General Electric Co. v. New York State Department of Labor

936 F.2d 1448
CourtCourt of Appeals for the Second Circuit
DecidedJune 28, 1991
DocketNo. 692, Docket 90-7672
StatusPublished
Cited by6 cases

This text of 936 F.2d 1448 (General Electric Co. v. New York State Department 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
General Electric Co. v. New York State Department of Labor, 936 F.2d 1448 (2d Cir. 1991).

Opinion

CARDAMONE, Circuit Judge:

This appeal challenges the validity of New York Labor Law § 220 (McKinney 1990). Appellant General Electric Company (GE) claims that the statute violates the due process clause of the Fourteenth Amendment, both on its face and as applied in this case because it unconstitutionally delegates authority to private parties to set prevailing wage rates. It also claims § 220 is unconstitutionally vague and is preempted by the National Labor Relations Act, 29 U.S.C. § 151, et seq. Finally, GE argues that § 220’s provisions relating to wage supplements — which we have previously held are preempted by § 514(a) of the Employment Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1144(a), see General Electric Co. v. New York State Dep’t of Labor, 891 F.2d 25 (2d Cir.1989)—are non-severable.

For the reasons stated below, we reverse and remand with respect to GE’s due process claim for further discovery and a trial on the merits, if necessary. In all other respects, we affirm.

BACKGROUND

A. New York Labor Law § 220

New York’s Labor Law § 220(3) requires that workers employed by a contractor or person doing work in connection with any contract to which the state is a party shall be paid not less than the prevailing rate of wages and wage supplements paid to workers in the private sector who perform similar work in the same locality.

The prevailing wage rate, as amended on July 15, 1983, is fixed “by virtue of collective bargaining agreements between bona fide labor organizations and employers of the private sector, performing public or private work provided that said employers employ at least thirty per centum of workers, laborers or mechanics in the same trade or occupation in the locality where the work is being performed.” § 220(5)(a). “Supplements” or fringe benefits include “all remuneration for employment paid in any medium other than cash, or reimbursement for expenses, or any payments which are not ‘wages’ within the meaning of the law,” § 220(5)(b), and are determined in the same manner as are wages, by collective bargaining agreements under § 220(5)(c). Wages and wage supplements wrongfully withheld by an employer must be repaid and the law provides for civil and criminal penalties. Labor Law § 220(7), (9).

The “locality” or geographic area used to fix the prevailing wage rate and supplements is defined by reference to the scope of the same “current collective bargaining agreements between bona fide labor orga[1451]*1451nizations and employers of the private sector, performing public and private work.” § 220(5)(d).

B. Facts

Because the instant litigation has been before us once before and has been the subject of two district court opinions, we set forth only those facts necessary to our discussion. In January 1987 GE entered into a contract with the Long Island Railroad (Railroad) to service and repair electric transformers located in Kings, Queens, Nassau, and Suffolk counties in New York. Performance of the contract was undertaken by General Electric Apparatus and Engineering Services — New York Service Center, a sub-entity of GE. The Service Center is headquartered in North Bergen, New Jersey, but the work at issue was performed in New York State. The Service Center’s employees are represented by Local 8, International Brotherhood of Electrical Workers (IBEW, Local 8 or union), and collective bargaining agreements between Local 3 and GE were in force during the relevant period.

In 1987 the New York State Department of Labor (Department) commenced an investigation into the wages and supplements GE paid its employees working on the Railroad project, and determined preliminarily that they had been underpaid, including penalty and interest, by $676,118. The Department determined the applicable prevailing wage and supplement rates for work done in Kings and Queens Counties through rates set in the collective bargaining agreement between Local 3 and an electrical contractors association, and for the work done in Nassau and Suffolk counties through rates set in the collective bargaining agreement between Local 25, IBEW and an electrical contractors association. These agreements provide for the payment of wages and supplements that are different from, and in some cases more than, those provided by GE to its employees working on the Railroad contract. Both agreements have two different wage scales, accompanied by explicit statements that the lower wages — which in both cases establish wages approximately one-half the higher wage scale — are not applicable to public works projects. In calculating GE’s delinquency, the Department relied on the higher of the two wage scales to set in the four named counties the prevailing wages. At the Department’s request, the Railroad withheld $439,294 in contract payments from GE.

C. Procedural History

On July 22, 1988 GE commenced the instant action seeking declaratory and in-junctive relief against enforcement of Labor Law § 220 and for recovery of the withheld funds. It alleged that the statute’s prevailing wage provisions, as applied to its contract with the Railroad, are preempted by ERISA and by the National Labor Relations Act, 29 U.S.C. § 151, et seq., (NLRA), and that the statute is an unconstitutional delegation of legislative power to private parties in violation of the Due Process Clause of the Fourteenth Amendment. GE also raised two state law claims.

On September 29, 1988 the United States District Court for the Southern District of New York (Carter, J.) denied GE’s motion for a preliminary injunction, holding that Labor Law § 220 was not preempted by the NLRA, ERISA or other federal statutes. It did not reach the due process claim. On November 29, 1989 we vacated the district court’s order on the ground that ERISA does preempt the portion of Labor Law § 220 dealing with supplements. General Electric Co. v. New York State Dep’t of Labor, 891 F.2d at 30. The district court’s holding that the state statute is not preempted by the NLRA was affirmed because, as a minimum labor standard, the statute does not interfere with the collective bargaining process. Id. at 27-28. We remanded the due process claim for initial consideration by the district court.

Upon remand, GE conducted discovery on its constitutional claim. On February 1, 1990 the district court denied GE’s motion for further discovery and instead ordered the parties to submit cross-motions for [1452]*1452summary judgment. On March 2, 1990 the parties stipulated that the Department would permit the release of all money withheld by the Railroad from GE in return for GE’s posting a bond payable in accordance with a final order of the district court, after exhaustion of all appeals and collateral proceedings.

On June 7, 1990 the district court granted summary judgment dismissing GE’s due process challenge to Labor Law § 220, stating that “[t]o the extent, if any, that the federal constitution limits the states’ delegation of ‘governmental’ decisions to self-interested third parties, these limitations are certainly respected by Section 220.” 742 F.Supp. 80.

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Bluebook (online)
936 F.2d 1448, Counsel Stack Legal Research, https://law.counselstack.com/opinion/general-electric-co-v-new-york-state-department-of-labor-ca2-1991.