616 N.W.2d 697 | Mich. Ct. App. | 2000

616 N.W.2d 697 (2000)
241 Mich. App. 406

MICHIGAN STATE BUILDING & CONSTRUCTION TRADES COUNCIL, AFL-CIO, and Resteel Contractors Association, Inc., Plaintiffs-Appellees,
v.
Lowell Perry and Consumer & Industry Services, f/k/a Michigan DEPARTMENT OF LABOR, Defendants-Appellants.

Docket No. 206704.

Court of Appeals of Michigan.

Submitted February 9, 2000, at Detroit.
Decided June 9, 2000, at 9:00 a.m.
Released for Publication September 6, 2000.

*698 Klimist, McKnight, Sale, McClow & Canzano, P.C. (by John R. Canzano), Southfield, for the plaintiffs.

Jennifer M. Granholm, Attorney General, Thomas L. Casey, Solicitor General, *699 and Richard P. Gartner, Assistant Attorney General, for the defendants.

Before: HOLBROOK, JR., P.J., and MICHAEL J. KELLY and COLLINS, JJ.

PER CURIAM.

In this case involving the prevailing wage act (PWA), M.C.L. § 408.551 et seq.; MSA 17.256(1) et seq., defendants Lowell Perry[1] and the Michigan Department of Consumer and Industry Services (collectively, the department) appeal the circuit court's final order granting plaintiffs declaratory and injunctive relief and the circuit court's order for a writ of mandamus. We affirm.

The PWA requires, among other things, that prevailing wages and fringe benefits be paid on certain state projects. See M.C.L. § 408.552; MSA 17.256(2), M.C.L. § 408.553; MSA 17.256(3); Western Michigan Univ. Bd. of Control v. Michigan, 455 Mich. 531, 533, 565 N.W.2d 828 (1997). Section 4 of the statute, states, in pertinent part, as follows:

The commissioner shall establish prevailing wages and fringe benefits at the same rate that prevails on projects of a similar character in the locality under collective agreements or understandings between bona fide organizations of construction mechanics and their employers. [MCL 408.554; MSA 17.256(4).]

Before July 1994, the department established all prevailing wage and fringe benefit rates according to the rates in local collective bargaining agreements as reported in a survey circulated by the department. The survey forms used before July 1994 asked for information regarding fringe benefit cost contributions in the following categories: "health and welfare," "vacation," "pension," "training fund," and "other." That survey also requested information regarding the daily, weekly, Saturday, and Sunday and holiday overtime pay requirements in those agreements.

In July 1994, the department began implementing new policies regarding its determination of prevailing wage and fringe benefit rates. The department determined that prevailing overtime wage rates would uniformly consist of time-and-one-half after forty hours a week, rather than the varying daily, weekly, Saturday, and Sunday and holiday overtime requirements often found in collective bargaining agreements, and that the fringe benefits considered in setting the prevailing rates would be limited to three categories: health and welfare, vacation and holiday, and pensions benefits. Under this revised policy, contributions for apprenticeship and training, labor-management cooperation committees, and supplemental unemployment benefits required under many collective bargaining agreements would not be included in the department's calculations of prevailing fringe benefit rates.

In August 1994, plaintiffs, the Michigan State Building and Construction Trades Council, AFL-CIO (the council), and Resteel Contractors Association, Inc. (the association), filed a complaint for declaratory judgment, injunctive relief, or a writ of mandamus, seeking to enjoin the new PWA policies and seeking to reinstate the department's policies in existence before July 1, 1994. Plaintiffs then filed a motion for a preliminary injunction or a writ of mandamus. The court granted plaintiffs' motion, in part. It found that the department had a duty under M.C.L. § 408.554; MSA 17.256(4) to establish prevailing wages at the rate that prevails under local collective bargaining agreements and that the process of ascertaining from collective bargaining agreements what the prevailing wages are is nondiscretionary and ministerial. The court directed defendants to cease and desist from implementing the department's new policy establishing prevailing overtime wage rates at time-and-one-half after forty hours a week and to reinstate the department's previous policy. *700 The court requested additional briefing regarding the definition of "fringe benefit" and entered a preliminary injunction restoring the status quo for establishing prevailing fringe benefit rates under the PWA.

The parties returned to the circuit court in September 1997 to resolve the fringe benefit issue.[2] The court granted plaintiffs' motion for injunctive relief and ordered the department to include in its determination of prevailing wage and fringe benefit rates contributions required by relevant collective bargaining agreements for apprenticeship and training, labor management committees, and supplemental unemployment benefits. The court concluded that the PWA should be liberally construed to benefit and protect employees and that the fringe benefits at issue were for the benefit of employees because they indirectly benefited all employees and advanced their interests.

Defendants argue on appeal that because the PWA requires that the department determine the prevailing wage and fringe benefit rates, but does not define the terms "overtime," or "fringe benefit," the department has discretion to define what constitutes "overtime" and a "fringe benefit" under the PWA and apply those definitions in establishing prevailing wage and fringe benefit rates. Statutory interpretation is a question of law that we review de novo on appeal. Oakland Co. Bd. of Co. Rd. Comm'rs v. Michigan Property & Casualty Guaranty Ass'n, 456 Mich. 590, 610, 575 N.W.2d 751 (1998).

The primary goal of judicial interpretation of statutes is to ascertain and give effect to the intent of the Legislature. Frankenmuth Mut. Ins. Co. v. Marlette Homes, Inc., 456 Mich. 511, 515, 573 N.W.2d 611 (1998). This Court will not read into a statute anything that is not within the manifest intention of the Legislature as gathered from the act itself. In re S. R., 229 Mich.App. 310, 314, 581 N.W.2d 291 (1998). Therefore, our courts look first to the specific language of the statute. In re MCI Telecommunications Complaint, 460 Mich. 396, 411, 596 N.W.2d 164 (1999). If the plain and ordinary meaning of the language is clear, judicial construction is neither necessary nor permitted. Heinz v. Chicago Rd. Investment Co., 216 Mich.App. 289, 295, 549 N.W.2d 47 (1996). Indeed, courts may not speculate with regard to the probable intent of the Legislature beyond the words expressed in the statute. In re Schnell, 214 Mich.App. 304, 310, 543 N.W.2d 11 (1995). Unless explicitly defined in a statute, every word or phrase of a statute should be accorded its plain and ordinary meaning, taking into account the context in which the words are used. McClellan v. Collar (On Remand), 240 Mich.App. 403, 613 N.W.2d 729 (2000).

We address first defendants' argument with regard to overtime wages. Defendants contend that because the PWA contains no definition of the term "overtime," the department may rely on the definition found in the Minimum Wage Law of 1964, M.C.L. § 408.384a; MSA 17.255(4a),[3] and apply that definition uniformly in establishing prevailing wage rates, irrespective of the specific provisions regarding overtime pay found in many collective bargaining agreements. We disagree. The plain language of the PWA specifically provides that the department *701 shall establish the prevailing wage and fringe benefit rates at the same rates as in local collective bargaining or similar agreements. The word "shall" is generally used to designate a mandatory provision. Depyper v. Safeco Ins. Co. of America, 232 Mich.App. 433, 438, 591 N.W.2d 344 (1998). Moreover, this Court has previously determined that the department's discretion in establishing prevailing wages under § 4 is extremely limited:

The Michigan Legislature has not delegated any legislative, policy-making authority to the Department of Labor. The Legislature has declared as the policy of this state that construction workers on public projects are to be paid the equivalent of the union wage in the locality... The Department is merely authorized to implement what the Legislature has already declared to be the law in Michigan.
... [T]he statute expresses the policy that wages equal to union scale are to be paid to both union and nonunion workers on public construction projects.... [The Legislature] merely adopted, as the critical standard to be used by the Department of Labor in determining prevailing wage, the wage rate arrived at through a collective bargaining process.... [West Ottawa Public Schools v. Director, Department of Labor, 107 Mich.App. 237, 245-246, 309 N.W.2d 220 (1981).]

Overtime wages clearly fall within the category of wages to be included when determining prevailing wage rates. Further, there is no question that collective bargaining agreements contain very specific provisions regarding overtime pay and that those provisions may contain variable overtime rates. We conclude, therefore, that under the unambiguous language of the PWA, the department, in establishing prevailing wage rates, has no discretion to depart from the wage provisions in local collective bargaining agreements by defining "overtime" in a manner inconsistent with those agreements.

We address next defendants' argument that because the term "fringe benefit" is not defined in the PWA, the department may rely on the definition found in the wages and fringe benefits act, M.C.L. § 408.471 et seq.; MSA 17.277(1) et seq.,[4] to determine what benefits should be included in its calculations of prevailing fringe benefit rates. We disagree. While the term "fringe benefit" is not specifically defined in the PWA, again, reference to a definition in a different statute addressing a similar subject is not necessary or proper, where the Legislature has specifically stated that the prevailing fringe benefit rates must be established with reference to local collective bargaining agreements.[5] Given the plain and mandatory language of the PWA and the purpose of the act, we conclude that the term "fringe benefit," in the context of the PWA, must be understood to include all negotiated employee benefits.

The benefit provisions that the department chose not to include under its revised policy include apprenticeship and training, labor-management cooperation committees, and supplemental unemployment benefits. Defendants do not contest that such benefits exist in collective bargaining agreements, but argue that, under the definition of "fringe benefit" found in the wages and fringe benefits act, because such benefits are not due, paid to, or made on behalf of any particular employee, they *702 should not be included in the department's calculations of prevailing rates. The PWA does not, however, so restrict the determination of prevailing fringe benefit rates, and to read the statute in such a restricted manner would amount to unwarranted judicial construction. See Theisen v. Knake, 236 Mich.App. 249, 253, 599 N.W.2d 777 (1999). Again, the statute provides that prevailing wage and fringe benefit rates are to be established "at the same rate that prevails on projects of similar character in the locality under collective agreements...." We believe this language requires that compensation on state projects be determined according to compensation in the private sector, regardless of the form it takes.

Moreover, our Supreme Court has noted that the PWA, "like the federal Davis-Bacon Act [40 USC 276a et seq.], implements public policy beneficial to businesses and their workers on government construction projects by providing for a certain minimum wage rate and benefit level." Western Michigan Univ. Bd. of Control, supra at 545, 565 N.W.2d 828. (Emphasis added.) Indeed, the public policy underlying the federal act has been explained as "protect[ing] local wage standards by preventing contractors from basing their bids on wages lower than those prevailing in the area" and "giv[ing] local labor and the local contractor a fair opportunity to participate in this building program." Id. at 535, 565 N.W.2d 828, quoting Universities Research Ass'n, Inc. v. Coutu, 450 U.S. 754, 773-774, 101 S.Ct. 1451, 67 L.Ed.2d 662 (1981). See also Associated Builders & Contractors, Saginaw Valley Area Chapter v. Perry, 115 F.3d 386, 390 (C.A.6, 1997). Because the contested benefits are negotiated employee benefits, whether paid to a particular employee or paid on behalf of employees in general, and thereby add to the labor cost under a contract containing such benefits, we conclude that under the language of the PWA, they must be included in determining prevailing wage and fringe benefit rates under § 4.[6]

We reject defendants' argument that the department's revised interpretation of the PWA is entitled to deference. While a longstanding and consistent administrative interpretation of a statute is entitled to considerable weight and ought not be overruled without cogent reasons, Ludington Service Corp. v. Acting Comm'r of Ins., 444 Mich. 481, 490, 511 N.W.2d 661 (1994), an administrative interpretation is not controlling and cannot overcome a statute's plain meaning. Western Michigan Univ Bd of Control, supra at 544, 565 N.W.2d 828. Here, the department's interpretation is neither longstanding nor consistent with its earlier policy. Rather, the policy challenged by plaintiffs is a "new" interpretation that is contrary to the department's earlier and longstanding policy of relying on surveys of local collective bargaining agreements to establish prevailing wage and fringe benefit rates. Moreover, as we have concluded, the department's revised method of determining prevailing wage and benefit rates conflicts with the statute's plain meaning.

We conclude that under the plain language of the PWA, the department is without discretion to define wages, including overtime, or fringe benefits independently of the collective bargaining agreements in the locality. Rather, in determining prevailing wage and benefit rates, the department is bound by the wage and fringe benefit requirements found in local collective bargaining agreements. Accordingly, *703 we find that the circuit court did not abuse its discretion in issuing a writ of mandamus requiring defendants to reinstate its previous procedure for establishing prevailing wages, in entering a declaratory judgment that defendants' revised policy regarding calculation of fringe benefits was invalid and unlawful, or in granting injunctive relief in favor of plaintiffs requiring defendants to include in the determination of prevailing fringe benefits rates the rates applicable under collective bargaining agreements for apprenticeship, training, supplemental unemployment, and labor-management cooperation committees. White-Bey v. Dep't of Corrections, 239 Mich.App. 221, 223, 608 N.W.2d 833 (1999); Allstate Ins. Co. v. Hayes, 442 Mich. 56, 74, 499 N.W.2d 743 (1993); Kernen v. Homestead Development Co., 232 Mich.App. 503, 509, 591 N.W.2d 369 (1998).

Affirmed.

NOTES

[1] Perry is the former director of the former Michigan Department of Labor, now the Michigan Department of Consumer and Industry Services.

[2] In December 1994, the case was put on hold as a result of the decision in Associated Builders & Contractors, Saginaw Valley Area Chapter v. Perry, 869 F.Supp. 1239 (E.D.Mich., 1994), holding that the PWA was preempted by the Employee Retirement Income Security Act [ERISA], 29 USC 1001 et seq. In June 1997, the United States Court of Appeals for the Sixth Circuit reversed, holding that the ERISA does not preempt the PWA. Associated Builders & Contractors, Saginaw Valley Area Chapter v. Perry, 115 F.3d 386 (C.A.6, 1997).

[3] MCL 408.384a; MSA 17.255(4a) defines" overtime" as "compensation not less than 1-1/2 times the regular rate at which the employee is employed for employment in a workweek in excess of 40 hours."

[4] Section 1(e) of the wages and fringe benefits act defines "fringe benefits" as:

[C]ompensation due an employee pursuant to a written contract or written policy for holiday, time off for sickness or injury, time off for personal reasons or vacation, bonuses, authorized expenses incurred during the course of employment, and contributions made on behalf of an employee. [MCL 408.471(e); MSA 17.277(1)(e).]

[5] Because we conclude that the definition of "fringe benefit" found in the wages and fringe benefits act does not control in the context of the PWA, we need not decide if the challenged benefits fall within that definition.

[6] As plaintiffs note, a bargained-for employee benefit such as labor-management cooperation committees is to be distinguished from employer assessments under some collective bargaining agreements to fund "industry advancement" or "industry promotions" programs. Plaintiffs acknowledge that, unlike contributions for fringe benefits, employer payments to fund industry advancement programs are not bargained as part of the wage and fringe benefit package. Plaintiffs do not contest the department's policy to exclude employer payments to industry advancement programs as part of its determination of prevailing wages and fringe benefits.

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