The Supreme Court of California recently issued two opinions assessing the breadth of California’s prevailing wage law.
Before the court in Mendoza v. Fonseca McElroy Grinding Co., Inc. was a specific question about whether California Labor Code section 1772 helped establish the scope of coverage by providing that workers employed “in the execution” of a public work contract should be deemed to be employed on a public work. In a welcome development for contractors, the court rejected a broad interpretation advanced by the California Department of Industrial Relations, instead holding that section 1772 was enacted to simply clarify that employees of non-public entities can be subject to prevailing wage obligations. When assessing what activity is actually subject to prevailing wages, the court clarified the focus should be on specifically identified activity, such as activity listed in Labor Code 1720. The court declined to definitively establish whether off-site activity including travel time can be subject to California prevailing wage obligations.
In Busker v. Wabtec Corporation, the Court addressed another narrow issue regarding the breadth of California prevailing wage law – i.e., whether such coverage can extend to “rolling stock” such as train cars and locomotives. Again, focusing on Legislative history and specific statutory language, the court noted the Labor Code had never been amended to broadly extend prevailing wage coverage to non-fixed contexts such as rolling stock. Although the court noted the concepts of “construction” and “installation” triggering prevailing wage coverage under Labor Code section 1720 could conceivably include activity outside real property, the historic context of California’s prevailing wage law did not support such a conclusion. Echoing its ruling in Mendoza, the court rejected an argument premised on Labor Code section 1772 that installation work on rolling stock was covered because such activity was necessary to execute the public works contract. According to the court, while the California Legislature has enlarged the concept of “construction” to include certain pre-and post-construction phases, the Labor Code has not been amended to extend coverage to work in non-fixed contexts outside of freestanding modular furniture.
The Mendoza and Busker decisions represent an important check on both administrative and lower court decisions which relied on the “in the execution” language within Labor Code 1772 to establish broad prevailing wage coverage standards. Moving forward, courts will need to specifically assess whether specifically identified coverage triggers within the Labor Code include off-site concepts such as travel and mobilization.
If you have questions about the application of the Supreme Court of California’s recent decisions or related issues pertaining to prevailing wage law, contact a Jackson Lewis attorney to discuss.