How much deference should courts give to interpretive guidance of the New York Department of Labor? We’ll soon find out, as the Second Circuit has certified the question to the New York Court of Appeals. The answer has the potential to significantly impact employers throughout New York.
The question arose out of Ramos v. SimplexGrinnell LP, in which the Plaintiff-employees alleged, among other things, that they were not paid “prevailing wages” for inspection and testing work performed under a public works contract. The New York Labor Law requires prevailing wages be paid to employees performing “maintenance” work under such contracts. In the litigation, Plaintiffs argued this work was maintenance; Simplex argued that it wasn’t.
While the action was pending, Simplex sought guidance from the New York DOL on this question. On December 31, 2009, the DOL published an opinion letter in which it stated that the work at issue was in fact “maintenance” work, requiring payment of prevailing wages. However, the DOL also said that due to “confusion in the past” about its position on this issue, it would enforce its interpretation of the law going forward, only. Armed with the DOL’s guidance, Simplex moved for summary judgment. In granting its motion on this issue, the District Court adopted the DOL’s opinion, deferring both to its substantive interpretation of the Labor Law and the DOL’s decision to enforce its interpretation prospectively, only.
On appeal, the Second Circuit certified two questions to the Court of Appeals. The first is, what deference “should a court pay to an agency’s decision… to construe [the Labor Law] prospectively only, when the court” is asked to interpret the law for a time period pre-dating the agency’s decision? The second question is whether a party’s agreement to pay prevailing wages in a contract binds “it to pay those wages only for work activities that were clearly understood by the parties to be covered by [the Labor Law]” when the contract was executed, or does it require payment of prevailing wages for all work “ultimately deemed by a court or agency to be ‘covered’. . .” The Court of Appeals’ answers to these questions, if framed broadly, could alter the landscape for judicial deference to DOL interpretations more generally.