R.L. Insulation Co. v. Prevailing Wage Appeals Board

923 A.2d 550, 2007 Pa. Commw. LEXIS 234
CourtCommonwealth Court of Pennsylvania
DecidedMay 8, 2007
StatusPublished
Cited by1 cases

This text of 923 A.2d 550 (R.L. Insulation Co. v. Prevailing Wage Appeals Board) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
R.L. Insulation Co. v. Prevailing Wage Appeals Board, 923 A.2d 550, 2007 Pa. Commw. LEXIS 234 (Pa. Ct. App. 2007).

Opinion

OPINION BY

Senior Judge McCLOSKEY.

R.L. Insulation Co., Inc., Ronald L. Lundquist, and Robin K. Lundquist (hereafter collectively referred to as Appellants) petition for review of the decision and [552]*552order of the Pennsylvania Prevailing Wage Appeals Board (Board), affirming the adjudication and order of the Secretary of the Department of Labor and Industry. In his order, the Secretary concluded that Appellants had intentionally violated the Pennsylvania Prevailing Wage Act (Act)1 by failing to pay the prevailing wages due their workers on certain public works projects and debarred Appellants from contracting for any further such projects for a period of three years. We now affirm.

R.L. Insulation Company, Inc. is a corporation located in Hopewell, Pennsylvania, and has been in business for seventeen years. Approximately half of their work involves prevailing wage projects. In 2002, the Department of Labor and Industry’s Bureau of Labor Law Compliance (the Bureau) began an investigation of one of Appellants’ projects for the Norwin School District.2 This investigation was conducted by Tim Driscoll, an investigator for the Bureau. During the course of this investigation, Robin Lundquist provided Mr. Driscoll with a copy of a letter that she had sent to another Bureau investigator dated January 20, 2000, outlining what she believed to be laborers’ tasks on a prevailing wage job.3

Upon review of this letter, Mr. Driscoll advised Ms. Lundquist that many of the tasks identified as laborers’ tasks were actually insulators’ tasks. Mr. Driscoll instructed Ms. Lundquist that workers must be paid according to the tasks performed and that their timecards must accurately reflect the nature of the work performed at the job site. As a result of the aforementioned investigation, the Bureau determined that two of Appellants’ workers at the Norwin School District project were paid less than the prevailing wage rates for the work they performed. The Bureau and Appellants entered into a settlement agreement regarding these underpayments. Pursuant to the settlement agreement, the underpaid workers received compensation which essentially amounted to a 6:2 payment ratio, six hours at the insulators’ rate and two hours at the laborers’ rate. However, Mr. Driscoll never informed Appellants that it was acceptable to continue to pay their workers at this ratio.

Subsequent to this settlement agreement, in June of 2002, Appellants changed their method of record keeping and new timecards were introduced to the workers. The new timecards delineated codes for actual tasks performed. The duties and corresponding codes were strikingly similar to the duties which Ms. Lundquist had described in her January 20, 2000, letter. Appellants held two meetings to explain the new timekeeping procedures, one for insulators and one for field employees. At the first meeting, the insulators were advised that they were continuing at their full insulators’ rate and were asked to send as much laborers’ tasks as they could to the newer employees on the job. At the second meeting, the field employees were [553]*553told to total up their laborers’ tasks for the day and record the same in the laborers’ column of their timecard, with the remainder of them day qualifying at the insulators’ rate.

In October of 2003, the Bureau began another investigation of Appellants after receiving five written complaints filed against Appellants by former workers. This investigation was conducted by Bureau investigator Salvatore Piccillo. The investigation involved sixteen public works projects in which Appellants were subcontractors. The insulators’ rates for these projects were determined in accordance with union collective bargaining agreements and were not challenged. By letter dated October 14, 2003, Mr. Piccillo sent a letter to Appellants advising them of the investigation and requesting certain documentation, including employee timecards, payroll ledgers, cancelled payroll checks and certified payroll records.

Upon receipt of the requested information, Mr. Piccillo initiated an audit and also arranged to meet with each of the five workers who had filed written complaints with the Bureau. Mr. Piccillo did in fact meet with these workers over a five-month period from January to May of 2004. Each of these workers had similar complaints regarding Appellants, i.e., although they were performing only insulation work eight hours a day on the projects, they were being paid at a 2:6 or 4:4 ratio. Each of the workers further complained that their timecards did not reflect the actual work that was being performed.

During an initial meeting with Mr. Pic-cillo and his supervisor, Joseph Hickey, in March of 2004, Appellants explained the company’s “training program,” whereby an inexperienced worker initially is paid at a 2:6 ratio (two hours insulators’ rate and six hours laborers’ rate), then progresses to a 4:4 ratio (four hours insulators’ rate and four hours laborers’ rate) and finally reaches a 6:2 ratio (six hours insulators’ rate and two hours laborers’ rate). Appellants also indicated to Mr. Piccillo that very few workers are paid strictly eight hours at the insulators’ rate.

Mr. Hickey thereafter advised Appellants that their “training program” was not appropriate for prevailing wage projects and suggested that they consider an apprenticeship program instead. Ronald Lundquist, however, strongly objected to this suggestion. Mr. Hickey proceeded to inform Appellants that, based upon the worker complaints and subsequent statements, he saw no alternative but to compile an audit spreadsheet in such a fashion that all hours are classified at the insulators’ rate. Following the meeting, Mr. Piccillo performed an audit of Appellants’ records and compiled his results into spreadsheets for each project in accordance with Mr. Hickey’s instructions. This audit resulted in a combined underpayment to forty-five of Appellants’ workers in the amount of $165,690.39.

On December 13, 2004, the Bureau issued an order to show cause charging Appellants with intentionally failing to pay their workers the predetermined prevailing minimum wage rates for the aforementioned sixteen public works projects. Appellants filed an answer and the case was assigned to a hearing officer.4 The hear[554]*554ing officer conducted hearings in this matter on June 20 and 21, 2005. At these hearings, the Bureau presented the testimony of four of the five employees who had filed complaints with the Bureau against Appellants, including Todd Goldizen, Steven Conner, Brian Little and Barry Wertz.

Mr. Goldizen testified that he worked as an insulator for Appellants for approximately eight years, from 1996 to 2004, at which time he was fired. Despite the fact that he initially performed insulating work for Appellants, Mr. Goldizen indicated that his first paychecks were at the “[s]traight laborer’s rate,” meaning he was paid eight hours at said rate. (R.R. at 266a). Mr. Goldizen also indicated that over time, and based on his on the job experience, his rate increased to two hours at the insulators’ rate, then four hours and finally six hours. Nevertheless, Mr. Goldizen noted that he was paid these rates regardless of the type of tasks he had performed.

Mr. Goldizen proceeded to discuss Appellants’ change in timecards in 2002. Mr.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
923 A.2d 550, 2007 Pa. Commw. LEXIS 234, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rl-insulation-co-v-prevailing-wage-appeals-board-pacommwct-2007.