Modular Building Institute

Discussion Forum

The Verdict is in: Victory for Offsite Contractors!

Original Comment:
The California Supreme Court recently ruled on the Mendoza vs Fonseca McElroy Grinding Company case supported by a MBI Amicus Brief. Simply put, we won.

In Mendoza, the court addressed the question of whether workers transporting heavy machinery to and from a public works jobsite are employed “in the execution of” the public works contract under 1772, even if the work does not fall within the Legislature’s definitions of a “public works.” The court rejected the plaintiffs’ claim they were entitled to prevailing wage because their work was integral to other public works.

In a similar case (Busker vs Wabtec Corp), the Court again ruled against prevailing wage expansion. Viewing the history and purpose of the law, the court rejected plaintiff’s argument that publicly funded work to install electrical components on train cars constituted “construction” or “installation” within the meaning of the prevailing wage law. The court reiterated that “the prevailing wage law has never been applied to all work financed by public funds,” concluding that the types of “construction” and “installation” work covered by prevailing wage “are generally restricted to activities associated with fixed work on land.”

According to MBI Executive Director Tom Hardiman, “MBI has long held the position that prevailing wages should not encroach upon the offsite fabrication of components and buildings. We have successfully defended this position for over a decade and in multiple legal challenges.”

The take-away from both opinions is that the Court narrowed the application of the Prevailing Wage Law to “public works” as defined in Labor Code Sections 1720 to 1720.9 and rejected the proposition that other provisions of the Law expanded coverage to include activities that are not within these sections.

MBI Government Affairs Director Jon Hannah-Spacagna added “We will continue to draw a line in the sand and protect our modular manufacturers from this decades old, antiquated labor provision that does nothing to improve quality, safety, nor efficiency.”

For the full legal analysis from MBI attorney Dennis Cook of Cook/Brown LLP, please email jon@modular.org.
Started on August 20, 2021 by Tom Hardiman
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Additional Comments:
UPDATE: The California Supreme Court ruled on September 29th to deny the plaintiff's petition for a rehearing, meaning the case is now final!
Updated on October 6, 2021 by Tom Hardiman

Thanks for the update, the good news and all of your efforts.
Updated on August 20, 2021 by Rick Bartolotti

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