Maryland Division of Labor & Industry v. Triangle General Contractors, Inc.

⁴¹¹ HARRELL, Judge. Following an evidentiary hearing before an administrative law judge (ALJ) of the Maryland Office of Administrative Hearings (OAH), a Proposed Decision was issued recommending that Appellee, Triangle General Contractors, Inc., the general contractor on a public works project, pay restitution to three employees of one of its subcontractors, Irocc Masonry, Inc. (“Irocc”), and liquidated damages to the contracting public body for Irocc’s violations of the Maryland Prevailing Wage Act, Maryland Code (1988,1995 Repl. Vol.), State Finance and Procurement Article, §§ 17-201-17-226. On 1 September 1998, the Maryland Deputy Commissioner of Labor and Industry (“the Commissioner”) issued a Final Decision and Order adopting the Proposed Decision.

Appellee sought judicial review by the Circuit Court for Anne Arundel County. On 26 October 2000, the Circuit Court affirmed that part of the decision of the Commissioner holding Appellee liable to the public body for liquidated damages, but reversed the decision of the Commissioner regarding restitution, finding that Appellee was not liable for restitution to Irocc’s employees. Appellant, the Maryland Division of Labor and Industry, filed an appeal to the Court of Special Appeals. We issued a writ of certiorari on our own initiative while the case was pending in the Court of Special Appeals, Maryland Div. of Labor and Indus, v. Triangle General Contractors, Inc., 364 Md. 139 , 771 A.2d 1069 (2001), to consider the following question: Whether the Circuit Court erred in concluding a general contractor is not jointly liable for the wage violations of its subcontractor under Maryland Code (1988, 1995 Repl.

Vol.), State Finance and Procurement Article, § 17-222(b). I. A. Relevant Factual Record Appellee, Triangle, was the general contractor on a state-funded project erecting the “Computer & Space Sciences Building” at the University of Maryland at College Park. Irocc ⁴¹² was Triangle’s initial masonry subcontractor on that project. On 31 December 1991, pursuant to Maryland Code (1988,1995 Repl.

Vol.), State Finance and Procurement Article, §§ 17-208 and 17-211 1 , Appellant’s Commissioner issued a determination of the prevailing wage rates for the project. 2 These prevailing wage rates applied to all employees working on the project, including those of Triangle, Irocc, and the other subcontractors. In the Summer of 1994, Mr. James C. Dugent, an investigator for the Maryland Division of Labor and Industry, began visiting the site weekly at the University of Maryland to verify that the employees on the job were working in the correct classifications and to ensure they were being paid the prevailing wage rate for their classifications. In October of 1994, Mr. Dugent learned from Mr. Cesar Rivera of the Coalition of Fair Contracting, Inc. (a union-related organization), that some of Iroec’s employees’ paychecks were bouncing and, important to this appeal, that Irocc may not be paying some of its employees the proper prevailing wage. On 1 June 1995, Mr. Dugent sent a letter to Irocc, with a carbon copy to Appellee, informing Irocc that his investigation revealed “[t]he contractor and/or subcontractor is delinquent in submitting payroll records [and] ... has allegedly underpaid employee [Mr. Antonio Pena].” 3 The letter requested a photo-copy of the employee’s restitution check and an $1,210 ⁴¹³ check for liquidated damages for “late payrolls and misclassifi-cation of employee.” 4 Mr. Dugent did not receive a response to that letter from Irocc or Appellee.

On 20 September 1995, Mr. Dugent sent another letter to Irocc, with a carbon copy to Appellee, informing Irocc that “[t]he contractor and/or subcontractor is delinquent in submitting payroll records [and] . .. has allegedly underpaid employeefs] [Mr. Antonio Pena and Mr. Francisco Pena].” He requested copies of the restitution checks provided to both employees, together with liquidated damages. Again, Mr. Dugent received no response from Irocc or Appellee. On 31 January 1996, the Commissioner, pursuant to § 17-221(g) 5 , sent notice to Appellee and Irocc informing them of the facts disclosed by Mr. Dugent’s investigation (which now included 3 former Irocc employees — Antonio Pena, Francisco Pena, and Fernando Gomez — who assertedly had not been paid the appropriate prevailing wage), including a calculation of the restitution and liquidated damages owed under § 17-222 6 , and notifying them that an administrative hearing would ⁴¹⁴ be held on the charges at the “earliest possible date.” The State subsequently withheld from its payments due to Appel-lee the contested amounts, as provided for under § 17-221(e). 7 B. Procedural History In accordance with COMAR 21.11.11.04B, Appellant’s Commissioner delegated his hearing responsibility, granted under § 17 — 221(h), to the OAH. On 14 August 1996, 1 April and 2 April 1997, a hearing was held before an AL J of the OAH.

On 1 July 1997, the ALJ issued a Proposed Decision concluding “that Irocc Masonry, Inc. violated [the Prevailing Wage Act] by submitting inaccurate payroll records 8 and failing to pay ⁴¹⁵ employees the prevailing wage for their classifications,” and recommending that Appellee or Irocc pay restitution to Antonio Pena, Francisco Pena, and Fernando Gomez (the former employees of Irocc), and that Appellee pay liquidated damages to the public body for Irocc’s violations of the prevailing wage statute. Appellee filed exceptions to this decision with the Commissioner pursuant to COMAR 21.11.11.04E(3). On 1 September 1998, the Commissioner issued a Final Decision and Order adopting the Proposed Decision, but modified the ultimate conclusion to require Triangle and Irocc to pay restitution and liquidated damages. Appellee then filed an action for judicial review in the Circuit Court for Anne Arundel County.

On 26 October 2000, the Circuit Court issued a Memorandum Opinion and Order affirming in part and reversing in part the decision of the Commissioner. The Circuit Court affirmed the decision that Appellee was liable to the public body for liquidated damages under § 17-222(a) (rendering “[a] contractor” liable for liquidated damages), finding “[t]he evidence established that ... three employees were underpaid for a period of 196 days.” Finding merit in Triangle’s legal argument that § 17-222(b) (rendering “a contractor or subcontractor” responsible for restitution) only makes liable for restitution the actual employer of the workers not paid the prevailing wage, the Circuit Court reversed the decision of the Commissioner regarding restitution, holding that Appellee was not liable for restitution to Irocc’s employees. Appellant filed an appeal in the Court of Special Appeals. On 9 May 2001, we issued a writ of certiorari on our own motion while the case was pending in the Court of Special Appeals. ⁴¹⁶ II.

A. We review an administrative agency’s decision “under the same statutory standards as the Circuit Court.” Gigeous v. E. Corr. Inst., 363 Md. 481, 495 , 769 A.2d 912, 921 (2001) (footnote omitted). Therefore, “we reevaluate the decision of the agency, not the decision of the lower court.” Gigeous, 363 Md. at 495-96 , 769 A.2d at 921 (citing Public Serv. Comm’n v. Balt.

Gas & Elec. Co., 273 Md. 357, 362 , 329 A.2d 691, 694-95 (1974)). In reviewing an administrative agency decision, we are “ ‘limited to determining if there is substantial evidence in the record as a whole to support the agency’s finding and conclusions, and to determine if the administrative decision is premised upon an erroneous conclusion of law.’ ” Board of Physician Quality Assurance v. Banks, 354 Md. 59, 67-68 , 729 A.2d 376, 380 (1999) (quoting United Parcel Serv., Inc. v. People’s Counsel for Baltimore County, 336 Md. 569, 577 , 650 A.2d 226, 230 (1994)). In applying the substantial evidence test to questions of fact, a reviewing court decides ‘whether a reasoning mind reasonably could have reached the factual conclusion the agency reached.’ A reviewing court should defer to the agency’s fact-finding and drawing of inferences if they are supported by the record.

A reviewing court ‘must review the agency’s decision in the light most favorable to it; ... the agency’s decision is prima facie correct and presumed valid, and ... it is the agency’s province to resolve conflicting evidence and to draw inferences from that evidence. Banks, 354 Md. at 68 , 729 A.2d at 380-81 (alterations in original) (citations omitted). Even “with regard to some legal issues, a degree of deference should often be accorded the position of the administrative agency. Thus, an administrative agency’s interpretation and application of the statute which the agency administers should ordinarily be given considerable weight by reviewing courts.” Banks, 354 Md. at 69 , 729 A.2d at 381 (citing Lussier v. Md. Racing Comm’n, 343 Md. 681, 696-97 , ⁴¹⁷ 684 A.2d 804, 811-12 (1996); McCullough v. Wittner, 314 Md. 602, 612 , 552 A.2d 881, 886 (1989) (“The interpretation of a statute by those officials charged with administering the statute is ... entitled to weight.”)).

Moreover, the “expertise of the agency in its own field should be respected.” Id. (citations omitted). Nevertheless, “when a statutory provision is entirely clear, with no ambiguity whatsoever, ‘administrative constructions, no matter how well entrenched, are not given weight.’ ” Banks, 354 Md. at 69 n. 2, 729 A.2d at 381 n. 2 (quoting Macke Co. v. Comptroller, 302 Md. 18, 22-23 , 485 A.2d 254, 257 (1984)). See also State Dept. of Assessments and Taxation v. Greyhound Computer Corp., 271 Md. 575, 589 , 320 A.2d 40, 47 (1974) (“[T]he unvarying construction of law by the agency charged with its enforcement over a long period of time ... cannot override the plain meaning of the statute or extend its provisions beyond the clear import of the language employed.”).

B. The Commissioner, in his Final Decision and Order, held Appellee liable for liquidated damages and restitution under § 17-222(a) and (b), respectively, for its subcontractor’s direct violations of the Prevailing Wage Act. The Commissioner read § 17-222(a) as clearly requiring “a general contractor to pay liquidated damages for underpayment ‘to each laborer or other employee ...,’” regardless of who the laborer’s or employee’s actual employer was, and found, in effect, Appellee strictly liable for restitution under § 17-222(b). The Circuit Court affirmed the Commissioner’s decision finding Appellee liable for liquidated damages 9 , but reversed that part of the decision holding Appellee liable for restitution. In so doing, the Circuit Court determined that § 17-222(b) of the State Finance and Procurement Article does not impose joint or strict liability for restitution on a contractor for the wage underpayments by its subcontractor for the subcontrac ⁴¹⁸ tor’s employees.

Rather, the court read § 17-222(b) as imposing liability on either the contractor or subcontractor, depending on which violated the prevailing wage requirements as to its respective employees. Appellant urges us to adopt the Commissioner’s decision and contends that the Circuit Court erred in its interpretation of § 17-222(b). Appellant argues that, based on the purpose 10 and legislative history 11 of the Prevailing Wage Act, and on a reading of the subtitle as a whole, § 17 — 222(b) imposes liability on a general contractor for restitution to its subcontractor’s employees. Appellee believes the Commissioner erred in his reading of § 17-222(b), and therefore urges us to affirm the decision of the Circuit Court.

Triangle maintains that the “language of the statute is clear and unambiguous,” and argues that “it is clear that the contractor or subcontractor have individual responsibility” for restitution only to their respective employees under § 17-222(b). We agree with Appellee and therefore affirm the judgment of the Circuit Court. C. In 1988, in culmination of a lengthy code revision process, the Prevailing Wage Act was recodified as §§ 17-201-17-226 ⁴¹⁹ of the State Finance and Procurement Article. 12 Chapter 48, § 2 of the Acts of 1988. A comparison of the Act prior to and after the revision reveals that the recodification did not simply renumber the Act from § 12 to § 17 of the State Finance and Procurement Article.

It also reworded, rearranged, and added sections to the Act. Com,pare Maryland Code (1985, 1986 Supp.), State Finance and Procurement Article, §§ 12-301-12-315, with, Maryland Code (1988, 1995 Repl. Vol.), State Finance and Procurement Article, §§ 17-201-17-226. Section 17-222, at issue in this case, was formed early in this recodifi-cation process.

It provides: § 17-222. Liability for failure to pay prevailing wage rate. (a) Liquidated damages. — A contractor under a public work contract is liable to the public body for liquidated damages of $10 for each laborer or other employee for each day for which: (1) the laborer is paid less than the prevailing wage rate of a mechanic while performing a task required to be performed by a mechanic or mechanic’s apprentice; or (2) the employee is paid less than the prevailing wage rate. (b) Restitution.• — If a contractor or subcontractor pays an employee less than the amount the employee is entitled to receive for the work performed, the contractor or subcontractor shall make restitution to the employee.

The available legislative history of H.B. 1 of 1988 (which became Chapter 48, § 2 of the Acts of 1988) indicates that the ⁴²⁰ inclusion of “or subcontractor” in what was to become § 17-222(b) occurred before first reading. This language apparently was devised either by the staff of the then Division of Statutory Revision, the Procurement Revision Review Committee, or the Procurement Code Revision Workshop, and included in H.B. 1 before first reader consideration by the legislature. After first reader, H.B. 1 was “reviewed extensively not only by the House Constitutional and Administrative Law Committee, to which [it] was referred, and its work group, but also by the House Economic Matters Committee and a workgroup of that Committee.” Report on House Bill 1 (Third Reading File Copy), at 19 (15 March 1988). No change was made in the relevant language of § 17-222(b) from that which appeared in the first reader version.

Although there are abundant references in the documentation pertaining to H.B. 1 that state, in one form or another, that the changes made in the course of the recodification of the State procurement law were intended to be stylistic, a re-organization, and non-substantive, we could find no such specific reference to the relevant new language of § 17-222(b), save possibly the general Revisor’s note, supra at n. 11. In any event, we conclude that the inclusion of “or subcontractor” in § 17-222(b) effected a clear substantive change in the Prevailing Wage Act. The “cardinal rule of statutory interpretation is to ascertain and effectuate the intention of the legislature.” Oaks v. Connors, 339 Md. 24, 35 , 660 A.2d 423, 429 (1995) (citing Fish Mkt. Nominee Corp. v. G.A.A., 337 Md. 1, 8 , 650 A.2d 705, 708 (1994)).

The first step in determining legislative intent is “to look at the statutory language.” Id. Where statutory provisions are “clear and unambiguous and express a plain meaning, we will give effect to the statute as it is written.” Id. (citing Jones v. State, 336 Md. 255, 261 , 647 A.2d 1204, 1206-07 (1994)). In such circumstances, “ ‘no construction or clarification is needed or permitted, it being the rule that a plainly worded statute must be construed without forced or subtle interpretations designed to extend or limit the scope of its operation.’ ” Giant Food, Inc. v. Dept. of Labor, ⁴²¹ 356 Md. 180, 189 , 738 A.2d 856, 861 (1999) (quoting Tucker v. Fireman’s Fund Ins.

Co., 308 Md. 69, 73 , 517 A.2d 730, 732 (1986)). The language of a statute, therefore, is to be given “its natural and ordinary meaning.” Montgomery County, Maryland v. Buckman, 333 Md. 516, 523 , 636 A.2d 448, 452 (1994) (citing Harford County v. Univ. Of Md. Med. Sys.

Corp., 318 Md. 525, 529 , 569 A.2d 649, 651 (1990); NCR Corp., v. Comptroller, 313 Md. 118, 124 , 544 A.2d 764, 767 (1988); Utt v. State, 293 Md. 271, 286 , 443 A.2d 582, 590 (1982)). The statute here is clear and unambiguous. Section 17-222(b) provides, “[i]f a contractor or subcontractor pays an employee less than” the prevailing wage, then “the contractor or subcontractor shall make restitution to the employee.” (Emphasis added). The word “or” in this statute, and in common usage, is generally used to indicate an alternative.

See Webster’s Ninth New Collegiate Dictionary (9th ed. 1989). An “alternative” “offer[s] a choice between two or more things only one of which may be chosen.” Id. Based on a plain reading of the statute, the alternative in § 17-222 is not open-ended, that is, Appellant is not free to choose whether to charge a contractor, subcontractor, or both for restitution, regardless of fault. Under the statute, if a contractor pays its employees less than the prevailing wage, then the contractor is liable for restitution.

Likewise, if a subcontractor underpays its employees, then the subcontractor alone, not the contractor (absent