Leonard S. Fiore, Inc. v. Commonwealth

585 A.2d 994, 526 Pa. 282, 30 Wage & Hour Cas. (BNA) 266, 1991 Pa. LEXIS 18
CourtSupreme Court of Pennsylvania
DecidedJanuary 17, 1991
Docket13 W.D. Appeal Dkt. 1990
StatusPublished
Cited by22 cases

This text of 585 A.2d 994 (Leonard S. Fiore, Inc. v. Commonwealth) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Leonard S. Fiore, Inc. v. Commonwealth, 585 A.2d 994, 526 Pa. 282, 30 Wage & Hour Cas. (BNA) 266, 1991 Pa. LEXIS 18 (Pa. 1991).

Opinions

OPINION

McDermott, justice.

We are asked to address, for the first time, what acts constitute an intentional violation of the Prevailing Wage [284]*284Act. 43 P.S. §§ 165-1 — 165-17. The issues are presented through a construction contractor’s appeal from a Commonwealth Court decision affirming the order of the Department of Labor and Industry, Prevailing Wage Appeals Board (Board), which affirmed the order of the Secretary of the Department (Secretary). 129 Pa.Cmwlth. 583, 566 A.2d 632. The Secretary determined that the appellant had intentionally violated the Prevailing Wage Act (PWA), 43 P.S. § 165-ll(h), when it failed to pay prevailing wage rates to one worker, Terry Robinson. Consequently, the Secretary barred agencies of the Commonwealth from awarding public works contracts to appellant for three years.1 The Secretary rejected a hearing examiner’s recommendation that appellant did not intentionally violate the PWA.

We granted allocatur in this case to determine whether the Secretary’s conclusion that the appellant intentionally violated the PWA is supported by substantial evidence. Specifically, we must determine whether a “reasonable mind” could conclude, after reviewing the whole record,2 that appellant committed an act in a knowing or [285]*285willful disregard of the rights of workmen to be paid prevailing wages. See 43 P.S. § 165-11(h)(1).

Appellant, a construction contractor, was a general contractor on three public works projects3 which were audited by the Prevailing Wage Division of the Department of Labor and Industry (Division) for compliance with the PWA. In 1986, the Division claimed that appellant had not paid prevailing wage rates to three (3) of the fifty-four (54) workers on these projects, Michael Matis, James Terrain and Terry Robinson. These three workers testified before a hearing examiner appointed by the Secretary at a hearing held on August 15, 1986. No representative of the appellant attended that hearing therefore another hearing was held before the hearing examiner on December 17, 1987. In this hearing the three workmen were cross-examined. Also testifying were Michael Leard, a field investigator for the Division, and Richard S. Fiore, appellant’s superintendent of all field construction. The Secretary eventually determined that appellant intentionally violated the PWA by failing to pay Robinson prevailing wage rates.

Robinson, who had worked for a five week period on the Student Apartments project, claimed that he had worked one hundred percent (100%) of the time as a carpenter but had been paid only at the laborer’s wage rate for all his hours of work. The prevailing minimum wage at the time of these projects was $13.58 per hour for a laborer and $18.28 per hour for a carpenter. The PWA provides that “Not less than the prevailing minimum wages as determined hereunder shall be paid to all workmen employed on public work.” 43 P.S. § 165-5. He worked 163 hours over the five week period and was underpaid $766.00.

Robinson testified that the prevailing wage scales were posted on the appellant’s trailers and therefore he was [286]*286aware that he was not being paid the prevailing wage for a carpenter. He never complained to any of the appellant’s corporate officials but instead complained to the Prevailing Wage Division of the Department of Labor and Industry after he was laid off.

Appellant contends that it did not violate the PWA because all of the carpenters who worked at the three public works projects also performed laborer tasks and therefore Robinson’s claim that he worked all of his hours as a carpenter must be disbelieved. Nevertheless, even crediting appellant’s argument as true, it remains uncontradicted that Robinson worked at least some or most of his hours as a carpenter and was paid entirely as a laborer. Therefore, it is ineluctable that appellant violated the requirement of paying prevailing wages. Whether appellant intentionally violated the PWA is another question.

Our Legislature has provided that “Any acts of omission or commission done willfully or with a knowing disregard of the rights of workmen resulting in the payment of less than prevailing wage rates” constitutes substantial evidence of intentional failure to pay prevailing wages. 43 P.S. § 165-11(h)(1). The Secretary determined that appellant intentionally violated the PWA because it was “aware” that Robinson worked solely as a carpenter and yet paid him a laborer’s wage. Additionally, in dismissing the appellant’s contention that its corporate officials were not “aware” of the misclassification of Robinson’s hours, the Secretary stated that appellant’s corporate officials were “being oblivious to the obvious____” Citing Dale D. Akins, Inc. v. Department of Labor and Industry, 16 Pa.Cmwlth.Ct. 191, 194, 329 A.2d 869, 871 (1974).

Furthermore, the Secretary determined that appellant did not adequately observe its employees in day-to-day functions and did not keep appropriate records of their activities as required by the PWA. See 43 P.S. § 165-6.4 This, the [287]*287Secretary reasoned, was an act of omission which evidenced a willful and knowing disregard of the rights of workmen. This conclusion was based upon Richard S. Fiore’s explanation of appellant’s method of determining the wages to be paid to workmen. Appellant employed a job superintendent to “intermittently” observe the employees, record the tasks being performed, and estimate the time required to perform the task. The superintendent would then report this information to Richard S. Fiore on a weekly basis for classification and payroll purposes.

Appellant argues that the above stated determinations of the Secretary are not supported by substantial evidence. It first argues that it neither had actual knowledge of the misclassification of Robinson nor was the misclassification so obvious that it should have been aware of the misclassification. In reviewing the whole record we agree with the appellant that no “reasonable mind” could conclude that it was either actually aware or should have been aware of the misclassification.

First, Richard S. Fiore, who was ultimately responsible for the classification of each employee, testified that he was not aware of the misclassification. Appellant argues that it was reasonable to believe Richard Fiore because there is uncontradicted evidence of record that many employees on the project performed solely laborer work and therefore there was no reason to discover the superintendent’s mistake. The Hearing Examiner chose to believe Richard Fiore’s testimony as “logical, consistent, credible and persuasive.” The Secretary determined that Robinson was credible. However, Robinson did not testify that Fiore, or any other of appellant’s corporate officials, was aware of the misclassification of his hours and admitted that he never complained to the appellant. Therefore, there is no conflict in the credibility determinations of the Hearing Examiner and the Secretary as to Richard Fiore’s aware[288]*288ness of the misclassification.

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Leonard S. Fiore, Inc. v. Commonwealth
585 A.2d 994 (Supreme Court of Pennsylvania, 1991)

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Bluebook (online)
585 A.2d 994, 526 Pa. 282, 30 Wage & Hour Cas. (BNA) 266, 1991 Pa. LEXIS 18, Counsel Stack Legal Research, https://law.counselstack.com/opinion/leonard-s-fiore-inc-v-commonwealth-pa-1991.