Frank Brothers, Inc. v. WI Dept Trans

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 03-3207
FRANK BROS., INC.,
Plaintiff-Appellant,
v.
WISCONSIN DEPARTMENT OF TRANSPORTATION,
FRANK BUSALACCHI, Secretary, and MARILYN
KUICK, Chief EEO/Labor Compliance,
Defendants-Appellees.
____________
Appeal from the United States District Court
for the Western District of Wisconsin.
No. 03 C 0083—Barbara B. Crabb, Chief Judge.
____________
ARGUED FEBRUARY 12, 2004—DECIDED JUNE 3, 2005
____________
Before CUDAHY, COFFEY, and ROVNER, Circuit Judges.
COFFEY, Circuit Judge. Plaintiff-appellant Frank Bros.,
Inc., (“Frank Bros.”) appeals an order of the district court
dismissing their complaint seeking a declaratory judgment
and injunctive relief against the Wisconsin Department of
Transportation, Frank Busalacchi, Secretary, and Marilyn
Kuick, Chief EEO/Labor Compliance for failure to state
a claim upon which relief could be granted pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure. In the
2 No. 03-3207
district court, Frank Bros. unsuccessfully argued that
provisions of the Davis-Bacon Act, 40 U.S.C. §§ 3141-3148,
and the Federal-Aid Highway Act, 23 U.S.C. §§ 101, et seq.,
preempt application of Wisconsin’s prevailing wage law,
Wis. Stat. § 103.50, to truck drivers who perform transpor-
tation and delivery work pursuant to joint federal-state
highway contracts. We affirm.
I. BACKGROUND
Frank Bros. is a construction company with its principal
place of business in Janesville, Wisconsin. In 2002,
Frank Bros. entered into two separate contracts with the
Wisconsin Department of Transportation (“WisDOT”) agree-
ing to act as a subcontractor on road construction projects
in Rock County, Wisconsin. Under these contracts, which
were funded by capital from both federal and state agencies
through the provisions of the Federal-Aid Highway Act
(“FHWA”), 23 U.S.C. §§ 101, et seq., Frank Bros. agreed to
procure and transport various aggregates, e.g., limestone
and other materials, to the construction sites. Frank Bros.
was also responsible for hauling recycled materials away
from the job sites. In accordance with the transportation
obligations created under the contracts, Frank Bros. hired
a number of independent trucking contractors and subcon-
tractors to haul the aggregate materials to and from a com-
mercial quarry owned and operated by Frank Bros.
The two highway construction contracts that Frank Bros.
entered into with the WisDOT required that the company
comply with all state and federal laws applicable to federally
funded highway construction projects. See 23 U.S.C. § 114.
Also, pursuant to federal law, both contracts incorporated
the terms of the Davis-Bacon Act, 40 U.S.C. §§ 3141-3148,
which requires that contractors and subcontractors on fed-
eral construction projects pay qualified employees (as defined
below) the prevailing wage rate for their job classification
No. 03-3207 3
as determined by the Secretary of Labor. See 40 U.S.C.
§ 3142(b); 23 U.S.C. § 113; 23 C.F.R. § 633.102. In order to
demonstrate compliance with the terms of the Davis-Bacon
Act, contractors and subcontractors subject to the Act’s pre-
vailing wage provisions, such as Frank Bros., are required
to submit weekly payroll records to the Department of
Labor disclosing the wages paid and hours worked by
covered employees. See 29 C.F.R. § 5.5(a)(3).
Not all persons performing work related to a federally
funded construction project will fall within the scope of the
Davis-Bacon Act’s prevailing wage and reporting require-
ments. Qualified employees under the Davis-Bacon Act
include, “laborers and mechanics,” 40 U.S.C. § 3142(b), em-
ployed on the site of federally assisted building projects
(either by contractors or subcontractors) performing tasks
such as “[a]ltering, remodeling, [and] installation.” 29 C.F.R.
§ 5.2(j)(1)(i). Specifically excluded from the Act are contrac-
tors and subcontractors, or employees thereof, engaged in
“the transportation of materials or supplies to or from the
site of the work.” 29 C.F.R. § 5.2(j)(2) (citing Bldg. & Constr.
Trades Dep’t AFL-CIO v. United States Dep’t of Labor Wage
App. Bd., 932 F.2d 985 (D.C. Cir. 1991)). Thus, under the
Davis-Bacon Act, Frank Bros. properly concluded that they
were not required by federal law to pay prevailing wages to
subcontractors or employees of subcontractors working as
truck drivers.
However, in addition to complying with mandatory fed-
eral prevailing wage laws, subcontractors on joint federal
and state construction projects are also required to abide by
the laws and regulations of the various states in which they
are performing work. In a number of states, including
Wisconsin, this means adhering to supplemental state
prevailing wage laws, sometimes referred to as the “little
Davis-Bacon Acts.” See generally, A. Thieblot, PREVAILING
WAGE LEGISLATION: THE DAVIS-BACON ACT, STATE “LITTLE
DAVIS-BACON” ACTS, THE WALSH-HEALEY ACT, AND THE
4 No. 03-3207
SERVICE CONTRACT ACT 21-135 (1986). The same year that
the Davis-Bacon Act was enacted by the United States
Congress, the State of Wisconsin followed suit and passed
its own prevailing wage laws, which remain in place today
in substantively the same form as when they were enacted
in 1931. Wis. Stat. §§ 66.0903 (municipal projects), 103.49
(state projects), 103.50 (highway projects). The Wisconsin
statute defines the State’s “prevailing wage rate” as “the
hourly basic rate of pay, plus the hourly contribution for
[fringe benefits] . . . paid directly or indirectly, for a major-
ity of the hours worked in the trade or occupation in the
area.” Wis. Stat. § 103.50(1)(d). The prevailing wage in
Wisconsin for a particular class of workers is determined on
a project-by-project basis by the Wisconsin Department of
Workforce Development (“DWD”), which shall “conduct
investigations and hold public hearings” to assist in defin-
ing the job classifications necessary for a given project as
well as the appropriate wage minimums for those jobs.
§ 103.50(3). The prevailing wages determined pursuant to
§ 103.50 by the Wisconsin DWD thus may or may not be
identical to the federal wage rate determined by the United
States Secretary of Labor under the Davis-Bacon Act.1
1
As stipulated in a supplemental contract provision in the high-
way construction agreement entered into between Frank Bros.
and the WisDOT, “[i]n the event the [prevailing wage rates under
Wis. Stat. § 103.50 and the Davis-Bacon Act] are not identical, the
higher of the two rates will govern.” This makes good sense
considering § 113 of the FHWA states “laborers and mechanics
employed by contractors or subcontractors on [federally funded
highway projects] . . . shall be paid at rates not less than those
prevailing on the same type of work on similar construction in the
immediate locality as determined by the [United States] Secretary
of Labor in accordance with [the Davis-Bacon Act].” 23 U.S.C.
§ 113. Thus, if the Wisconsin DWD were to set a prevailing wage
for workers that was lower than that set by the Secretary of Labor
(continued...)
No. 03-3207 5
More importantly though, Wisconsin’s prevailing wage
enactment, unlike the Davis-Bacon Act and the regulations
promulgated thereunder, expressly provides that “[a]ll
laborers, workers, mechanics and truck drivers employed,”
on public works projects shall be paid the prevailing wage
determined by the DWD. Wis. Stat. § 103.50(2m)(a)(2) (em-
phasis added). Thus, while the federal government does not
provide for a prevailing minimum wage rate for truck
drivers performing work on federally funded state highway
projects, the State of Wisconsin expressly requires that
truck drivers rendering services such as hauling materials
to and from federally funded construction projects in
Wisconsin be paid the state mandated prevailing wage. Like
the Davis-Bacon Act, § 103.50 of the Wisconsin Statutes
must be incorporated into all WisDOT highway construction
contracts, Wis. Stat. § 103.50(6), meaning the contracts
Frank Bros. entered into require compliance with both the
federal and state prevailing wage schemes.
Confronted with this legislative and contractual scenario,
Frank Bros. chose to comply fully with the federal prevail-
ing wage requirements, but did not pay—or require its
subcontractors to pay—the prevailing wage required under
Wisconsin law to truck drivers employed in hauling lime-
stone and other aggregates from the Frank Bros. quarry to
the job sites. Frank Bros. also failed to comply with Wiscon-
sin law by not providing the required (weekly) supporting
1
(...continued)
under the provisions of the Davis-Bacon Act, Wisconsin’s prevail-
ing wage law would clearly be preempted due to the fact that it
would be physically impossible for an employer to comply with
both federal and state law. See California Fed. Savings & Loan
Ass’n v. Guerra, 479 U.S. 272, 281 (1987). However, as we hold
today, this is not the case where a state’s wage rate is set higher
than the federal rate or when additional classes of workers are
covered under state law.
6 No. 03-3207
payroll documentation to the WisDOT (such as the wages
paid and number of hours worked by truck drivers employed
either directly or indirectly on the project).
Having learned of this situation, Marilyn Kuick, Chief
of the EEO/Labor Compliance Bureau for the WisDOT,
ordered Frank Bros. to immediately comply with Wisconsin
law. In a letter dated January 15, 2003, Kuick directed the
company to begin paying all truck drivers employed in haul-
ing materials to and from the construction sites Wisconsin’s
prevailing wage rate. The letter further instructed
Frank Bros. to comply with the reporting provisions of
§ 103.50, provide the required weekly payroll information
and, if necessary, pay any back wages to those workers who
might have been paid less than the State’s prevailing wage
while working on the project. Kuick explained the rationale
of her order by stating that the WisDOT would apply the
definition of “covered employees” in Wis. Stat. § 103.50, which
includes truck drivers, instead of the narrower definition
found in regulations implementing federal law.
On February 19, 2003, Frank Bros. filed suit in the
United States District Court for the Western District of
Wisconsin. The company sought a declaratory judgment and
injunctive relief against the WisDOT and other named
defendants pursuant to the Davis-Bacon Act, 40 U.S.C.
§§ 3141-3148, the Federal-Aid Highway Act, 23 U.S.C.
§§ 101 et seq., and the Declaratory Judgment Act, 28 U.S.C.
§§ 2201-2202. In essence, Frank Bros. claimed that Wiscon-
sin’s prevailing wage statute is preempted by federal law and
that WisDOT is thus precluded from requiring that truck
drivers be paid the prevailing wage mandated under Wis.
Stat. § 103.50.
Shortly after the complaint was filed, but before discovery
had commenced, the defendants-appellees moved to dismiss
pursuant to Rule 12(b)(6) claiming that Frank Bros. had
failed to state a claim upon which relief could be granted.
No. 03-3207 7
See FED. R. CIV. P. 12(b)(6). The district court granted
WisDOT’s motion, finding that Frank Bros. had failed to
demonstrate that anything in the Davis-Bacon Act or
related federal legislation precluded the State of Wisconsin
from placing additional wage rate requirements on subcon-
tractors working on joint federal and state highway con-
struction projects. We affirm.
II. DISCUSSION
The district court dismissed the defendants-appellees’
complaint under Rule 12(b)(6) for failure to state a claim
upon which relief could be granted, a question of law which
we review de novo. See Thomas v. Law Firm of Simpson &
Cybak, 392 F.3d 914, 916 (7th Cir. 2004). Dismissal is only
appropriate if the plaintiff cannot possibly establish any set
of facts which would entitle him to the relief requested. See
Hunt-Golliday v. Metro. Water Reclamation Dist., 390 F.3d
1032, 1034 (7th Cir. 2004). For purposes of this appeal we
accept as true all of the well-pleaded allegations in Frank
Bros. complaint and will draw all reasonable inferences in
their favor. See Thomas, 392 F.3d at 916.
A. Federal Preemption Doctrine
The sole issue presented on appeal is whether the federal
prevailing wage scheme, which expressly exempts truck
drivers from its scope of coverage, preempts Wisconsin’s pre-
vailing wage law, which specifically includes truck drivers.
Under the Supremacy Clause of the United States
Constitution, U.S. CONST., art. VI, state law may be pre-
empted by federal legislation either by “express provision,
by implication, or by a conflict between federal and state law.”
N.Y. State Conference of Blue Cross & Blue Shield Plans v.
Travelers Ins. Co., 514 U.S. 645, 654 (1995) (citing Pacific
Gas & Elec. Co. v. State Energy Resources Conservation and
8 No. 03-3207
Dev. Comm’n, 461 U.S. 190, 203-04 (1983)). Although state
legislation may be preempted by federal provisions in a
number of ways, we presume that, in all circumstances,
“Congress does not intend to supplant state law.” Travelers
Ins. Co., 514 U.S. at 654. This is particularly true where a
party claims that federal law bars state action in areas of
traditional state regulation, such as public works. See
Meditronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996); see also
California Div. of Labor Standards Enforcement v. Dillingham
Constr., N.A., Inc., 519 U.S. 316, 325 (1997). In such cases
preemption shall not be found absent evidence that it was
Congress’ “clear and manifest purpose [to do so].” Rush
Prudential HMO v. Moran, 536 U.S. 355, 365 (2002); Rice
v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947).
1. Express Congressional Intent
Although Frank Bros. does not argue that Wisconsin’s
prevailing wage law is expressly preempted by federal law,
“we begin as we do in any exercise of statutory construction
with the text of the provision in question, and move on, as
need be, to the structure and purpose of the Act in which it
occurs.” Travelers Ins. Co., 514 U.S. at 655. There is nothing
in the statutory text of the federal statutes at work here
which would lead us to conclude that it was the intention of
Congress to expressly override either complementary or
inconsistent state laws. The Davis-Bacon Act, 40 U.S.C.
§ 3146, states that the Act is “not [to be construed to]
supersede or impair any authority otherwise granted by
federal law to provide for the establishment of specific wage
rates,” but is silent on the subject of interaction with state
legislation. Likewise, the FAHA “contains no statement
about its effect on either federal or state statutes.” Siuslaw
Concrete Constr. Co. v. Wash. Dep’t of Transp., 784 F.2d
952, 955 n.3 (9th Cir. 1986).
No. 03-3207 9
When interpreting the text of a statutory provision for
preemptive intent we assume that the ordinary meaning of
the language used by Congress accurately reflects the
legislative purpose. See Morales v. Trans World Airlines,
Inc., 504 U.S. 374, 383 (1992). Congress’ failure to expressly
state, one way or the other, whether the Davis-Bacon Act
and/or the FHWA are meant to preempt state law, prevents
us from holding that Wisconsin’s prevailing wage law has
been expressly preempted, a determination that is only
possible where Congress has expressed a clear intent to
override state law.2 See, e.g., Louisiana Pub. Serv. Comm’n
v. Fed. Communications Comm’n., 476 U.S. 355, 368 (1986);
Time Warner Cable v. Doyle, 66 F.3d 867, 875 (7th Cir.
1995). Nevertheless, state law may also be supplanted
when, absent an express statement of legislative intent,
“Congress’ command is . . . implicitly contained in [an Act’s]
structure and purpose.” Fidelity Fed. Savings & Loan Ass’n
v. de la Cuesta, 458 U.S. 141, 152-53 (1982) (quoting Jones
v. Rath Packing Co., 430 U.S. 519, 525 (1971)).
2
Indeed, as discussed infra, provisions in both the Davis-Bacon
Act and the FHWA suggest that Congress intended a scheme of
complementary state/federal legislation. For example, 23 U.S.C.
§ 114(a) provides that “labor in each State shall be performed . . .
in accordance with the laws of that State and applicable Federal
law.” In addition, we pause to note that prior to the passage of the
Davis-Bacon Act in 1931 seven states had some form of prevailing
wage legislation on the books. Armand J. Thieblot, Jr., Prevailing
Wage Laws of the States, 4 Gov. Union Rev. 1, 5 (Fall 1983). The
Supreme Court has made clear that Congress’ silence regarding
the preemption of preexisting state laws may aid the court in
concluding that Congress did not intend to preempt those state
laws. See Dillingham, 519 U.S. at 329-31; Camps New-
found/Owatonna, Inc. v. Town of Harrison, Me., 520 U.S. 564, 616
(1997).
10 No. 03-3207
2. Implicit Preemption
Frank Bros.’ first claim on appeal is that congressional
legislation, in the form of the Davis-Bacon Act, as incorpo-
rated by the FHWA, is so pervasive that it leaves no room
for the State of Wisconsin to impose its own prevailing wage
scheme. Thus, Frank Bros. concludes that the State of
Wisconsin is precluded from enforcing its prevailing wage
legislation and accordingly may not require Frank Bros. to
pay a state prevailing wage to truck drivers in the com-
pany’s (and its subcontractor’s) employ. The appellants base
this claim primarily on the following allegations: (a) that
“Congress specifically addressed how wages should be set
on federally funded highway contracts in 23 U.S.C. § 113 by
stating that wages shall be paid “in accordance with . . . the
Davis-Bacon Act”; and (b) that “there is a lack of any other
specific statutory reference that permits or authorizes a
state to impose its prevailing wage scheme on federally
funded highway contracts.” Appellant’s Brief at 24. We
disagree.
In this country, it is a long-standing principle of law that,
in the absence of explicit language signaling preemptive
intent, the manifest purpose of Congress to preclude the
application of State law may also be evinced by either a
“scheme of federal regulation . . . so pervasive to make
reasonable the inference that Congress left no room for the
States to supplement it,” or the passage of an Act that
“touch[es] a field in which the federal interest is so domi-
nant that the federal system will be assumed to preclude
enforcement of state laws on the same subject.” Rice, 331
U.S. at 230.
As noted above, the establishment of prevailing wage
rates and labor standards for indigenous workers is an area
of traditional state regulation. See Dillingham, 519 U.S. at
330; Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 21
(1987). Therefore, it is Frank Bros.’ burden to establish, in
No. 03-3207 11
the context of field preemption, that it was the clear
“manifest purpose of Congress” to preclude the states, and
specifically Wisconsin, from enacting their own prevailing
wage legislation. Rice, 331 U.S. at 230. However, both the
text of the federal statutes involved and the legislative
history of the Davis Bacon-Act and the FHWA, as well as
regulations promulgated pursuant to those laws, demon-
strate that this is not the case.
The statutory language of both the Davis-Bacon Act and
the FAHA both suggest that Congress intended federal law
to be complementary to, rather than preclusive of, state
law. The Davis-Bacon Act was initally enacted in 1931 dur-
ing the Hoover administration and mandates that a “pre-
vailing wage” determined by the Secretary of Labor be paid
to those employees who perform various qualified tasks for
contractors on federal public works projects.3 See 40 U.S.C.
§ 3142.4 And we note that some of the most striking and
convincing evidence of congressional intent can be found in
the text of the Davis-Bacon Act itself.
If Congress had intended to supplant more stringent state
legislation it is unlikely that they would have characterized
the federal prevailing wage as the “minimum wages to be
paid various classes of laborers and mechanics.” 40 U.S.C.
3
It should be noted, however, that over the years the Davis-
Bacon Act has been amended many times and, as a result, con-
tains many nuances that the bill passed in 1931 did not. See gen-
erally Lisa Morowitz, Government Contracts, Social Legislation,
and Prevailing Woes: Enforcing the Davis Bacon Act, 9 IN. PUB. INT.
29, 32 (1989).
4
As Representative Bacon stated, the Davis-Bacon Act was in-
tended to discourage “certain itinerant, irresponsible contractors,
with itinerant, cheap, bootleg labor . . . [from] ‘picking’ off a con-
tract here and a contract there,” and to “simply give local labor
and the local contractor a fair opportunity to participate in this
building program.” 74 Cong. Rec. 6510 (1931).
12 No. 03-3207
§ 3142(a) (emphasis added). The use of the word minimum
in the statute, in and of itself, is strong evidence of a
congressional intention to have the statute read as comple-
mentary to state legislation. There is no doubt that congres-
sional lawmakers were aware of their inherent authority to
legislatively preempt state authority in the field by making
the federal wage rate mandatory and preclusive of state (or
employer) supplementation, however, the text of the statute
itself establishes that they chose not to do so. See
Hillsborough v. Automated Medical Labs, Inc., 471 U.S.
707, 718 (1985). Instead, when crafting the Davis-Bacon
Act, Congress chose the word “minimum” to benefit workers
(for whom the legislation was passed) and allowed for the
payment of higher wages if the states, the market or individ-
ual employers concluded that supplemental wages were in
order.
Indeed, the broader federal law requiring that all workers,
regardless of job classification, be paid a “minimum wage”
has long been an area of the law which is governed by a
complementary web of federal and state legislation, and
there is no reason to believe that Congress did not envision
that the same system would operate with respect to the
Davis-Bacon Act as well. See, e.g., 29 U.S.C. §§ 201-209
(entitled the “Fair Labor Standards Act”). This conclusion
is consistent with the fact that, like the Davis-Bacon Act,
the federal minimum wage was part of comprehensive
legislation aimed at mitigating the financial damage done
to the working class in the United States during the
Great Depression. See generally William P. Quigley, ‘A Fair
Day’s Pay For a Fair Day’s Work’: Time to Raise and Index
the Minimum Wage, 27 St. Mary’s L.J. 513, 515-29 (1996).
The only substantive difference between the federal mini-
mum wage law and the Davis-Bacon Act in this context is
that Congress saw fit to include an express non-preemption
clause in the Fair Labor Standards Act. See 29 U.S.C.
§ 218(a) (“No provision of this chapter or of any order
No. 03-3207 13
thereunder shall excuse noncompliance with any Federal or
State law or municipal ordinance establishing a minimum
wage higher than the minimum wage established under
this chapter. . . .”). Nonetheless, the fact that Congress did
not expressly reserve the right of the states to set a min-
imum prevailing wage for workers taking part in public
works projects does not support the conclusion that the
states do not maintain that right.
Additional guidance as to congressional intention not to
preempt state regulation in the field is provided by the
FHWA, which implements the Davis-Bacon Act in conjunc-
tion with all federally funded state highway projects. A
comprehensive analysis of the FHWA demonstrates that
Congress both understood state involvement in setting and
maintaining prevailing wages and sought the states’ coop-
eration in facilitating the enforcement of the Davis-Bacon
Act. Moreover, there is nothing in the FHWA which sug-
gests that Congress intended the Davis-Bacon Act or the
FHWA to preclude supplemental wage rate legislation by
the states in the form of either a higher prevailing wage or
the payment of a prevailing wage to a broader variety of
workers.5 For example, the FHWA provides in part that “all
laborers and mechanics employed by contractors or subcon-
tractors . . . shall be paid wages at rates not less than those
prevailing on the same type of work on similar construction
in the immediate locality as determined by the Secretary of
Labor in accordance with . . . [the Davis-Bacon Act].” 23
U.S.C. § 113 (emphasis added).
Frank Bros. attaches great importance to the words “in
accordance with” in the statute and argues that § 113, by its
5
In terms of the FHWA, a number of courts have held that be-
cause participation in the FHWA is at the states’ option, it cannot
be said that Congress intended to preempt the field and preclude
supplementary state decision making. Siuslaw Concrete Constr.
Co., 784 F.2d at 953.
14 No. 03-3207
very terms, establishes Congress’ intention to preempt
inconsistent state prevailing wage laws where the Davis-
Bacon Act is applicable. However, this argument is mis-
guided for a number of reasons. First, § 113 merely assures
that the mandatory provisions of the Davis-Bacon Act, such
as the payment by contractors of a prevailing minimum
wage to certain covered employees, will be adhered to on
federally funded highway contracts, but does not in any
manner or respect alter, much less limit, the ability of
states to require that contractors abide by supplemental
state prevailing wage regulations. Support is found for this
proposition in another provision in the FHWA which ex-
pressly states that “construction work and labor in each
State shall be performed under the direct supervision of the
State transportation department and in accordance with the
laws of that state and applicable federal laws.” 23 U.S.C.
§ 114 (emphasis added).6 Instead of precluding supplemen-
tal state regulation, as Frank Bros. suggests, the language
employed in the FHWA embodies Congress’ intention to
provide legal authority to and encourage cooperation be-
tween State and Federal regulators in order that they might
achieve similar results in accomplishing the goals of the
Davis-Bacon Act. Furthermore, § 113 of the FHWA requires
the Secretary of Labor to “consult [as directed by the
regulations] with the highway department of the State in
which a project . . . is to be performed . . . [and] [a]fter giv-
6
Frank Bros. argues unpersuasively that the phrase “ . . . and
applicable federal laws” in § 114 is evidence of Congress’ intention
to make state law subordinate to federal law with respect to state
prevailing wage laws. The problem with this reading of the
statute, as discussed infra, is that if Congress intended to control
the field there would be no need to refer to applicable state laws.
Indeed, a fair reading of the statute reveals Congress’ contempla-
tion of state law and intention not to supplant or in anyway
disturb existing state law where there is no “applicable federal
law.” 23 U.S.C. § 114.
No. 03-3207 15
ing due regard to the information thus obtained, he shall
make a predetermination of the minimum wages to be paid
laborers and mechanics.” 23 U.S.C. § 113(b).7 Such consulta-
tion would be unnecessary and perhaps undesirable if, as
Frank Bros. contends, Congress had intended to exercise
plenary power over prevailing wage determinations.8 See
Dillingham, 519 U.S. at 330. Indeed, in California Division
of Labor Standards Enforcement v. Dillingham, another
Davis-Bacon Act case that dealt with ERISA preemption of
the California prevailing wage scheme, the Supreme Court
cited Congress’ express direction to the Secretary of Labor
to cooperate with state agencies engaged in formulating and
promoting apprenticeship standards as persuasive evidence
that California’s prevailing wage scheme was not pre-
empted by ERISA. See id. (citing 29 U.S.C. § 50).
Moreover, nothing in either the legislative history of
the Davis-Bacon Act or the FHWA supports Frank Bros.’
contention that Congress intended to preempt broader
prevailing minimum wage requirements implemented by
the states. As the Supreme Court acknowledged for the first
time over fifty years ago: “The language of the [Davis-
7
While it is true, as Frank Bros. asserts, that the Secretary of
Labor has the authority to set the Federal prevailing wage with-
out regard to applicable state regulations, this fails to add any-
thing to their cause; for as 23 U.S.C. § 114 states on its face,
contractors are to comply with both the laws of the state in which
they are performing the work as well as applicable federal laws.
8
This conclusion is also bolstered by 23 U.S.C. § 145 which
provides in pertinent part: “(a) Protection of State sovereignty.—
The authorization of the appropriation of Federal funds or their
availability for expenditure under this chapter shall in no way
infringe on the sovereign rights of the States to determine which
projects shall be federally financed. The provisions of this
chapter provide for a federally assisted State program.”
§ 145 (emphasis added).
16 No. 03-3207
Bacon] Act and its legislative history plainly show that it
was not enacted to benefit contractors, but rather to protect
their employees from substandard earnings by fixing a floor
under wages on Government projects.” United States v.
Binghamton Const. Co., 347 U.S. 171, 177 (1954) (emphasis
added). Support for this assertion is pervasive and most
compelling. For example, when Congress enacted the Davis-
Bacon Act in 1931 seven states had already adopted
prevailing wage statutes, many of which had disparate re-
quirements, provided for higher prevailing wage calcula-
tions and contained different worker coverage than their
later adopted federal counterpart. See Armand J. Thieblot,
Jr., Prevailing Wage Laws of the States, 4 Gov. Union Rev.
1, 5 (Fall 1983); see also Dillingham, 519 U.S. at 329-31;
Camps Newfound/Owatonna, Inc., 520 U.S. at 616. Also,
there are currently thirty states that have some form of
prevailing wage legislation for public works projects, and
most of those contain categories of covered employees or
prevailing wage rates which differ from the Davis-Bacon
Act, i.e., some states require that a prevailing wage be paid
to one or more classifications of employees that are not
covered under the Davis-Bacon Act.9 See Dillingham, 519
9
Those states are: ALASKA STAT. § 36.05.010 (Alaska); ARK. CODE
ANN. §§ 22-9-301, 22-9-303 (Arkansas); CAL. LAB. CODE §§ 1770,
1720.3 (California); CONN. GEN. STAT. § 31-53 (Connecticut); DEL.
CODE ANN. tit. 2, § 2003 (2004) (Delaware); HAW. REV. STAT. ANN.
§ 104-2 (Hawaii); 820 ILL. COMP. STAT. ANN. 130/1, 130/2 (Illinois);
IND. CODE ANN. § 5-16-7-1 (Indiana); KY. REV. STAT. ANN. § 337.010
(Kentucky); ME. REV. STAT. ANN. tit. 26 §§ 1304-1305 (Maine); MD.
CODE ANN., STATE FIN. & PROC. § 17-213 (Maryland); MASS. GEN.
LAWS ch. 149, § 27F (Massachusetts); MINN. STAT. ANN. § 177.41
(Minnesota); MO. ANN. STAT. §§ 290.220, 290.230 (Missouri); MONT.
CODE ANN. §§ 18-2-401, -402 (Montana); NEB. REV. STAT. ANN.
§ 71-6018.02 (Nebraska); NEV. REV. STAT. ANN. §§ 332.390, 338.020
(Nevada); N.J. STAT. ANN. §§ 34:11-56.25, -56.26 (New Jersey); N.M.
(continued...)
No. 03-3207 17
U.S. at 329-31. As stated above, if in fact it was the intent
of Congress to preempt such competing state regulation in
the field, there is no doubt that they were acutely aware of
how to accomplish that goal. See, e.g., Hillsborough, 471 U.S.
at 718. Again, the decision not to do so is evidence of Con-
gress’ primary goal in passing the Davis-Bacon Act in the
first place, which was not to supplant state regulations in
the area, but to insure that, in states with prevailing wage
legislation, “contractors [on public works projects would] not
pay [workers] less than is paid in private industry.” 75
Cong. Rec. 6515 (1931) (statement of Rep. Kopp).
The proposition that Congress, at least implicitly, in-
tended to allow for supplemental and even more aggressive
state regulation, is also supported with compelling evidence
that the federal government is well aware of, and even com-
fortable with, the fact that some of the “little Davis-Bacon
Acts,” such as Wisconsin’s prevailing wage law, impose
more stringent requirements (i.e, higher prevailing wages
and additional categories of covered employees) on contrac-
tors and subcontractors than those mandated by the Davis-
Bacon Act. For example, a great number of states have
prevailing wage legislation in place that mandates that
worker classifications, such as truck drivers—employees
that are not qualified employees under the Davis-Bacon
Act—be paid a state prevailing wage. See supra note 9 and
accompanying text. More importantly, aside from Wiscon-
9
(...continued)
STAT. ANN. § 13-4-11 (New Mexico); N.Y. LAB. LAW § 220 (New
York); OHIO REV. CODE ANN. § 4115.04 (Ohio); OKLA. STAT. ANN.
tit. 40, § 197 (Oklahoma); 62 PA. CONS. STAT. ANN. § 3901 (Pennsyl-
vania); R.I. GEN. LAWS § 37-13-6 (Rhode Island); TENN. CODE ANN.
§ 12-4-402 (Tennessee); TEX. GOV’T CODE ANN. §§ 2258.001,
2258.002 (Texas); WASH. REV. CODE. ANN. § 39.12.020 (Washing-
ton); W. VA. CODE ANN. § 21-5A-2 (West Virginia); and WIS. STAT.
§ 103.50 (Wisconsin).
18 No. 03-3207
sin, at least three other states specifically include truck
drivers as one of the classes of contractor employees that
must be paid the prevailing wage under state law. See, e.g.,
CAL. LAB. CODE § 1720.3 (“public works’ also means the
hauling of refuse from a public works site to an outside
disposal location”); MASS. GEN. LAWS ch. 149, § 27F (“No
agreement of lease, rental, or other arrangement . . . under
which a truck or any automotive or other vehicle or equip-
ment is to be engaged in public works . . . shall be entered
into or given by any public official or public body unless
said agreement, order or requisition contains a stipulation
requiring prescribed rates of wages, as determined by the
commissioner, to be paid said truck drivers”); Superior
Asphalt & Concrete Co. v. Dep’t of Labor & Indus. of Wash.,
112 Wash. App. 291, 298-303 (Wash. Ct. App. 2002) (finding
that most truck drivers are covered under WASH. REV. CODE
§ 39.12.020).
However, even if it were reasonable for Frank Bros. to
suggest that Congress is oblivious of this legislation, the
record suggests that—at the very least—the Federal
Highway Administration is well aware that certain states
have enacted legislation that is supplementary to the Davis-
Bacon Act. In 1985 the Federal Highway Authority pro-
posed a rule which would have allowed the Federal High-
way Administrator to decline funding to highway contracts
that are too costly due to “design, materials or labor costs.”
50 Fed. Reg. at 39137-39139, withdrawn at 54 Fed. Reg. at
34529. This rule would have imbued the FHWA with the
discretion to refuse to use federal funds to finance the
excess costs of labor in states, such as Wisconsin, where
either the prevailing wage calculation is greater than that of
the Secretary of Labor or where state legislation requires
the payment to additional classifications of workers (not
covered under the Davis-Bacon Act) such as truck drivers.
The rule was eventually withdrawn, but the text of the
proposed regulation offers valuable insight into the Federal
No. 03-3207 19
Highway Administration’s interpretation of the interaction
between state laws and the Davis-Bacon Act; for the
proposed rule states that, in the Administration’s opinion
“neither the Davis-Bacon Act nor 23 U.S.C. [§] 113 pre-
empts State law.” Id. Although not binding precedent, the
courts “have long recognized that considerable weight
should be accorded to an executive department’s construc-
tion of a statutory scheme it is entrusted to administer . . . .”
Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837, 844 (1984).
The fact that the Federal Highway Administration, the
agency charged with arranging and approving federal high-
way contracts as well as implementing the Davis-Bacon Act
on those projects, has never challenged these alleged
inconsistencies between federal and state law (and even
stated in the federal record that the Davis-Bacon Act did
not preempt state legislation in the field) certainly weighs
in favor of a conclusion that the field has not been occupied
by federal legislation and regulation.
Essentially the only evidence that Frank Bros. relies upon
in support of their argument for field preemption is Con-
gress’ silence as to the application or existence of state
prevailing wage laws.10 However, silence on the part of
Congress alone is not only insufficient to demonstrate field
10
Frank Bros. incorrectly asserts that “[w]hen Congress has en-
acted protective labor legislation that intrudes upon the historic
police powers of States, the traditional pattern followed by
Congress has been to specifically assert in the legislation that the
States retain these police powers, if Congress wishes the States to
retain those powers.” Appellant’s Brief at 28. A quick read of the
United States Constitution reveals that “powers not delegated to
the United States by the Constitution, nor prohibited by it to the
States, are reserved to the States respectively. . . .” U.S. CONST.
amend. X. In addition, as mentioned earlier, in spheres of tradi-
tional state regulation the courts will presume that Congress did not
intend to supercede state law. See supra pp. 11-12; Rice, 331 U.S.
at 230.
20 No. 03-3207
preemption, it actually weighs in favor of holding that it
was the intent of Congress not to occupy the field.
Hillsborough, 471 U.S. at 718 (holding that the courts “can
expect that [Congress and/or agencies] . . . will make their
intentions clear if they intend for their regulations to be ex-
clusive”); Camps Newfound/Owatonna, Inc., 520 U.S. at 616
(holding that “even where Congress has legislated in an area
subject to its authority, our pre-emption jurisprudence
explicitly rejects the notion that mere congressional silence
on a particular issue may be read as preempting state law”).
To illustrate the point further, this is not a situation akin
to the one encountered by the Supreme Court in Guss v.
Utah Labor Board, which Frank Bros. cites as support for
its argument that the Davis-Bacon Act preempts state
prevailing wage laws. 353 U.S. 1 (1957). In Guss, the
Supreme Court held that, by promulgating the National
Labor Relations Act, Congress granted the National Labor
Relations Board (“NLRB”) plenary power “to prevent any
person from engaging in any unfair labor practice.” Id. at 3-
12. The Court reasoned that under § 10(a) of the National
Labor Relations Act, the only manner in which the states
would have jurisdiction over labor disputes covered under
the Act would be where their power to deal with those dis-
putes was ceded by the NLRB. Id. at 5-12. In other words,
the Court concluded that Congress had intended that the
NLRB would be vested with jurisdiction over all labor
disputes affecting commerce and that this constituted “not
only a general intent to pre-empt the field,” but also implied
exclusiveness on the part of the Board to act at the behest
of Congress on such matters. Id. at 10. Thus, a declination
on the part of the Board to exercise its jurisdiction did not
allow the states to step in when exclusive jurisdiction was
vested in the Board. Id. at 10-12.
Guss is distinguishable, for in this case we are not dealing
with a plenary grant of power by the Congress to the
Secretary of Labor. As we have illustrated, although the
No. 03-3207 21
Davis-Bacon Act grants the Secretary the power to deter-
mine a minimum prevailing wage, nothing in the act even
implies exclusivity. Whereas in Guss the Court needed look
no further than the statute itself to determine that Con-
gress had “meant to reach to the full extent of its power
under the Commerce Clause,” in passing the National
Labor Relations Act. Id. at 3. Congress did not exercise its
power in this manner when enacting the Davis-Bacon Act,
although they certainly had the power to do so. The fact
that Congress did not exercise plenary power when enacting
the Davis-Bacon Act, especially when confronted with
supplementary legislation in the field, demonstrates Con-
gress’ intention that the Davis-Bacon Act coexist with state
regulation rather than preempt it. See Hillsborough, 471
U.S. at 718. In addition, contrary to Frank Bros.’ argument,
Congress had not “left unregulated” any area of labor
disputes affecting commerce under the National Labor
Relations Act. Guss, 353 U.S. at 3. In fact, as we pointed out
earlier, the Supreme Court held in Guss that Congress had
invested the NLRB with exclusive, plenary power over labor
disputes. Id. at 10. The Davis-Bacon Act confers no such
authority to the Secretary of Labor, and thus the states are
free to act as long as their regulations do not otherwise
interfere with congressional intent.
Because we are not satisfied that the Davis-Bacon Act, as
incorporated by the FHWA, evinces the clear and “manifest
purpose of Congress” to implement a scheme of legislation
so pervasive11 that it would, in effect, preempt any state
11
Frank Bros. also claims that the determination of how workers
are to be categorized and/or paid on federally funded highway pro-
jects is of such significant interest to Congress that the federal
interest in regulating such matters is so dominant as to preempt
all state laws touching on the same subject. As support for this
argument Frank Bros. cites the amount of money spent by the
(continued...)
22 No. 03-3207
regulation in the field, we conclude that the State of
Wisconsin is free to require compliance with its own
prevailing wage scheme, as long as that legislation is not in
conflict with federal law or prevents the full purposes and
objectives of Congress from being carried out.12
11
(...continued)
federal government (billions of dollars each year) on state highway
projects. They therefore argue that the states are precluded from
raising the price of labor on joint federal/state highway projects by
imposing supplementary prevailing wage schemes.
However, this argument is unpersuasive because: “[u]ndoubtedly,
every subject that merits congressional legislation is, by definition,
a subject of national concern. That cannot mean, however, that
every federal statute ousts all related state law.” Hillborough, 471
U.S. at 719. For example, state legislation on the subject of
national security and foreign affairs has been held implicitly pre-
empted because “Congress has legislated in an area of paramount
federal importance.” Mite Corp. v. Dixon, 633 F.2d 486, 493 (7th
Cir. 1980) (citing Pennsylvania v. Nelson, 350 U.S. 497 (1956)
(national security); Hines v. Davidowitz, 312 U.S. 52 (1941)
(foreign affairs)). However, the wage rates for certain employees
of government contractors cannot be considered an area of such
significant national concern that it would be treated along the
lines of either legislation in the realm of national security or
foreign affairs. Indeed, if this were the case, it would follow that
every piece of legislation, from state minimum wage laws to local
highway laws, might conceivably be preempted by federal law
because they, in some way, impact the federal budget, regardless
of whether those laws fall within the traditional sphere of state
regulation. Hillborough, 471 U.S. at 719; see supra pp. 12-13.
12
Even if we were to assume that the legislative scheme of the
Davis-Bacon Act (and the Federal-Aid Highway Act) was com-
prehensive in its field, comprehensiveness does not always justify
preemption. Hillsborough, 471 U.S. at 717. “In New York Dept. of
Social Services v. Dublino, 413 U.S. 405 (1973), the Supreme
Court stated that ‘[the] subjects of modern social and regulatory
(continued...)
No. 03-3207 23
12
(...continued)
legislation often by their very nature require intricate and com-
plex responses from the Congress, but without Congress necessar-
ily intending its enactment as the exclusive means of meeting the
problem.’ ” Hillsborough, 471 U.S. at 717 (quoting N.Y. Dep’t of
Soc. Servs. v. Dublino, 413 U.S. 405, 415 (1973)). Therefore,
“merely because the federal provisions were sufficiently compre-
hensive to meet the need identified by Congress did not mean that
States and localities were barred from identifying additional needs
or imposing further requirements in the field.” Hillsborough, 471
U.S. at 717 (citing De Canas v. Bica, 424 U.S. 351 at 359-60
(1976)).
As far as the particular Davis-Bacon Act regulation at question
here pertaining to truck drivers, 29 C.F.R. § 5.2, is concerned, it
would be too broad a sweeping inference to suggest that Congress
intended to preempt an area of traditional state regulation on the
basis of a single administrative regulation promulgated by a
federal agency. See Favel v. American Renovation and Constr. Co.,
59 P.3d 412, 425 (Mont. 2002) (“We conclude, as did the
U.S. Supreme Court in Geier, 529 U.S. 861 at 908-09, 120 S. Ct.
1913, that regulatory preemption will not be implied absent some
declaration of an intent to preempt. Such a declaration being ab-
sent here, we find no implied preemption in the Davis-Bacon reg-
ulations.”). Although both federal regulations and statutes may
preempt state law, the courts are more reluctant to infer preemp-
tion from the text of federal regulations as opposed to statutes.
Hillsborough, 471 U.S. at 717.
As a result of their specialized functions, agencies normally
deal with problems in far more detail than does Congress. To
infer pre-emption whenever an agency deals with a problem
comprehensively is virtually tantamount to saying that when-
ever a federal agency decides to step into a field, its regula-
tions will be exclusive. Such a rule, of course, would be
inconsistent with the federal-state balance embodied in our
Supremacy Clause jurisprudence. See Jones v. Rath Packing
Co., 430 U.S. at 525. . . . Thus, if an agency does not speak to
the question of preemption, we will pause before saying that
(continued...)
24 No. 03-3207
3. Conflict Preemption
Frank Bros. argues, in the alternative, that by incorp-
orating the Davis-Bacon Act into the FHWA, it was the
intention of Congress to comprehensively regulate the type
of wages paid and the manner in which those wages were
determined. Thus, they argue that, by also setting forth the
wages to be paid and to whom they are to be paid, Wiscon-
sin’s prevailing wage law conflicts with federal law. For the
most part this is simply an extension of their implied
preemption argument and is likewise unpersuasive.
Conflict preemption occurs only in those circumstances
where “compliance with both federal and state regulations
is a[n] . . . impossibility,” or where state law “stands as an
obstacle to the accomplishment and execution of the full
purposes and objectives of Congress.” California Fed.
Savings & Loan Ass’n, 479 U.S. at 281; Crosby, 530 U.S. at
372-73 (citations omitted); La. Pub. Serv., 476 U.S. at 368-
69; de La Cuesta, 458 U.S. at 153; Freightliner Corp. v.
Myrick, 514 U.S. 280, 287 (1995); Time Warner Cable, 66
F.3d at 875.
The appellants initially argue that the application of
Wisconsin’s prevailing wage rate to truck drivers conflicts
with the implementation and intent of the federal scheme.
Specifically, they argue that because delivery drivers on
construction projects are expressly excluded under regula-
tions promulgated pursuant to the Davis-Bacon Act and
12
(...continued)
the mere volume and complexity of its regulations indicate
that the agency did in fact intend to pre-empt.
Hillsborough, 471 U.S. at 717-18. This court would be reticent to
infer the Department of Labor’s intent to preempt a state pre-
vailing wage law under these circumstances; for it is true that
“[federal agencies] will make their intentions clear if they intend
for their regulations to be exclusive.” Id. at 718.
No. 03-3207 25
incorporated by the FHWA, Congress intended that truck
drivers are to be paid at “free market rates” when working
for subcontractors on federal highway projects. Appellant’s
Brief at 18. The appellants go on to assert that “the State of
Wisconsin has contradicted this free market philosophy . . . ,
by concluding that they should be paid governmentally set
rates.” Appellant’s Brief at 18-19. We disagree.
In order to determine whether state law constitutes an
obstacle to the accomplishment of the purposes and objec-
tives of Congress we will “consider the relationship between
state and federal laws as they are interpreted and applied,
not merely as they are written,” and “mere differences
between state and federal regulation of the same subject
are not conclusive of preemption . . . the crucial inquiry is
whether [state law] differs from [federal law] in such a way
that achievement of the congressional objective . . . is
frustrated.” Mite Corp., 633 F.2d at 493; California v. ARC
America Corp., 490 U.S. 93, 100-01 (1989); Florida Lime &
Avocado Growers, Inc. v. Paul, 373 U.S. 132, 143, 83 S. Ct.
1210, 1218, 10 L. Ed. 2d 248 (1963); Motor Vehicle Mfrs.
Ass’n of United States v. Abrams, 899 F.2d 1315, 1322
(2d Cir. 1990). In other words, the mere fact that two statutes
differ is not conclusive evidence of preemptive effect. See id.
Thus, in this case, Frank Bros. must allege facts or cite
empirical evidence that would establish that the congressio-
nal objective at work behind the enactment of the Davis-
Bacon Act and the FHWA would either be frustrated or
rendered ineffective if Wisconsin mandates that a prevail-
ing wage be paid to truck drivers.
As mentioned above, the Davis-Bacon Act and the regu-
lations promulgated pursuant to that statutory enactment
provide for a detailed web of legislation which, at its heart
was “designed for the benefit of . . . workers.” Universities
Research Ass’n v. Coutu, 450 U.S. 754, 771 (1981) (quoting
Binghamton Const. Co., 347 U.S. at 178). The Supreme Court
26 No. 03-3207
has specifically held that “[t]he language of the act and its
legislative history plainly show that it was not enacted to
benefit contractors, but rather protect their employees . . .
by fixing a floor under wages on Government projects.”
Binghamton, 347 U.S. at 176-77. A conclusion which is also
well supported in the legislative history of the Act. See 75
Cong. Rec. 6515 (1931) (statement of Rep. Kopp) (This bill
“simply insist[s] that Government shall not use its power to
demoralize the rates in places where public buildings are
constructed. Nothing could be fairer. Nothing could be more
just and equitable. This is a policy to which no one can take
exceptions.”).
In addition, subsequent to the Supreme Court’s decision
in Binghamton, the Court has gone on to hold that contrac-
tual agreements between employers and employees do not
frustrate the purposes of the Davis-Bacon Act where the
agreed upon compensation is greater than the floor estab-
lished by the Davis-Bacon Act. See Walsh v. Schlecht, 429
U.S. 401, 411 (1977) (holding “that the objective of the
Davis-Bacon Act is to benefit the contractor’s employees,
and that objective is clearly not “frustrated” when contrac-
tual arrangements between employers and their employees
result in higher compensation and benefits than the floor
established by the Act”). And it is well-settled that where a
federal statute provides only a floor, such a statute does
“not stand in the way of a stricter standard that the laws of
some States provide.” Atherton v. Federal Deposit Insurance
Corp., 519 U.S. 213, 227 (1997).
It is most disingenuous for Frank Bros. to argue that
Wisconsin’s decision to pay a prevailing wage to a category
of workers which the federal government has chosen to
exclude “stands as an obstacle to the accomplishment and
execution of the full purposes and objectives of Congress.”
California Fed. Savings & Loan Ass’n, 479 U.S. at 281. This
is because, looking no further than the text of the Act itself,
it is clear that the purpose of the law is to ensure that
No. 03-3207 27
workers engaged in public works projects be paid the same
rate as those employed in private industry in the locality in
which they are employed, whether or not this happens to be
the “market rate” as Frank Bros. characterizes it.13 See 40
U.S.C. § 3142. The Wisconsin statute in question, Wis. Stat.
§ 103.50, has the same intent and effect, except for the fact
that it affects an expanded segment of employees. In order
to follow Frank Bros.’ logic here, we would have to conclude
that it was the objective of Congress to actually harm truck
drivers by excluding them from the purview of the Davis-
Bacon Act, thereby allowing them to be paid wages less
than the prevailing wage in any particular locality. Said
differently, if Frank Bros.’ theory is correct and the “full
purpose and objectives of Congress” would be frustrated if
they are required under Wisconsin law to pay truck drivers
no less than a prevailing wage, they must be arguing that
Congress and the Secretary of Labor intended for truck
drivers to earn—at least in some instances—less than a
prevailing wage when performing work in conjunction with
a federally funded highway project. Such an assertion
makes little sense, either constitutionally or in terms of the
Davis-Bacon Act.
Instead, it would be more logical and accurate to conclude
that, responding to judicial precedent holding that Congress
13
Of course, if the free market price of labor is higher in a given
locality than what either the Secretary of Labor or the WisDOT
determines the prevailing wage to be, contractors may be required
to pay workers more given their individual circumstances. As we
have already discussed, the Davis-Bacon Act was intended to set
a “floor” on labor prices, and we have not been presented with any
evidence suggesting the federal law prohibits either the State of
Wisconsin or the free market from setting the price of labor higher
in a certain locality. If Frank Bros. has a problem with the
economic sense of the state regulation, perhaps that is an issue
that should be taken up with the Wisconsin legislature.
28 No. 03-3207
had not intended to include off-site truck drivers as covered
workers when the Davis-Bacon Act was passed, see Build-
ing and Constr. Trades Dept., AFL-CIO v. United States
Dept. of Labor Wage Appeals Bd., 932 F.2d 985, 989-92
(D.C. Cir. 1991), the Department of Labor, to avoid further
litigation on the matter, decided to make a rule bringing the
law into conformity with that court decision.14 In any case,
whether or not Congress intended to exclude truck drivers
from the protections of the Davis-Bacon Act, Congress’
goal—to protect local construction employees— may still be
fully realized while Wisconsin chooses to pay truck drivers
a state defined prevailing wage. Were this court to hold that
Wisconsin was precluded from requiring that truck drivers
are paid a minimum wage, we would not be advancing the
goals of Congress in any meaningful way; indeed, we may
even be doing damage to those objectives. See supra pp. 18-
23.
In an effort to bolster their claim that conflict preemption
should prohibit operation of Wisconsin’s prevailing wage
law Frank Bros. cites a Northern District of New York de-
cision, FHM Constructors, Inc. v. Village of Canton Housing
Authority, No. 91-CV-0065, 1993 WL 23587 (N.D.N.Y. 1993),
and a New York Supreme Court decision, Majstrovic v.
14
Prior to the decision in Building and Construction Trades
Department, AFL-CIO, it was an open question as to whether
truck drivers employed by government contractors were covered
by the Davis-Bacon Act or not. See Zachry Co. v. United States,
344 F.2d 352, 361 (Ct. Claims 1965). We should note that although
delivery drivers may, at one time, have been covered under the
Davis-Bacon Act, there is no guarantee that Wisconsin’s pre-
vailing wage would have been identical to the federal prevailing
wage. This certainly would not have posed a constitutional prob-
lem, for as the Supreme Court has instructed and the history
and text of the Act bear out, the Act merely imposes a minimum
wage for workers, which acts as a floor that the states are free to
augment upward at their discretion. See supra pp. 18-23.
No. 03-3207 29
R. Maria Piping Inc., 655 N.Y.S.2d 285 (N.Y. Sup. Ct. 1997)
for the proposition that the Davis-Bacon Act, as incorpo-
rated by the United States Housing Act, 42 U.S.C. § 1437j,
preempts New York’s prevailing wage law. However, FHM
and Majstrovic are distinguishable. The court in FHM was
deciding whether state legislation which set higher wages
than the Davis-Bacon Act was contrary to the purposes and
intent of Congress under the United States Housing Act, not
the Davis-Bacon Act. FHM Constructors, Inc., 1993
WL 23587, at *10. In addition, during the time between the
completion of the construction project in question and the
filing of the complaint the Department of Housing and
Urban Development (“HUD”) had passed a “Final Rule”
which expressly preempted New York’s prevailing wage law.
Id. at *6. Although the court found that the regulation was
inapplicable, it did consider it when arriving at its decision
that New York’s prevailing wage law was preempted by the
Housing Act. Id. Majstrovic was decided on essentially the
same grounds and, for the same reasons explained below, is
likewise inapplicable to this case.15 Majstrovic, 655 N.Y.S.2d
at 287-88.
The FHM and Majstrovic cases do nothing to sway our
opinion that Wis. Stat. § 103.50 does not stand as an ob-
stacle to the accomplishment and execution of the full
purposes and objectives of Congress. The Federal Highway
Administration does not have an express preemption rule
like the one adopted by HUD. In addition, in a proposed
15
The court in Majstrovic also held that the federal Davis-
Bacon Act preempted state prevailing wage rate schedules for
purposes of federally funded housing projects. This case does not
help Frank Bros.’ argument either, because HUD explicitly pre-
empted the state law which set higher prevailing wage rates, while
the FHWA includes no such clause. Majstrovic, 655 N.Y.S.2d at
286.
30 No. 03-3207
rule the Administration did state that “neither the Davis-
Bacon Act nor 23 U.S.C. [§] 113 preempts State law.” 50
Fed. Reg. at 39137-39139, withdrawn at 54 Fed. Reg.
at 34529. Although the rule never became final, the Adminis-
tration’s own statement about the construction of an Act
which it administers is afforded considerable weight.
Chevron, U.S.A., Inc., 467 U.S. at 844.
Finally, Frank Bros. claims that it is “physically impossi-
ble” to comply with both Wisconsin’s prevailing wage law
and federal law. This argument is a red herring. It is not
“physically impossible” for Frank Bros. to comply with the
Davis-Bacon Act, the FHWA and the Wisconsin statute. As
we have noted earlier, the Davis-Bacon Act merely sets a
“floor” for the prevailing wage to be paid workers on fed-
erally funded public works. Also, it is true that according to
regulations promulgated by the Department of Labor, truck
drivers are specifically excluded from coverage under the Act.
However, what Frank Bros. misunderstands is that there is
nothing in the Davis-Bacon Act which specifically or
expressly prohibits paying truck drivers a prevailing wage.
Instead, the regulations merely articulate the idea that “the
transportation of materials or supplies to or from the site of
work by employees of the construction contractor or a
construction contractor is not ‘construction, prosecution,
completion or repair,’ ” within the meaning of the Davis-
Bacon Act. 29 C.F.R. § 5.2.
The same is true for the FHWA. Section 113 of the FHWA
provides that all qualified “laborers and mechanics” work-
ing on Federal-aid funded projects are to be paid “not less
than” the prevailing wage as determined by the Secretary
of Labor in accordance with the Davis-Bacon Act. 23 U.S.C.
§ 113. Again, it is true that the Davis-Bacon Act regulation
expressly excludes delivery drivers from the definition of
“laborers and mechanics,” 29 C.F.R. § 5.2, but, 23 U.S.C.
§ 114, makes it clear that all construction work performed
No. 03-3207 31
in each state “shall be performed under the direct supervi-
sion of the State transportation department and in accor-
dance with the laws of that State . . . .” 23 U.S.C. § 114.
State law, here Wisconsin law, therefore merely supple-
ments the federal scheme by ensuring that truck drivers are
also paid a prevailing wage determined by the Wisconsin
Department of Workforce Development. See Wis. Stat.
§§ 103.50(2m)(1) and (4).
Wisconsin’s prevailing wage legislative scheme is sup-
plemental in nature and thus there is nothing barring
Frank Bros. from complying with both federal and state law
in this case. Neither federal law nor the regulations under
the Davis-Bacon Act prohibit contractors, like Frank Bros.
from paying a prevailing wage to truck drivers; they are
merely excluded from coverage under the Davis-Bacon Act.
This is an area of traditional state regulation and as such
the State of Wisconsin is free to set whatever wage it likes
for whatever category of worker it considers worthy, as long
as that regulation does not enter into a field occupied by
federal legislation and does not conflict with that legisla-
tion. We conclude that federal law does not prohibit Frank
Bros. from paying the State’s prevailing wage to truck
drivers, and thus it is not “physically impossible” for them
to comply with both federal and state law in this instance.
III. CONCLUSION
Because we hold that it was not the clear and manifest
purpose of Congress to preempt supplementary state reg-
ulation in the area of prevailing wage rates and because we
find nothing in Wisconsin’s prevailing wage law which con-
flicts with federal legislation, the decision of the district
court is
AFFIRMED.
32 No. 03-3207
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—6-3-05