Barnes v. Commissioner of Labor & Industry

Wilner, J., delivered the opinion of the Court. Appellant M. Nelson Barnes & Sons, Inc. (Barnes, Inc.) was a subcontractor on two public school construction projects — Fallston Senior High School in Harford County and Owings Mills High School in Baltimore County. Both projects were deemed subject to the State Prevailing Wage Law (Md. Ann. Code art. 100, § 96, et seq., hereafter referred to as "PWL”), 1 and, accordingly, prevailing wage rates for each job classification had been determined by the Commissioner of Labor and Industry. At some point, one or more of its employees complained to the Commissioner that Barnes, Inc. was violating PWL by failing to pay the prevailing rate for steamfitters to employees doing steamfitting work.

Specifically, it was alleged that appellant had misclassified persons doing steamfitting work as plumbers or mechanics and had paid them the prevailing ³⁹⁸ rate for plumbers, which was lower than that for steamfitters. After investigation, the Commissioner designated an examiner to conduct a hearing into the matter. 2 Present at the hearing were counsel for Local 438 of the Steamfitters union, Local 48 of the Plumbers union, and the Baltimore Building & Construction Trades Council (the Trades Council), an umbrella organization composed of the various construction trade unions (hereafter collectively referred to as "the unions”). Barnes, Inc., a non-union contractor, objected to their presence because none of the unions represented any of its employees; but the hearing examiner nevertheless declared them to be "interested persons,” and thus allowed them not only to remain but to participate in the hearing through the cross-examination of witnesses and the presentation of argument. The evidence was presented chiefly by an Assistant Attorney General assigned to the Commissioner.

See COMAR 09.12.51.05F. At the end of the third day of hearing, it appeared that he had concluded his case; and the hearing examiner turned to counsel for Barnes, Inc., asking if he wished a continuance before commencing his client’s case. At that point, counsel for the Trades Council indicated his desire to subpoena certain records and witnesses from Barnes, Inc. After some discussion as to the Trades Council’s authority to initiate such a subpoena, the Assistant Attorney General decided that "as a party of interest, they [the Trades Council] have a right to subpoena themselves, so if they make a request for subpoenas, they will be issued by the Commissioner, and as such, they will be honored. So it’s not a question of whether the State is doing it.” The examiner then concluded that such evidence as the Trades Council desired to present would be deemed "part of the Commissioner’s case,” and that, as a result, "the State hasn’t completed its case.” The hearing was then recessed.

On November 24, 1978, the Commissioner issued identical subpoenas to appellants, Barnes, Inc. and its ³⁹⁹ president J. Gordon Barnes, directing them to appear at the continued hearing on December 6, 1978, and to bring with them virtually all writings and documents pertaining to the two construction projects. Each subpoena stated that its recipient was being called "to testify as a witness ... at the request of the ITrades Council].” Appellants made no move to quash these subpoenas. At the appointed time, their counsel appeared, requested (and received) permission to call a witness "out of turn,” and proceeded to examine that witness. Counsel then announced that neither of the appellants intended to comply with the subpoenas, upon the advice of counsel, because (1) they were improperly issued, and (2) they were overbroad.

The gravamen of the first objection was that the subpoenas were issued solely at the behest of the unions, who were not "interested persons” and were therefore not entitled to participate in the proceeding, rather than for any legitimate purpose of the Commissioner. The second complaint was that the subpoenas sought records that were irrelevant, non-existent, or already in the Commissioner’s possession. Faced with this circumstance, the Commissioner petitioned the Circuit Court for an order compelling compliance with the subpoenas. Over appellant’s objection, the unions were permitted to intervene in the Circuit Court action.

After a non-evidentiary hearing, the court directed appellants to comply with the subpoenas, and this appeal followed. We turn now to the issues, as we see them. I. Jurisdiction There is an underlying question in this appeal, of jurisdictional dimension, that none of the parties has raised: Is an order enforcing an administrative subpoena, in an action brought solely for that purpose, a final judgment from which an appeal will lie under Md. Ann. Code, Courts article, § 12-301? The Maryland appellate courts have, in fact, entertained such appeals (see, for example, Equitable Tr. v. State of Md. Comm’n, 42 Md. App. 53 , rev’d 280 Md. 80 ⁴⁰⁰ (1980); but it does not appear that they have ever considered and discussed their jurisdiction to do so.

It is, perhaps, time that the question be addressed and resolved. Based largely upon clear pronouncements from the United States Supreme Court and a number of the Federal Courts of Appeals, 3 we conclude that the order before us is in the nature of a final, and thus appealable, order. The reason for this, as expressed by Mr. Justice Holmes in Ellis v. Int. Com.

Comm., 237 U.S. 434, 442 (1915), is that "[i]t is the end of a proceeding begun against the witness.” In that proceeding, there is nothing further for the court to do, nothing further to be litigated.

II

Intervention in the Circuit Court Proceeding Intervention in judicial proceedings is governed by Maryland Rule 208. Section a thereof permits intervention as of right "when the representation of the appellant’s interest by existing parties is or may be inadequate and the applicant is or may be bound by a judgment in the action.” Section b allows intervention, discretionarily, when the applicant’s claim or defense "has a question of law or fact in common with the action.” Here, of course, the sole issue was whether appellants should be compelled to comply with the Commissioner’s subpoenas. As noted, the subpoenas were issued at the request and on behalf of the unions, and the unions would be the principal beneficiaries of their fruits. In this circumstance, at the very least, their claim was in common with the Commissioner’s action; and we therefore cannot conclude that the court abused its discretion in permitting ⁴⁰¹ intervention under section b.

We need not, therefore, consider whether they had a right to intervene under section a.

III

Status of the Unions at the Administrative Proceeding Appellants do not challenge the Commissioner’s authority to issue subpoenas of this type; that is specifically provided by § 101(c) of art. 100. The thrust of their complaint, aside from the breadth of the subpoenas, is that, in issuing them, the Commissioner was not acting on his own behalf but rather as a mere conduit for the unions, who had no legal standing in the proceeding. The records sought, they contend, were not needed or wanted as evidence by or for the Commissioner, but as evidence for other persons (the unions) who had no right to present evidence. The Commissioner conceded at oral argument that he had indeed concluded his case prior to the unions’ request, that he had no need or desire for the records sought by the unions, and that the subpoenas were issued solely at the request and for the benefit of the unions.

Both he and the unions further conceded that, in that circumstance, the validity of the subpoenas vel non depends upon whether the unions were lawfully entitled to participate in the proceeding — whether, in other words, they were "interested persons.” The real point of dispute between the parties, in this regard, is whether the unions qualify as "interested persons”; this is the core issue and therefore must be addressed and resolved by us. 4 ⁴⁰² A. Definition — "Interested Person” Article 100, § 101 (c) permits "interested persons” to participate in compliance proceedings under the PWL, but does not define the term. Logically, then, in order to determine whether the unions were properly allowed to initiate these subpoenas, we must first define what the law means by "interested persons” and then see if, as to that type of proceeding, the unions qualify for that status. In Hyson v. Montgomery County, 242 Md. 55, 69 (1966), a zoning case, the Court defined "interested persons” as "the same class of persons who can qualify as 'aggrieved persons’ under our decisions relative to qualifications to be entitled to appeal,” which would seem to require an "interest or right of property” in the pending matter. See Pattison v. Corby, 226 Md. 97, 101 (1961), also a zoning case.

The requirement of a "property” interest may be suitable to zoning proceedings, which peculiarly affect property; but it seems to be unduly restrictive, and we think unintended by the Court of Appeals, in the context of other types of administrative proceedings where "property” rights, in the classic sense, may not be involved. Analogous considerations would also suggest the inappropriateness of blindly applying the criteria precisely as set forth in Maryland Rule 208, governing intervention in judicial proceedings, although some aspects of those standards are not entirely inapposite. From an amalgam of the concepts laid down in Maryland Rule 208, the few pronouncements in relevant judicial decisions, and what appears to be the manner in which courts have actually dealt with situations of this type, we would define an "interested person,” for purposes of intervention in administrative proceedings of the sort involved here, as one who would be directly affected by the outcome of the proceeding in a different and more substantial way than would the public in general. 5 See ⁴⁰³ Pattison v. Corby, supra, at 101 and cases cited therein; City of San Antonio v. C.A.B., 374 F.2d 326 , 332 (D.C. Cir. 1967). B. Statutory Framework Having defined the term, we now look to see whether the unions possess the requisite interest.

This, of course, requires some understanding of the PWL itself — its purpose and the manner in which it is administered. Prevailing wage laws, of one type or another, have been around for nearly 90 years, and are currently in effect in 41 States. Most of these enactments, particularly the later ones like Maryland’s, were patterned after the Federal Davis-Bacon Act (Title 40, U.S.C., § 276a, et seq.), first passed by Congress in 1931; indeed, they are often referred to as "Little Davis-Bacon Acts.” The original purpose of these laws — particularly Davis-Bacon — was to protect local contractors and workmen against what was deemed to be unfair and predatory competition from outsiders who, by importing cheap migratory labor, could obtain important public works contracts by underbidding contractors located in the community where the project was to be built. The direct effect of that type of competition, of course, was to place local contractors, having permanent ties to the community, at a competitive disadvantage and thus to deny employment on public projects to the "home town” workmen.

An equally significant secondary effect was to destabilize wage rates generally prevailing in the locally based construction industry. In all these respects, such practices necessarily engendered a great deal of labor unrest. At a time when public projects dominated total construction spending, and unemployment in the construction industry was especially high, the need for remedial action by government was apparent; and both labor and industry initially supported this type of legislation, at least at the Federal level. 6 ⁴⁰⁴ Circumstances have, of course, changed since these earlier enactments, yet States, throughout the 1950’s and 1960’s continued to adopt these laws, even in light of the new and different economic conditions. 7 The common rationale of these statutes, including that of Maryland, seems to be one of wage stabilization — to assure that wage rates generally prevailing in the construction industry in particular areas are not adversely affected by major public works projects undertaken in those areas. By requiring contractors engaged in public construction to pay at least the same wage rates they would be expected to pay if engaged in non-public construction in the same community, the Legislature has endeavored to avoid unnecessary labor unrest that might especially affect public projects and delay their efficient completion.

Viewpoints differ, of course, as to the efficacy and fairness of these laws, 8 but that does seem to be their asserted purjpose and function. Once a project is determined to be subject to PWL, there is, under the Maryland statute, a tripartite framework for achieving those goals, to wit: (1) requiring the Commissioner of Labor and Industry "to determine the prevailing rates of wages for workmen and apprentices for the class or type of work called for by the public works, in the ⁴⁰⁵ locality the work is to be performed”; 9 (2) requiring the contractor on public works projects to pay its employees at least those determined prevailing rates by making them a part of the contract specifications; and (3) providing a post-determination mechanism for assuring compliance by the contractor. 10 The first and third aspects of this process involve administration action; the second is virtually automatic. The determination of what the prevailing rates are for each job classification is obviously a matter of extreme importance to both labor and management (not to mention the public, who ends up paying the cost of the project); and, because such determinations will have an influence generally throughout the construction industry, their interest extends beyond any particular public works project. In recognition of that pervading interest, the law requires that these groups, among others, have a reasonable opportunity to provide "input” into the Commissioner’s determinations.

In making his initial determination, the Commissioner examines collective bargaining agreements, payroll data, and other information supplied by "contractors, contractors’ associations, labor organizations, public officials, and other interested parties.” COMAR 09.12.51.06B. Through this process, there is afforded an opportunity for pre-determination "input.” Once the Commissioner makes his initial determination, he is required to give notice thereof "to any representative of any classification, any employer, or any representative of any group of employers who in writing requests the Commissioner so to do.” Md. Ann. Code art. 100, § 98 (a). Any of these persons or groups may, by verified petition, ⁴⁰⁶ request a review of the determinations; and, upon such a petition, the Commissioner is required to institute an investigation and conduct a "public hearing.” (§ 99(a)) He must give notice of this hearing "to the petitioner, the public body authorizing the public work, and the recognized collective bargaining representatives for the particular classifications involved, and also to all persons entitled to receive notice pursuant to [§ 98(a)]... .” (Emphasis supplied.) (Id.) At this hearing, the Commissioner offers the basis for his initial determinations and the results of his investigation. Thereafter, says § 99(a), "[t]he Commissioner or any interested parties . . . may introduce any evidence that is material to the issues.” (Emphasis supplied.) There is no statutory right of further administrative or judicial review of the ultimate determinations.

Appellants concede that labor organizations representing workmen in the construction trades qualify as "interested parties” for purposes of proceedings under §§98 and 99 — i.e., with respect to the determination of the prevailing wage rates. As to this, they agree, the unions have an obvious and direct interest; and the law clearly recognizes it by specifically including them among the groups entitled to notice and to file a review petition. But with respect to compliance proceedings, they say, a labor organization is not an "interested person” and therefore has no right to participate unless it represents the employees directly affected. We agree.

Compliance and enforcement procedures are set forth in §§ 100-105 of art. 100. Section 100 (a) requires that notice of the prevailing hourly wage rates be continuously and conspicuously posted at the job site, in order that the workers themselves can police their employer. In addition, §100 (d) requires the contractor to submit to the Commissioner a complete copy of its payroll records and those of each of its subcontractors. These records must be submitted within 14 days after the end of each payroll period, and are to "be available for inspection during regular business hours.” See § 100 (d); also COMAR 09.12.51.01.

The contractor is obliged to certify that the records are ⁴⁰⁷ accurate, including, among other things, a certification "that the classification set forth for each workman or apprentice conforms with the work he performed....” § 100 (d). Section 101 (a) empowers the Commissioner to cause investigations to be made to assure compliance with the law. He may do this on his own, and need not wait for a complaint. In part, this is done by having his staff audit the payroll records submitted to him, and compare them with the various classifications and wage rate determinations initially established for the job.

If, upon completion of an investigation, the Commissioner determines that a violation may have occurred, he must (1) notify the public agency — the contracting authority — which is then required to withhold sufficient sums from the contractor to satisfy the deficiency, and (2) schedule a hearing. It is such a hearing that is at issue here. Section 101 (c) directs the Commissioner to give notice of the hearing to "all interested persons, including the interested public body.” At the hearing, "|e]very interested person shall have an opportunity to be heard in respect to the matters complained of.. . .” Id. Specifically, any "party of interest” may (1) "introduce testimony or other evidence in rebuttal or of an affirmative nature,” (2) "directly or through his attorney make any statement or argument relevant to the hearing,” and (3) through counsel, "be heard on any preliminary objections,