Opinion
111072/08.
Decided March 2, 2009.
Petitioners International Union of Elevator Constructors Local No. 1, AFL-CIO ("Local 1") and Local 1's President, Lenny Legotte, bring this proceeding, pursuant to Article 78 of the C.P.L.R., for an order and judgment declaring that the determination by William C. Thompson, Jr., the Comptroller of the City of New York, concerning the prevailing rate of wages and benefits of certain workers, is arbitrary and capricious, not supported by substantial evidence, affected by an error of law, made in violation of lawful procedure, and an abuse of discretion. Petitioners seek to vacate and set aside respondent's determination concerning the prevailing rate of wages and benefits for elevator repair and maintenance workers for the period from July 1, 2008 through June 30, 2009, and ask that respondent be directed to issue an amended prevailing wage schedule using the rates for Local 1 or, alternatively, conduct a new and proper investigation to determine the prevailing rates for elevator repair and maintenance work for the period from July 1, 2008 through June 30, 2009, consistent with the requirements of Labor Law § 220. Petitioners also seek costs and disbursements. According to petitioners, there are two main labor unions in New York City that represent elevator repair and maintenance workers: Local 1 (petitioners) and Local 3 of the International Brotherhood of Electrical Workers ("Local 3"). Local 1 alleges that it represents more elevator repair and maintenance workers in New York City than any other union, including Local 3.
Pursuant to Labor Law § 220, the Comptroller is required to determine the "prevailing rate of wage" for various trades on an annual basis, no later than thirty days prior to July 1 of each year. Labor Law § 220(5)(a). The "prevailing rate" is the rate set forth in the collective bargaining agreement (the "CBA") for the particular trade union. Although the statute does not set forth how the "prevailing rate" is to be determined when there is more than one union representing a particular type of worker, Local 1 asserts that the "historical practice" has been for the Comptroller to use the rates set forth in the CBA for the predominant union for the trade.
In determining the prevailing rate for the period of July 1, 2008 through June 30, 2009, the Comptroller used the rates set forth in Local 3's CBA, rather than the higher rates set forth in Local 1's CBA. But, Local 1 contends that the United States Department of Labor and the New York State Department of Labor have both determined that Local 1 is the predominant union in New York City for elevator repair and maintenance workers. Local 1 argues that since it has more members who are elevator repair and maintenance workers than does Local 3, the Comptroller should have used Local 1's rates rather than Local 3's rates.
Local 1 asserts that the Comptroller is "simply wrong," and that the error in using Local 3's rates stemmed from a flawed survey that was conducted in 2006, which omitted employment data from the seven largest elevator contractors in New York City, each of which is a signatory to a CBA with Local 1. Local 1 asserts that the Comptroller omitted nearly 1,500 Local 1 members. Local 1 asserts that it has 1,608 members to Local 3's 1,331 members. If the excluded data had been included, Local 1 argues, the Comptroller's determination would had to have been that Local 1 has several hundred more members who perform elevator repair and elevator maintenance work in New York City than does Local 3. Local 1 contends that it is the predominant union and that Local 1's contractual wage and supplemental rates should be used to set the prevailing rates under Labor Law § 220(5)(a).
Local 1 analogizes the Comptroller's survey to determining domestic automobile work wage rates without including wages paid at General Motors or Ford Corporation.
In an Article 78 proceeding, the court's review of an administrative action is limited to a determination of whether that administrative decision was made in violation of lawful procedures, whether it was arbitrary or capricious, or whether it was affected by an error of law. Matter of Pell v. Board of Educ., 34 NY2d 222, 231 (1974). "The arbitrary or capricious test chiefly relates to whether a particular action should have been taken or is justified . . . and whether the administrative action is without foundation in fact.'" Id. (citation omitted). A determination is considered "arbitrary" when it is made "without sound basis in reason and is generally taken without regard to the facts." Id.
In New York, the mandate for paying laborers in a public works project a "prevailing wage" is set forth in the New York State Constitution. Article I, § 17 provides:
Labor of human beings is not a commodity nor an article of commerce and shall never be so considered or construed.
No laborer, worker or mechanic, in the employ of a contractor or sub-contractor engaged in the performance of any public work, shall be permitted to work more than eight hours in any day or more than five days in any week, except in cases of extraordinary emergency; nor shall he or she be paid less than the rate of wages prevailing in the same trade or occupation in the locality within the state where such public work is to be situated, erected or used.
Employees shall have the right to organize and to bargain collectively through representatives of their own choosing.
In Lantry v. State of New York , 6 NY3d 49 (2005), the Court of Appeals outlined the procedure whereby the Commissioner of the New York State Department of Labor sets the prevailing rate for workers on State and local public works projects (except in New York City, where it is the responsibility of the Comptroller). First, the Commissioner (here, Comptroller) classifies the work to a specific trade or occupation. Second, the Commissioner (here, Comptroller) "must ascertain the prevailing rate for that trade or occupation in the relevant locality." 6 NY3d at 54. The decision notes that in the early 1980s, the prevailing wage rate was fixed by performing industry surveys of the actual wages received by trade workers in each of the state's localities. Because this was a cumbersome and costly process, and because the result was virtually always that the wages would equate to the collectively bargained wages, Labor Law § 220 was amended in 1983 to authorize the Commissioner to dispense with the survey process, and instead adopt the rate paid in a locality by referring to the CBAs between private sector employers and labor unions, so long as the agreement covered at least 30% of the workers in that particular trade or occupation. Id.
None of the recent cases define the term "prevailing rate" or address how the prevailing rate should be determined when there is more than one union involved in the particular trade. In one of the older cases discussing the issue of the prevailing rate of wages for a public works project, one Judge of the Court of Appeals looked to the dictionary definition of the phrase "prevailing rate." See, People ex rel. Rodgers v. Coler, 4 Bedell 1, 166 NY 1, 42 (1901) (Haight, J. dissenting) (superceded by statute). Under the current definition, the word "prevail" means "[t]o be commonly accepted or predominant." Black's Law Dictionary at 1206 (7th ed. 1999). The word "prevailing" is defined as "most frequent; predominant." Random House Webster's College Dictionary, at 1070 (1995).
Local 1 recognizes that setting the prevailing rate is relatively simple when a trade is represented by one union. In such a case, the rate is set by utilizing the rate in that union's CBA. Local 1 concedes that the statute does not expressly state how the prevailing rates are to be determined where a highly unionized trade is represented by more than one union (each of which has different collective bargaining agreements containing different wage rates and benefits). New York Tel. Co. v. New York State Dep't of Labor, 272 AD2d 741, 744 (3d Dep't 2000) (noting that "Labor Law § 220 is silent as to the means of determining which prevailing wage rate should apply where, as here, the trade in question is covered by more than one collective bargaining agreement."). Under the definition of "prevail" or "prevailing," however, it stands to reason that when a trade is represented by more than one union, as is the case here, the rate should be set by using the rate set forth in the CBA of the union that has the most members employed in that trade within New York City. Indeed, Local 1 asserts that the historic practice has been for the rate to be set by utilizing the rate in the CBA for the "predominant" union for the trade, i.e., the union with the most members employed in that trade within New York City.
Local 1 asserts that Local 3 has 1,331 members while Local 1 has 1,608 members. If this is true, the use of Local 3's CBA would be arbitrary and capricious; Local 3 would not be the predominant union. Using petitioners' numbers, 55% of the unionized elevator repair/maintenance workers belong to Local 1, while 45% belong to Local 3. An exhibit to the papers, a letter dated April 24, 2008 to the Comptroller's Office, sets forth that there are 2,490 Local 1 members covered by CBAs between Local 1 and employers performing elevator work and construction. Local 1 asserts that the Comptroller's determination that Local 1 had only 130 members employed by contractors performing elevator work in New York City, while Local 3 had 1,331 members, was based on flawed data. Indeed, the Comptroller states that the survey was conducted by mailing "survey packets" to contractors that were identified by the unions as employing their members, and 50 contractors that employed non-union members. Of the 78 contractors mailed survey kits that were identified by Local 1 as employing its members, only 12 responded to Comptroller's survey. In contrast, 20 of the 27 contractors identified as employing Local 3 members returned the survey. It strains credulity for the Comptroller to have concluded that the survey response was an accurate measure of the each union's membership. The use of a survey with such a poor response from contractors identified by Local 1 resulted in a determination that "is without foundation in fact." Pell v. Board of Educ., supra.
Only 15% of the contractors identified by Local 1 responded, in contrast to almost 75% of the contractors identified by Local 3.
On these papers, this court cannot determine as a matter of law that Local 1 has more members than Local 3. While the Comptroller argues that Local 1 failed to submit competent evidence that Local 3 does not represent more than 30% of the trade at issue, this is not the standard to be utilized here. The 30% number is a threshold number in determining whether a sufficient number of workers are unionized (Labor Law § 220[a]); here the issue is which of two unions is the predominant union. The issue of which is the predominant union in New York City raises a factual issue which must be resolved at a hearing, with the taking of testimony and submission of evidence to consider how many members there are in Local 1, as opposed to Local 3. Such a proceeding also necessitates the involvement of Local 3, which shall be joined as a party in this proceeding. Migliore v. Manzo , 28 AD3d 620 , 621 (2d Dep't 2006) ("[t]he absence of a necessary party may be raised at any stage of the proceedings, by any party or by the court on its own motion."). It is readily apparent that Local 3 might be inequitably affected by a judgment in this action. C.P.L.R. § 1001(a). 27th Street Block Ass'n. v. Dormitory Authority of State of New York, 302 AD2d 155, 160 (1st Dep't 2002) (noting that the joinder provisions of § 1001[a] applies to Article 78 proceedings).
The defenses raised in respondent's answer are without merit. Local 1 has standing, since it is challenging the determination by the Comptroller that Local 3 is the predominant union; Local 1 is not bringing a private right of action for a violation of Labor Law § 220, for which it would not have standing. International Ass'n of Bridge, Structural and Ornamental Ironworkers, Local Union No. 6, AFL-CIO v. State, 280 AD2d 713, 715-16 (3d Dep't 2001). Respondent's other defenses have been addressed. Other than the defense that Local 3 is a necessary party, the defenses are without merit.
The petition is determined in accordance with the foregoing. On this record, this court cannot annul the determination of the Comptroller setting the prevailing rates for elevator repair/maintenance work for the period of July 1, 2008 through June 30, 2009 at the rate for Local 3's CBA. The issue of whether this determination must be annulled must await a determination, following a hearing, as to whether Local 1 or Local 3 has a greater membership for elevator repair/maintenance workers in New York City.
Within thirty (30) days of the date of this decision and order, petitioners are directed to serve an amended Notice of Petition and Petition, which includes Local 3 as a party respondent to this proceeding. C.P.L.R. § 1001(a). The parties shall appear for a conference on April 14, 2009 at 11:00 a.m. to schedule a hearing on the issue of which union is the predominant union or, alternatively, to otherwise resolve the issues raised in this proceeding. This constitutes the decision and order of the court.