Park District Failed to Fulfill the Notice Requirement under the Prevailing Wage Act Where Contract Included Conditional Language

By September 29, 2021October 4th, 2021News, The Extra Mile Newsletter

In Valerio v. Moore Landscaping, a group of landscape laborers brought an action for unpaid wages, punitive damages, costs, and attorney fees against a landscaping contractor, in connection with work the laborers performed pursuant to a contract between the landscaping contractor and a park district. The laborers brought the action against the landscaping contractor, pursuant to Section 11 of the Prevailing Wage Act, alleging that they were paid less than the prevailing rate of wages. Section 11 provides laborers a right of action for backpay, penalties, statutory punitive damages, costs, and attorney fees against a contractor when the laborers were paid for their services in a sum that is less than the stipulated rates for work done under a contract for public work between a contractor and a public body.

The Illinois Supreme Court determined that the laborers had no right of action under Section 11 because the underlying contract between the landscaping contractor and the park district did not clearly stipulate that the payment of prevailing wage rates was applicable to the landscaping work. Instead, the contract simply stated that: “Contractor shall pay all persons employed by [c]ontractor, or its subcontractors, prevailing wages where applicable.” Because the language included the phrase “where applicable,” it failed to specify to the landscaping contractor that it was required to pay prevailing wage rates to the laborers for their work on the project.

While the park district was not a party to this case, the clear implication of the court’s opinion is that the park district failed to fulfill its obligations under the Prevailing Wage Act. Under Section 4 of the Prevailing Wage Act, public bodies must, in all contracts for public works, include a stipulation that not less than the prevailing rate of wages must be paid to all laborers, workers and mechanics performing work under the contract. Based on the court’s reasoning, it seems likely that the laborers would have a cause of action against the park district.

This case serves as an important reminder that public bodies must carefully review bid documents and contracts for public works to ensure that they include specific provisions concerning compliance with the Prevailing Wage Act. General statements concerning compliance with applicable laws will not be sufficient.

Please contact an attorney in the Board Governance/Corporate practice group with questions.

Source: Valerio v. Moore Landscapes, LLC, 2021 IL 126139