L.P. Group 2, Inc. v. Philadelphia Labor Standards Unit ( 2016 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
L.P. Group 2, Inc., :
Appellant :
:
v. : No. 1411 C.D. 2015
: Argued: May 12, 2016
Philadelphia Labor Standards Unit :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE DAN PELLEGRINI, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE COHN JUBELIRER FILED: August 22, 2016
L.P. Group 2, Inc., (LPG) appeals from the June 29, 2015 Order of the Court
of Common Pleas of Philadelphia County (common pleas) that denied LPG’s
appeal from the decision of the Board of Labor Standards of the City of
Philadelphia (Board). The Board denied LPG’s appeal from, and sustained
citations issued by, the City of Philadelphia Labor Standards Unit (Unit) for LPG’s
alleged failure to pay prevailing wage1 and other related violations on seven
demolition contracts. LPG raises four issues on appeal: (1) whether the
adjudication of the Board is void for lack of authority and subject matter
1
“Prevailing wage” is an hourly base pay plus fringe benefit rate for each listed
classification. (N.T. 8/14/13 at 165, R.R. at 179a.) Workers on a contract subject to prevailing
wage must receive the base pay, and employers may pay either the listed fringe benefit amount
directly to the employee or into a fringe benefit plan. (N.T. 8/22/13 at 28, R.R. at 231a.)
jurisdiction; (2) whether common pleas erred by upholding the Board’s
adjudication; (3) whether the Board’s adjudication is based on improperly adduced
facts and reflects a capricious disregard of competent evidence of record; and (4)
whether the Board’s findings of fact are supported by substantial evidence. After
review, we conclude that five of the seven demolition contracts did not meet the
$200,000 threshold necessary to fall within the ambit of “city-work” set by the
Philadelphia Code (Code). As a result, the alleged failure to pay prevailing wage
on those contracts was not within the general class of matters cognizable by the
Unit or on appeal to the Board. Both bodies thus lacked jurisdiction to consider
the violations alleged. We, therefore, reverse common pleas as to those five
contracts. The remaining two contracts met the $200,000 threshold and fall within
the ambit of “city-work,” so the alleged failure to pay prevailing wage on those
contracts falls within the Unit’s and the Board’s jurisdiction. We affirm common
pleas as to those two contracts.
The Demolition Contracts and the Neighborhood Transformation Initiative (NTI)2
Between 2004 and 2006, the City of Philadelphia (City) as part of its NTI
awarded to LPG a total of seven contracts for demolition services at various sites
across the City. The seven contracts, including the locations of the work, amounts
and date awarded, are as follows:
Chester Ave. Area - $89,505.86 (Contract No. 04-0564)
(awarded 05/24/2004);
Salford & Beaumont Area - $138,042.00 (Contract No. 04-
0559) (awarded 05/24/2004);
2
NTI was an urban renewal program intended to redevelop blighted neighborhoods
across the City. (N.T. 8/14/13 at 110-12, R.R. at 124a-26a.)
2
Lindenwood Area - $165,962.43 (Contract No. 04-0565)
(awarded 05/25/2004);
Peach & Ruby Area - $109,690.00 (Contract No. 04-0563)
(awarded 05/25/2004);
49th & Saybrook Area - $146,531.00 (Contract No. 05-0290)
(awarded 10/27/2004);
Allegheny West Area - $929,194.80 (Contract No. 05-0308)
(awarded 11/24/2004);
Haddington B Area - $1,574,568.25 (Contract No. 06-0263)
(awarded 01/06/2006).
(N.T. 11/7/13 at 117-23, R.R. at 439a-40a; Contract Award Letters, S.R.R. at
184b-87b.)
Five of the seven contracts were for less than $200,000. Those five
contracts were awarded as part of a “Small Demolition Bid Package Program”
(Small Bid Program). This program featured smaller contracts for 5 to 10
demolitions designed toward small and minority businesses. (N.T. 8/14/13 at 71,
111-13, R.R. at 85a, 125a-27a; Small Bid Program flyer (Flyer), S.R.R. at 42b.)
The Small Bid contracts had insurance and payment bond requirements that were
less than the regular NTI demolition contracts, and a maximum contract value of
$500,000, so many did not meet the $200,000 “city-work” threshold set by the
Code as the minimum amount that required payment of prevailing wage. (N.T.
8/14/13 at 111-13, R.R. at 125a-27a.) The Flyer announcing the Small Bid
Program stated that “standard NTI Provisions will still apply, including prevailing
wage requirements,” and identical terms were included in each of the contracts,
even though five were for less than $200,000. (N.T. 8/14/13 at 72-73, 100-01,
R.R. at 86a-87a, 114a-15a; Flyer, S.R.R. at 42b.)
3
Proceedings Before the Unit
On September 8, 2005, the Unit issued LPG a Citation Notice for failing to
pay prevailing wage and required fringe benefits, and related offenses on the
Allegheny West, Saybrook and Lindenwood contracts. (R.R. at 517a-18a; S.R.R.
at 177b-78b.) LPG allegedly owed $181,857.34 for these violations based on the
Unit’s audit. (Id.)
LPG sought a hearing before the Unit regarding the September 8, 2005
Citation Notice. The hearing was held on October 27, 2005. The presiding officer
for the Unit suggested that LPG was “not fully prepared to defen[d] itself . . .
against the citation letters of September 8th” and further advised LPG that several
additional current and former LPG employees from three additional contract sites
(Salford & Beaumont, Chester Avenue and Peach & Ruby) came forward
subsequent to the September 8, 2005 Citation Notice with claims that they were
not paid prevailing wage. (N.T. 10/27/05 at 3-4, 22, S.R.R. at 194b-95b, 213b.)
The Unit provided LPG with notice of these additional alleged violations by means
of a spreadsheet “made part of the record” and requested that LPG provide
certified payroll and other records to challenge the new allegations. (N.T. 10/27/05
at 4, 30, 34, S.R.R. at 195b, 221b, 225b.)
The Unit requested these submissions in 10 days, but LPG’s request that it
have 60 days was granted such that the additional materials were due on or before
January 3, 2006. (N.T. 10/27/05 at 4, 28-30, 3, 42, S.R.R. at 195b, 219b-21b,
233b.) The Unit advised that it would set another hearing date upon receipt and
review of the additional materials. (Id.) LPG’s counsel asked the Unit questions
about the basis for the violations. (N.T. 10/27/05 at 4-29, S.R.R. at 195b-220b.)
4
In addition to this dialogue, counsel for LPG argued that the Saybrook and
Lindenwood contracts were exempt from the prevailing wage requirements
because the contract amounts were below the threshold for “city-work,” and
because they were part of an “appropriate job training program.”3 (N.T. 10/27/05
at 31, S.R.R. at 222b.) LPG’s counsel stated that LPG would submit
documentation to the Unit to challenge the violations and argument on LPG’s legal
issues. (N.T. 10/27/05 at 12, 31-33, S.R.R. at 203b, 222b-24b.)
LPG did not submit the additional materials by the January 3, 2006 date
established at the hearing. On January 10, 2006, the Unit sustained all of the
violations charged to LPG for the original contracts identified in the September 8,
2005 citation as well as the three additional contracts identified at the October 27,
2005 hearing. (S.R.R. at 44b-45b.) LPG appealed the Unit’s January 10, 2006
determination to the Board on January 20, 2006. (LPG’s 1/20/06 Notice of
Appeal; R.R. at 520a-21a.) On December 21, 2006, the Unit issued a Citation
Notice to LPG alleging the failure to pay prevailing wage for the seventh contract
site (Haddington B). (S.R.R. at 47b-48b.) Based upon a further dialogue between
3
Section 17-107(2)(b)(.2) of the Code provides that:
(2) Contracts.
***
[(b)](.2) A bonafide member of a job training program may be paid less
than the prevailing wage if said training program’s primary purpose is to provide
construction training opportunities and that the said training program has been
approved by the City, a City Agency, or City-related Agency, and provided that
the size of the construction project does not exceed 8 housing units.
Phila. Code § 17-107(2)(b)(.2).
5
LPG and the Unit this Citation was amended twice and eventually also was
appealed to the Board. (N.T. 8/22/13 at 24, R.R. at 227a; Amended Citation
Notices, S.R.R. at 50b, 52b.)
Hearing before the Board
The Board held a de novo evidentiary hearing which spanned four days,
August 14, 2013, August 22, 2013, October 21, 2013, and November 7, 2013, and
which generated a 2,000 page hearing record. The Unit presented six witnesses:
(1) Ronald Payne; (2) Vernon Ray (aka Vernon Haskins, aka Lamont Haskins); (3)
Kevin Thompson, all former LPG employees who worked under the contracts; (4)
then-Philadelphia Procurement Commissioner, Hugh Ortman; (5) Ben Lewitt, from
Hill International, a consultant that managed the City’s NTI contracts; and (6)
James Ferraro, then-Deputy Director of the Unit. (N.T. 8/14/13 at 21, 37, 44, 60-
61, 65-66, 109-10, 161, R.R. at 35a, 51a, 58a, 74a-75a, 79a-80a, 123a-24a, 175a.)
LPG presented four witnesses: (1) Curtis Fowlkes, a former LPG supervisor; (2)
Anthony Rutledge, LPG’s insurance broker; (3) Jay McCalla, a former City
Deputy Managing Director who supervised the NTI program; and (4) Garnett
Littlepage, an LPG officer. (N.T. 10/21/13 at 9, 53, 57, 102, R.R. at 378a, 389a-
90a, 401a; N.T. 11/7/13 at 51, R.R. at 422a.)
While the Unit focused on the contract process and the terms of the
contracts, LPG focused on Code Section 17-107(6)(b), which defines the Unit’s
powers and duties, and argued that the Board lacked the authority to hear LPG’s
appeal because LPG requested but never received a due process hearing from the
Unit. LPG further argued that its defenses to the original citation, that the
contracts were not for “city-work” and that they were part of an “appropriate job
6
training program,” had never been addressed. (N.T. 8/14/13 at 10-13, R.R. at 24a-
27a.)
LPG argued that the Board is vested with authority to conduct a de novo
review of the record upon which the action appealed from was taken only after the
Unit makes a record and renders a valid determination that an appellant violated
Code Section 17-107, relying on Code Sections 17-107(7)(b)(.1), (.3) and (.4),
which delineate the Board’s authority over actions of the Unit. In other words,
LPG contended that a due process hearing by the Unit finding a violation of Code
Section 17-107 is a procedural prerequisite to the Board’s power to consider an
appeal, and that the October 27, 2005 proceeding and the subsequent January 10,
2006 determination did not meet that standard.
The Board denied LPG’s appeal on November 7, 2013. In so doing the
Board sustained all the prevailing wage violations issued by the Unit on all seven
contracts. Specifically, the Board found that LPG was liable to its employees for
$291,227.66 and that LPG intentionally committed the violations, and the Board
authorized the Unit to make restitution to the employees from the funds withheld
on the contracts. (11/7/13 Board Order, R.R. at 3a; N.T. 11/7/13 at 246-49, R.R. at
471a-72a.) The Board issued its findings of fact and conclusions of law on April 7,
2014. (R.R. at 4a-14a.) Therein, the Board concluded that it had authority to hear
LPG’s appeal and held that LPG had both a contractual duty and a statutory duty to
pay its employees the prevailing wage on the seven contracts (addressing LPG’s
city-work issue). (Board Findings of Fact and Conclusions of Law ¶¶ 33-35.) The
7
Board also rejected LPG’s argument that the training exemption applied to its work
under the contracts.4 (Id. ¶¶ 36-37.)
As to its authority to hear LPG’s appeal, the Board made the following
conclusions of law:
The Board may decide this controversy
33. The requirement of Code Section 17-107(7)(b)(.1) that the Board
may not hear an appeal until “after the completion and determination
of the due process hearing by the Labor Standards Unit” was satisfied.
The Unit’s letter of January 10, 2006, upholding its prior violation
notice, completed and determined the Unit’s due process hearing. See
Ex. City-13.
34. Furthermore, Appellant agreed that “[t]he Contract is subject to
Section 17-107 of the Philadelphia Code . . . and all regulations and
procedures adopted thereunder.” See Ex. LP-2 at ¶ 102. Appeal to the
Board is a procedure for review of the determination of the Unit under
Section 17-107.
35. Furthermore, Appellant’s voluntary decision to appeal this matter
to the Board waived any argument it might have had as to the
authority of the Board to hear an appeal.
(Board Findings of Fact and Conclusions of Law ¶¶ 33-35.)
With regard to LPG’s argument that the contracts did not constitute “city-
work” as defined in Code Section 17-107(1)(b), the Board determined LPG’s
liability on two independent bases: (1) by contract, LPG agreed to pay prevailing
wage, (Board Findings of Fact and Conclusions of Law ¶¶ 6-12, 42-43); and,
alternatively (2) Section 17-107 required it to do so, as, aggregated together, the
4
Although common pleas addressed LPG’s arguments in this regard, LPG does not
reference the training exemption either in its principal brief or its reply brief filed with this
Court. Accordingly, we do not address that issue here.
8
contracts exceeded $200,000, and thus were city-work as defined by Code Section
17-107(1)(b), (Board Findings of Fact and Conclusions of Law ¶¶ 38-41).
Common Pleas’ Decision
LPG appealed to common pleas. Common pleas decided LPG’s appeal
based on the record made before the Board and did not take additional evidence.
The parties engaged in extensive motion practice and filed briefs arguing their
various positions. LPG requested that common pleas hear the appeal de novo on
the basis that the Board improperly excluded evidence regarding the training
program exemption. The Unit opposed a de novo hearing, and common pleas
heard argument on this issue and on the merits of LPG’s appeal. Common pleas
denied LPG’s appeal by the Order dated June 29, 2015. (R.R. at 605a.) LPG
appealed to this Court,5 and common pleas directed LPG to file a Concise
Statement of Errors Complained of on Appeal pursuant to Rule 1925(b) of the
Pennsylvania Rules of Appellate Procedure, Pa. R.A.P. 1925(b).6, 7
5
Our review of a local agency appeal where common pleas takes no additional evidence
is limited to determining if constitutional rights were violated, if an error of law was committed,
or if “the necessary factual findings are supported by substantial evidence.” Society Hill Civic
Ass’n v. Phila. Bd. of License & Inspection Review, 905 A.2d 579, 587 (Pa. Cmwlth. 2006);
Section 754 of the Local Agency Law, 2 Pa. C.S. § 754.
6
Rule 1925(b) provides:
***
(b) Direction to file statement of errors complained of on appeal;
instructions to the appellant and the trial court.--If the judge entering the order
giving rise to the notice of appeal (“judge”) desires clarification of the errors
complained of on appeal, the judge may enter an order directing the appellant to
file of record in the trial court and serve on the judge a concise statement of the
errors complained of on appeal (“Statement”).
Pa. R.A.P. 1925(b).
9
Common pleas issued its Opinion in support of its June 29, 2015 Order on
November 6, 2015. Common pleas held that the Board had subject matter
jurisdiction and authority to hear LPG’s appeal and that LPG agreed to pay
prevailing wage by virtue of the terms of the contracts.
Arguments before this Court
Because it is dispositive as to five of the seven contracts at issue, we first
address LPG’s argument that common pleas erred because the term “city-work” is
defined in Code Section 17-107(1)(b) as non-professional service contracts for
compensation in excess of $200,000. For this reason, LPG argues that the Board’s
consideration and determination of the City’s breach of contract claims were not
within the subject matter jurisdiction given to the Unit, and consequently to the
7
LPG filed its Statement and identified, in relevant part, the following errors in “general
terms”:
1. The trial court erred by applying an incorrect standard of review;
2. The trial court erred as a matter of law by upholding the [Board’s]
November 7, 2013 adjudication which denied the appeal and sustained the
citations issued by the [Unit];
3. LPG’s constitutional right to receive a due process hearing to challenge
the [Unit’s] September 8, 2005 Citation Notice was violated by the [Unit’s]
investigation, prosecution, and adjudication of LPG's alleged violations of
Philadelphia Code Section 17-107 by a biased agency;
4. The [Board’s] November 7, 2013 adjudication is void as the [Board]
lacked authority and subject matter jurisdiction to hear the appeal;
5. The [Board] violated LPG’s constitutional rights to be heard, to
examine witnesses, and elicit evidence in support of its governmental estoppel
defense before an unbiased tribunal;
6. The November 7, 2013 adjudication is not in accordance with law, as
the [Board’s] findings of fact reflect a conscious disregard of competent evidence;
7. The [Board] abused its discretion as the necessary findings are not
supported by substantial evidence.
(Statement, R.R. at 612a.)
10
Board, under the Code. The Unit argues in response that common pleas correctly
found that the terms of the contracts required LPG to pay prevailing wage
notwithstanding that the contracts were for less than $200,000.
We first review the relevant Code provisions. Section 17-107(1)(f) defines
“Contractor” as “[a]ny employer who has been awarded a contract for City-work.”
Phila. Code § 17-107(1)(f). “City-Work” is defined in Section 17-107(1)(b) to
include “non-professional service contracts with the City for compensation that
exceeds two hundred thousand dollars ($200,000) . . . .” Phila. Code § 17-
107(1)(b). Section 17-107(1)(h) defines “Non-professional Service Contracts” as
“[c]ontracts for the provision of the following non-professional services only: . . .
demolition . . . .” Phila. Code § 17-107(1)(h). Section 17-107(2)(b) provides that
“[e]very City-work contract shall contain a provision that all employees
performing city-work other than . . . job trainees . . . shall be paid at least the
applicable prevailing wages . . . .” Phila. Code § 17-107(2)(b).
The Unit’s powers and duties are set forth in Section 17-107(6)(b) as
follows:
(6) The Unit shall have the responsibility of administering this
Section and in connection therewith shall:
***
(b) Receive and refer to the Commissioner under whose supervision
a City-work contract is being performed, complaints against any
contractor or subcontractor for alleged violations of this Section or the
provisions of the City-work contract required hereby. Thereafter, the
Director shall investigate such complaints and in connection therewith
or with respect to any investigation shall have full power and
authority to subpoena any witness, books, records, or other data of any
person for the purposes of obtaining information pertinent to such
investigation. The Director shall make a finding in writing with
11
respect to each complaint filed, and shall send a copy thereof to the
complainant and the contractor and shall maintain it on file. Upon
request, the unit shall provide any affected contractor or subcontractor
with a hearing, pursuant to subsection 8(e).
Phila. Code § 17-107(6)(b).
The Board’s powers and duties are found in Code Section 17-107(7), which
provides, in pertinent part:
(7) Board of Labor Standards. There is hereby created a Board to be
known as the Board of Labor Standards.
***
(b) The Board shall serve as an appeal body to review the findings
made under subsection (6)(b) of this Section or any other violation
found by the Director.
(.1) No appeal shall be considered unless after the completion
and determination of the due process hearing by the Labor Standards
Unit the appeal is filed in writing with the Board within ten (10) days
of the date that the findings or violation notice was sent to the parties.
***
(.3) The Director and, if applicable, the operating department
overseeing the contract, upon a notice of appeal, shall transmit to the
Board all the papers constituting the record upon which the action
appealed from was taken.
(.4) In the exercise of its powers, the Board may reverse, affirm
or modify the finding, order, or determination appealed from.
Phila. Code § 17-107(7)(b)(.1), (.3) and (.4).
Thus, Section 17-107(6)(b) provides that the Unit “shall have the
responsibility of administering this Section and in connection therewith shall” . . .
“[r]eceive and refer to the Commissioner under whose supervision a City-work
12
contract is being performed, complaints against any contractor or subcontractor
for alleged violations of this Section or the provisions of the City-work contract .
. . .” Phila. Code § 17-107(6)(b) (emphasis added). As such, the Code specifically
limits the Unit’s jurisdiction to alleged violations of “city-work” contracts.
Nevertheless, the Unit argues that LPG, by entering into the contracts, agreed to be
subject to the prevailing wage requirements and that the contracts would be treated
as “city-work” contracts regardless of whether the contract amount met the
$200,000 threshold.
Agencies such as the Unit are products of their enabling legislation, and their
authority to act is constrained by the bounds of that legislation. See, e.g., Dep’t of
Health v. Office of Open Records, 4 A.3d 803, 814 (Pa. Cmwlth. 2010) (holding
that in order for agency to assert non-criminal investigative exemption in response
to a Right-to-Know Law request, the asserted “investigation must necessarily be a
part of the agency’s official duties”); Mazza v. Dep’t of Transp., Bureau of Driver
Licensing, 692 A.2d 251, 252 (Pa. Cmwlth. 1997) (stating that “[a]n administrative
agency is creature of statute and cannot exercise powers that are not explicitly
given to it by the legislature.”). Perhaps recognizing the plain language of the
Code, the Unit argues that the parties by agreement vested jurisdiction in the Unit
notwithstanding the provisions of the Unit’s enabling ordinance that limits its
jurisdiction to “city-work” contracts.
However, this is not the law. See Mercury Trucking, Inc. v. Pa. Pub. Util.
Comm’n, 55 A.3d 1056, 1066 (Pa. 2012) (“A party, or the parties by agreement,
may not vest subject matter jurisdiction in a court which does not have it
otherwise.”). See also Witney v. City of Lebanon, 85 A.2d 106, 108 (Pa. 1952)
(stating “that the test of jurisdiction [is the court’s competency] to determine
13
controversies of the general class to which the case presented . . . belong[s],--
whether the court had power to enter upon the inquiry, not whether it might
ultimately decide that it was unable to grant the relief sought in the particular
case.”) (emphasis in original); Earl Realty, Inc. v. Conestoga Valley Sch. Dist.,
403 A.2d 232, 233 (Pa. Cmwlth. 1979) (stating same).
Department of Health instructs that agencies are required to act within the
bounds of their enabling legislation. That principal, combined with Mercury,
Witney, and Earl Realty, instructs that a tribunal (such as the Unit and the Board
here) must have authority to consider a particular class of matter initially, and that
the parties may not by agreement bestow upon the tribunal that which the enabling
legislation does not confer. As such, under the plain language of Code Section 17-
107(6)(b), the Unit’s jurisdiction is limited to contracts for “city-work,” which is
defined, in pertinent part, as those non-professional service contracts with values
exceeding $200,000. As five of the seven contracts did not meet this threshold, the
Unit was without jurisdiction to consider complaints alleging that LPG violated the
Code or those contracts. Moreover, as the Board under Code Section 17-107(7)
serves as an appeal body to review the findings of the Unit, the Board’s review as
to the five contracts that were not for “city-work” was a nullity. Accordingly, we
reverse common pleas as to those five contracts.
However, the remaining two contracts, Allegheny West and Haddington B,
both met the dollar threshold for “city-work,” and, therefore, the Unit and the
Board had jurisdiction to review whether LPG violated the Code with regard to
those contracts. We proceed to review LPG’s remaining arguments in that context.
LPG argues that the Code is the only source of power given to the Board to
review the findings made under Section 17-107(6)(b), or any other violation found
14
by the Unit. Thus, the Board had no authority to hear and consider LPG’s appeal,
where LPG requested but never received the due process hearing which the Unit is
required to provide. More specifically, LPG argues that the Board had no authority
to hear, consider, and determine the contractual prevailing wage claims because
such claims were not part of any finding made by the Unit under Code Section 17-
107(6)(b). LPG thus urges that common pleas erred as a matter of law when it
upheld the Board’s conclusion that the Board had jurisdiction because there is no
evidence showing that the Unit’s determination, dated January 10, 2006, satisfied
the requirement of Code Section 17-107(7)(b)(.1).
The Board’s jurisdiction over appeals from the Unit is found in Code
Section 17-107(7)(b). LPG contends that the Board lacked subject matter
jurisdiction because Code Section 17-107(7)(b)(.1) provides, in pertinent part, that
“[n]o appeal shall be considered unless after the completion and determination of
the due process hearing by the . . . Unit the appeal is filed in writing with the Board
within ten (10) days of the date that the findings or violation notice was sent to the
parties.” Phila. Code § 17-107(7)(b)(.1). However, the record establishes that
LPG requested a hearing before the Unit and that a hearing was convened on
October 27, 2005, as LPG was entitled.8 The record further shows that at the
October 27, 2005 hearing, LPG presented argument, asked questions, sought
clarification of the documentation sought by the Unit, and raised legal defenses.
Although new claims were raised before the Board, which the Unit did not hear,
the administrative appeal to the Board was de novo, and LPG received there an
8
The Code at Section 17-107(6)(b) provides that “[u]pon request, the [U]nit shall provide
any affected contractor . . . with a hearing . . . .” Phila. Code § 17-107(6)(b). Code Section 17-
107(8)(e) states that “the contractor . . . may make a written request for a hearing from the Unit.”
Phila. Code § 17-107(8)(e).
15
evidentiary hearing with the full panoply of due process protections. This
subsequent de novo hearing and determination by the Board did not violate due
process and complied with the Code. See, e.g., Allegheny Ludlum Steel Corp. v.
Pa. Pub. Util. Comm’n, 459 A.2d 1218, 1220-22 (Pa. 1983) (holding that the
automatic energy cost rate adjustment provision in Public Utility Code that
provides for adjustments to reflect utility’s fuel cost increases without opportunity
for opponents of increase to be heard prior to the increase does not violate
procedural due process. The Public Utility Code affords procedural due process
safeguards “through a subsequent, year-end, automatic proceeding for final
determination and adjustment of rate increases, allowing full participation by all
interested parties”). Common pleas thus properly determined that the Board had
jurisdiction9 to hear LPG’s appeal.10
LPG next argues that the Board capriciously disregarded the unambiguous
text of the Code, and that it disregarded testimony by the Unit’s Deputy Director
that cast doubt on his reasons for not rescheduling the due process hearing that
LPG contends the Unit was mandated to give under the Code. In addition, LPG
points to testimony by the Unit’s Deputy Director that the Unit addresses only
prevailing wage issues, and not breach of contract issues.
9
To the extent that LPG argues that a due process hearing before the Unit is a
jurisdictional prerequisite to the Board’s authority to hear LPG’s appeal, based on the facts in
this case, the Board in its Findings of Facts and Conclusions of Law ¶ 33, and common pleas,
(Op. at 18), properly determined that the Unit’s January 10, 2006 determination that followed the
October 27, 2005 hearing and the 60-day period for LPG to submit additional documentation,
completed the Unit’s due process hearing, and vested jurisdiction in the Board.
10
The Unit argues that LPG failed to preserve with sufficient particularity the due
process issue either before the Board or in its Statement. (Unit’s Br. at 25-26 n.5.) However, we
need not make that determination as we have concluded that the record enables us to provide
adequate appellate review on that issue.
16
Common pleas held that there was substantial evidence to support the
Board’s findings of prevailing wage violations11 on these contracts and LPG does
not contest these conclusions. LPG was therefore required to pay prevailing wage
on the two contracts that met the threshold for “city-work,” Allegheny West and
Haddington B, and it did not do so.
For these reasons, common pleas June 29, 2015 Order is reversed as to the
five contracts that did not meet the Code threshold for “city-work,” and affirmed as
to the remaining two contracts.
________________________________
RENÉE COHN JUBELIRER, Judge
11
Common pleas found that:
Evidence and testimony was introduced to show that Appellant was aware of the
prevailing wage requirement; that it did not pay its employees a prevailing wage;
that it falsified payroll records and improperly classified employees; that
Appellant double-reported employees; that it did not provide fringe benefits; that
Appellant advised its employees not to cooperate with the Unit and threatened to
fire them if they did; and that Appellant did in fact fire employees who spoke to
the Unit. See N.T. 8/14/13 at 13-15, 22-29, 30-33, 39-40, 41-43, 46-49, 52-53,
57-59, 62, 66-68, 71-73, 88, 90, 97, 99-101, 107, 112-116, 123-124, 129, 162,
166-171, 175, 178-80, 183-85; N.T. 8/22/13 at 31, 88, 117-19, 147. Thus, it was
the Board as factfinders’ [sic] job to examine evidence and witness testimony and
make credibility determinations. Appellant has not shown any error in the
Board’s decisions. Following an examination of the voluminous record, exhibits,
and testimony, this court cannot conclude that the findings of fact were not
supported by substantial evidence.
(Op. at 16.)
17
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
L.P. Group 2, Inc., :
Appellant :
:
v. : No. 1411 C.D. 2015
:
Philadelphia Labor Standards Unit :
ORDER
NOW, August 22, 2016, the June 29, 2015 Order of the Court of Common
Pleas of Philadelphia County is hereby REVERSED as to the five contracts that
did not meet the monetary threshold for city-work, as defined in Section 17-
107(b)(2) of the Philadelphia Code, and AFFIRMED as to the remaining two
contracts.
________________________________
RENÉE COHN JUBELIRER, Judge