Indiana CCW Scale Must Be Supported By Substantial Evidence

In June 2011, the Indiana Court of Appeals affirmed a lower court’s decision that a common construction wage determination adopted by the Board of Commissioners of Allen County, setting ABC rates, was not supported by substantial evidence. Bd. of Comm'rs in Cnty. of Allen v. N.E. Ind. Bldg. Trades Council, Ind. Ct. App., No. 02A03-1009-PL-534, 6/15/11.

On public work projects in Indiana, each public body is responsible for setting a wage scale “that is not less than the common construction wage of all construction wages being paid in the county where a project is located.” IC 5-16-7-4(1). Under Indiana case law, the common construction wage (“CCW”) is the most frequently paid wage, or “mode,” not the average. Union Township School Corporation v. Joyce, 706 N.E.2d 183 (Ind. Ct. App. 1998).

In August 2009, the Allen County Board of Commissioners adopted a wage scale proposed by the Associated Builders and Contractors, Indiana Chapter (“ABC”). In support of this wage scale, the ABC submitted information summarizing the results of a wage survey and a blank copy of the survey sent to its member contractors and other non-union employers. The Northeastern Indiana Building Trades Council (“Trades Council”) filed a complaint alleging the wage determination was arbitrary and capricious given “the lack of any evidence substantiating that the ABC wage scale represented the mode wages paid in Allen County.”

As an initial matter on review, the Court of Appeals found that the Trades Council had associational standing to sue on behalf of its constituent unions’ members. It also concluded that the trial court had subject matter jurisdiction to review the Commissioners’ CCW determination.

Next, the Court found that there was no substantial evidence that the ABC wage scale represented the most commonly paid wages in Allen County. “It was undisputed that non-union contractors tend to pay each employee a different wage based upon what each employee is perceived to merit, whereas union contractors pay all employees in a given trade and skill level the same wage based upon multi-employer collective bargaining agreements….Therefore, even though non-union contractors and employees area majority in Allen County, 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.”

While the Court stated that its decision was case-specific, its analysis is instructive for future common construction wage settings. While CCW committees have considerable discretion, this decision makes clear that the committee must carefully weigh the evidence presented when establishing a wage scale, and set the rates based on “substantial evidence.”

A copy of the Court’s decision is available on the Indiana Courts website. http://www.in.gov/judiciary/opinions/pdf/06151101mgr.pdf