STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BILTMORE CONSTRUCTION COMPANY, ) INC. )

)

Petitioner, )

)

vs. ) CASE NO. 77-300RX

) DEPARTMENT OF COMMERCE, DIVISION ) OF LABOR, )

)

Respondent, )

)

VERNON J. NEFF, ET. AL., )

)

Intervenors. )

)

FINAL ORDER

This matter came before the undersigned Hearing Officer, Director, Division of Administrative Hearings, on the petition of Biltmore Construction Company challenging prevailing wage rate determinations issued by the Division of Labor for the construction of the Morris Bridge Water Treatment Facility in Tampa, Florida.

APPEARANCES

For Petitioner: William E. Sizemore, Esquire

Post Office Box 3324 Tampa, Florida 33601

and

Dennis P. Thompson, Esquire 1253 Park Street

Clearwater, Florida 33516

For Respondent: Dan F. Turnbull, Esquire

Department of Commerce

401 Collins Building Tallahassee, Florida 32304

For Intervenors: James B. Loper, Esquire

101 East Kennedy Boulevard Tampa, Florida 33602

1. Biltmore Construction Company was awarded the contract by the City of Tampa for the construction of this water treatment facility. Under Section 215.19, Florida Statutes, the contracting authority was obligated to pay wages not less than prevailing wages for such work in the area. That statute requires that in all public construction of over $5,000 the workers be paid at least the rate prevailing in the area for similar skills and requires the Division of Labor to prepare prevailing wage rate schedules to apply to such projects.

2. A dispute has arisen between the Petitioner and its construction workers as to whether Biltmore has been paying the appropriate wage rates and if it is obligated to do so under the contract and the applicable statute.

   
   

3. In a separate proceeding, the Division of Labor has begun proceedings under Chapter 215, F.S., to determine whether Biltmore is obligated to reimburse its employees at a higher rate for this project. Under the authority of Chapter 215, F.S., a certain percentage of the contract money has been withheld from Biltmore pending the outcome of these wage disputes. Shortly before this matter went to final hearing on March 23, 1977 a petition to intervene was filed on behalf of construction workers employed by Biltmore. That motion was granted. At the final hearing a motion to dismiss the petition was filed on behalf of the Intervenors. The grounds for that motion are that Biltmore has contracted with the City of Tampa to pay its employees at the same wage rate as determined by the Division of Labor to be the prevailing wage rate in the area for this project. Therefore, claims the Intervenor, since Biltmore has obligated itself by contract to pay at the same wage rate schedule which it now challenges, Biltmore is really not substantially affected by the prevailing wage rate determination as prepared by the Division of Labor and lacks standing to challenge them.

   
   

4. Assuming that Biltmore is legally bound by contract to pay its employees at the same rate as contained in the Division of Labor's prevailing wage schedules, Biltmore is still substantially affected by the schedules prepared by the Division of Labor and may challenge them as rules under Section 120.56, F.S. Biltmore is affected by those wage rate determinations because the Division of Labor has begun proceedings to enforce compliance with Chapter 215 and the Division of Labor has caused certain monies to be withheld from Biltmore in preparation of a resolution of the wage dispute. Biltmore's contract with the City of Tampa is an issue which is separate and apart from its relationship with the Division of Labor. The outcome of this matter should not affect the validity of that contract nor impair or strengthen any party's rights or obligations thereunder. The outcome of this matter will not determine or in any way affect whether Biltmore is validly bound by contract to pay the wage rate computed by the Division of Labor.

   
   

5. The issues in this hearing were identical to the issues in the case of Matthews Corporation v. Department of Commerce, Division of Labor which was heard by the undersigned Hearing Officer on November 9, 1976 (Division of Administrative Hearings Case No. 76-1602R) and decided in December 1976. In that case the undersigned Hearing Officer held that prevailing wage rate determinations issued by the Division of Labor were rules as defined by Section 120.52(14), F.S., and must be adopted pursuant to Chapter 120, F.S., in order to be valid and enforceable.

6. Among other things, it was determined in the Matthews proceeding that: "The prevailing wage rate schedules are

   prepared by the Division of Labor in

   compliance with Section 215.19, F.S. This section requires that all municipal works in excess of $5,000 which require the employment of construction workers shall contain a provision that the rate of wages a for workers shall not be less than the prevailing rate of wages for similar skills in the city, town,

   village or other civil division of the station in which the said public work is located.

   That statute further requires in Subsection (2)(a) the Division of Labor to make a:

   
   

   '...continuing study to determine the prevailing wage rates of laborers, mechanics and apprentices usually employed in work similar to that contemplated by the section to the various parts of the state, and shall furnish to any person, upon request, a schedule of applicable wage rates in the area where public work of similar character is in progress or contemplated.'

   
   

   It is that study which is challenged as being an invalid rule. The Respondent, Division of labor, states that the above cannot be a rule because prevailing rate schedules prepared by the Respondent, are not of general applicability since they only apply to regional areas of the state.

   
   

   After considering all the testimony and examining the applicable statutes it is the decision of this Hearing Officer that prevailing wage schedules prepared by the Division of Labor are rules according to the definition of Section 120.52(14), F.S., and must be adopted in compliance with that chapter to be valid. It can hardly be questioned that the wage determinations are agency statements that implement law. They are prepared by the Respondent, Division of Labor, and directly implement Section 215.19, F.S.

   
   

   It is the opinion of this Hearing Officer that the word 'general applicability' does not necessarily mean the agency's statement must apply statewide in a uniform manner. These wage scale determinations apply equally to the geographic area for which they are formulated. This is enough to satisfy the requirements of Chapter 120, F.S. General applicability, in Section 120.52(14), means the agency statement applies to all member of a particular class or region within the state. It does not mean that the definition of a rule only includes regulations which apply to all citizens or areas of the state. The rules in question are uniformly applied to all contractors in each geographic area where the rules are intended

   to apply.

   
   

   Furthermore, there are other persuasive reasons why they must be considered to be

   administrative rules. Section 215.19(18), F.S., imposes a criminal penalty on anyone violating 'any provision of this subsection or any lawful order or rule of the contracting authority or of the Division of Labor authorized by this section... The fact that a contractor way be convicted of a crime for paying wages other than those scheduled by the Division of Labor requires that such wage determinations be at least given the dignity of administrative rules, and adopted according to Chapter 120, F.S., and published in the Administrative Code. Only through a formal rule making proceeding can the affected public appear at rule making hearings, offer

   comments and criticisms, and generally partake and participate in this type of decision which has such significant impact. By failing to comply with Chapter 120, F.S., the Division of Labor cannot validly enforce such wage schedules.

   
   

   Recently the Florida Supreme Court reached a similar result in the case of Straughn v.

   O'Riordan, 338 So 2d 832. There the court considered `guidelines' of the Department of Revenue and declared them to he rules as defined in Subsection 120.52(14), F.S. Justice England, writing for the majority stated that a main purpose of the New Administrative Procedure Act was to eliminate 'unwritten rules' by which agencies could implement and interpret legislative policy.

   Without having been adopted and published according to that act the guidelines were improper and could not be enforced.

   
   

   As the court stated in footnote 3, page 384:

   
   

   'As pertains to this proceeding, the now act has as one of its principle goals the abolition of "unwritten riles" by which agency employees can act with unrestrained discretion to adopt, change and enforce governmental policy. The term "rule" was broadly defined in the new act to reach precisely the form

   of invisible policy-making which the Department has employed in the course of enforcing this bonding requirement. Section 120.52(14), Fla. Stat. (1975).'

   
   

   The wage determination in this case is no less a rule than in the Straughn decision.

   
   

7. The Division of Labor in that case and in the case presently before this Hearing Officer argued that this Division does not have the authority to determine whether an agency statement is a rule and lacks the authority to

   adjudicate a rule's validity. This argument has been resolved by the First District Court of Appeal in the case of State of Florida, Department of Administration and State of Florida, Department of Health and Rehabilitative Services v. J. Richard Stevens, Case Nos. CC-101, CC-156 decided April 6, 1977. In that decision, the First District Court of Appeal affirmatively resolved that this Division does have the authority to determine whether an agency statement is a rule and whether such a rule is invalid.

   
   

8. Furthermore, the Division of Labor argues that since Biltmore has contracted with the City of Tampa to implement the Division of Labor's prevailing wage schedules in its contract, Biltmore is estopped to challenge that wage rate determination. However, the issue here is not the validity of that contract, but the prevailing wage rate determinations issued by the Division of Labor. Biltmore has not contracted with the Division of Labor and it is the Division of Labor, not the City of Tampa, which seeks to enforce Chapter 215, F.S., against Biltmore. Therefore, it is determined that Biltmore is not estopped to challenge the validity of these wage rate determinations. This is not to imply that were the circumstances different Biltmore might be estopped to assert his rule challenge. Absent a specific waiver it would be unusual to hold a party is estopped to challenge unauthorized acts of a state agency.

   
   

9. The actual hearing itself on this petition did not require the taking of extensive testimony as the transcript of the case of Matthews Corporation v. Department of Commerce was introduced as Petitioner's Exhibit #1 and admitted into evidence over the objections of the Intervenors. The Intervenors were given two weeks in which to cross examine all witnesses by deposition who testified at that hearing should they challenge any of the testimony which was transcribed in Petitioner's Exhibit #1. After reviewing all issues brought up under this petition, it is evident that the facts are substantially the sane as appeared in the Matthews Corporation v. Department of Commerce case previously decided by this Hearing Officer and it is therefore determined that the prevailing wage rate determinations issued by the Division of Labor and challenged by Petitioner in this case are rules as defined by Section 120.52(14), F.S. They have not been adopted in accordance with the formal rule making requirements of Chapter 120, F.S.

Therefore, said rules are invalid.

DONE and ORDERED this 19th day of April, 1977, in Tallahassee, Florida.

KENNETH G. OERTEL, DIRECTOR

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 19th day of April, 1977.

COPIES FURNISHED:

William E. Sizemore, Esquire Post Office Box 3324

Tampa, Florida 33601

Dennis P. Thompson, Esquire 1253 Park Street

Clearwater, Florida 33516

Dan F. Turnbull, Esquire Department of Commerce

401 Collins Building Tallahassee, Florida 32304

James B. Loper, Esquire

101 East Kennedy Boulevard Tampa, Florida 33602

Carroll Webb, Executive Director Administrative Procedure Committee

101 Holland Building Tallahassee, Florida 32304

Ms. Liz Cloud Department of State

403 E. Gaines Street Tallahassee, Florida 32302

Docket for Case No: 77-000300RX

Orders for Case No: 77-000300RX