Ramsey County District Court. File No. C4-01-11786.
Considered and decided by Toussaint, Chief Judge; Minge , Judge; and Huspeni , Judge.*fn1
1. The doctrines of primary jurisdiction and exhaustion do not require judicial deference to agency rulemaking when there is no enforcement or administrative proceeding in which the contesting party can participate, and when the agency declines to request such deference.
2. The courts have jurisdiction to consider a declaratory judgment action to review quasi-legislative agency action if neither a writ of certiorari nor other forms of review are available to the parties and if the moving party is not the subject of any current, active agency proceeding.
3. In administering the Minnesota Prevailing Wage Law (MnPWL), the Minnesota Department of Labor and Industry (DOLI) has discretion to either establish a separate classification for workers with unique responsibilities or to determine that such workers are members of and included within an existing classification.
4. The MnPWL and regulations adopted by DOLI require DOLI to engage in a rulemaking proceeding to define categories of work in the Master Job Classification and to modify those classifications.
5. If, in administering the MnPWL, DOLI declines to engage in rulemaking and determines that a particular type of work is already covered in the Master Job Classification, an aggrieved party has the right to request reconsideration of that decision in a contested case proceeding.
The opinion of the court was delivered by: Minge, Judge
Appellant subcontractor challenges summary judgment for respondents Minnesota Department of Transportation (MnDOT) and Department of Labor and Industry (DOLI)*fn2 in appellant's action for declaratory relief, injunctive relief, and damages on claims that the state violated the Minnesota Prevailing Wage Law (MnPWL), DOLI's regulations, and the Minnesota Administrative Procedures Act (MAPA) and was equitably estopped from enforcing its classifications of appellant's employees. Because the state failed to observe required procedures and because there are disputed facts that affect the outcome of the procedures, we reverse.
Appellant AAA Striping Service Company (AAA) is a pavement-marking subcontractor whose principal service is the application of stripes and messages to road surfaces. It performs work on both federal and state funded projects.
AAA has named its employees who perform this work "stripers" and "striper tenders." The striper drives the truck containing a marking machine; operates the machine that applies striping materials, such as epoxy, paint, and traffic tape, to the road surface; and, in some cases, operates a machine that sprays paint over stencils to create pavement messages. In some settings, one striper drives the truck and a second operates the marking machine, and in other settings, the same employee does both functions. The stripers do not select the material or use discretion in the placement of the material to the road surface. According to AAA, the position does not require education or experience; rather, on-the-job training, consisting of no more than four hours of instruction, is all that is needed to perform the job.
Striper tenders follow the striping truck in a second truck and place traffic cones on the roadway around the fresh striping material and remove the cones after the adhesive has set or the paint has dried. The striper tenders further assist in applying pavement messages by placing and removing the stencils on the roadway. They do not select the stencils and cones used or determine where they are placed. According to AAA, the striper tenders do not require experience or education and their training is limited to one hour.
AAA works on highway projects that are financed with state funds or both federal and state funds. In the absence of federal financing, AAA is subject to the MnPWL, requiring the payment of state established prevailing wages to employees in accordance with an established job classification list. See Minn. Stat. § 177.44 (2002). Projects financed by both federal and state funds are covered by both the MnPWL and the federal Davis-Bacon Act, which requires AAA to pay federally established prevailing wages to its employees. See 40 U.S.C. § 276a (2000). In jointly funded situations, a contractor must pay its employees the higher of the prevailing wage rates. This case involves projects financed with only state funds.
The purpose of the MnPWL is to ensure that those who work on projects financed in whole or in part by state funds are paid wages comparable to wages paid for similar work in the community. Minn. Stat. § 177.41 (2002). Under the MnPWL, DOLI establishes the labor classifications for workers and determines the prevailing wage rates for the classifications. Minn. Stat. § 177.44, subds. 3, 4. Wages must be based on work performed solely within the applicable class of labor. Minn. R. 5200.1030, subp. 2 (2003).
DOLI has identified over 140 categories of work in a list of Master Job Classifications. Minn. R. 5200.1100 (2003). Prior to 1997, there was no procedure for setting wage rates under the MnPWL for jobs that did not appear on this list. In 1997, DOLI adopted a regulation for establishing wage rates for unlisted classifications, which, among other steps, requires a rulemaking procedure to define the category in the Master Job Classification. See Minn. R. 5200.1030, subp. 2a.C (2003). DOLI's class determinations are to be based on the nature of the work performed, with consideration given to the traditional trades, crafts, occupations, skills, customs, usage, and distinct classes of labor in the construction industry, and consideration of classifications in collective bargaining agreements, apprenticeship agreements filed with DOLI, and the United States Department of Labor Dictionary of Occupational Titles. Minn. R. 5200.1040 (2003). On road construction projects, MnDOT enforces the prevailing wage rates so set by DOLI. Minn. Stat. § 177.44, subd. 7 (2002).
Stripers and striper tenders have never been included in the Master Job Classification by those names or by job description. However, the appropriate classifications of such positions have been an issue on several occasions. In 1995, MnDOT published a Notice to Bidders stating that the common laborer classification applied to workers who engaged in traffic control functions, such as road striping and cone setting. After MnDOT informed AAA that it owed back wages based on this classification, AAA responded that it did not perform traffic control work, that its employees were not common laborers, and that it was not covered by the notice. In June 1997, MnDOT rescinded the Notice to Bidders.
In August 1997, the assistant Minnesota Attorney General and manager of the office's transportation division sent a letter to AAA that stated that there was "no established labor classification for stripers" and that the issue would be submitted to the U.S. Department of Labor (DOL)*fn3 for resolution, and added the following statement:
With respect to MnDOT projects with only state funds, MnDOT intends to comply with the procedures set forth in the newly-adopted regulations of the Department of Labor and Industry for establishment of new or missing wage rates. The determination in those cases will be applied prospectively.
This is an apparent reference to Minn. R. 5200.1030, subp. 2a.C, which was adopted in 1997. Although there is no evidence of further communication between AAA and MnDOT, in June 1998, MnDOT circulated an internal memorandum stating that employees who painted roads from vehicles were covered by the truck driver classification, employees who painted roads by hand were classified as painters, and employees who set cones were common laborers. MnDOT never enforced such rates against AAA.
There is also some evidence of county MnPWL enforcement efforts. In 1999, the Washington County Public Works Department informed AAA that, based on a directive from DOLI, its stripers had to be paid the painter rate. When AAA challenged this determination, Washington County relented, stating "technically there was no actual 'Striper' classification and that the State would not be able to enforce the 'Painter' classification." In 2001, Washington County attempted to enforce the bituminous spray operator and common laborer rates to the striper and striper tender positions. AAA disputed these rates and did not hear from Washington County again.
On July 30, 2001, DOLI published a notice in the state register requesting comments on its plan to add amendments to the Master Job Classification to create new classes for or alter existing classifications for several types of work, including the painting and striping of roads. 26 Minn. Reg. 107 (July 30, 2001). The president of AAA testified at a February 28, 2002, meeting on the subject. ...