Stockton v. Silco Construction Co.

877 P.2d 71, 319 Or. 365, 1994 Ore. LEXIS 67
CourtOregon Supreme Court
DecidedJuly 29, 1994
DocketCC 9108-04931; CA A75975; SC S40872
StatusPublished
Cited by5 cases

This text of 877 P.2d 71 (Stockton v. Silco Construction Co.) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stockton v. Silco Construction Co., 877 P.2d 71, 319 Or. 365, 1994 Ore. LEXIS 67 (Or. 1994).

Opinion

*368 GILLETTE, J.

In this public contracts case, a subcontractor on several public works projects allegedly failed to pay the statutorily required prevailing rate of wage to five of its employees who worked on the projects. The employees brought the present action, seeking to recover the unpaid prevailing wages directly from the general contractor. The trial court granted summary judgment in the general contractor’s favor. On appeal, the Court of Appeals affirmed, holding that the employees of the subcontractor could not recover unpaid prevailing wages from the general contractor under the pertinent statute, ORS 279.365(1) (set out infra, 319 Or at 370), after the completion of the public works contracts and that the employees could not recover those wages from the general contractor as third-party beneficiaries of the prevailing wage provisions in the public works contracts. Stockton v. Silco Construction Co., 123 Or App 504, 860 P2d 851 (1993). We allowed review and now affirm the decision of the Court of Appeals, in part on different grounds.

Defendant Silco Construction Company (Silco) is a general building contractor that engages in public and private construction in Oregon. In 1989, 1990, and 1991, Silco was the general contractor on five public works projects. On each project, Silco subcontracted with B & R Excavating (B & R) to perform excavation and backfill work. Plaintiffs were employees of B & R who worked on those projects.

Oregon has adopted its own “Little Davis-Bacon Act,” ORS 279.348 to 279.365, which, like its federal counterpart, the Davis-Bacon Act, 40 USC § 276a et seq, is aimed at ensuring that workers on governmental projects are paid at least the prevailing wage in the area in which the project is carried out for the workers’ respective crafts.

Under ORS 279.350, workers on all public works projects must be paid not less than the “prevailing rate of wage,” as defined in ORS 279.348(1). 1 ORS 279.352 further *369 requires that the specifications for every public works contract contain a provision “stating the existing prevailing rate of wage” and that the contract itself contain a provision “that such workers shall be paid not less than such specified minimum hourly rate of wage.” The parties agree that the public works contracts at issue here contained prevailing wage provisions intended to meet the requirements of ORS 279.352. 2 In addition, each of the subcontracts between Silco and B & R required B & R to pay the prevailing rate of wage to its employees on the public works projects.

*368 “ ‘Prevailing rate of wage’ means the rate of hourly wage, including all fringe benefits under subsection (4) of this section, paid in the locality to the majority of workers employed on projects of a similar character in the same trade or occupation, as determined by the Commissioner of the Bureau of Labor and Industries.”

*369 According to plaintiffs, and despite the foregoing contractual provisions, B & R failed to pay them the prevailing rate of wage for their work on the projects. Consequently, plaintiffs commenced the present action in August 1991, seeking to recover their unpaid wages from Silco. 3 As relevant here, plaintiffs sought to recover from Silco on two theories. First, plaintiffs claimed that Silco was liable for the unpaid wages under ORS 279.365(1) (set out infra). Second, plaintiffs claimed that they were entitled to collect the unpaid wages from Silco as intended third-party beneficiaries of the prevailing wage provisions in the public works contracts between the contracting public agencies and Silco.

Silco moved for summary judgment, arguing that the right of action provided by ORS 279.365(1) was available to plaintiffs only while the construction projects were ongoing and that the prevailing wage provisions in the public works contracts did not require Silco to be directly responsible for paying the prevailing rate of wage to the employees of a subcontractor like B & R. The trial court granted summary judgment in Silco’s favor.

On appeal, the Court of Appeals affirmed. With regard to plaintiffs’ claims under ORS 279.365(1), the Court of Appeals held that the right of action provided by that statute is available “only when payments from the public agency to the general contractor remain due, and the contractor retains the possibility of recourse against the noncomplying subcontractor.” Stockton v. Silco Construction Co., supra, 123 Or App at 508. With regard to the third-party *370 beneficiary claims, the court held that the prevailing wage provisions in the public works contracts “require the payment of the prevailing wage rate by the direct employer, which in this case is the subcontractor,” and that plaintiffs “are simply not entitled to have [Silco] perform a promise on their behalf that the contracts do not require it to perform on behalf of employees other than its own.” Id. at 508-09. We allowed review to consider those important issues of first impression.

We begin with plaintiffs’ claims against Silco under ORS 279.365(1). That statute provides:

“The Commissioner of the Bureau of Labor and Industries or any other person may bring a civil action in any court of competent jurisdiction to require a public agency under a public contract with a contractor to withhold twice the wages in dispute if it is shown that the contractor or subcontractor on the contract has intentionally failed or refused to pay the prevailing rate of wage to workers employed on that contract and to require the contractor to pay the prevailing rate of wage and any deficiencies that can be shown to exist because of improper wage payments already made. In addition to other relief, the court may also enjoin any such contractor or subcontractor from committing future violations. The contractor or subcontractor involved shall be named as a party in all civil actions brought under this section.

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Cite This Page — Counsel Stack

Bluebook (online)
877 P.2d 71, 319 Or. 365, 1994 Ore. LEXIS 67, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stockton-v-silco-construction-co-or-1994.