Title: Bergman v. Monarch Constr. Co.

State: ohio

Issuer: Ohio Supreme Court

Document:

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Bergman v. Monarch Constr. Co., Slip Opinion No. 2010-Ohio-622.] 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2010-OHIO-622 
BERGMAN ET AL., APPELLANTS, v. MONARCH CONSTRUCTION COMPANY, 
APPELLEE, ET AL. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as Bergman v. Monarch Constr. Co.,  
Slip Opinion No. 2010-Ohio-622.] 
Prevailing-wage law — R.C. 4115.10(A) — Penalty for noncompliance in 
employee-initiated action. 
(Nos. 2009-0558 and 2009-0649 — Submitted November 18, 2009 — Decided 
March 2, 2010.) 
APPEAL from and CERTIFIED by the Court of Appeals for Butler County,  
No. CA2008-02-044, 2009-Ohio-551. 
__________________ 
SYLLABUS OF THE COURT 
In an employee-initiated action to enforce the prevailing-wage law, the penalties 
set forth in R.C. 4115.10(A) are mandatory penalties that must be imposed 
against a party found to have violated the prevailing-wage law if the 
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violation has not resulted from the exceptions specified in R.C. 
4115.13(C). 
__________________ 
 
CUPP, J. 
{¶ 1} We are asked to determine whether, in an employee-initiated 
enforcement action, the penalties set forth in R.C. 4115.10(A) are mandatory 
penalties that must be imposed against a party found to have violated the 
prevailing-wage law if the violation has not resulted from the exceptions specified 
in R.C. 4115.13(C).  We conclude that the penalties in the foregoing circumstance 
are mandatory.  Accordingly, we reverse the court of appeals’ judgment and 
remand this matter to the trial court for further proceedings. 
I 
{¶ 2} Monarch Construction, appellee, a general contractor, entered into 
a contract with Miami University to build student housing. Monarch subsequently 
contracted with Don Salyers Masonry, Inc. (“Salyers”) to work on the project, 
which was a public improvement.  Because of that status, Monarch and Salyers 
were required to pay their employees the wages determined pursuant to R.C. 
Chapter 4115. 
{¶ 3} After an investigation, the Department of Commerce issued an 
initial determination that Salyers had underpaid employees and that Salyers and 
Monarch were liable for $368,266.34 in back wages and $368,266.34 in penalties. 
The department notified Monarch of the result by sending it a copy of the 
determination, which was Monarch's first notice of the investigation. 
{¶ 4} Plaintiffs, 36 underpaid employees who decided not to assign their 
claims to the Department of Commerce for collection, filed suit on February 21, 
2006, under R.C. 4115.10(A).  Before trial, Miami University was dismissed from 
the case on its motion, and the court entered a default judgment against Salyers. 
January Term, 2010 
3 
 
{¶ 5} After a bench trial, the court found Monarch liable for back pay 
but denied the plaintiffs’ request to penalize Monarch an additional 25 percent of 
the back wages it owed, as set forth in R.C. 4115.10(A).  The court held that the 
25 percent penalty was discretionary and that because Monarch had cooperated as 
soon as it received notice of Salyers’s violation, the penalty was not warranted.  
The court also refused to impose a penalty equal to 75 percent of the back wages 
owed, to be paid to the director of commerce.  The court reasoned that this 
penalty was also discretionary and that the circumstances of the case did not 
warrant it. 
{¶ 6} The appellate court affirmed.  We acknowledged a certified 
conflict and accepted review under our discretionary jurisdiction.  121 Ohio St.3d 
1497, 1500, 2009-Ohio-2511, 907 N.E.2d 321, 324.  Appellants are five of the 
original underpaid employees: Doug Bergman, Shawn Adams, Ricky Smith, Scott 
Brackett, and Andrew Sykes. 
II 
{¶ 7} The issue in this case involves the statutory interpretation of R.C. 
4115.10(A).1  This statute provides: "No person, firm, corporation, or public 
authority that constructs a public improvement * * * shall violate the wage 
provisions of sections 4115.03 to 4115.16 of the Revised Code * * *.  Any 
employee upon any public improvement, except an employee to whom or on 
behalf of whom restitution is made pursuant to division (C) of section 4115.13 of 
the Revised Code, who is paid less than the fixed rate of wages applicable thereto 
may recover from such person, firm, corporation, or public authority * * * the 
difference between the fixed rate of wages and the amount paid to the employee 
and in addition thereto a sum equal to twenty-five per cent of that difference. The 
                                                 
1.  When we accepted this discretionary appeal, we accepted three propositions of law.  The 
second proposition of law reflects the penalty issue presented in the conflict certification. Upon 
consideration of this matter, and our resolution of the conflict and its corresponding proposition of 
law, we dismiss the first and third propositions of law as having been improvidently accepted.  
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person, firm, corporation, or public authority who fails to pay the rate of wages so 
fixed also shall pay a penalty to the director of seventy-five per cent of the 
difference between the fixed rate of wages and the amount paid to the employees 
on the public improvement." 
{¶ 8} Based on the language of R.C. 4115.10(A), appellants claim that 
the appellate court erred when it affirmed the trial court’s decision not to award 
them an additional 25 percent penalty on the amount of the underpaid wages.  
They contend that the 25 percent penalty is required by R.C. 4115.10(A).  They 
also assert that the appellate court erred when it affirmed the trial court’s decision 
not to require Monarch to pay a 75 percent penalty on the amount of the 
underpaid wages to the director of commerce.  Upon consideration of the merits 
argued by the parties, we agree that the appellate court misconstrued the statute. 
III 
{¶ 9} A court’s paramount concern in construing a statute is the intent of 
the legislature.  State ex rel. Musial v. N. Olmsted, 106 Ohio St.3d 459, 2005-
Ohio-5521, 835 N.E.2d 1243, ¶ 23.  In this regard, “it is the duty of this court to 
give effect to the words used, not to delete words used or to insert words not 
used” and to read those words and phrases in context according to the rules of 
grammar and common usage.  Cleveland Elec. Illum. Co. v. Cleveland (1988), 37 
Ohio St.3d 50, 524 N.E.2d 441, paragraph three of the syllabus; R.C. 1.42. 
{¶ 10} We have previously stated that the legislative intent of the 
prevailing-wage law in R.C. Chapter 4115 is to “provide a comprehensive, 
uniform framework for, inter alia, worker rights and remedies vis-a-vis private 
contractors, sub-contractors and materialmen engaged in the construction of 
public improvements in this state.”  State ex rel. Evans v. Moore (1982), 69 Ohio 
St.2d 88, 91, 23 O.O.3d 145, 431 N.E.2d 311 (plurality opinion).  “[T]he primary 
purpose of the prevailing wage law is to support the integrity of the collective 
bargaining process by preventing the undercutting of employee wages in the 
January Term, 2010 
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private construction sector.”  Id.  To achieve this end, R.C. Chapter 4115 provides 
to employees who have been denied the prevailing wage a comprehensive 
statutory procedure of administrative and civil proceedings to ensure an 
employer’s compliance with the prevailing-wage laws.  State ex rel. Harris v. 
Williams (1985), 18 Ohio St.3d 198, 200, 18 OBR 263, 480 N.E.2d 471.  
Supporting the administrative and civil proceedings are statutory deterrents in the 
form of civil and criminal penalties.  State ex rel. Evans v. Moore, 69 Ohio St.2d 
at 91.  It is with this primary purpose in mind that we review this matter. 
IV 
{¶ 11} The general rule of the prevailing-wage law is that an employer 
shall not violate the wage provisions of R.C. Chapter 4115 or require an employee 
to work for less than the “rate of wages so fixed.”  R.C. 4115.10(A).  If the 
employer violates this proscription and pays an employee less than the prevailing 
wage, the employee has several options to recoup his underpayment.  The 
employee can institute an enforcement action under R.C. 4155.10(A) or assign to 
the director of commerce the right to institute an enforcement action under R.C. 
4115.10(B).  In the event the employee does not institute an enforcement action or 
assign his or her rights to the director of commerce within the statutorily specified 
time, the director then has the obligation to “bring any legal action necessary to 
collect any amounts owed to employees and the director.”  R.C. 4115.10(C); see 
generally Harris v. Van Hoose (1990), 49 Ohio St.3d 24, 26-27, 550 N.E.2d 461.2 
{¶ 12} For the employee-initiated enforcement action under R.C. 
4115.10(A), the remedy for the underpayment of wages is plainly set forth: the 
employee is entitled to “the difference between the fixed rate of wages and the 
amount paid to the employee and in addition thereto a sum equal to twenty-five 
                                                 
2.  An interested party may also file a complaint with the director of commerce alleging 
prevailing-wage violations.  R.C. 4115.16.  Proceedings instituted in this manner also implicate 
the remedies specified in R.C. 4115.03 to 4115.16.  Unions and trade associations are “interested 
parties” for the purposes of R.C. 4115.16.  R.C. 4115.03(F). 
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per cent of that difference.”  In addition, the underpaying employer “also shall 
pay a penalty to the director of seventy-five per cent of the difference between the 
fixed rate of wages and the amount paid to the employee.”  Id. 
{¶ 13} The appellate court’s rationale that the R.C. 4115.10(A) penalties 
were discretionary was based on its interpretation that the phrase “may recover” 
gives the trial court discretion to deny recovery to the employee.  In this regard, 
the court stated that “there does not seem to be any clear intent from the 
legislators that they intended their choice of the word ‘may’ [in R.C. 4115.10(A)] 
to actually mean ‘shall’ or that the 25 percent penalty is anything but 
discretionary.”  2009-Ohio-551, ¶ 76. 
{¶ 14} However, the appellate court misread R.C. 4115.10(A).  The 
phrase “may recover” within R.C. 4115.10(A) pertains to the choice the underpaid 
employee has to enforce his or her right to recover the underpayment.  It vests 
with the employee the discretion of whether to commence an action for restitution 
of the underpayment.  See R.C. 4115.10(A), (B), and (C).  Correspondingly, if the 
employee chooses to enforce his or her statutory right to recover the unpaid 
wages, and proves the case, then the statutory penalties follow as a matter of 
course and are mandatory.  R.C. 4115.10(A).  This interpretation reflects the 
legislative intent of R.C. Chapter 4115, State ex rel. Harris v. Williams, 18 Ohio 
St.3d at 200, 18 OBR 263, 480 N.E.2d 471, and gives force and effect to the basic 
rule contained in R.C. 4115.10(A): an employer shall not violate the prevailing-
wage laws or pay an employee “less than the rate of wages so fixed.” 
{¶ 15} To deny an underpaid employee the additional 25 percent penalty 
is contrary to the language of R.C. 4115.10(A).  From its inception, the 
prevailing-wage law has required employers who violated it to pay a penalty on 
the amount of the back wages owed. G.C. 17-6.3  The only variation through the 
                                                 
3.  {¶ a}  As it was originally enacted in 1931, the penalty section read: 
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years has been to whom the penalty is paid.  Initially, the penalty was a payment 
of 100 percent of the back wages to the underpaid employee.  Id.  In 1994, the 
terms of the penalty were altered, but to change only the allocation of the penalty: 
it was to be apportioned between the underpaid employee and the director of 
commerce, in an attempt to fund a newly created penalty-enforcement fund.  R.C. 
4115.10(A); 1994 Am.Sub.H.B. No. 350, 145 Ohio Laws, Part III, 5572, 5575. 
{¶ 16} The statute is also clear in its direction with regard to the 75 
percent penalty: it shall be paid to the director of commerce, and it is used for 
enforcement of the prevailing-wage laws.  R.C. 4115.10(A).  A basic rule of 
statutory construction is that “shall” is “construed as mandatory unless there 
appears a clear and unequivocal legislative intent” otherwise.  Dorrian v. Scioto 
Conservancy Dist. (1971), 27 Ohio St.2d 102, 56 O.O.2d 58, 271 N.E.2d 834, 
paragraph one of the syllabus; R.C. 1.42 (“Words and phrases shall be read in 
context and construed according to the rules of grammar and common usage”).  In 
this case, the “clear and unequivocal legislative intent” as expressed in the statute 
is that the 75 percent penalty is to be paid whenever the director of commerce 
determines that there has been a prevailing-wage underpayment and the 
determination becomes final. 
{¶ 17} Finally, within the prevailing-wage legislation, there is only one 
exception to the payment of the penalties.  According to R.C. 4115.13(C), when 
the director of commerce finds that a wage underpayment is the result of a 
misinterpretation of the prevailing-wage statutes or an erroneous preparation of 
the payroll documents, provided restitution of the underpayment is made, no 
                                                                                                                                     
     {¶ b}  “Any contractor or sub-contractor who shall violate the wage provisions of such 
contract, or who shall suffer, permit or require any employee to work for less than the rate of 
wages so fixed, shall be fined not less than $50.00 or more than $500.00.  Any employee upon any 
public improvement who is paid less than the fixed rate of wages applicable thereto may recover 
from the contractor or sub-contractor the difference between the fixed rate of wages and the 
amount paid to him, and in addition thereto a penalty equal in amount to such difference.”  G.C. 
17-6, 1931 H.B. No. 3, Section 4, 114 Ohio Laws 117, eff. July 27, 1931. 
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further proceedings will occur and no penalties are assessed.  Because this 
provision does not apply to Monarch in this case, there is no authority for the 
mandatory penalty to be waived. 
V 
{¶ 18} We hold that in an employee-initiated action to enforce the 
prevailing-wage law, the penalties set forth in R.C. 4115.10(A) are mandatory 
penalties that must be imposed against a party found to have violated the 
prevailing-wage statutes if the violation has not resulted from the exceptions 
specified in R.C. 4115.13(C). 
{¶ 19} Based on the foregoing, the judgment of the court of appeals is 
reversed and the cause is remanded to the trial court for further proceedings 
consistent with this opinion. 
Judgment reversed 
and cause remanded. 
 
MOYER, C.J., and PFEIFER, O’CONNOR, and LANZINGER, JJ., concur. 
 
LUNDBERG STRATTON and O’DONNELL, JJ., dissent. 
__________________ 
 
LUNDBERG STRATTON, J., dissenting. 
{¶ 20} Because I believe that the 25 percent penalty set forth in R.C. 
4115.10(A) is discretionary in an employee-initiated action to enforce the 
prevailing-wage law and that the employee is not entitled to recover the 75 
percent penalty that is intended for the director of commerce, I respectfully 
dissent. 
{¶ 21} The plaintiffs filed this action to recover unpaid prevailing wages 
from their employer, Don Salyers Masonry, Inc. (“Salyers”), for work performed 
on a public improvement project at Miami University.  Salyers was a 
subcontractor hired by Monarch Construction, the general contractor.  Both 
Monarch and Miami University were also named defendants.  The case arose after 
January Term, 2010 
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the Ohio Department of Commerce conducted an investigation into whether 
Salyers had paid its employees the prevailing wage rate on the project.  The 
department eventually determined that Salyers had violated Ohio’s prevailing-
wage law.  On December 12, 2005, the department notified Salyers and Monarch 
of the deficiencies.  This was the first that Monarch knew of the investigation that 
had begun months earlier. 
{¶ 22} The trial court dismissed Miami University per Civ.R. 12(B)(6) 
and issued a default judgment against Salyers.  Following a bench trial, the court 
ordered Monarch to pay the plaintiffs the back wages, less an amount for fringe 
benefits already paid.  However, the trial court refused to award the penalties 
under R.C. 4115.10(A), on the basis that they were discretionary and not 
warranted in the case.  The court explained its reasoning:  “[T]he testimony at 
trial and the evidence before this Court indicates [sic] that Salyers repeatedly 
assured Monarch that [it] was paying the prevailing wage to its employees.  In 
addition, Monarch reviewed Salyers’ payroll records, and confirmed the correct 
prevailing wage rate with Miami University.  Finally, once Monarch learned of 
the investigation and determination against Salyers, it cooperated with the 
[department], and took all steps necessary to ensure the [department] had all the 
correct documentation.” 
{¶ 23} The court of appeals affirmed.  The appellate court relied on the 
plain language of R.C. 4115.10(A), which states that “the employees ‘may 
recover’ a penalty equal to 25 percent of wages owed * * *,” and applying  well-
establish rules of statutory construction, the appellate court construed “may 
recover” as being permissive or discretionary.  2009-Ohio-551, ¶ 74.  Thus, the 
appellate court held that the trial court had discretion to deny the penalty. 
{¶ 24} I agree that the plain language of the statute and the General 
Assembly’s repeated use of both “may” and “shall” throughout the prevailing-
wage statutes supports the appellate court’s interpretation.  The sentence at issue 
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in R.C. 4115.10(A) provides that an employee who is paid less than the applicable 
fixed rate of wages on the project “may recover * * * the difference between the 
fixed rate of wages and the amount paid to the employee and in addition thereto a 
sum equal to twenty-five per cent of that difference.”  (Emphasis added.)  Later in 
that section, in discussing remedies, R.C. 4115.10(A) also states that the 
employee “may file” to recover.  The majority rejects the appellate court’s plain 
reading of the statute in favor of an interpretation that “may recover” “pertains to 
the choice the underpaid employee has to enforce his right to recover the 
underpayment.”  However, there is nothing in the statute that connects the verb 
“may recover” to the employee’s choices of how to collect unpaid wages. 
{¶ 25} I agree that an employee does have a choice either to file suit to 
recover for a prevailing-wage violation, R.C. 4115.10(A), or to assign the claim to 
the Department of Commerce to file, R.C. 4115.10(B).  The employer also may 
do nothing, in which case the department may bring legal action to collect the 
wages.  R.C. 4115.10(C).  However, there is no language in the statute that 
supports the majority’s interpretation that “may recover” pertains only to the 
employee’s choice of methods to recover wages, which is addressed later in the 
statute. 
{¶ 26} We have long held that “[i]n statutory construction, the word 
‘may’ shall be construed as permissive and the word ‘shall’ shall be construed as 
mandatory unless there appears a clear and unequivocal legislative intent that they 
receive a construction other than their ordinary usage.”  Dorrian v. Scioto 
Conservancy Dist. (1971), 27 Ohio St.2d 102, 56 O.O.2d 58, 271 N.E.2d 834, 
paragraph one of the syllabus;  R.C. 1.42.  The General Assembly’s use of the 
word “may” before the word “recover” indicates that recovery is discretionary.  
Also, “may recover” must be read in the context of the entire sentence, which 
pertains to what the employee may recover, not how to recover. 
January Term, 2010 
11 
 
{¶ 27} Furthermore, the General Assembly has used both “may” and 
“shall” throughout the prevailing-wage statutory scheme.  For example, R.C. 
4115.10(B) provides that an employee may file a complaint with the director and 
that the director shall take an assignment of a claim for the assigning employee.  
R.C. 4115.16(D) provides that a court shall award attorney fees and costs to the 
prevailing party when there is a violation but may award costs and fees to the 
prevailing party if the court finds that there was no violation and that the action 
was unreasonable or lacked foundation.  I believe that the General Assembly 
clearly intended that these terms be given their ordinary meaning.  Thus, I believe 
it is contrary to the plain language of the statute that the employee’s recovery of a 
25 percent penalty is mandatory. 
{¶ 28} In addition, I do not believe that the plaintiff in an employee-
initiated action is entitled to recover the 75 percent penalty that is paid to the 
director once there has been a final determination of a prevailing-wage 
underpayment.  R.C. 4115.10(A) provides that the person or entity that fails to 
pay the prevailing wage “shall pay a penalty to the director.”  (Emphasis added.)  
“The director shall bring any legal action necessary to collect any amounts owed 
to the employees and the director.”  R.C. 4115.10(C).  The statute, however, has 
no similar provision authorizing the employee to pursue and recover the amounts 
owed to the employee and the penalty that is payable to the director.  And as a 
practical matter, if the employee is entitled to recover the 75 percent, is it paid to 
the plaintiff/employee, who then becomes responsible for giving it to the director, 
or must it be paid directly to the nonparty director?  For these reasons, I do not 
believe that the employee is the real party in interest and entitled to pursue the 
penalty that is payable to the director. 
{¶ 29} In conclusion, when Monarch questioned whether Salyers was 
complying with prevailing-wage laws, the general contractor was assured by both 
Miami University and Salyers that it was.  Months later, when Monarch learned 
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of department’s determination, it obtained wage and fringe-benefit information 
from Salyers’s files for the department.  Monarch cooperated with the department 
in settlement negotiations involving employees who chose not to file suit.  I 
believe that these efforts demonstrate why the General Assembly intended for the 
penalty against the employer to be discretionary. 
{¶ 30} Consequently, I respectfully dissent and would affirm the 
judgment of the court of appeals. 
 
O’DONNELL, J., concurs in the foregoing opinion. 
__________________ 
 
Cosme, D’Angelo & Szollosi Co., L.P.A., and Joseph M. D’Angelo, for 
appellants. 
 
Taft, Stettinius & Hollister, L.L.P., Gregory Parker Rogers, and Matthew 
R. Byrne, for appellee. 
 
Benesch, Friedlander, Coplan & Aranoff, L.L.P., N. Victor Goodman, and 
Mark D. Tucker, urging reversal for amicus curiae, Ohio State Building & 
Construction Trades Council. 
 
Richard Cordray, Attorney General, Benjamin C. Mizer, Solicitor General, 
Alexandra T. Schimmer, Chief Deputy Solicitor General, and Susan M. Sullivan, 
Dan E. Belville, and Lindsay M. Sestile, Assistant Attorneys General, urging 
reversal for amicus curiae state of Ohio. 
 
Ross, Brittain & Schonberg Co., L.P.A., Alan G. Ross, and Nick A. 
Nykulak, urging affirmance for amici curiae ABC of Ohio, Inc., and Northern 
Ohio Chapter of Associated Builders & Contractors, Inc. 
 
Schottenstein, Zox & Dunn, and Roger L. Sabo, urging affirmance for 
amici curiae Associated General Contractors of Ohio and Allied Construction 
Industries. 
______________________