Frank Bros., Inc. v. Wisconsin Department of Transportation, Frank Busalacchi, Secretary, and Marilyn Kuick, Chief Eeo/labor ComplianceFrank Bros., Inc. v. Wisconsin Department of Transportation, Frank Busalacchi, Secretary, and Marilyn Kuick, Chief Eeo/labor Compliance
Plaintiff-appellant Frank Bros., Inc., (“Frank Bros.”) appeals an order of the district court dismissing their complaint seeking a declaratory judgment and in-junctive relief against the Wisconsin Department of Transportation, Frank Busa-lacchi, Secretary, and Marilyn Kuick, Chief EEO/Labor Compliance for failure to state a claim upon which relief could be granted pursuant to
I. Background
Frank Bros, is a construction company with its principal place of business in Janesville, Wisconsin. In 2002, Frank Bros, entered into two separate contracts with the Wisconsin Depai’tment of Transportation (‘WisDOT”) agreeing to act as a subcontractor on road construction projects in Rock County, Wisconsin. Under these contracts, which were funded by capital from both federal and state agencies through the provisions of the Federal-Aid Highway Act (“FHWA”),
The two highway construction contracts that Frank Bros, entered into with the WisDOT required that the company comply with all state and federal laws applicable to federally funded highway construction projects.
See
Not all persons performing work related to a federally funded construction project will fall within the scope of the Davis-Bacon Act’s prevailing wage and reporting requirements. Qualified employees under the Davis-Bacon Act include, “laborers and mechanics,”
However, in addition to complying with mandatory federal prevailing wage laws, subcontractors on joint federal and state construction projects are also required to abide by the laws and regulations of the various states in which they are performing work. In a number of states, including Wisconsin, this means adhering to supplemental state prevailing wage laws, sometimes referred to as the “little Davis-Bacon Acts.”
See generally,
A. Thieblot, PREVAILING WAGE LEGISLATION: THE DAVIS-BACON ACT, STATE “LITTLE DAVIS-BACON” ACTS, THE WALSH-HEALEY ACT, AND THE SERVICE CONTRACT ACT 21-135 (1986). The same year that the Davis-Bacon Act was enacted by the United States Congress, the State of Wisconsin followed suit and passed its own prevailing wage laws, which remain in place today in substantively the same form as when they were enacted in 1931.
More importantly though, Wisconsin’s prevailing wage enactment, unlike the Davis-Bacon Act and the regulations promulgated thereunder, expressly provides that “[a]ll laborers, workers, mechanics and
truck drivers
employed,” on public works projects shall be paid the prevailing wage determined by the DWD.
Confronted with this legislative and contractual scenario, Frank Bros, chose to comply fully with the federal prevailing wage requirements, but did not pay — or require its subcontractors to pay — the prevailing wage required under Wisconsin law to truck drivers employed in hauling limestone and other aggregates from the Frank Bros, quarry to the job sites. Frank Bros, also failed to comply with Wisconsin law by not providing the required (weekly) supporting payroll documentation to the WisDOT (such as the wages paid and number of hours worked by truck drivers employed either directly or indirectly on the project).
Having learned of this situation, Marilyn Kuick, Chief of the EEO/Labor Compliance Bureau for the WisDOT, ordered Frank Bros, to immediately comply with Wisconsin law. In a letter dated January 15, 2003, Kuick directed the company to begin paying all truck drivers employed in hauling materials to and from the construction sites Wisconsin’s prevailing wage rate. The letter further instructed Frank Bros, to comply with the reporting provisions of
On February 19, 2003, Frank Bros, filed suit in the United States District Court for the Western District of Wisconsin. The company sought a declaratory judgment and injunctive relief against the WisDOT and other named defendants pursuant to the Davis-Bacon Act,
Shortly after the complaint was filed, but before discovery had commenced, the defendants-appellees moved to dismiss pursuant to
II. DlSCÜSSION
The district court dismissed the defendants-appellees’ complaint under
A. Federal Preemption Doctrine
The sole issue presented on appeal is whether the federal prevailing wage scheme, which expressly exempts truck drivers from its scope of coverage, preempts Wisconsin’s prevailing wage law, which specifically includes truck drivers.
Under the Supremacy Clause of the United States Constitution, U.S. CONST., art. VI, state law may be preempted by federal legislation either by “express provision, by implication, or by a conflict between' federal and' state law.”
N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co.,
1. Express Congressional Intent
Although Frank Bros, does not argue that Wisconsin’s prevailing wage law is expressly preempted by federal law, “we begin as we do in any exercise of statutory construction with the text of the provision in question, and move on, as need be, to the structure and purpose of the Act in which it occurs.”
Travelers Ins. Co.,
When interpreting the text of a statutory provision for preemptive intent we assume that the ordinary meaning of the language used by Congress accurately reflects the legislative purpose.
See Morales v. Trans World Airlines, Inc.,
2. Implicit Preemption
Frank Bros.’ first claim on appeal is that congressional legislation, in the form of the Davis-Bacon Act, as incorporated by the FHWA, is so pervasive that it leaves no room for the State of Wisconsin to impose its own prevailing wage scheme. Thus, Frank Bros, concludes that the State of Wisconsin is precluded from enforcing its prevailing wage legislation and accordingly may not require Frank Bros, to pay a state prevailing wage to truck drivers in the company’s (and its subcontractor’s) employ. The appellants base this claim primarily on the following allegations: (a) that “Congress specifically addressed how wages should be set on federally funded highway contracts in
In this country, it is a long-standing principle of law that, in the absence of explicit language signaling preemptive intent, the manifest purpose of Congress to preclude the application of State law may also be evinced by either a “scheme of federal regulation ... so pervasive to make reasonable the inference that Congress left no room for the States to supplement it,” or the passage of an Act that “touchfes] a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject.”
Rice,
As noted above, the establishment of prevailing wage rates and labor standards for indigenous workers is an area of traditional state regulation.
See Dillingham,
The statutory language of both the Davis-Bacon Act and the FAHA both suggest that Congress intended federal law to be complementary to, rather than preclu-sive of, state law. The Davis-Bacon Act was initially enacted in 1931 during the Hoover administration and mandates that a “prevailing wage” determined by the Secretary of Labor be paid to those employees who perform various qualified tasks for contractors on federal public works projects.
3
See
If Congress had intended to supplant more stringent state legislation it is unlikely that they would have characterized the federal prevailing wage as the
“minimum, wages
to be paid various classes of laborers and mechanics.”
Indeed, the broader federal law requiring that all workers, regardless of job classification, be paid a “minimum wage” has long been an area of the law which is governed by a complementary web of federal and state legislation, and there is no reason to believe that Congress did not envision that the same system would operate with respect to the Davis-Bacon Act as well.
See, e.g.,
29.U.S.C. §§ 201-209 (entitled the “Fair Labor Standards Act”). This conclusion is consistent with the fact that, like the Davis-Bacon Act, the federal minimum wage was part of comprehensive legislation aimed at mitigating the financial damage done to the working class in the United States during the Great Depression.
See generally
William P. Quigley,
‘A Fair Day’s Pay For a Fair Day’s Work’: Time to Raise and Index the Minimum Wage,
27 St. Mary’s L.J. 513, 515-29 (1996). The only substantive difference between the federal minimum wage law and the Davis-Bacon Act in this context is
Additional guidance as to congressional intention not to preempt state regulation in the field is provided by the FHWA, which implements the Davis-Bacon Act in conjunction with all federally funded state highway projects. A comprehensive analysis of the FHWA demonstrates that Congress both understood state involvement in setting and maintaining prevailing wages and sought the states’ cooperation in facilitating the enforcement of the Davis-Bacon Act. Moreover, there is nothing in the FHWA which suggests that Congress intended the Davis-Bacon Act or the FHWA to preclude supplemental wage rate legislation by the states in the form of either a higher prevailing wage or the payment of a prevailing wage to a broader variety of workers.
5
For example, the FHWA provides in part that “all laborers and mechanics employed by contractors or subcontractors ... shall be paid wages at rates
not less than
those prevailing on the same type of work on similar construction in the immediate locality as determined by the Secretary of Labor
in accordance with ...
[the Davis-Bacon Act].”
Frank Bros, attaches great importance to the words “in accordance with” in the statute and argues that
Moreover, nothing in either the legislative history of the Davis-Bacon Act or the FHWA supports Frank Bros.’ contention that Congress intended to preempt broader prevailing minimum wage requirements implemented by the states. As the Supreme Court acknowledged for the first time over fifty years ago: “The language of the [Davis-Bacon] Act and its legislative history plainly show that it was not enacted to benefit contractors, but rather to protect their employees from substandard earnings
by fixing a floor under wages on
Government projects.”
United States v. Binghamton Const. Co.,
The proposition that Congress, at least implicitly, intended to allow for supplemental and even more aggressive state regulation, is also supported with compelling evidence that the federal government is well aware of, and even comfortable with, the fact that some of the “little Davis-Bacon Acts,” such as Wisconsin’s prevailing wage law, impose more stringent requirements
0ie.,
higher prevailing wages and additional categories of covered employees) on contractors and subcontractors than those mandated by the Davis-Bacon Act. For example, a great number of states have prevailing wage legislation in place that mandates that worker classifications, such as truck drivers — employees that are not qualified employees under the Davis-Bacon Act — be paid a state prevailing wage.
See supra
note 9 and accompanying text. More importantly, aside from Wisconsin, at least three other states specifically include truck drivers as one of the classes of contractor employees that must be paid the prevailing wage under state law.
See, e.g.,
However, even if it were reasonable for Frank Bros, to suggest that Congress is oblivious of this legislation, the record suggests that — at the very least— the Federal Highway Administration is well aware that certain states have enacted legislation that is supplementary to the Davis-Bacon Act. In 1985 the Federal Highway Authority proposed a rule which would have allowed the Federal Highway Administrator to decline funding to highway contracts that are too costly due to
Essentially the only evidence that Frank Bros, relies upon in support of their argument for field preemption is Congress’ silence as to the application or existence of state prevailing wage laws.
10
However, silence on the part of Congress alone is not only insufficient to demonstrate field preemption, it actually weighs in favor of holding that it was the intent of Congress
not
to occupy the field.
Hillsborough,
To illustrate the point further, this is not a situation akin to the one encountered by the Supreme Court in
Guss v. Utah Labor Board,
which Frank Bros, cites as support for its argument that the Davis-Bacon Act preempts state prevailing wage laws.
Guss
is distinguishable, for in this case we are not dealing with a plenary grant of power by the Congress to the Secretary of Labor. As we have illustrated, although the Davis-Bacon Act grants the Secretary the power to determine a minimum prevailing wage, nothing in the act even implies exclusivity. Whereas in
Guss
the Court needed look no further than the statute itself to determine that Congress had “meant to reach to the full extent of its power under the Commerce Clause,” in passing the National Labor Relations Act.
Id.
at 3,
Because we are not satisfied that the Davis-Bacon Act, as incorporated by the FHWA, evinces the clear and “manifest purpose of Congress” to implement a scheme of legislation so pervasive
11
that it would, in effect, preempt any state regulation in the field, we conclude that the State of Wisconsin is free to require compliance
3. Conflict Preemption
Frank Bros, argues, in the alternative, that by incorporating the Davis-Bacon Act into the FHWA, it was the intention of Congress to comprehensively regulate the type of wages paid and the manner in which those wages were determined. Thus, they argue that, by also setting forth the wages to be paid and to whom they are to be paid, Wisconsin’s prevailing wage law conflicts with federal law. For the most part this is simply an extension of their
Conflict preemption occurs only in those circumstances where “compliance with both federal and state regulations is a[n] ... impossibility,” or where state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”
California Fed. Savings & Loan Ass’n,
The appellants initially argue that the application of Wisconsin’s prevailing wage rate to truck drivers conflicts with the implementation and intent of the federal scheme. Specifically, they argue that because delivery drivers on construction projects are expressly excluded under regulations promulgated pursuant to the Davis-Bacon Act and incorporated by the FHWA, Congress intended that truck drivers are to be paid at “free market rates” when working for subcontractors on federal highway projects. Appellant’s Brief at 18. The appellants go on to assert that “the State of Wisconsin has contradicted this free market philosophy ..., by concluding that they should be paid gov-ernmentally set rates.” Appellant’s Brief at 18-19. We disagree.
In order to determine whether state law constitutes an obstacle to the accomplishment of the purposes and objectives of Congress we will “consider the relationship between - state and federal laws as they are interpreted and applied, not merely as they are written,” and “mere differences between state and federal regulation of the same subject are not conclusive of preemption ... the crucial inquiry is whether [state law] differs from [federal law] in such a way that achievement of the congressional objective ... is frustrated.”
MITE Corp.,
As mentioned above, the Davis-Bacon Act and the regulations promulgated pursuant to that statutory enactment provide for a detailed web of legislation which, at its heart was “designed for the benefit of ... workers.”
Universities Research Ass’n v. Coutu,
In addition, subsequent to the Supreme Court’s decision in
Binghamton,
the Court has gone on to hold that contractual agreements between employers and employees do not frustrate the purposes of the Davis-Bacon Act where the agreed upon compensation is greater than the floor established by the Davis-Bacon Act.
See Walsh v. Schlecht,
It is most disingenuous for Frank Bros, to argue that Wisconsin’s decision to pay a prevailing wage to a category of workers which the federal government has chosen to exclude “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”
California Fed. Savings & Loan Ass’n,
Instead, it would be more logical and accurate to conclude that, responding to judicial precedent holding that Congress had not intended to include off-site truck drivers as covered workers when the Davis-Bacon Act was passed,
see Building and Constr. Trades Dept., AFL-CIO v.
In an effort to bolster their claim that conflict preemption should prohibit operation of Wisconsin’s prevailing wage law Frank Bros, cites a Northern District of New York decision,
FHM Constructors, Inc. v. Village of Canton Housing Authority,
No. 91-CV-0065,
The
FHM
and
Majstrovic
cases do nothing to sway our opinion that
Finally, Frank Bros, claims that it is “physically impossible” to comply with both Wisconsin’s prevailing wage law and federal law. This argument is a red herring. It is not “physically impossible” for Frank Bros, to comply with the Davis-Bacon Act, the FHWA and the Wisconsin statute. As we have noted earlier, the Davis-Bacon Act merely sets a “floor” for the prevailing wage to be paid workers on federally funded public works. Also, it is true that according to regulations promulgated by the Department of Labor, truck drivers are specifically excluded from coverage under the Act. However, what Frank Bros, misunderstands is that there is nothing in the Davis-Bacon Act which specifically or expressly
prohibits
paying truck drivers a prevailing wage. Instead, the regulations merely articulate the idea that “the transportation of materials or supplies to or from the site of work by employees of the construction contractor or a construction contractor is not ‘construction, prosecution, completion or repair,’ ” within the meaning of the Davis-Bacon Act.
The same is true for the FHWA.
Wisconsin’s prevailing wage legislative scheme is supplemental in nature and thus there is nothing barring Frank Bros, from complying with both federal and state law in this case. Neither federal law nor the regulations under the Davis-Bacon Act prohibit contractors, like Frank Bros, from paying a prevailing wage to truck drivers; they are merely excluded from coverage under the Davis-Bacon Act. This is an area of traditional state regulation and as such the State of Wisconsin is free to set whatever wage it likes for whatever category of worker it considers worthy, as long as that regulation does not enter into a field occupied by federal legislation and does not conflict with that legislation. We conclude that federal law does not prohibit Frank Bros, from paying the State’s prevailing wage to truck drivers, and thus it is not “physically impossible” for them to comply with both federal and state law in this instance.
III. Conclusion
Because we hold that it was not the clear and manifest purpose of Congress to preempt supplementary state regulation in the area of prevailing wage rates and because we find nothing in Wisconsin’s prevailing wage law which conflicts with fed
Affirmed.
Notes
. As stipulated in a supplemental contract provision in the highway construction agreement entered into between Frank Bros, and the WisDOT, "[i]n the event the [prevailing wage rates under
. Indeed, as discussed
infra,
provisions in both the Davis-Bacon Act and the FHWA suggest that Congress intended a scheme of complementary state/federal legislation. For example,
. It should be noted, however, that over the years the Davis-Bacon Act has been amended many times and, as a result, contains many nuances that the bill passed in 1931 did not. See generally Lisa Morowitz, Government Contracts, Social Legislation, and Prevailing Woes: Enforcing the Davis Bacon Act, 9 In. Pub. Int. 29, 32 (1989).
. As Representative Bacon stated, the Davis-Bacon Act was intended to discourage "certain itinerant, irresponsible contractors, with itinerant, cheap, bootleg labor ... [from] 'picking' off a contract here and a contract there,” and to "simply give local labor and the local contractor a fair opportunity to participate in this building program.” 74 Cong. Rec. 6510 (1931).
. In terms of the FHWA, a number of courts have held that because participation in the FHWA is at the states’ option, it cannot be said that Congress intended to preempt the field and preclude supplementary state decision making.
Siuslaw Concrete Constr. Co.,
. Frank Bros, argues unpersuasively that the phrase "... and applicable federal laws” in
. While it is true, as Frank Bros, asserts, that the Secretary of Labor has the authority to set the Federal prevailing wage without regard to applicable state regulations, this fails to add anything to their cause; for as
. This conclusion is also bolstered by
.Those states are:
. Frank Bros, incorrectly asserts that "[w]hen Congress has enacted protective labor legislation that intrudes upon the historic police powers of States, the traditional pattern followed by Congress has been to specifically assert in the legislation that the States retain these police powers, if Congress wishes the States to retain those powers.” Appellant’s Brief at 28. A quick read of the United States Constitution reveals that "powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively....”
. Frank Bros, also claims that the determination of how workers are to be categorized and/or paid on federally funded highway projects is of such significant interest to Congress that the federal interest in regulating such matters is so dominant as to preempt all state laws touching on the same subject. As support for this argument Frank Bros, cites the amount of money spent by the federal government (billions of dollars each year) on state highway projects. They therefore argue that the states are precluded from raising the price of labor on joint federal/state highway projects by imposing supplementary prevailing wage schemes.
However, this argument is unpersuasive because: "[undoubtedly, every subject that merits congressional legislation is, by definition, a subject of national concern. That cannot mean, however, that every federal statute ousts all related state law.”
Hillsborough,
. Even if we were to assume that the legislative scheme of the Davis-Bacon Act (and the Federal-Aid Highway Act) was comprehensive in its field, comprehensiveness does not always justify preemption.
Hillsborough,
As far as the particular Davis-Bacon Act regulation at question here pertaining to truck drivers,
As a result of their specialized functions, agencies normally deal with problems in far more detail than does Congress. To infer pre-emption whenever an agency deals with a problem comprehensively is virtually tantamount to saying that whenever a federal agency decides to step into a field, its regulations will be exclusive. Such a rule, of course, would be inconsistent with the federal-state balance embodied in our Supremacy Clause jurisprudence. See Jones v. Rath Packing Co.,430 U.S. at 525 ,97 S.Ct. 1305 .... Thus, if an agency does not speak to the question of preemption, we will pause before saying that the mere volume and complexity of its regulations indicate that the agency did in fact intend to preempt.
Hillsborough,
. Of course, if the free market price of labor is higher in a given locality than what either the Secretary of Labor or the WisDOT determines the prevailing wage to be, contractors may be required to pay workers more given their individual circumstances. As we have already discussed, the Davis-Bacon Act was intended to set a "floor” on labor prices, and we have not been presented with any evidence suggesting the federal law prohibits either the State of Wisconsin or the free market from setting the price of labor higher in a certain locality. If Frank Bros, has a problem with the economic sense of the state regulation, perhaps that is an issue that should be taken up with the Wisconsin legislature.
. Prior to the decision in
Building and Con-stmetion Trades Department, AFL-CIO,
it was an open question as to whether truck drivers employed by government contractors were covered by the Davis-Bacon Act or not.
See Zachry Co. v. United States,
. The court in
Majstrovic
also held that the federal Davis-Bacon Act preempted state prevailing wage rate schedules for purposes of federally funded housing projects. This case does not help Frank Bros.' argument either, because HUD explicitly preempted the state law which set higher prevailing wage rates, while the FHWA includes no such clause.
Majstrovic,