Most Ohio contractors are, or should be, aware of prevailing wage requirements on public construction projects (with the exception of school construction, where prevailing wage is not required). If a contractor bids on a public construction project, then its costs will include the wages for the employees who will work on the project. If one contractor is permitted to bypass the prevailing wage requirements, then its bid could be lower, and it would have an unfair advantage. Failure to pay prevailing wage to employees who work on the project could also create a hardship for the employees involved.

When a contractor or subcontractor fails to pay prevailing wage to its employees, who has a right to sue the contractor? This was the question in United Brotherhood of Carpenters, Local Union No. 1581 v. Edgerton Hardware Co. (Williams App. Aug. 3, 2007), 2007-Ohio-3958.

In Local Union No. 1581, a subcontractor failed to pay prevailing wage to its employees. The United Brotherhood of Carpenters and Joiners of America, Local Union No. 1581, filed suit, claiming that the subcontractor violated portions of the Ohio revised Code by failing to pay prevailing wage to its employees.

The trial court, on its own initiative, determined that Local Union No 1581 did not have “standing” to sue. “Standing” is legal jargon that means a party has an interest in a case. As an example, if someone owes you money and has not paid, then you have standing to sue. Your neighbor does not.

Local Union No. 1581 appealed the court’s decision on the basis that it was an “interested party” under the express language of the statute. The appellate court agreed. According to the appellate court, the question to be answered was whether or not the union had a “personal stake in the outcome of the controversy.”

In order to have standing, Local 1581 had to be an “interested party” as defined in Ohio Revised Code § 4115.03(F). The next Code section defines the term “interested party”:

(F) “Interested party,” with respect to a particular public improvement, means:

(1) Any person who submits a bid for the purpose of securing the award of a contract for construction of the public improvement;

(2) Any person acting as a subcontractor of a person mentioned in division (F)(1) of this section;

(3) Any bona fide organization of labor which has as members or is authorized to represent employees of a person mentioned in division (F)(1) or (2) of this section and which exists, in whole or in part, for the purpose of negotiating with employers concerning the wages, hours, or terms and conditions of employment of employees;

(4) Any association having as members any of the persons mentioned in division (F)(1) or (2) of this section.

The trial court had apparently assumed that the carpenters’ union did not gain standing to sue the defendant, a plumbing and sheet metal contractor, just because some of the union’s members worked for a company that had submitted an unsuccessful bid for carpentry work on the project. If the union had a complaint, it apparently had to be about carpentry work, the court thought.

The Court of Appeals disagreed, after looking at the statute. Evidence presented by Local 1581 established that its members worked for a company that bid on but was not awarded the project. That was enough to satisfy the third section of the “interested party” definition, the court thought. Local 1581 was an “interested party” for purposes of bringing a suit based upon any subcontractor’s failure to pay prevailing wage. It was not restricted to suing a subcontractor in the same trade.