L.P. Group 2, Inc. v. Philadelphia Labor Standards Unit
1411 C.D. 2015
| Pa. Commw. Ct. | Aug 22, 2016Background
- Between 2004–2006 Philadelphia awarded LPG seven NTI demolition contracts; five were under $200,000 and two exceeded $200,000 (Allegheny West and Haddington B).
- The City’s Labor Standards Unit (Unit) issued citations alleging LPG failed to pay prevailing wage on all seven contracts following audits and employee complaints.
- LPG requested and received a Unit hearing (Oct. 27, 2005) and was given time to submit additional records; Unit issued a determination (Jan. 10, 2006) sustaining violations and LPG appealed to the Board.
- The Board held a de novo four-day evidentiary hearing (2013), sustained violations for all seven contracts, and ordered restitution; LPG appealed to the Court of Common Pleas, which affirmed the Board.
- On further appeal, this Court examined whether the Unit and Board had jurisdiction under Philadelphia Code §17-107 (which limits Unit jurisdiction to “city-work” defined as non-professional service contracts exceeding $200,000) and whether procedural/due-process prerequisites were met.
Issues
| Issue | Plaintiff's Argument (LPG) | Defendant's Argument (Unit/Board) | Held |
|---|---|---|---|
| 1. Whether Board/Unit had subject-matter jurisdiction over all seven contracts | Five contracts were below $200,000 so not “city-work”; Unit/Board lacked jurisdiction | Contracts’ terms and parties’ agreement made prevailing wage obligations applicable regardless of dollar threshold | Reverse as to five sub-$200,000 contracts (Unit/Board lacked jurisdiction); affirm as to two over $200,000 (jurisdiction proper) |
| 2. Whether Board had authority to hear LPG’s appeal absent a full Unit due-process hearing | Board lacked authority because Code requires completion of Unit due-process hearing before appeal | LPG had a Unit hearing, received notice and opportunity; Jan. 10, 2006 determination completed Unit process; Board’s de novo hearing cured any omissions | Board had jurisdiction to hear the appeal as Unit’s process (Oct. 27 hearing + Jan. 10 determination) satisfied Code requirements; de novo Board hearing afforded due process |
| 3. Whether Board capriciously disregarded evidence or law (e.g., training exemption) | Board ignored Code text and testimony about Unit’s failure to reschedule mandatory due-process hearing and about Unit’s limited scope | Board credited record evidence, rejected training-exemption and found contractual/statutory duty to pay prevailing wage for city-work | No capricious disregard found; Board’s credibility determinations and legal conclusions sustained for the two city-work contracts |
| 4. Whether Board’s findings were supported by substantial evidence | Board’s findings contradicted documentary/testimony showing exemption and procedural defects | Extensive testimonial and documentary record supported findings of violation, falsified payrolls, nonpayment, and retaliation | Findings supported by substantial evidence for the two city-work contracts; LPG did not contest those merits on appeal |
Key Cases Cited
- Dep’t of Health v. Office of Open Records, 4 A.3d 803 (Pa. Cmwlth. 2010) (agency may only assert authorities within its statutory duties)
- Mercury Trucking, Inc. v. Pa. Pub. Util. Comm’n, 55 A.3d 1056 (Pa. 2012) (parties cannot confer subject-matter jurisdiction by agreement)
- Witney v. City of Lebanon, 85 A.2d 106 (Pa. 1952) (jurisdictional test focuses on tribunal’s competency over the class of controversies)
- Earl Realty, Inc. v. Conestoga Valley Sch. Dist., 403 A.2d 232 (Pa. Cmwlth. 1979) (same principle on tribunal authority over general class of matters)
- Allegheny Ludlum Steel Corp. v. Pa. Pub. Util. Comm’n, 459 A.2d 1218 (Pa. 1983) (procedural due process can be satisfied by subsequent proceedings that afford full participation)