Ogundare v. DIR: Court Addresses Debarment of Contractor From Public Works Projects for Violation of Prevailing Wage Requirements

Ogundare v. Department of Industrial Relations, Division of Labor Standards Enforcement (2/27/13) --- Cal. App.4th --- deals with the DLSE and its enforcement of the state's prevailing wage requirements for public works projects. As stated in the opinion: 

Ayodeji A. Ogundare, individually and doing business as Pacific Engineering Company (together Pacific), filed a petition for writ of administrative mandate asking the trial court to set aside a “debarment” decision adopted by the State of California, Department of Industrial Relations, Division of Labor Standards Enforcement (DLSE) that would have precluded Pacific from bidding or working on public works construction projects for one year. The trial court reviewed the administrative record and concluded there was no credible evidence to support a finding that Pacific violated prevailing wage laws with intent to defraud, which finding was necessary in this case for debarment to be imposed under Labor Code section 1777.1.2 Accordingly, the trial court granted Pacific's petition. DLSE appeals, arguing that (i) the trial court failed to apply the correct standard of review (i.e., the substantial evidence test) and (ii) there was substantial evidence in the record to support the administrative finding of intent to defraud. We agree on both points and will reverse.  

Slip op. at 2. 

The case makes two important points:  

1. The decision to prohibit a contractor from working on public works projects does not affect a "a fundamental vested right" of the contractor, and the reviewing court does not "conduct an independent review of the entire record to determine whether the weight of the evidence supports the administrative findings."  Instead, its review is limited to "determining whether the administrative findings are supported by substantial evidence."  Slip op. at 6-9. 

2. Substantial evidence supported the DLSE's finding of the contractor's "intent to defraud" where an employee testified, and his paycheck showed, that he worked 61 hours at $15 per hour (less than the prevailing wage rate), while the contractor submitted certified payroll records to the DLSE showing that the employee worked only 25 hours at the correct prevailing wage rate of $36.10 per hour.  Slip op. at 9-12.  

The opinion is available here.