The United States Court of Appeals, Second Circuit, has asked New York’s highest Court to answer the following two questions relating to prevailing wages:
As the Court sates in Ramos v. SimplexGrinnell LP, 12-4901-cv, “This case raises two questions of New York State law that are unsettled and of importance to the relationship between the State’s administrative agencies and its courts, as well as to the functioning of New York’s labor law.”
This case was commenced against Simplex Grinnell for failure to pay prevailing wages for testing and inspection of fire alarm and suppression systems. During the litigation Simplex Grinnell separately asked the New York State Department of Labor for clarification as to whether the work was covered. The DOL posted on its website certain matrices created by Simplex Grinnell indicating the work was not subject to prevailing wage requirements. Subsequently however the DOL Commissioner ordered the matrices removed and issued an opinion letter indicating the work was indeed “covered” but would only enforce this interpretation prospectively.
The first question dealing with the “decision of how to treat agency determinations that are made separately from a direct legal claim, and the extent to which the agency’s own prospective enforcement decision ought to bear upon that, separately brought, claim, will affect cases far beyond the particular question before us.”
The second question, deals with the question of intent of the contracting parties. It is undisputed that Simplex Grinnell agreed to pay prevailing wages under the statute as interpreted by the agency and the courts at the time of contract. What is not clear is whether Simplex Grinnell “also contracted to be bound by what the statute was ultimately read to require, even if that requirement was not clear to the parties when the contract was signed.”
The decision in this case can have far reaching effects in how contractors bid on projects involving prevailing wages and how they handle disputes involving prevailing wages. We will continue to monitor this case and will report on the Court of Appeals’ decision.