Opinion
Civil Action No. 99M-08-031 SCD.
Submitted: April 10, 2000.
Decided: May 5, 2000.
Decision Upon Non-Jury Trial
Dear Counsel:
On August 16, 1999, the Department of Labor commenced an action against Mattes Electric, Inc., Waldron H. Giles and Thelma P. Giles. Mattes Electric, Inc. is a Delaware corporation. Mr. and Mrs. Giles are the officers of the corporation.
Mattes Electric was the successful bidder on two separate state projects which, because they involved the use of money from the State or a subdivision (City of Newark), required that the contract be executed in accordance with the prevailing wage requirements of 29 Del. C. § 6960.
Enforcement of the statute rests with the Department of Labor which is charged with the responsibility of investigating all claims that the prevailing wage rates are not paid, or that there are other irregularities in the contractor's compliance with the law.
There is no factual dispute regarding some, if not all, of the violations alleged in the complaint. Mr. and Mrs. Giles admit that some of the employees were not paid in full. They further admit that some overtime payments were not made; that the employees were not paid weekly as is specifically required by statute; and that there were irregularities in the ratio requirements between apprentices and mechanics.
In accordance with the authority vested in the Department, Mr. Giles was advised in April 1998 that there were irregularities. Further correspondence followed from the Department in May 1998. Mattes Electric responded, through counsel, in June, 1998, acknowledging that it was not paying weekly, as required by the statute, but arguing that it should be excused from the requirement because paying bi-weekly was a de minimus variation. As to the issue of the ratio between the apprentice and mechanics workers, Mattes argued that it was discriminatory and should be changed.
Finally, Mattes argued that the prevailing wage statute only provides penalties for employers who "knowingly" fail or refuse to pay the prevailing wage. It argued that since the corporation did not intend to breach a requirement of a statute or regulation, and that its failure was de minimus or discriminatory, it should be excused.
The defenses offered to the violations claimed are unpersuasive. The law cannot be forgiven because an employer did not remember a provision, did not read a contract or regulation, or did not find an obligation to be practical. This court does not have the power or the inclination to usurp the authority of the legislature. The way to change unsatisfactory laws is through ones elected representatives. I have no difficulty concluding that the violations of the prevailing wage act were done knowingly because they were not addressed and remedied when the opportunity was presented.
The evidence presented to the Court was focused not on the specific monetary obligations due, but on the broader issue of whether or not Mr. and Mrs. Giles, as principals in the corporation, can be held personally liable. The issue arises because the corporation is still in existence, but it has been fully liquidated due to severe financial losses. The Giles' contend that the debt, if any, is due from the corporation, and not by them personally.
The Department relies on the wage payment and collection statute, 19 Del. C. § 1101 (b) which states:
(b) For the purpose of this chapter the officers of a corporation and any agents having the management thereof who knowingly permit the corporation to violate this chapter shall be deemed to be the employers of the employees of the corporation.
Based on the language of § 1101, I conclude that the Giles' are liable for any deficiencies in the payment of wages . This ruling applies to claims for costs and counsel fees as they are within the scope of the "chapter", meaning 19 Del. C., Ch. 11. The evidence supports the conclusion that the officers, Mr. and Mrs. Giles, are liable personally for deficiencies related to the rate applicable when the required apprentice/mechanic ratio was not met, and when overtime wages were due. The personal liability provision does not apply to other claims arising exclusively out of the prevailing wage statute, such as claims or sanctions related to the failure to pay wages weekly, instead of bi-weekly; to an award for treble damages pursuant to § 6960(f), or to any other remedy provided by the prevailing wage statute but not within the scope of 19 Del. C., Ch. 11. The Giles' would be responsible for the wage sanctions set forth in 19 Del. C. § 1103 (b), which in effect grants a doubling of the unpaid wages in this case, due to the passage of time.
Those rulings having been made based on the evidence presented, it is my understanding that the parties will confer to determine whether or not a further hearing is required to determined the actual amounts due each worker, and what sanctions, if any apply. The parties are instructed to advise me no later than May 31, 2000, whether the balance of the dispute can be resolved. That failing, a hearing will be scheduled.
IT IS SO ORDERED.