An unpublished Indiana Court of Appeals decision has cast doubt as to how municipalities may calculate the common wage scale for public construction projects.

In Board of Commissioners in County of Allen v. Northeastern Indiana Building Trades Council, the Court affirmed the judgment of the Allen Superior Court, which set aside the Allen County Commissioners’ decision to adopt the wage scale proposed by Associated Builders and Contractors, Indiana Chapter, Inc., (ABC) for a public works project. In Board of Commissioners in County of Allen v. Northeastern Indiana Building Trades Council, the court unanimously held that a union had associational standing to sue on behalf of the members of its constituent unions and that the trial court had subject matter jurisdiction to review the Commissioners’ decision. A 2-1 majority of the court also reversed the Commissioners’ decision that the adopted wage scale comported with the “common construction wage” in the county as required by Indiana Code § 5-16-7-1(d).

The Court of Appeals had previously held that the phrase “common construction wage” is defined as “the scale of wages that are most commonly paid in the community.” To support its proposed wage scale, which was below that paid by unionized contractors, ABC provided the Commissioners with the results of a wage survey that it sent to its member contractors and other non-union employers. 

Although roughly 90 percent of contractors in Allen County are non-unionized, the court held that “it cannot be inferred that non-union contractors pay more employees at the most common non-union wage than do union contractors at the most common union wage.” The Court concluded that the survey could not accurately reflect the prevailing wage because it essentially excluded the unionized contractors, who likely paid higher wages.  The opinion was concerned with the fact that while most of the area’s contractors were non-unionized, it was unclear how many workers were employed by the unionized contractors and therefore how common the unionized wages actually were.

Despite the survey supporting the Commissioners’ decision, the Court of Appeals held that there was no substantial evidence supporting the common wage decision.

The court’s memorandum decision can be found at: http://www.in.gov/judiciary/opinions/pdf/06151101mgr.pdf  read more