Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

KEYSTONE v. FOLEY

July 30, 1993

KEYSTONE CHAPTER, ASSOCIATED BUILDERS AND CONTRACTORS, INC., IN REPRESENTATION OF ITS MEMBERS, Plaintiff
v.
THOMAS P. FOLEY, in his official capacity as the SECRETARY OF LABOR AND INDUSTRY FOR THE COMMONWEALTH OF PENNSYLVANIA, Defendant. THE BELL TELEPHONE COMPANY OF PENNSYLVANIA, et al., Plaintiffs v. THOMAS P. FOLEY, et al., Defendants.


Kosik


The opinion of the court was delivered by: EDWIN M. KOSIK

Before the court in each of the above-captioned actions are cross-motions for summary judgment. The issues to be decided in these motions are identical, and therefore will be discussed in this joint Memorandum.

 I. Background

 The Pennsylvania Prevailing Wage Act, 43 Pa. Stat. Ann. §§ 165-1 et seq. [the "Act" or the "Prevailing Wage Act"], and its accompanying regulations published at 34 Pa. Code 9.101 et seq., require contractors on public works projects to pay their employees the prevailing wages for the locality where the project is located. 43 Pa. Stat. Ann. §§ 165-4, 165-5, 165-6. The Secretary of Labor and Industry is required to determine the general prevailing minimum wage rate for the locality where the project is located "for each craft or classification of all workmen needed to perform public work contracts" for the duration of the project. 43 Pa. Stat. Ann. § 165-7. In determining the prevailing wage rate, contributions toward employee benefits made pursuant to a bona fide collective bargaining agreement are to be considered and integral part of the wage rate. Id. The Act sets minimum wage rates to be paid on public works projects. It does not prevent contractors from paying wages in excess of those rates. Id.

 For several years prior to April 13, 1992, the Secretary interpreted the Act as precluding a contractor from receiving any credit towards a particular fringe benefit over the amount listed for that fringe benefit in the wage determination issued for a specific project. As a result, employers were required to contribute fringe benefits precisely as mandated by the state for the particular locality, or pay a cash equivalent directly to employees. On April 13, 1992, the Prevailing Wage Appeals Board issued a Declaratory Order modifying this approach. *fn1" The Order states that "a contribution is bona fide if that contribution: (a) is made to an 'employee benefit plan' or a fund or program subject to the Employee Retirement Income Security Act of 1974." The Order requires contractors to separately examine and meet the wage and fringe benefit components of the prevailing wage determination. Thus, the maximum credit an employer may take for employee benefits can not exceed the total amount of contributions for the employee benefits established by the predetermination. In that light, the Declaratory Order provides that:

 
No credit for contributions for employee benefits exceeding the maximum established by the predetermination shall be given and no payment in one or more employee benefit categories shall be off-set against an underpayment in wages.

 An example of how the Prevailing Wage Act works is illustrative. Under the Act, for a specific project, the Secretary may determine the prevailing rate to be $ 20 an hour in wages and $ 5 an hour in fringe benefits. If an employer, pursuant to a collective bargaining agreement, pays employees $ 16 an hour in wages and $ 10 an hour in fringe benefits, however, it receives no credit for the higher payment in benefits. Under this example, the employer would be obligated to provide an additional $ 4 per hour in wages in order to be in compliance under the Act. Such a result may cause employers to attempt to bargain for lower benefit payments with the members of the collective bargaining group it seeks to employ on this project.

 II. Procedural History

 The plaintiff in Civil Action Number 92-0459, Keystone Chapter, Associated Builders and Contractors, Inc., in representation of its members ["Keystone Chapter"], filed a complaint on April 8, 1992, seeking injunctive relief against defendant Thomas P. Foley, in his capacity as Secretary of Labor and Industry for the Commonwealth of Pennsylvania ["Foley"]. The gravamen of Keystone Chapter's complaint is that the Prevailing Wage Act is preempted by the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001 et seq. ["ERISA"].

 Plaintiffs in Civil Action Number 92-1105, Bell Telephone Company of Pennsylvania ["Bell"] and Communication Workers of America, AFL-CIO, District 13 ["Communication Workers"], filed their original complaint on August 13, 1992. An amended complaint was filed on December 11, 1992. The defendants in the amended complaint are Foley, and the individual members of the Pennsylvania Prevailing Wage Appeals Board. *fn2" The amended complaint, in each of two counts, sought a declaratory judgment that the Prevailing Wage Act was preempted by federal law, either by the National Labor Relations Act, 29 U.S.C. §§ 151 et seq. [the "NLRA"], in Count I, or ERISA, in Count II. By Memorandum and Order dated March 16, 1993, we granted the defendants' motion to dismiss Count I of the complaint, concerning preemption under the NLRA.

 On April 30, 1993, Bell and Communication Workers filed a motion for summary judgment on Count II of their complaint, claiming that ERISA preempts the Prevailing Wage Act, its accompanying regulations and the Declaratory Order of the Prevailing Wage Appeals Board dated April 13, 1992. The defendants in that action filed a cross-motion for summary judgment on the same date. Keystone Chapter filed a motion for summary judgment on May 3, 1993, on precisely the same issue. Foley filed a cross-motion in that action on April 30, 1993.

 III. Discussion

 All parties in these two actions agree that no question of material fact exists that would prevent the entry of summary judgment on the ERISA preemption issue. Thus, our task is to determine, as a matter of law, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.