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Worth & Co., Inc. v. Getzie

United States District Court, E.D. Pennsylvania

April 3, 2014

WORTH & COMPANY, INC.
v.
PETER VON GETZIE, et al

Decided: April 2, 2014.

Page 485

[Copyrighted Material Omitted]

Page 486

For WORTH & COMPANY, INC., Plaintiff: JONATHAN LANDESMAN, MARK J. LEAVY, LEAD ATTORNEYS, COHEN SEGLIAS PALLAS GREENHALL & FURMAN, PC, PHILADELPHIA, PA.

For PETER VON GETZIE, ACTING DIRECTOR, PENNSYLVANIA APPRENTICESHIP AND TRAINING COUNCIL, JULIA K. HEARTHWAY, SECRETARY, PENNSYLVANIA DEPARTMENT OF LABOR & INDUSTRY, PENNSYLVANIA APPRENTICESHIP AND TRAINING COUNCIL, A Departmental Agency of The Pennsylvania Department of Labor & Industry, and its members, in their individual and official capacities, Defendants: BARRY N. KRAMER, PA OFFICE OF ATTY GENERAL, PHILADELPHIA, PA.

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MEMORANDUM

Harvey Bartle III, J.

Plaintiff Worth & Company, Inc. (" Worth" ), a mechanical and plumbing contractor which bids on publicly-funded construction projects, brings this action under 42 U.S.C. § 1983 and for state-law tortious interference with contract against the Pennsylvania Apprenticeship and Training Council (" PATC" ), its members in their individual and official capacities, PATC Acting Director Peter Von Getzie, and Secretary of the Pennsylvania Department of Labor & Industry Julia K. Hearthway.

According to the amended complaint, the PATC has denied Worth's requests to permit modification of its state-registered apprenticeship training program so that Worth may use a greater proportion of lower-paid apprentices on publicly-funded projects than usually allowed in Pennsylvania. The PATC has also allegedly failed to apply its apprenticeship rules to out-of-state contractors as required by federal regulations.

Now before the court is the defendants' motion to dismiss the amended complaint under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure.[1]

I.

When deciding a Rule 12(b)(6) motion to dismiss, the court must accept as true all factual allegations in the complaint and draw all inferences in the light most favorable to the plaintiff. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008); Umland v. Planco Fin. Servs., Inc., 542 F.3d 59, 64 (3d Cir. 2008). We must then determine whether the pleading at issue " contain[s] sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A claim must do more than raise a " 'mere possibility of misconduct.'" Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quoting Iqbal, 556 U.S. at 679). Under this standard, " [t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678. On a motion to dismiss, the court may consider " allegations contained in the complaint, exhibits attached to the complaint and matters of public record." Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993) (citing 5A Charles Allen Wright & Arthur R. Miller, Federal Practice and Procedure § 1357, at 299 (2d ed. 1990)).

When considering a facial attack on the complaint under Rule 12(b)(1) as we do here, " the trial court must accept the complaint's allegations as true." Turicentro, S.A. v. Am. Airlines Inc., 303 F.3d 293, 300 n.4 (3d Cir. 2002) (citing NE Hub Partners, L.P. v. CNG Transmission Corp., 239 F.3d 333, 341 & n.7 (3d Cir. 2001)). As in a Rule 12(b)(6) setting, the court should draw all reasonable inferences

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in the plaintiff's favor. NE Hub Partners, 239 F.3d at 341.

II.

The following facts for present purposes are accepted as true or taken in the light most favorable to Worth. Worth, one of the largest mechanical and plumbing contractors in Pennsylvania, bids on state- and federally-funded public construction contracts. These contracts are awarded on a competitive basis, and contractors seeking to win them must submit bids that include estimated material and labor costs on the contemplated work. Labor costs often make or break a bid because they are commonly the single largest line item in a projected budget.

On publicly funded construction projects, contractors must pay their employees consistent with federal and state prevailing wage laws under the Davis-Bacon Act of 1931, 40 U.S.C. § 3141 et seq., and the Pennsylvania Prevailing Wage Act, 43 Pa. Cons. Stat. Ann. § 165-1 et seq. These statutes ordinarily require employees to be paid the " journeyman" rate for their given trade. Nonetheless, under certain circumstances apprentices are allowed who are generally paid between 40% and 95% of the journeyman rate depending on experience and other factors. A contractor can therefore make its bid on a publicly-funded contract more competitive by employing as great a proportion of apprentices as possible.

An apprentice may be paid below the journeyman rate only if he or she is registered as such and is participating in an approved apprenticeship program run by the employee's union or employer. The U.S. Department of Labor (" DOL" ), pursuant to authority granted to it by the National Apprenticeship Act of 1937, 29 U.S.C. § 50 et seq., has established the Office of Apprenticeship (" OA," formerly known as the Bureau of Apprenticeship and Training) to approve, administer, and regulate formal apprenticeship training programs throughout the country. 29 C.F.R. § 29.1 et seq. To be approved at the federal level, such an apprenticeship program must have " [a] numeric ratio of apprentices to journeyworkers consistent with proper supervision, training, safety, and continuity of employment, and applicable provisions in collective bargaining agreements, except where such ratios are expressly prohibited by the collective bargaining agreements." 29 C.F.R. § 29.5(b)(7).

States may also seek delegated authority over apprenticeship programs by obtaining approval from the OA to operate a State Apprenticeship Agency (" SAA" ). Once approved, the SAA steps into the OA's shoes for purposes of approving and overseeing apprenticeship training programs within the state. Pennsylvania has obtained this authority, which it has vested in the PATC through the Apprenticeship and Training Act, 43 Pa. Cons. Stat. Ann. § 90.1 et seq.[2] The PATC has issued regulations for the administration of apprenticeship programs. See generally 34 Pa. Code § 81.1 et seq.

In Pennsylvania, unlike at the federal level, an apprenticeship training program must ordinarily feature a standard numeric journeymen-to-apprentice ratio. 34 Pa. Code § 83.5(b)(7). Pennsylvania requires a so-called " modified 5:1 ratio," that is, one apprentice is permitted for the first four journeymen, and a second apprentice is

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permitted for each five additional journeymen thereafter. Id. Although this is the default ratio, the PATC has discretion to grant ratio exemptions limited only by the flexible ratio standard articulated in 29 C.F.R. § 29.5(b)(7) and quoted above. Id.

Pennsylvania's apprenticeship regulations have been revised only once, in 1995, but the regulatory field has changed since that time. In October 2008, the DOL promulgated new federal regulations related to apprenticeship programs and SAAs. These revisions required SAAs to enact new, state-level " legislation, regulations, policies and/or operational procedures" by December 29, 2010 that grant reciprocal recognition to out-of-state apprenticeship programs, subject to certain conditions. 29 C.F.R. ยง 29.13(c). Specifically, the revised federal regulations direct an SAA to " [a]ccord reciprocal approval for Federal purposes to apprentices, apprenticeship programs and standards that are registered in other States ... if such reciprocity is requested by the apprenticeship program sponsor. Program sponsors seeking reciprocal approval ...


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