OPINION
Appellants-Plaintiffs, Matthew Burgess, William Burgess, Ronald Clark, Yves Dambreville, Michael Eseue, Brett Flynn, Ronald Hamilton, Sr., James Loussaint, Christine Patterson, Rahman Sharief, and Trby Whittaker (collectively "the Employees"), challenge the trial court's grant of summary judgment in favor of Appellee, Defendant, E.L.C. Electric, Ine. ("E.L.C."). Upon appeal, the Employees claim that the trial court erred in determining that their claims under the Indiana Common - Construction - Wage _ Act ("CCWA") are preempted by the federal Employee Retirement Income Security Act ("ERISA").
We reverse and remand.
The record reveals that defendant E.L.C. is an electrical contracting firm based in Indiana The Employees all worked for E.L.C. at the time relevant to this appeal. E.L.C. performed work on public construction projects in Indiana. Because of this, E.L.C. falls within the ambit of Indiana Code §§ 5-16-7-1 through 5-16-7-5 (Burns Code Ed. Repl. 2001), known as the Indiana Common Construction Wage Act. See Union Township School Corp. v. State ex rel. Joyce,
It must be a condition of a contract awarded that the successful bidder and all subcontractors shall comply strictly with the determination of wages made under Section 1. I.C. § 5-16-7-1(h). The CCWA is applicable to projects either owned entirely or leased with an option to purchase by the state or political subdivision. Id. at § 1). However, the COCWA. is generally not applicable to projects paid for in whole or in part with federal funds, nor to projects whose actual construction costs are less than $150,000. Id. at § 11), (k).
The Indiana Department of Labor ("IDOL") is charged by statute with the enforcement of Indiana's labor laws, including the CCWA. See Union Township,
In response to the notice letters received from IDOL, the Employees, on October 31, 2001, filed suit against E.L.C. seeking unpaid wages, "liquidated damages," and attorney fees. On February 7, 2003, E.L.C. filed a motion for declaratory judgment asking the trial court to declare the CCWA unconstitutional. Following a hearing held on July 25, 2008, the trial court denied E.L.C.'s motion on October 8, 2003, concluding that the CCWA was not unconstitutional and that E.L.C. had not been deprived of procedural due process. E.L.C. sought permission from the trial court to file an interlocutory appeal from the decision, but the trial court denied its motion. 2
On December 15, 2008, E.L.C. filed a combined motion to dismiss and motion for summary judgment. In this motion, E.L.C. claimed for the first time that the Employees' claims were preempted by ERISA. The Employees responded on January 12, 2004, arguing that their claims did not relate to any ERISA-based fringe benefit plans. There is no indication in the record that a hearing was held on E.L.C.'s combined motion. But on May 5, 2004, the trial court entered findings of fact and conclusions of law granting *5 E.L.C.'s motion for summary judgment. The Employees filed a notice of appeal on May 26, 2004.
Summary judgment is appropriate only if the designated evidentiary material demonstrates that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Byrd v. Am. Fed. of State, County, & Municipal Employees, Council 62,
The non-moving party may not rest upon the pleadings but must set forth specific facts, using supporting materials contemplated under the rule, which show the existence of a genuine issue for trial. Id. Although the party appealing a grant of summary judgment bears the burden of persuading us that the trial court erred, we must carefully serutinize an entry of summary judgment in order to ensure that the non-prevailing party is not denied his day in court. See id.; Jones v. W. Reserve Group/Lightning Rod Mut. Ins. Co.,
ERISA
As observed by the Indiana Supreme Court:
"The stated purpose of ERISA is to 'protect ... participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions,; and ready access to Federal courts' [] 29 U.S.C. § 1001(b) (1998). ERISA creates a federal statutory claim for recovery of 'benefits due to [the beneficiary] under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the planL] [] 29 U.S.C. § 1132(2)(1)(B) (1994 & Supp.1997). Suits under § 1132(a)(1)(B) may be brought in either federal or state court. Id. § 1132(e)(1)." Midwest Sec. Life Ins. Co. v. Stroup,730 N.E.2d 163 , 166 (Ind.2000) (emphasis supplied).
However, ERISA does not mandate that employers provide any particular benefits: Shaw v. Delta Air Lines, Inc.,
In the case at bar, the Employees claim that the trial court erred in conelud-ing that ERISA preempts the CCWA. E.L.C. contends that the trial court did not find that the CCWA was preempted by ERISA. Instead, E,.L.C. claims that the trial court "disallowed the [Employees'] claims asserting a state claim where federal law only permits an ERISA claim." Ap-pellee's Br. 8-9.. In other words, E.L.C. claims that the trial court did not determine that the CCWA was preempted, but instead disallowed the Employees'. claims brought under the CCWA based upon ERISA. In arguing in support of summary judgment to the trial court, E.L.C. argued that the Employees' claims were preempted by ERISA, and the trial court's order granting summary judgment agreed with this argument. To us, this is a distinction without a difference. Whether the question is framed as one of whether ERISA preempts the relevant portions of the CCWA or as whether the Employees' claims brought under the relevant portions of the CCWA 3 are preempted by ERISA, the pertinent issues remain the same.
Neither party directs us to an Indiana case directly on point, and our research has revealed none. Yet our courts have addressed ERISA preemption in several cases. Upon appeal, E.L.C. claims that the outcome of the present case is controlled by Edwards v. Bethlehem Steel Corp.,
In a similar vein, E.L.C. contends that the Employees are "converting" a claim for unpaid fringe benefits into one for unpaid wages, and that ERISA prohibits such claims unless brought under ERISA. The Employees' complaint alleges that E.L.C. "failed to pay Plaintiffs the full amount of fringe benefits each Plaintiff was entitled to receive according to the prevailing seale of wages being paid in the immediate locality for the class of work *7 performed by each Plaintiff." Appellant's App. at 14. Although this claim does state that the Employees were not paid fringe benefits, they base their claim not upon the terms of any benefit plan, but upon the common wage the Employees were entitled to receive under the CCWA. Indeed, in their prayer for relief, the Employees requested "damages equal to the amount of unpaid wages representing the difference between the amount each Plaintiff was paid by ELC and the amount each Plaintiff should have received from ELC had he or she been paid the prevailing wage scale rate as required by statute." Id.
Thus, the Employees are not seeking to enforce conditions of their fringe benefits as in Edwards, supra, but instead claim that the total wages they were entitled to under the CCWA were not paid because they did not receive the full amount of fringe benefits E.L.C. claims to have paid them. In other words, the Employees do not seek to enforce their fringe benefits under the terms.of any benefit plan, but instead seek the cash value of what they allege was owed to them based upon E.L.C.'s obligations under the CCWA.
The Employees further point out that the holding in Edwards was later limited by the court in Seaboard Surety Co. v. Indiana State District Council of Laborers & Hod Carriers Health & Welfare Fund,
Upon appeal, the Seaboard court reversed the trial court and held that the claims were not preempted.
Here, we note that Indiana has required that employers working on public works pay a prevailing or common wage since the first half of the last century and that such is a traditional exercise of state authority. This does not support a finding of ERISA preemption. See id. However, unlike the laws at issue in Seaboard, the CCWA af-feets the relations between the parties to the benefit plans-the Employer, E.L.C., and the Employees as plan beneficiaries. Nevertheless, as more fully discussed below, we conclude that any effect the CCWA might have on ERISA plans is incidental in nature.
In Stroup, supra, our Supreme Court addressed the issue of ERISA preemption of state claims for breach of contract and bad faith. In that case, the Stroups received an ERISA-governed group health insurance policy from Midwest through Mr. Stroup's employment. Midwest approved orthognathic surgery for Mrs. Stroup to correct certain congenital problems with her jaw, but complications arose from this surgery that required another procedure shortly thereafter. Mrs. Stroup continued to have problems with her jaw following the surgeries, and non-surgical treatments were not successful. However, four months after the second surgery, Midwest amended its plan to exclude or-thognathic surgery. When Mrs. Stroup sought pre-determination for another surgery, the surgery was not considered as a continuation of the prior treatment but was instead approved under another coverage provision which limited benefits to $1,000 per year. To avoid the costs of surgery, Mrs. Stroup opted to continue non-surgical treatments. Such treatments were unsuccessful, and Mrs. Stroup's jaw eventually fractured, requiring extensive surgeries. Thereafter, the Stroups filed suit against Midwest, later amending their complaint to add claims for breach of contract and bad faith. The trial court held that the claims were not preempted by ERISA, and upon interlocutory appeal, the Court of Appeals reversed. 5
Upon transfer, our Supreme Court held that the Stroups's claims were preempted. Stroup,
"These claims are based on Midwest's failure to pay benefits due under an ERISA-governed pension plan. The complaint asks for damages for breach 'of the insurance contract and for punitive and compensatory damages for the tort of bad faith based on Midwest's denial of coverage under the insurance contract. The claims clearly have connection with and refer to the ERISA plan.
The essence of the claims is a failure to supply benefits under the plan.... Just as in Ingersoll-Rand [Co. v. McClendon,498 U.S. 133 , 140,111 S.Ct. 478 ,112 L.Ed.2d 474 (1990) 1, 'there sim *9 ply is no cause of action if there is no plan'" Id. at 166-67,111 S.Ct. 478 .
Here, we are unable to say that if there is no plan, there is no cause of action; the essence of the claim is not the failure to pay benefits due under the terms of any plan, but the failure to make up any obligation under the CCWA in cash. See id. at 167,
Since there are no controlling Indiana cases, we look to other jurisdictions for guidance. In doing so, we note that decisions of the United States Supreme Court pertaining to federal issues are binding on state courts but that decisions of lower federal courts, although they may be persuasive, are not binding upon state courts. Ind. Dep't of Pub. Welfare v. Payne, 622 NE.2d 461, 468 (Ind.1993).
In California Division of Labor Standards Enforcement v. Dillingham Construction N.A., Inc.,
Although earlier decisions liberally interpreted this test and portrayed the scope of ERISA preemption as clearly expansive, more recent Court decisions have been more restrictive. See State v. Phillips,
Here, we are convinced that the CCWA does not "refer to" ERISA or ERISA plans. The text of the CCWA makes no mention of ERISA or fringe benefits of any type. Indeed, fringe benefits are considered as a "wage" under the CCWA only pursuant to case law. See Union Township,
Although IDOL's interpretation of the law is not binding upon this court, 8 we do agree that neither the CCWA nor the definition of "wage" as interpreted by case law makes any distinction between cash payments or fringe benefits. As explained by the court in Union Township, a "wage" for purposes of the CCWA in-eludes:
"'Every form of remuneration payable for a given period to an individual for personal services, including salaries, commissions, vacation pay, dismissal wages, bonuses and reasonable value of board, rent, housing, lodging, payments in kind, tips, and any other similar advantage received from the individual's employer or directly with respect to work for him.
[The] term should be broadly defined and includes not only periodic monetary earnings but all compensation for services rendered without regard to the manner in which such compensation is computed.'"706 N.E.2d at 191 (quoting Johnson v. Wiley,613 N.E.2d 446 , 450 n. 3 (Ind.Ct.App.1993)). 9
This definition makes no distinction between cash payments, fringe benefits governed by ERISA, or fringe benefits not governed by ERISA. Instead, it includes all compensation for services rendered.
Thus, it cannot be said that the CCWA acts immediately or exclusively . upon ERISA. See Dillingham,
However, a law which does not "refer to" ERISA may yet be preempted by ERISA if it has a "connection with" ERISA plans. Dillingham,
Here, wage regulation is clearly an area within the historic police powers of the states. See Dillingham,
"Given the paucity of indication in ERISA and its legislative history of any intent on the part of Congress to preempt state apprenticeship training standards, or state prevailing wage laws that incorporate them, we are reluctant to alter our ordinary assumption that the historic police powers of the States were not to be superseded by the Federal Act. Accordingly, as in Travelers, we address the substance of the California statute with the presumption that ERISA did not intend to supplant it."519 U.S. at 331 ,117 S.Ct. 832 . (emphasis supplied) (citations and internal quotations omitted).
*12
The Dillingham Court contrasted a case in which the state laws at issue were found to have a "connection with" ERISA with one in which the state law was not found to have such a connection. In Shaw v. Delta Air Lines, Inc.,
In contrast, in Travelers supra, the state statute at issue regulated hospital rates and required hospitals to exact surcharges from patients whose hospital bills were paid by certain insurance providers not associated with Blue Cross/Blue Shield. - Because ERISA plans were among the purchasers of insurance, the statute was claimed to invoke ERISA preemption. The proponents of preemption argued that the differential rates charged made non-Blue Cross insurance coverage more expensive and less attractive. Therefore, insurance purchasers, including ERISA plans, were encouraged to purchase coverage through Blue Cross. The Travelers Court upheld the statute, finding no preemption.
"Indeed i#f ERISA were concerned with any state action-such as medical-care quality standards or hospital workplace regulations-that increased the costs of providing certain benefits, and thereby potentially affected the choices made by ERISA plans, we could scarcely see the end of ERISA's pre-emptive reach, and the words 'relate to' would limit noth"519 U.S. at 329 ,117 S.Ct. 832 . ing."
Based upon this Supreme Court precedent, we aré unable to conclude in the present case that the CCWA has a "connection with" ERISA for purposes of federal preemption. Although our issue was not the precise issue before it, the Dilling-ham Court stated that there was little indication in ERISA that Congress intended to preempt state apprenticeship laws "or the state prevailing wage laws that incorporate them."
Several lower federal courts and state courts have considered the relationship between ERISA and state prevailing wage laws and come to a similar conclusion. See Minnesota Chapter of Associated Builders & Contractors, Inc. v. Minnesota Dep't of Labor & Indus.,
The Second Circuit in General Electric Co. v. New York State Department of Labor,
We observe, however, that General Electric was decided before the U.S. Supreme Court began to reign in the expansive scope of ERISA preemption. Also, the Ninth Cireuit in Curry, supra, held that it is not enough that a state law impose
*14
additional administrative burdens regarding benefit contributions upon the employer. See
More importantly, in Burgio, supra, the Second Circuit distinguished the General Electric holding. By the time of the Bur-gio opinion, New York had abandoned the "line-item" approach and now simply required employers to match the total costs of all the prevailing supplements.
The same can be said of the Indiana scheme. The CCWA merely requires that the specified common wage be paid, and the employer's obligation may be met through any form of remuneration, including wages and fringe benefits. See Union Township,
E.L.C. also argues that, in determining the value of the fringe benefits given to E.L.C.'s employees, IDOL apparently "disallowed" some of the associated expenses which E.L.C. claims should be counted in determining the cost of the fringe benefits it paid. Specifically, E.L.C. claims that IDOL disallowed certain costs associated with self-administration of the fringe benefits. First, we note that E.L.C. does not explain what it means in claiming that ERISA would "allow" such expenses. E.L.C. cites no provision in ERISA which would require that specific administrative expenses be counted towards an employer's common wage obligations.
Furthermore, we again state that IDOL's determinations of law are not binding upon courts. Indeed, as the trial court concluded in denying E.L.C.'s motion for a declaratory judgment, which neither party challenges upon appeal:
*15 "26. The opinions issued by [IDOL] at the conclusion of the audit process do not affect the legal rights of the employers. Rather, opinion letters are issued pursuant to [IDOL]'s statutory duty to inspect records and communicate its findings in order to monitor and ensure compliance with the labor laws.
27. The letters to employees do not grant employees the right to sue. The letters are advisory only, and thus they do not constitute administrative decisions from which there is a right to an administrative - appeal." - Appellant's App. at 218 (citations omitted).
If the letters and opinions of IDOL are not binding, then IDOL's "disallowance" of certain expenses during the audit do not appear to be grounds for ERISA preemption of the Employees' claims. However, the Employees do appear to base their claims upon the same reasoning as used by IDOL during the audit.
So far as we are able to determine, E.L.C. argues that IDOL's enforcement of the CCWA places additional administrative burdens and costs upon it, allegedly in violation of ERISA. The trial court apparently accepted this argument, stating in the order granting summary judgment, "ERISA prohibits state regulations or a state action that places administrative burdens and costs on ERISA plans maintained by E.L.C. Electric, Inc." Appellant's App. at 11. One of the authorities cited for this contention is Keystone,
A state law may be preempted by ERISA if it imposes additional administrative requirements for ERISA plans. See Curry,
In essence, the Employees claim that E.L.C., by not paying to them certain fringe benefits E.L.C. claimed to have paid, owed the Employees cash wages based upon the common wages established pursuant to the CCWA. E.L.C. claims that the money it spent should count towards its wage obligations: We agree with the argument' of the amici.curiae that to the extent that E.L.C. disagrees with IDOL's audit results, it should have the opportunity to challenge such findings at trial when it comes to determining how much, if any, unpaid) wages E.L.C. owes the Employees. 14 See Brief of Amicus Curiae Indiana State Building and Construc *16 tion Trades Council at 15-16, Brief of Amicus Curiae Indiana Department of Labor at 17.
In conclusion, the CCWA, and the Employees' claims based thereon, are neither "connected with" nor "refer to" ERISA in such a manner as to warrant application of ERISA's preemption provision. The trial court erred in concluding otherwise. To the extent that E.L.C. claims that it did not receive proper credit for certain expenses in IDOU's audit, this is an issue which should be resolved at trial. .
The judgment of the trial court is reversed, and the cause is remanded for further proceedings consistent with this opinion. - |
Notes
. This committee is made up of five members: a labor representative appointed by the president of the state federation of labor, an industry representative appointed by the awarding agency, a member named by the governor, a local taxpayer appointed by the owner of the project, and a taxpayer appointed by the legislative body of the county where the project is located. Id. at § 1(b).
. ELC. does not bring a cross-appeal from the trial court's ruling upon this matter.
. We observe that the text of the CCWA does not create a private cause of action for failure to comply with the requirements of the act. However, in Stampco Construction Co., Inc. v. Guffey,
, ELC. makes no mention of this Seaboard case or its effect on the holding in Edwards. E.L.C. does cite to Indiana Carpenters Central and Western Indiana Pension Fund v. Seaboard Surety Co.,
. See Midwest Sec. Life Ins. Co. v. Stroup,
. - As noted by the Wisconsin Court of Appeals in Phillips, Justice Scalia, joined by Justice Ginsburg, wrote separately in Dillingham to state that ERISA preemption should be governed by traditional concepts of field preemption and conflict preemption.
. Under this "reference to" prong of the test, the Supreme Court has held preempted a law that imposed requirements by reference to ERISA-covered programs, a law that specifically exempted ERISA plans from an otherwise generally applicable garnishment provision, and a common-law cause of action premised on the existence of an ERISA plan. Id. at 324-25,
. When an appeal involves an agency's determination of a question of law, we are not bound by that agency's interpretation of the law, but rather we determine whether the agency correctly interpreted and applied the law. Miller Brewing Co. v. Bartholemew County Beverage Co., Inc.,
. The Johnson court was in turn quoting from Black's Law Dictionary 1579 (6th ed. 1990).
. We also note, albeit parenthetically, that Judge Miller of the United States District Court for the Northern District of Indiana came to a similar conclusion in an unpublished memorandum order in Boatman v. Dilling Mechanical Contractors, Inc.,
. These wage supplements were defined to include "all remuneration for employment paid in any medium other than cash, or reimbursement for expenses, or any payments which are not 'wages' within the meaning of the law...." General Electric,
. We recognize that there are some courts which have held that state prevailing wage laws were preempted. See, e.g., City of Des Moines v. Master Builders of Iowa,
. EL.C. also claims that the type of expenses IDOL disallowed in the audit of E.L.C. have been allowed in audits of other companies. ELC. never fully develops this argument, and we fail to see how this could be grounds for ERISA preemption of the Employees' claims. -
. Of course, in determining this factual issue, the trial court will be bound not to use, any method which would conflict with ERISA.