Last week the Second Circuit issued an opinion reaffirming that the Davis-Bacon Act preempts state law claims by workers to enforce prevailing wage rates as third-party beneficiaries to a contract. Congress enacted the Davis-Bacon Act during the Great Depression to provide minimum wages for laborers working under federal construction contracts. The Act requires contractors to pay a “prevailing wage” or the wages paid to similar workers in the same locality. The Department of Labor sets the prevailing wages. Other federal laws impose similar prevailing wage requirements. The Service Contract Act, for example, covers employers providing services to the federal government.
In Carrion v. Agfa Construction, Inc., the plaintiff was a former employee of a federal contractor working pursuant to a construction contract with the New York City Housing Authority. The plaintiff argued that he had not been paid the prevailing wage as set forth in the contract. He brought suit as a third-party beneficiary to the construction contract.
The Second Circuit dismissed the claim, finding it had already resolved the question in a 2003 decision. The 2003 decision found that the Davis-Bacon Act did not create a private right of action for an aggrieved employee to obtain back wages and that state law actions seeking the same goal were not allowed. In affirming its 2003 decision, the Second Circuit recognized that a recent New York state court case allowed a claim for back wages to go forward.
The decision serves as a reminder to contractors subject to the Davis-Bacon Act and similar laws (such as the Service Contract Act) to verify that they are paying their employees in accordance with applicable prevailing wage rates. It also shows that some courts are willing to entertain state law claims for violations of the prevailing wage schedules set by the Department of Labor.