West Virginia Record

Thursday, April 2, 2020

W.Va. SC: Out-of-state company should've paid prevailing wage

By Jessica M. Karmasek | Jun 14, 2012

Chief Justice Menis Ketchum

CHARLESTON - The West Virginia Supreme Court of Appeals said last week the state's Division of Labor was "not clearly wrong" in determining that work done by an out-of-state company on the new State Museum was subject to West Virginia's Prevailing Wage Act.

Commissioner David Mullins, in a July 8, 2010 order, found that Florida-based Themeworks Inc. failed to pay its employees prevailing wage rates for their work on the new museum.

The Kanawha Circuit Court, in a May 3, 2011 order, affirmed Mullins' order.

Themeworks appealed to the state's high court.

The Prevailing Wage Act requires prevailing wage to be paid to "all workmen who are employed 'on behalf of any public authority' and who are 'engaged in the construction of public improvements.'"

The State awarded a contract to Design and Productions Inc. for the fabrication and installation of museum exhibits. The company then subcontracted with Themeworks to research, fabricate and install certain historical exhibits in the new museum.

The subcontract contained a "flow down" provision stating that all terms and conditions of the State's contract with D and P shall also apply to Themeworks, including the prevailing wage rates of the DOL.

Themeworks, which did not pay the rates to its employees, argued the act did not apply to the type of "specialty" work that its employees performed.

A hearing was held, and Mullins disagreed. He ordered Themeworks to pay its employees the difference between the prevailing rates and the wages actually paid for a total of $222,020.55.

The DOL used the prevailing hourly rate for carpenters in coming to the figure.

The "carpenter" classification includes those workers who "construct, erect, install and repair structures, structural members and fixtures made of wood, plywood, wallboard and materials that take the place of wood, such as plastic, metals, composites, fiberglass and Transite sheeting and Cemesto Board, using carpenter hand tools and power tools."

In its appeal to the Supreme Court, Themeworks argues that the act only applies to "routine" and "systematic" work, such as following a blueprint to construct a building.

The company contends its employees use a high degree of skill and creativity, going beyond blueprints.

Themeworks said in constructing exhibits for the new museum, its employees must figure out the best way to fabricate an item -- for example, make a piece of plastic look like rusted metal.

In its memorandum decision filed Friday, the Court sided with the DOL, saying Mullins was "not clearly wrong" in his determination.

"Unquestionably, the State Museum project was on behalf of a public authority, the State of West Virginia," the justices wrote in their five-page ruling.

"Moreover, the museum project was a 'public improvement' as that term is broadly defined by West Virginia Code § 21-5A-1(4); specifically, the museum was a 'structure upon which construction may be let to contract by the State of West Virginia.'"

The Court also agreed with Mullins' findings as to the nature of the work performed -- i.e. construction.

"Evidence presented at the administrative hearing proved that, when creating and installing the museum displays, Themeworks' employees constructed, improved, enlarged, painted and decorated," the justices wrote.

"Contrary to the interpretation urged by Themeworks, nothing in the statutory definitions limits the application of the act solely to the rote execution of blueprints."

As to Mullins' categorization of the company's workers as "carpenters" under the act, the Court said it also was not "clearly wrong."

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State of West VirginiaWest Virginia Supreme Court of Appeals