practices,
and their classification is Truck Driver[.]”
C. Appellate Proceedings
Eckard Brandes appealed the Hearing Officer’s decision
and order to the Circuit Court of the First Circuit (circuit
4 It appears that the Hearings Officer mistakenly found that Foyt was paid at the Laborer I or Laborer II wage classification for all work he performed as an Eckard Brandes employee. However, the record reflects that Foyt was paid the lower company rate for cleaning and inspection work.
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court) in 2018. 5 Following briefing and oral argument, the
circuit court orally reversed the DLIR Hearing Officer’s
decision and order. The circuit court’s basis for reversal was
Eckard Brandes’s reasonable reliance on the 2005 Befitel letter:
The basis for the [circuit court’s] decision is that it was arbitrary and capricious for the [DLIR] to vary from clear statements made in the director’s July 26, 2005 letter upon which [Eckard Brandes] reasonably relied in calculating its expenses to submit its bids on state contracts. So basically the State cannot change the rules after a clear statement like this without notice being given to the employer, such as it arguably was in 2013 in the meeting with [Eckard Brandes representatives and DLIR]. So the court is not ruling that [the 2013 letter] was a correct decision by [DLIR]. The court is just ruling that it cannot be applied retroactively. So it was a misapplication of the law for the Wage Standards Division not to apply the directives contained in the director’s July 26, 2005 letter. So because the parties did not controvert and [Foyt] agreed that he was paid for the correct number of hours, the only things he was contesting was the classification. And since the classification used by [Eckard Brandes] was consistent with the statements made in Mr. Befitel’s or the director’s July 26, 2005 letter, it was error for the Wage Standards Division to find otherwise.
(Emphases added.)
In its written order, the circuit court further stated
that the DLIR “was bound by the July 2005 letter, from then
Director Nelson Befitel, that the work of sewer line cleaning
was not subject to Chapter 104 HRS and therefore, the work
performed by [Foyt] at the time, was not subject to Chapter 104
HRS.”
Foyt filed a motion to intervene and appealed the
circuit court’s reversal of the DLIR’s Hearing Officer’s
5 The Honorable Keith K. Hiraoka presided.
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decision and order, arguing the matter directly resulted in his
loss of $54,664.65 in wages under the Truck Driver
classification. After the ICA dismissed Foyt’s appeal for lack
of jurisdiction, this court vacated the ICA’s dismissal and
instructed the ICA to address the merits of the case. 6 Eckard
Brandes, Inc. v. Dep’t of Lab. & Indus. Rels., 146 Hawaiʻi 354,
364, 463 P.3d 1011, 1021 (2020).
On remand, Foyt argued that the hearing officer’s
decision was supported by substantial evidence and was not
clearly erroneous. He contended his cleaning and inspection
work were subject to HRS chapter 104 because they are an
“integral part” of construction projects on which Eckard Brandes
was a subcontractor. Therefore, Foyt argued, Eckard Brandes
could not have reasonably relied on the 2005 Befitel letter, nor
could it have been used to invoke estoppel against DLIR’s 2017
Notice of Violation.
The ICA disagreed. Addressing the merits of Foyt’s
appeal, the ICA affirmed the circuit court’s decision. It
reasoned that the wages Eckard Brandes paid Foyt were consistent
with the 2005 Befitel letter, which Eckard Brandes reasonably
relied upon before receiving conflicting instructions from the
6 Although Foyt’s appeal to the ICA was untimely, we held his untimely appeal was “excusable neglect” because Foyt was not a party to the case and due to the timing of the holiday season, Foyt was only able to retain counsel the day before the deadline to appeal the circuit court’s decision. Eckard Brandes, 146 Hawaiʻi at 360-61, 463 P.3d at 1017-18.
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DLIR in 2013. Therefore, the ICA held the circuit court did not
err when it determined the DLIR was arbitrary and capricious
when it “retroactively” applied its 2013 interpretation of HRS
chapter 104’s applicability to sewer cleaning and inspection
“without notifying [Eckard Brandes] that it was not entitled to
rely on Director Befitel’s 2005 Letter.”
Foyt applied for writ of certiorari, which we
accepted.
III. STANDARD OF REVIEW
[W]hen reviewing a determination of an administrative agency, we first decide whether the legislature granted the agency discretion to make the determination being reviewed. If the legislature has granted the agency discretion over a particular matter, then we review the agency’s action pursuant to the deferential abuse of discretion standard (bearing in mind the legislature determines the boundaries of that discretion). If the legislature has not granted the agency discretion over a particular matter, then the agency’s conclusions are subject to de novo review.
Paul’s Elec. Serv., Inc. v. Befitel, 104 Hawai‘i 412, 419–20, 91
P.3d 494, 501–02 (2004).
An agency’s conclusions of law are reviewed de novo, while an agency’s factual findings are reviewed for clear error. A conclusion of law that presents mixed questions of fact and law is reviewed under the clearly erroneous standard because the conclusion is dependent upon the facts and circumstances of the particular case.
Del Monte Fresh Produce (Haw.), Inc. v. Int’l Longshore &
Warehouse Union, Local 142, AFL-CIO, 112 Hawai‘i 489, 499, 146
P.3d 1066, 1076 (2006) (internal quotation marks, citations, and
brackets omitted).
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IV. DISCUSSION
Foyt contends that Eckard Brandes erroneously relied
upon the 2005 Befitel letter. He argues the letter was in
“direct conflict” with HRS chapter 104 and its related
regulations. In other words, Foyt contends that because the
2005 DLIR interpretation of HRS chapter 104 and its relevant
regulations was erroneous as a matter of law, the DLIR could not
be estopped from penalizing Eckard Brandes. We disagree, and
conclude Eckard Brandes’s reliance on the 2005 Befitel letter,
under the facts of this case, was reasonable and the DLIR was
estopped from applying its later interpretation of HRS chapter
104 retroactively to Eckard Brandes.
Although the doctrine of equitable estoppel is limited
in its application against the government, this court has
“explicitly maintained the validity of the notion that a
government can be estopped.” Filipo v. Chang, 62 Haw. 626, 635,
618 P.2d 295, 300 (1980); see Yamada v. Nat. Disaster Claims
Comm’n, 54 Haw. 621, 629, 513 P.2d 1001, 1006 (1973) (“[T]he
doctrine of equitable estoppel is fully applicable against the
government if it is necessary to invoke it to prevent manifest
injustice.”). Consistent with courts’ “reluctance” to apply
estoppel against the government, we have recognized that
“estoppel cannot be applied to actions for which the agency or
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agent of the government has no authority.” Filipo, 62 Haw. at
634, 618 P.2d at 300.
That is not the case here. The plain language of HRS
chapter 104 makes clear that “[t]he prevailing wages shall be
established by the [DLIR] director.” HRS § 104-2(b)(1). Then-
DLIR Director Befitel was therefore properly authorized to
instruct Eckard Brandes that the Sewer Line Tele-Repairer
classification would no longer be recognized, and that cleaning
and inspection work would not be covered under HRS chapter 104.
Cf. Turner v. Chandler, 87 Hawaiʻi 330, 334, 955 P.2d 1062, 1066
(App. 1998) (holding that since the state agency had no
authority to confer benefits on appellant during a particular
period, the contrary representation made to the appellant by an
agency caseworker was unauthorized and ultra vires).
Foyt cites to the Ninth Circuit’s test in applying the
government estoppel doctrine, and argues that Eckard Brandes is
unable to meet its test “to provide a shield to [his] prevailing
wage claim.” See Wagner v. Dir., Fed. Emergency Mgmt. Agency,
847 F.2d 515, 519 (9th Cir. 1988). In Wagner, the Ninth Circuit
adopted a “stringent test” requiring parties invoking government
estoppel to “establish affirmative misconduct going beyond mere
negligence; even then, estoppel will only apply where the
government’s wrongful act will cause a serious injustice, and
the public’s interest will not suffer undue damage by imposition
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of the liability.” Id. (internal quotation marks omitted).
However, this court has suggested Hawaiʻi has a less stringent
standard than the Ninth Circuit – that “[o]ne invoking equitable
estoppel must show that he or she has detrimentally relied on
the representation or conduct of the person sought to be
estopped, and that such reliance was reasonable.” Doherty v.
Hartford Ins. Grp., 58 Haw. 570, 573, 574 P.2d 132, 134–35
(1978) (emphasis added).
Articulating a similar standard, courts in the First
Circuit have expressed that a defense of equitable estoppel may
be viable where “there has been reasonable reliance on
affirmative misconduct attributable to the [government].”
Griffin v. Reich, 956 F. Supp. 98, 107 (D.R.I. 1997) (quoting
United States v. Ven-Fuel, Inc., 758 F.2d 741, 761 (1st Cir.
1985) (internal quotation marks omitted). The measure of what
amounts to “affirmative misconduct” is “only moderately
demanding,” but nonetheless must rise above “mere inaction,
delay or sloth on the part of the government.” Id. at 108.
Griffin involved the applicability of prevailing wages
at a public housing development funded by the United States
Department of Housing and Urban Development (HUD). Id. at 100-
01. There, the plaintiff contractor challenged a determination
by the Wage and Hour Division of the United States Department of
Labor (DOL) that the contractor should have been paying
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prevailing wages under the Davis-Bacon Act to its workers at an
off-site fabrication facility related to the HUD project. Id.
at 100-04. The plaintiff had sought advice from HUD regarding
the wages of workers at the off-site facility. Id. at 101. The
HUD Director of Housing Management replied with a letter stating
that “Davis-Bacon Wage Rates do not apply to the fabrication of
building components.” Id. On review, the United States
District Court for the District of Rhode Island opined “that if
ever there was a case where equitable estoppel should explicitly
apply against the government, this is it, provided the factual
predicates are found to exist.” Id. at 108. That court
remanded the proceedings to DOL to make factual determinations
concerning the application of equitable estoppel and directed
that “[DOL]’s inquiry should focus first on whether plaintiffs
reasonably relied on affirmative representations by HUD,” and
second, “whether plaintiffs, in fact, complied with HUD’s
policies.” Id. at 109. Summarizing the administrative and
procedural history of the case, the court noted that the
disparate interpretation of policy by the two government
agencies had resulted in a “bureaucratic whipsaw” for the
plaintiff. Id. “To right this wrong,” the court held that
equitable estoppel should apply if plaintiffs relied on and were
in compliance with “HUD’s policies and representations
concerning the applicability of Davis-Bacon requirements.” Id.
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Similar circumstances are present here, although
unlike Griffin, the record makes clear that Eckard Brandes
reasonably relied on “affirmative representations” by the DLIR
in the 2005 Befitel letter, and accordingly complied with its
guidance. Cf. id. The 2005 letter differentiated between
repair versus inspection and cleaning, stating that employees
doing repair work must be paid the prevailing Laborer I wage,
while employees doing inspection and cleaning need not be as it
“is not considered construction work.” Eckard Brandes, having
received the 2005 Befitel letter, adjusted how it paid its
employees and how it submitted bids for the public works
projects Foyt worked on between 2011 and 2013. Notably, the
record reflects that until DLIR Administrator Martin’s
September 6, 2013 letter, the DLIR did not clarify or retract
its 2005 guidance. Indeed, more than a year after the 2005
Befitel letter, DLIR Director Befitel again confirmed that the
“cleaning of sewer lines, [CCTV] recording of sewer lines,
bypassing of wastewater, reporting, documenting, and other
incidentals, does not warrant any determination under [HRS]
Chapter 104, because the work is not considered as construction
work,” in a November 2006 letter to the County of Maui
Wastewater Reclamation Division.
Furthermore, the record reflects that the Truck Driver
classification is not industry practice as none of the
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applicable wage classifications prior to the DLIR’s 2017
Notification of Violation were based on operating a truck.
Rather, prior to 2005, workers who performed any kind of sewer
cleaning, inspection, or repair were classified as Sewer Line
Tele-Repairers. 7 From 2005 until DLIR Administrator Martin’s
September 2013 letter, the pertinent wage classification for
workers conducting sewer repairs was Laborer I or Laborer II,
depending on the equipment used. Additionally, the DLIR’s
September 2013 letter made no distinction between cleaning,
inspection, or operating a Vactor truck (which is part of sewer
pipe cleaning), and made no indication a separate Truck Driver
classification should apply. 8 Therefore, because the Truck
Driver classification was not an applicable classification prior
to the DLIR’s 2017 Notification of Violation, we conclude the
circuit court did not err when it determined that it was
7 Although a description of the Sewer Line Tele-Repairer classification is not in the record before this court, subsequent applicable wage classifications of sewer line workers are in the record. Notably, they do not differentiate between workers who operate trucks and those who do not, suggesting the pre-2005 Sewer Line Tele-Repairer classification also did not differentiate truck drivers from other sewer line workers.
8 The record further suggests that other Hawaiʻi companies that conduct sewer work do not use the Truck Driver wage classification. For example, the owner of Eckard Brandes’s competitor, Underground Services, Inc., testified at the hearing that at no time was he informed by the DLIR or the City and County of Honolulu that his employees who operate Vactor trucks must be paid at the Truck Driver rate. Additionally, Eckard Brandes’s President testified that another competitor, whose employees are members of the Operating Engineers, Local 3 union and conduct similar sewer cleaning and inspection, paid their employees the Laborer I rate regardless of whether the employee operated a Vactor truck.
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“arbitrary and capricious for the [DLIR] to vary from the clear
statements made in the director’s July 26, 2005 letter upon
which [Eckard Brandes] reasonably relied[.]”
Given these circumstances, to require Eckard Brandes
to have paid Foyt and other similarly situated employees the
Truck Driver wage, when it could not have anticipated that the
DLIR would later switch course in 2013, would result in a
“bureaucratic whipsaw.” See Griffin, 956 F. Supp. at 109. In
reaching this conclusion, we need not determine whether the 2005
Befitel letter’s interpretation that sewer cleaning and
inspection is outside the scope of HRS chapter 104 when
performed as “an integral part of or in conjunction with a
construction contract” was erroneous as a matter of law. See
HAR § 12-22-1.
Even if the 2005 Befitel letter’s analysis of the
applicability of HRS chapter 104 to sewer cleaning and repair
was faulty, we conclude that DLIR retroactively changing its
2005 position without notifying Eckard Brandes that it was not
entitled to rely on the 2005 letter was arbitrary and
capricious. See Paul’s Elec. Serv., Inc., 104 Hawai‘i at 419-20,
91 P.3d at 501-02. And we further conclude that the ICA did not
err when it applied the government estoppel doctrine to this
case.
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V. CONCLUSION
For the foregoing reasons, we affirm the ICA’s May 29,
2024 Judgment on Appeal affirming the circuit court’s December
19, 2018 Order Reversing Decision of the Department of Labor and
Industrial Relations and Final Judgment.
Shawn A. Luiz /s/ Mark E. Recktenwald for petitioner /s/ Sabrina S. McKenna Richard M. Rand for respondent /s/ Todd W. Eddins
/s/ Vladimir P. Devens
/s/ Matthew J. Viola