State Law Enforcement of Federal Prevailing Wage Provisions: Cox v NAP Construction Co. Sets New Precedent

State Law Enforcement of Federal Prevailing Wage Provisions: Cox v NAP Construction Co. Sets New Precedent

Introduction

In the landmark decision of Cox v. NAP Construction Co., Inc., the Court of Appeals of the State of New York addressed a pivotal issue concerning the enforcement of federally mandated prevailing wage provisions through state law claims. This case revolves around workers employed by contractors on projects funded by the United States Housing Authority, who alleged that their employers failed to pay the wages required by the Davis-Bacon Act (DBA). The central question was whether these workers could enforce the contractual obligation to pay prevailing wages through state law claims, despite the absence of an explicit federal private right of action.

The parties involved include Anthony Cox and other similarly situated respondents representing the workers, and NAP Construction Company, Inc. along with other defendants representing the contractors and their sureties. The cases examined the interplay between federal statutes—the Housing Act and the DBA—and state common law in the context of labor compensation.

Summary of the Judgment

The Court of Appeals upheld the Appellate Division's decision in Cox v. NAP Construction Co., Inc. by affirming that workers could indeed pursue breach of contract claims under state law to enforce prevailing wage provisions mandated by federal law. Conversely, in ARAUJO v. TIANO'S CONStruction Corp., the court modified the Appellate Division's order to reinstate breach of contract and suretyship claims against the defendants.

The crux of the Court's decision lies in recognizing that state common-law remedies remain available to workers, even in the absence of an express federal private right of action. The court determined that the contractual agreements between the New York City Housing Authority (NYCHA) and the contractors, which incorporated DBA wage requirements, confer third-party beneficiary rights to the workers. Consequently, workers are entitled to enforce these provisions through state law claims without infringing upon federal statutes.

Analysis

Precedents Cited

The Court meticulously examined several precedents that previously held that no private right of action exists under the DBA or related federal statutes for workers seeking to enforce prevailing wage provisions through common-law claims. Notably:

The Court ultimately differentiated its ruling from these precedents by emphasizing the lack of comprehensive federal remedies, thus allowing state-law claims to proceed.

Legal Reasoning

The Court's legal reasoning centers on the distinction between the creation of a federal right of action and the preemption of state law claims. The absence of an explicit federal private right of action under the DBA or the Housing Act does not inherently preclude workers from seeking redress through state courts.

The Court highlighted that:

  • The Housing Act mandates the payment of prevailing wages but does not provide a specific federal enforcement mechanism akin to the DBA's provisions for contractors. This gap indicates that Congress did not intend to wholly occupy the field, leaving room for state remedies.
  • Preemption requires either an express statement in the federal statute or a clear conflict with state law, neither of which exists in this context. The Court referred to Hillsborough County v. Automated Medical Laboratories, Inc. and JONES v. RATH PACKING CO. to support this interpretation.
  • The historical context, including the 1932 veto by President Hoover, underscored Congress's preference for existing state remedies over new federal enforcement mechanisms.

By interpreting these elements, the Court concluded that state common-law claims are not only permissible but necessary to ensure compliance with prevailing wage standards in the absence of a federal private enforcement option.

Impact

This judgment has significant implications for both workers and contractors involved in federally funded construction projects:

  • Empowerment of Workers: Workers are now affirmed the ability to enforce prevailing wage provisions through state law claims, enhancing their legal recourse against wage violations.
  • Contractor Compliance: Contractors must adhere strictly to prevailing wage requirements, knowing that failure to do so could result in state lawsuits.
  • Legal Precedence: Future cases will likely reference Cox v. NAP Construction Co. as a foundational precedent for similar disputes involving federal wage provisions and state law enforcement.
  • Federal-State Law Dynamics: The decision delineates the boundaries between federal mandates and state law enforcement, reinforcing that the absence of federal enforcement does not nullify state remedies.

Complex Concepts Simplified

Preemption

Preemption occurs when a higher authority of law supersedes a lower one. In this case, federal law (the Housing Act and the DBA) was examined to determine if it overrides state law claims. The Court found that federal law did not explicitly or implicitly prevent state law claims from being pursued.

Third-Party Beneficiary

A third-party beneficiary is someone who, although not a direct party to a contract, stands to benefit from it. In these cases, the workers (respondents) are third-party beneficiaries of the contracts between NYCHA and the contractors because the contracts include wage provisions intended to protect the workers' interests.

Davis-Bacon Act (DBA)

The DBA is a federal law that requires contractors and subcontractors working on federally funded or assisted construction projects to pay their laborers and mechanics no less than the prevailing wages and benefits in the area. These wages are determined by the Secretary of Labor.

Breash of Contract

A breach of contract occurs when one party fails to fulfill its obligations under a contract. Here, workers alleged that contractors breached their contractual duty to pay prevailing wages as stipulated in their agreements with NYCHA.

Conclusion

The Court of Appeals' decision in Cox v. NAP Construction Co., Inc. marks a significant development in the enforcement of prevailing wage provisions on federally funded projects. By affirming that state common-law claims for breach of contract are viable avenues for workers to seek redress, the court bridges a critical gap left by federal statutes that lack explicit private enforcement mechanisms.

This judgment underscores the enduring relevance of state law in supplementing federal mandates, ensuring that workers are protected and compensated fairly. It reinforces the principle that the absence of a federal private right of action does not render state remedies inaccessible, thereby upholding workers' rights within the existing legal framework.

Moving forward, stakeholders in the construction and labor sectors must recognize the expanded scope of enforceable wage provisions, potentially leading to increased compliance and accountability in federally funded projects.

Case Details

Year: 2008
Court: Court of Appeals of the State of New York.

Judge(s)

SMITH, J.

Attorney(S)

Biaggi Biaggi, New York City ( Mario Biaggi, Jr., and Richard Mario Biaggi of counsel), for appellant in the first above-entitled action. I. Respondents' state law claims should be dismissed because the Davis-Bacon Act does not afford respondents a private right of action. ( Gonzalez v DS Zaffuto Joint Venture, 271 AD2d 356; Grochowski v Phoenix Constr, 318 F3d 80; Chan v City of New York, 1 F3d 96; Operating Engrs. Health Welfare Trust Fund v JWJ Contr. Co., 135 F3d 671; Weber v Heat Co., 728 F2d 599; Majstrovic v Marie Piping, 171 Misc 2d 429; Broder v Cablevision, 418 F3d 187.) II. Respondents' state law claims should be dismissed because the Davis-Bacon Act does not afford respondents an implied right of action. ( Chan v City of New York, 1 F3d 96; Thompson v Thompson, 484 US 174; Northwest Airlines, Inc. v Transport Workers, 451 US 77; Touche Ross Co. v Redington, 442 US 560; Wilder v Virginia Hospital Assn., 496 US 498; Cort v Ash, 422 US 66; Karahalios v Federal Employees, 489 US 527; Grochowski v Phoenix Constr, 318 F3d 80.) III. Respondents' claim should be dismissed because of the doctrine of preemption. ( Gibbons v Ogden, 9 Wheat [ 22 US] 1; International Paper Co. v Ouellette, 479 US 481; Michigan Canners Freezers Assn., Inc. v Agricultural Marketing Bargaining Bd., 467 US 461; Florida Lime Avocado Growers, Inc. v Paul, 373 US 132; Hines v Davidowitz, 312 US 52; Hillsborough County v Automated Medical Laboratories, Inc., 471 US 707; Capital Cities Cable, Inc. v Crisp, 467 US 691; Fidelity Fed. Sav. Loan Assn. v Be la Cuesta, 458 US 141; United States v Shimer, 367 US 374; Gawez v Inter-Connection Elec., Inc., 9 Misc 3d 1107.) IV Respondents' failure to follow the enforcement mechanism prior to pursuing a state law claim does not afford respondents the protection that is contemplated under the Davis-Bacon Act and its regulations. ( United States ex rel. Windsor v DynCorp, Inc., 895 F Supp 844; United States ex rel. Bradbury v TLT Constr. Corp., 138 F Supp 2d 237; Universities Research Assn., Inc. v Coutu, 450 US 754.) V. Respondents have failed to exhaust their administrative remedies and therefore respondents' claims should be dismissed. ( United States ex rel. Bradbury v TLT Constr. Corp., 138 F Supp 2d 237; Veader v Bay State Dredging Contr. Co., 79 F Supp 837; Reiter v Cooper, 507 US 258; Communications Workers of Am. v American Tel. Tel. Co., 40 F3d 426; Howell v Immigration Naturalization Serv., 72 F3d 288; Hells Canyon Preservation Council v Richmond, 841 F Supp 1039; McCarthy v Madigan, 503 US 140; Andrade v Lauer, 729 F2d 1475; United States ex rel. Windsor v DynCorp, Inc., 895 F Supp 844.) Barnes, Iaccarino, Virginia, Ambinder Shepherd, PLLC, New York City ( Dennis Cariello and Lloyd R. Ambinder of counsel), for Anthony Cox and others, respondents in the first above-entitled action. I. New York law permits a worker to maintain a state law claim for unpaid wages on a federally-financed construction project. ( Bodrick v Mayfair Constr. Corp., 38 NY2d 926, 426 US 825; Filardo v Foley Bros., 297 NY 217, 336 US 281; Strong v American Fence Constr. Co., 245 NY 48; United States ex rel. Johnson v Morley Constr. Co., 98 F2d 781, cert denied sub nom. Maryland Cos. Co. v U. S. for use of Harrington, 305 US 651; United States v Binghamton Constr. Co., 347 US 171; Wright v Wright Stucco, 72 AD2d 959, 50 NY2d 837; Lawrence v Fox, 20 NY 268; Fourth Ocean Putnam Corp. v Interstate Wrecking Co., 66 NY2d 38; Fata v S.A. Healy Co., 289 NY 401; Pesantez v Boyle Envtl. Servs., 251 AD2d 11.) II. The lack of an express or implied private right of action based on the Davis-Bacon Act has no bearing on respondents' state law claims. ( United States ex rel. Johnson v Morley Constr. Co., 98 F2d 781, cert denied sub nom. Maryland Cas. Co. v U. S. for use of Harrington, 305 US 651; Filardo v Foley Bros., 297 NY 217; Weber v Heat Control Co., 579 F Supp 346; Wright v Wright Stucco, 50 NY2d 837; Fata v S.A. Healy Co., 289 NY 401; Pesantez v Boyle Envtl. Servs., 251 AD2d 11; Grochowski v Phoenix Constr., 318 F3d 80; Chan v City of New York, 1 F3d 96; Broder v Cablevision, 418 F3d 187; Walsh v Schlecht, 429 US 401.) III. Federal law does not preempt the instant action. ( Crosby v National Foreign Trade Council, 530 US 363; New York State Conference of Blue Cross Blue Shield Plans v Travelers Ins. Co., 514 US 645; Medtronic, Inc. v Lohr, 518 US 470; California Div. of Labor Standards Enforcement v Dillingham Constr., N.A., Inc., 519 US 316; Rush Prudential HMO, Inc. v Moran, 536 US 355; Hillsborough County v Automated Medical Laboratories, Inc., 471 US 707; Louisiana Pub. Serv. Comm'n v FCC, 476 US 355; Morales v Trans World Airlines, Inc., 504 US 374; McDaniel v University of Chicago, 512 F2d 583; Frank Bros., Inc. v Wisconsin Dept. of Transp., 409 F3d 880.) IV Respondents do not enjoy, nor need they have exhausted, any administrative remedies. ( A.C. Legnetto Constr. v Hartford Fire Ins. Co., 92 NY2d 275; McDaniel v University of Chicago, 512 F2d 583; Universities Research Assn., Inc. v Coutu, 450 US 754; United States ex rel. Johnson v Morley Constr. Co., 98 F2d 781, cert denied sub nom. Maryland Cas. Co. v U. S. for use of Harrington, 305 US 651; Bodrick v Mayfair Constr. Corp., 38 NY2d 926; Filardo v Foley Bros., 297 NY 217; Strong v American Fence Constr. Co., 245 NY 48; Fata v S.A. Healy Co., 289 NY 401; Chan v City of New York, 1 F3d 96.) V. Respondents have an implied private right of action under the United States Housing Act for unpaid Davis-Bacon Act wages. ( Negrin v Norwest Mtge., 263 AD2d 39; Bodrick v Mayfair Constr. Corp., 38 NY2d 926, 429 US 825; Filardo v Foley Bros., 297 NY 217; Matter of Burke v Bowen, 40 NY2d 264; Biyal v City of New York, 56 AD2d 770; Area Masonry v Dormitory Auth. of State of N.Y., 64 AD2d 810; Knecht, Inc. v United Pac. Ins. Co., 860 F2d 74; Majstrovic v Marie Piping, 171 Misc 2d 429.) Wolff Samson P.C., New York City ( Jonathan Bondy and Andrew S. Kent of counsel), for Greenwich Insurance Company, respondent in the first above-entitled action. I. Plaintiffs' prevailing wage claims are governed by the United States Housing Act, the Davis-Bacon Act, and by federal regulations for the uniform enforcement of those and related statutes, under which private rights of action may not be pursued prior to an administrative finding that such wages are due. ( Local 2677, Am. Fedn. of Govt. Empls. v Phillips, 358 F Supp 60; Universities Research Assn., Inc. v Coutu, 450 US 754; Herman B. Taylor Constr. Co. v Barram, 203 F3d 808; United States v Binghamton Constr. Co., 347 US 171; Fry Bros. Corp. v Department of Hous. Urban Dev., 614 F2d 732; Framlau Corp. v Dembling, 360 F Supp 806; Abhe Suoboda, Inc. v Chao, 508 F3d 1052; United States ex rel. Windsor v DynCorp, Inc., 895 F Supp 844; United States ex rel. Bradbury v TLT Constr. Corp., 138 F Supp 2d 237; Copeland v Veneman, 350 F3d 1230.) II. Persons claiming as third-party beneficiaries of the Davis-Bacon Act (DBA)-related contract clauses may not pursue private rights of action except under the conditions set forth in the DBA. ( BAII Banking Corp. v UPG, Inc., 985 F2d 685.) III. Plaintiffs-respondents have not genuinely pursued administrative remedies. ( McCarthy v Madigan, 503 US 140; United States ex rel. Bradbury v TLT Constr. Corp., 138 F Supp 2d 237; Beharry v Ashcroft, 329 F3d 51; Association of Flight Attendants-CWA v Chao, 493 F3d 155.) Barnes, Iaccarino, Virginia, Ambinder Shepherd, PLLC, New York City ( Dennis Cariello and Lloyd R. Ambinder of counsel), for appellants in the second above-entitled action. I. New York law permits a worker to maintain a common-law claim for unpaid wages on a federally-financed construction project. ( Gonzalez v DS Zaffuto Joint Venture, 271 AD2d 356; Lawrence v Fox, 20 NY 268; Fourth Ocean Putnam Corp. v Interstate Wrecking Co., 66 NY2d 38; United States v Binghamton Constr. Co., 347 US 171; Fata v S.A. Healy Co., 289 NY 401; Pesantez v Boyle Envtl. Servs., 251 AD2d 11; Miree v DeKalb County, 433 US 25; Bodrick v Mayfair Constr. Corp., 38 NY2d 926, 429 US 825; Filardo v Foley Bros., 297 NY 217, 336 US 281; Strong v American Fence Constr. Co., 245 NY 48.) II. The Davis-Bacon Act does not preempt the instant action. ( New York State Conference of Blue Cross Blue Shield Plans v Travelers Ins. Co., 514 US 645; Medtronic, Inc. v Lohr, 518 US 470; California Div. of Labor Standards Enforcement v Dillingham Constr, N. A., Inc., 519 US 316; Rush Prudential HMO, Inc. v Moran, 536 US 355; Hillsborough County v Automated Medical Laboratories, Inc., 471 US 707; Boyle v United Technologies Corp., 487 US 500; Cox v NAP Constr. Co., Inc., 9 Misc 3d 958; Grochowski v Phoenix Constr., 318 F3d 80; Crosby v National Foreign Trade Council, 530 US 363; Louisiana Pub. Serv. Comm'n v FCC, 476 US 355.) III. The surety claims are proper. ( Matter of Camarda, 103 Misc 2d 362; Timberline Elec. Supply Corp. v Insurance Co. of N. Am., 72 AD2d 905, 52 NY2d 793; United States v Seaboard Sur. Co., 817 F2d 956, 484 US 855; United States v American States Ins. Co., 252 F3d 1268; Knecht, Inc. v United Pac. Ins. Co., 860 F2d 74; A.C. Legnetto Constr. v Hartford Fire Ins. Co., 92 NY2d 275; United States to Use of Acme Furnace Fitting Co. v Fort George G. Meade Defense Hous. Corp. No. 1, 186 F Supp 639.) IV Appellants have an implied private right of action under the United States Housing Act for unpaid Davis-Bacon Act wages. ( Cort v Ash, 422 US 66; Uhr v East Greenbush Cent. School Dist., 94 NY2d 32; Gerel Corp. v Prime Eastside Holdings, LLC, 12 AD3d 86; Gonzalez v St. Margaret's House Hous. Dev. Fund Corp., 620 F Supp 806; United States v Binghamton Constr. Co., 347 US 171; Fata v S.A. Healy Co., 289 NY 401; Bodrick v Mayfair Constr. Corp., 38 NY2d 926, 429 US 825; Burns Jackson Miller Summit Spitzer v Lindner, 59 NY2d 314; California Diu. of Labor Standards Enforcement v Dillingham Constr., N. A., Inc., 519 US 316; Strong v American Fence Constr. Co., 245 NY 48.) V. Appellant workers possess no administrative remedies. ( Chan v City of New York, 1 F3d 96; Bodrick v Mayfair Constr. Corp., 38 NY2d 926; Pesantez v Boyle Envtl. Servs., 251 AD2d 11; McDaniel v University of Chicago, 512 F2d 583, 423 US 810, 548 F2d 689, 434 US 1033; Sullivan v International Fid. Ins. Co., 255 AD2d 128.) Mayer, Ross Hagan, P.C., Patchogue ( Robert W. Mayer of counsel), for Tiano's Construction Corp., respondent in the second above-entitled action. I. The administrative remedies for alleged grievances with respect to contracts for federal construction projects are exclusive; no private remedy is available to appellants. ( Gonzalez v DS Zaffuto Joint Venture, 271 AD2d 356; Transamerica Mortgage Advisors, Inc. v Lewis, 444 US 11; Touche Ross Co. v Redington, 442 US 560; Cannon v University of Chicago, 441 US 677; Cort v Ash, 422 US 66; United States for Benefit on Behalf of Glynn v Capeletti Bros., Inc., 621 F2d 1309; Universities Research Assn., Inc. v Coutu, 450 US 754; Grochowski v Phoenix Constr., 318 F3d 80; Karahalios v Federal Employees, 489 US 527; Transamerica Mortgage Advisors, Inc. v Lewis, 444 US 11.) II. The Davis-Bacon Act and its requirements preempt state law with respect to federally funded projects and the construction contracts related thereto. ( Jones v Rath Packing Co., 430 US 519; Fidelity Fed. Sav. Loan Assn. v Be la Cuesta, 458 US 141; Florida Lime Avocado Growers, Inc. v Paul, 373 US 132; Hines v Davidowitz, 312 US 52; Savage v Jones, 225 US 501.) III. Appellants failed to properly avail themselves of the administrative mechanisms provided; they did not exhaust administrative procedures. IV Cases cited by appellants are not controlling. ( Wright v Wright Stucco, 72 AD2d 959; Bodrick v Mayfair Constr. Corp., 38 NY2d 926; Filardo v Foley Bros., 297 NY 217; Fata v S.A. Healy Co., 289 NY 401; United States ex rel. Johnson v Morley Constr. Co., 98 F2d 781; Strong v American Fence Constr. Co., 245 NY 48.) Dreifuss Bonacci Parker, LLP, Florham Park, New Jersey ( Derek A. Popeil of counsel), for Lumbermens Mutual Casualty Company, respondent in the second above-entitled action. I. The appellate court correctly held that appellants' claims are preempted by federal law. ( Gonzalez v DS Zaffuto Joint Venture, 271 AD2d 356; Grochowski v Phoenix Constr, 318 F3d 80; Majstrovic v Marie Piping, 171 Misc 2d 429; United States for Benefit on Behalf of Glynn v Capeletti Bros., Inc., 621 F2d 1309; Gawez v Inter-Connection Elec., Inc., 9 Misc 3d 1107[A], 2005 NY Slip Op 51443 [U], 44 AD3d 898; Davis v United Air Lines, Inc., 575 F Supp 677, 662 F2d 120, 456 US 965; Building Constr. Trades Dept. AFL-CIO v United States Dept. of Labor Wage Appeals Bd., 932 F2d 985; Universities Research Assn., Inc. v Coutu, 450 US 754; Rondout Elec., Inc. v NYS Dept. of Labor, 335 F3d 162; Chapman v Houston Welfare Rights Organization, 441 US 600.) II. Appellants have no state law based rights of action against a contractor or its surety. ( Gonzalez v DS Zaffuto Joint Venture, 271 AD2d 356; Grochowski v Phoenix Constr, 318 F3d 80; Davis v United Air Lines, Inc., 662 F2d 120, 456 US 965; Weber v Heat Control Co., 579 F Supp 346, 728 F2d 599; United States v Seaboard Sur. Co., 817 F2d 956; Venus Mech. v Insurance Co. of N. Am., 245 AD2d 559; Dimacopoulos v Consort Dev. Corp., 158 AD2d 658; American Bldg. Supply Corp. v Avalon Props., Inc., 8 AD3d 515; Lori-Kay Golf v Lassner, 61 NY2d 722; Northwestern Natl. Ins. Co. of Milwaukee, Wis. v Alberts, 822 F Supp 1079.)

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