This is an interesting case because it combines the elements of necessary, but not proven, commonality of situation for class certification and a quirky element of overtime calculation based on a unique FLSA provision.  The bottom line is that the two workers who sought a class action on both the federal and state levels lost both because of the need for too much individual scrutiny of worker claims.  The case is entitled Sinclair et al. v. PGA Inc., and was filed in federal court in the Western District of Wisconsin.

The Judge rejected the claim, for a class, that the Company should have paid the higher wage rates for skilled labor (e.g. trade work, such as carpentry) as opposed to generic wage rates.  The Judge also agreed to decertify a FLSA collective whose overtime rates were allegedly miscalculated or underestimated.  The Judge opined that the state-law part of the suit did not possess several elements of a viable class action under Rule 23, citing to the need for too much individual attention needed for each worker’s situation.  The Judge also observed that no other worker had opted into the suit, and this fact “undermines the entire purpose of a collective action.”

The theory was that the employer violated the Wisconsin prevailing wage law by paying workers at a lower, general for work done to support more skilled work.  The plaintiffs alleged that this practice violated the FLSA because the rate should have been that which they earned before overtime kicked in as opposed to the lower-rated work they were actually performing in the overtime hours.

Importantly, the Judge denied the request for class certification on the prevailing wage claims.  The Court held that the workers failed to meet the numerosity requirement, as they could not make a showing as to the actual number of workers who worked the lower-rated support work.  They also could not meet the “predominance” requirement, meaning that the underpayment theory applied to most members of the class.

The Judge stated that the claim of the employees is based “not just on the amount, but also on the type of work” each class member did, and would force the court to make “an individual determination of whether an employee’s work on a specific week, day and even hour made possible, supported or cleaned up after a skilled trade worker.”  The Court added that a trial would focus on individual workers’ “unique work on an hourly, daily or weekly basis” and whether it should have been paid at higher wages, the workers did not meet the “superiority” requirement that they show a single class case would be better than a series of individual cases.

The Takeaway

Here, the workers lost the federal and state class actions.  The state case is quite interesting because it shows a path for employers sued in class actions in prevailing wage cases how they can defeat the motion for class certification.  I have preached this dogma for years and repeat it proudly now, again.

Individual scrutiny destroys a class!

The world of prevailing wage law is a complex and nuanced one. It is, in truth, a niche within a niche of the wage-hour world. I have handled almost one hundred prevailing wage audits and lawsuits and still am learning things about how these laws are interpreted. In an interesting twist, the New York State Court of Appeals has examined the issue of when apprentice wages can (and cannot) be paid on prevailing wage projects. The case is entitled International Union of Painters & Allied Trades, Dist. Council No. 4 v. New York State Dept. of Labor and issued from the Court of Appeals of the State of New York.

The Court held (in agreement with the NYS DOL) that apprentices who are not discharging the job functions of their trade must be paid the higher, journeyman wages.  The vote was 6-1.   The Court stated “we uphold the statute-based policy of the New York State Department of Labor that the payment of apprentice wages on public work projects to apprentices who are performing tasks that are within the respective trade classifications of the approved apprenticeship programs in which they are enrolled.”

The Union sponsored a DOL-approved glazier apprenticeship program, but during their work as apprentice glaziers, these workers may have to discharge some Ironworker job duties.  The plaintiffs sued, asking for a judgment that as long as the tasks were performed under the aegis of the apprentice program, it did not matter that they were doing other tasks covered by other trade jurisdictions.  The DOL took the view that this work demanded payment at that craft’s rate (a much higher rate).

The lower court dismissed the suit but an appellate tribunal revived it, holding that “glazing contractors may compensate apprentices registered and enrolled in the DC 4 Glazier Apprenticeship Program in accordance with the applicable apprentice rates posted by defendant New York State Department of Labor on taxpayer financed projects.”  That panel also was concerned that apprentices could be improperly used as “cheap labor.”   The highest NYS court agreed, finding “there is a substantial risk that employers would seek to use cheaper labor whenever consistent with the construction market.”

The Takeaway

Construction contractors need to be very careful when they do prevailing wage projects, as there are many minefields for the unwary employer.   This case highlights but a single one of these.

There are many more…