1 STATE OF MINNESOTA
IN SUPREME COURT
A 14

- 086 3 A14

- 1021
Court of Appeals Gildea, C.J. Dissenting, Lillehaug and Stras, J J. J.D. Donovan, Inc., et al., Took no part, Hudson and Chutich, JJ.

Appellants,

vs. Filed: April 20, 2016 Minnes ota Department of Transportation, et al., Office of Appellate Courts

Respondents.

________________________ Thomas Revnew , Tara Craft Adams , Seaton, Peters & Revnew, P.A. , Minneapolis , Minnesota, for appellant s . Lori Swanson, Attorney General, Mathew Ferche, Assistant Attorney General , Saint Paul , Minnesota, for respondent s . Brendan D. Cummins , Justin D. Cum mins, Cum mins & Cum mins , LLP , Minneapolis , Minnesota, for amicus curiae Minnesota State Building and Construction Trades Council

.

________________________ S Y L L A B U S The transport of asphalt cement from a commercial oil refinery to a contractor’s
facilit y is not subject to the Prevailing Wage Act b ecause the scope of hauling activities considered to be “work under the contract” unde r Minn . R. 5200.1106 (2015) is limited to hauling activities to, from, or on the site of a public works project. Reversed

.2 O P I N I O N GILDEA, Chief Justice. This consolidated appeal involves the scope of the Minnesota Prevailing Wage
Act , Minn. Stat . §§ 177. 41

– . 44 (2014) , as applied to hauling activities for state highway projects

. The question presented is whether truck drivers haul ing asphalt cement from a commercial oil refinery to a contractor’s facility are performing “ work under a contract” wi thin the meaning of Minn. Stat. § 177.44, subd. 1, and therefore must be paid prevailing wages. Relying on an administrative rule that addresses the meaning of “work under a contract,” Minn. R. 5200.1106 (2015) , t he courts below answered this question in the affirmative

. B ecause we hold that hauling activities must be to, from, or on the site of a public works project to qualify as “work under a contract, ” we reverse. Respondent Minnesota Department of Transportation (MnDOT ) awarded
contracts to OMG Midwe st, Inc., d/b/a So uthern Minnesota Construction (SMC ) , and appellant Hardrives, Inc. (Hardrives ) for highway p roject s . In 20 1 2, t he State contracted with SMC for work on Trunk H ighway 30 in Blue Earth County . In 2009, t he State contracted with Hardrives for work on Trunk H ighways 10 and 23 in Benton Count y . As the prime contractors for the highway projects, SMC and Hardrives furnish ed all services and materials needed to complete the work specified in the contracts

. As relevant here , SMC and Hardrives ag reed to incorporate a particular grade of asphalt cement into the asphalt concrete mixture furnished to pave the highway surface s . SMC and Hardrives further agreed to obtain th e asphalt cement from a MnDOT

- certified oil3

refinery. Appellants J.D. Donovan, Inc. (Donovan) and Wayne Transports, Inc. (Wayne)

a ssist ed in the acquisition and transport of asphalt cement for the project s . Donovan provided services for both the SMC project and the Hardrives project

. Specifically , Donovan purchased asphalt cement from the oil refineries, resold the asphalt cement to SMC and Hardrives, and dispatched truck drivers to haul the asphalt cement from the refineries to SMC’s and Hardrives’ s permanent asphalt mixing facilities

. At these facilities, the asphalt cement was pumped into storage tank s for later use in creating asphalt concrete for the project s. Donovan did not make any deliveries to either of the project work sites and did not provide any hauling services at the work sites. Wayne , a common carrier with for

- hi re trucking services, provided services for the Hardrives p roject

. During the relevant period , Wayne transport ed 1,129 loads of asphalt
cement from a n oil refinery to Hardrives’ s permanent asphalt mixing facility. Seven of these loads were used for the H ardrives p roject , although Wayne was not informed tha t these loads would be used for the project

. Wayne did not make any deliveries to the project work site and did not provid e any hauling services at the work site.
In addition to awarding contracts for state highway projects , MnDOT is charged with enforcing s ection 177.44 of the Prevailing Wage Act , which addresses the prevailing wage requirements for state highway projects

. Minn. Stat. § 177.44, subd. 7. Following an investigation , the Labor Complian ce Unit of MnDOT determined that Hardrives had violated the project contract by failing to ensure that drivers employed by Donovan were paid prevailing wage s . In February 2013, MnDOT notified Hardrives by letter that hiring subcontractors to haul “contrac t

- specific oil ” directly to i t s asphalt plant “in order to4

produce a contract

- specific product” constituted “work under the co ntract” under Minn.
R. 5200.1106 , which required the payment of prevailing wage rates. Shortly thereafter , MnDOT sent a similar l etter to SMC. MnDOT gave Hardrives and SMC 20 days to submit certified payroll record s demonstrating compliance with the prevailing wage requirements

. See Minn. Stat. § 177.44, subd. 7

. In response to the notice s , appellants commenced two separate action s in district
court against MnDOT, seeking declaratory and injunctive relief. Donovan instituted one action against MnDOT involving the SMC project. Donovan, Wayne, and Hardrives collectively instituted another action against MnDOT involving the Hardrive s project. In both cases, appellants argued that the hauling activities of Donovan and Wayne did not constitute “work under a contract” under Minn. Stat. § 177.44 , subd. 1

. They claimed that MnDOT was taking a new position on the application of the Preva iling Wage Act to trucki ng firms. Donovan asser ted that it had been providing trucking services on dozens of state highway projects over the previous several years, and MnDOT had never before claimed that hauling asphalt cement from a refinery to a fixe d commercial plant location

was subject to the prevailing wage requirements

. Alternatively, appellants argued that the hauling activities were exempt from the prevailing wage requirement s under the “commercial establishment exception ” in the Act. See Minn. Stat. § 177.44, subd. 2

. 1

1 Because we conclude that the hauling activities are not “work under the contract” for purposes of the Act, it is not neces sary for us to resolve the commercial establishment issue appellants raise

. S ee Minn. Stat. § 177.44, subd. 2.5

The district courts in both cases granted s ummary judgment to MnDOT . The court of appeals consolidated the cases for appeal and affirmed

. J.D. Donovan, Inc

. v. Minn. Dep’t of Transp. , No s . A14

- 0863, A14

- 1021, 2015 WL 404666 , at *6 (Minn. App. Feb. 2, 2015)

. The court of appeals concluded that the hauling activities of Donovan and Wayne qualified as “work under a contract” under Minn . R. 5200.1106, subp. 3(B)(5)

. J.D. Donovan , 2015 WL 404666, at *5. In addition , the court of a ppeals summarily rejected appellants’ argument s concerning the application of the commercial
est ablishment exception

. I d. at *5

- 6. We gr a nted appellants’ petition for review.

I. At issue here is the meaning of “work under a contract” for state highway pr ojects under the Prevailing Wage Act

. Minn. Stat. § 177.44 , subd. 1

. Under section 177.44 , a laborer who is employed by a contractor, subcontractor, agent, or other person doing or contracting to do all or part of the work under a contract

. . . to whic h the state is a party, for the construction or maintenance of a highway

. . . must be paid at least the prevailing wage rate in the same or most similar trade or occupation in the area. Minn. Stat. § 1 77.44, subd. 1 (emphasis added) ; see Minn. Stat. § 17 7.42 , subd. 6 (defining the term “ [ p ] revailing wage rate”). The Minnesota Departme nt of Labor and Industry has promulgated administrative rules that apply t o prevailing wage
determination s. Minn. R. 5200.1000

– .1120 (2015); see Minn. Stat. § 177.44, subd. 3 ( calling for the Department of Labor and Industry to define classes of laborers and to determine prevailing wage rates for all classes of labor commonly employed in highway construction work). MnDOT is responsible for ensuring adherence to the6

prevaili ng wage requirements. Minn. Stat. § 177.44, subd. 7. The Act provides fines and penalties for violations of section 177.44 , including criminal penalties

. See id. , subd. 6 ( “A contractor, subcontractor, or agent who violates this section is guilty of a

m isdemeanor and may be fined not more than $300 or imprisone d not more than 90 days or both. ” ) In addition, businesses that violate the Act may be barred from working on state projects for a 3

- year period. See Minn. Stat. § 16C.285, subd. 3 (2014) (defini ng a “ [ r ] esponsible contractor” as a contractor that, among other requirements, has not violate d the prevailing wage statutes)

. The dispute here center s on whether “work under a contract” with respect to the hauling activities of truck drivers is limited t o hauling activities to, from, or on the site of the state highway project . Appellants argue that the hauling activities of Donovan and Wayne do not qualify as “ work under a contract” because the y were not making deliveries to or from a project work site. MnDOT responds that the hauling activities do not have to take place a t a project work site in order to qualify as “ work under a contract,” stressing that the transport of contract

- specific asphalt cement to the prime contactors’ facilit i es was an integr al part of the highway project s. II. We begin our analysis by examining the meaning of “work under a co nt ract” in Minn. Stat. § 177.44 , subd. 1 . Statutory interpretation is a question of law that we review de novo. Krummenacher v. City of Minnetonka , 783 N.W.2d 721, 726 (Minn. 2010). Although t he Prevailing Wage Act does not define th e term “work under a contract,” section 177.44 provide s two examples that help delineate the scope of the Act7

with respect to the deli very of project materials

. The Act do es not apply to “the delivery of materials or products by or for commercial establishments which have a fixed place of business from which they regularly supply the processed or manufactured materials or products,” which is the “commercial establishment ex ception .” Minn. Stat. § 177.44, sub d. 2. But t he Act does apply to “laborers or mechanics who deliver mineral aggregate such as sand, gravel, or stone which is incorporated into the work under the contract by depositing the material substantially in plac e, directly or through spreaders, from the transporting vehicle.” Id

. T his statutory context does not constitute a definition of “work
under a contract,” but it does confirm that the Legislature did not intend that all types of hauling activity would be subject to the Act. 2
Because the statute does not specifically define t he phrase “work under a contract,” the parties agree that we should look principally to the definition of “work under the contract” in Minn. R. 5200.1106 to determine whether the deli very of asphalt cement from an oil refinery to a prime contactor’s asphalt mixing facility is subject to the prevailing wage requirements. See Minn. R. 5200.1106 , subp. 2(A) (defining “work under the contract” and indicating that “[t]he term ‘work under a cont r act’ has the same meaning”). The interpretation of an administrative regulation presents a question of law

2 In concluding that the Act covers all types of hauling activity connected in any way to a state highway project, the dissent ignores this sta tutory context

. The dissent’s simplistic reading of the phrase “work under the contract” would also mean that the Department of Transportation has been in violation of the Act for decades. This is so because the Legislature directed the Department of T r ansportation to “require adherence to” the statute. Minn. Stat. § 177.44, subd. 7. But, as we know from the record here, the Department has never, before this case, required truckers engaged in the type of hauling at issue here to “adhere[] to” the Act.8

that we review de novo. In re Alexandria Lake Area Sanitary Dist. NPDES/SDS Permit
No. MN0040738 (

Alexandria ) , 763 N.W.2d 303, 310 (Minn. 200 9) ; see Citizens Advocating Responsible Dev. v. Kandiyohi Cty. Bd. of Comm’rs , 713 N.W.2d 817, 828

n. 9 (Minn. 2006) (noting that administrative regulations are governed by the same rules
of const ruction that apply to statutes). Our first task is to deter mine whether the language of the rule is ambiguous. Johnson v. Paynesville Farmers Union Coop. Oil Co. , 817 N.W.2d 693, 707 (Minn. 2012). A rule is ambiguous “ if it is unclear or reasonably susceptible to more than one reasonable interpretation.” In re Cities of Annandale & Maple Lake NPDES/SDS Permit
Issuance (

Annandale ) , 731 N.W.2d 502, 517 (Minn. 2007). Our assessment of whether the r ule is ambiguous does not depend on a reading of words or phrases in isolation, “ but relies on the meaning assigned to the words or phrases in accordance with the apparent purpose of the regulation as a whole.” Id

. ; see also Troyer v. Vertlu Mgmt. Co./Kok & Lundberg Funeral Homes , 806 N.W.2d 17, 24 (Minn. 2011) (explaining that we “construe rules ‘as a whole’ and ‘words and sentences are understood .

. . in the light of their context’ ” (quoting State v. Gaiovnik , 794 N.W.2d 643, 647 (Minn. 2011) ) ). If the rule is not ambiguous, “we construe the rule according to the common and approved usage of its words and phrases and do not disregard the rule’s plain meaning to pursue its spirit.” Troyer , 806 N.W.2d at 24.9

Turning to the text of the rule, “work under the contract” generally means : all construction activities associated with the public works project, including any re quired hauling activities on the site of or to or from a public works project and work conducted pursuant to a contract

. . . regardless of whether the construction activity or work is performed by the prime contractor, subcontractor, trucking broker, truc king firms, independent contractor, or employee or agent of any of the foregoing entities, and regardless of which entity or person hires or contracts with another. Minn. R. 5200.1106, subp. 2(A) (e mphasis added); s ee also id. , subp. 4 (specifying certai n types of work that are “not conside red to be work under a contract,” which relate

to the commercial establishment exception )

. MnDOT argues th at the hauling activities of Donovan and Wayne fall within the plain meaning of “work under the contract” becaus e the phrase “construction activities associated with the public works project ” s pecifically
encompasse s “hauling activities” and work performed by “trucking firms.” Id. , subp. 2(A). According to MnDOT, “truck drivers delivering materials to a prime

cont ractor are as much a part of a highway project as any other class of labor.” In addition, MnDOT points out that Rule 5200.1106 references “ construction or
construc tion service

- related activities” as “ including trucking activities.” Id. , subp. 2(D) (defin ing “contractor”). 3 Therefore, MnDOT contends that “[t]rucking activities are

3 The parties dispute whether Donovan and Wayne are “contractors” within the meaning of M inn. R. 5200.1106, subp. 2(D). Appellants contend that the provision of asphalt cement and rela ted hauling activities make s Donovan and Wayne “more akin to a mater ial supplier than a contractor.” Because we conclude that the hauling activities of Donovan and Wayne do not constitute “work under the contract” under Minn. R. 5200.1106, subp. 2(A), we need not reach this issue.10

plainly recognized as an important function ” that is covered by the prevailing wage requirements

. A ppellants re s pond that the definition of “work under the contract” is explic it ly limited with respect to hauling activities and includes only “ hauling activit ies on the site of or to or from a public works project .” Minn. R. 5200.1106, subp. 2(A). Although MnDOT contends that the reference to “hauling activities on the site of o r to or from a public works project” is simply a nonexclusive example of a type of covered construction activity , appellants assert that interpreting “work under the contract” to encompass all haulin g activities associated with a public works project would render the reference to “on the site of or to or from a public works project” superfluous and insignificant. See Troyer , 806 N.W.2d at 24 (“When possible, ‘ no word, phrase, or sentence should be deemed superfluous, void, or insignificant. ’ ” (quoting Kru eger v. Zeman Constr. Co. , 781 N.W.2d 858, 861 (Minn. 2010)))

. MnDOT also relies on Minn. R. 5200.1106, subp

. 3 (B), which provides six specific examples of hauling activities that are considered “work under the contract ” for purposes of prevailing wage r equirement s . F ive of the six examples

— (1) through (4) and (6)

— specifically reference hauling activities to, from, or on the site of a project work site: (1) the hauling of any or all stockpiled or excavated materials on the project work site to other location s on the same project even if the trucks leave the work site at some point; (2) the delivery of materials from any facility that does not meet the requirements of a commercial establishment to the project and the return haul to the starting location either em pty or loaded;11

(3) the delivery of materials from another construction project site to the public works project and the return haul empty or loaded is considered work under the contract. Construction projects are not considered a commercial establishment; (4) the hauling required to remove any materials from the public works project to a location off the project site and the return haul if empty or if loaded from other than a commercial establishment; (5) the delivery of materials or products by trucks hired by a con tractor, subcontractor, or agent thereof, from a commercial establishment; and (6) delivery of sand, gravel, or rock, by or for a commercial establishment, which is deposited “substantially in place,” either directly or through spreaders from the transporting vehicles is work under the contract. In addition, the return haul to the off

- site facility empty or loaded is also considered work under the contract. Minn. R. 5200.1106, subp. 3(B) ( emphasis added)

. MnDOT ’s argument that the hauling activities here are covered construction activities focus es on the fifth example : “ the delivery of materials or products by trucks hired by a contractor, subcontractor, or agent thereof, from a commercial establishment

. ” Id. , subp. 3(B)(5). According to MnDOT , the plain la nguage of this provision specifically cover s the hauling activities here because Donovan and Wayne were hired by project contractors to deliver asphalt cement from oil refineries, which MnDOT contends are “ commercial establishment s ” under the rule. See id

. , subp

. 5(F) (defining “commercial establishment” )

. 4

4 If, as the dissent concludes, the Ac t covers all hauling activity connected to a state highway project , it is difficult to understand why the rule drafters would have gone to the trouble to write these detailed and lengthy examples. Indeed, the dissent’s interpretation of the statute render s large portions of the rule superfluous , because, if as the dissent asserts, all hauling activity connected in any way with a state highway project is covered, there is no purpose for all of the specific, detailed examples in the rule of the types of haul ing activit ies that are covered. We are not empowered to render all of these (Footnote continued on next page.)12

For their part, appellants contend that the fifth example , when read in context , applies only to deliveries “ from a commercial establishment ” to a project work site. Id. , subp. 3(B) (5)

. Appellants st ress that the overarching definition of “work under the

contract ” as applied to “hauling activities” means “ hauling activit ies on the site of or to or from a public works project .” Id. , subp. 2(A). It makes no sense, appellants argue, for the specific ex amples in subpart 3(B) to be read more broadly than the overarching definition in subpart 2( A ), noting that all of the other examples are s pecifically limited to hauling activities to, from , or on the proj ect work site

. 5
The broad definition of the phra se “work under the contract” as encompassing “all construction activities associated with the public works project” provides a basis for more than one reasonable interpretation of the phrase as applied to hauling activities

. Id. , subp. 2(A). Read broadly , “ all construction activities associated with the public works project ” could reasonably be construed to in clude deliveries of asphalt cement to the prime contractors’ facilities because Donovan and Wayne were delivering construction

(Footnote continued from previous page.) examples null. Our obligation, instead, is to interpret the rule in a way that gives effect to all of the rule’s provisions. Troyer , 806 N.W.2d at 24

. 5 Appellants also argue that there is a fact dispute over whether the oil refineries that supplied the asphalt cement here are “commercial establishment [ s ] .” See Minn. R. 5200.1106, subp. 5(F) (stating that “[t]he determination of whether a facility is a ‘commercial establishmen t’ is made on a location

- by

- location basis and on a product

- by

product basis”). Because we conclude that the hauling activities are not “work under the contract” for purposes of the prevailing wage requirements, it is not necessary for us to interpret or apply the commercial establishment ex c eption. But see infra n. 8 (discussing the rationale behind the example in Minn. R. 5200.1106, subp. 3(B)(5) as expressed in the Statement of Need and Reasonableness).13

materials needed for the highway projects. But w hen we read the rule in its entirety, it is not unreasonable to conclude that the phrase “work under the contract,” as applied to hauling activities, i s limited to hauling activities to, from, or on the project work site

. In fa ct, the principal definition of “work under the contract ” in Minn. R. 5200.1106, subp. 2(A), specifically references hauling activities “on the site of or to or from a public
works project,” making it reasonable to interpret the limitation as specifying th e scope of covered hauling activities. Moreover, the rep eated references to the project work site in the examples of hauling activities that are considered to be “work under the contract” in Minn. R. 5200.1106, subp. 3(B), could reaso nably be construed as confirmation that hauling activities that are not to, from, or on the project work site fall outside the scope of the prevailing w age requirements

. Cf. McBoyle v. United States , 283 U.S. 25, 27 (1931) (declining “to read words that so carefully enumerate the different forms of motor vehicles” that are subject to the National Motor Vehicle Theft Act as including airplanes
where the statute contains “no reference of any kind to aircraft”). Therefore, because there is more than one reasonable interpretation of Minn. R. 5200.1106 , we conclude that the phrase “work under the contract” is ambiguous with respect to deliveries of construction materials that are not to or from a project work site. 6

6 The dissent proclaims that the words “work und er a contract” in Minn. Stat. § 177.44, subd. 1, are clear and free from ambiguity and that applying the statute “to the facts in this case is not a difficult task.” But, in the rulemaking proceeding for Rule 5200.1106 , the administrative law j udge (ALJ) found that there had been “ very different and divergent understandings” of the meaning of “work under a contract” in connection with the work of truck drivers; i n fact, as of 2001

— almost 30 years after its enactment

— the Prevailing Wage Act had “ not been im plemented for many truck drivers making (Footnote continued on next page.)14 III. Having concluded that the meaning of “work under the contrac t” is ambiguous
with re spect to hauling activities that are not to, from, or on the project work site , “we apply ca nons of construction to determine the intent of the rule makers,” Troyer v. Vertlu Mgmt. Co./Kok & Lundberg Funeral Homes , 806 N.W.2d 17, 25 (Minn. 2011) , including consideration of the “ rulemaking record, ” Citizens Advocating Responsible Dev. v. Kandiyohi Cty. Bd. of Comm’ rs , 713 N.W.2d 817, 828 (Minn. 2006)

. See generally Minn. Stat. § 645.16 (2014) (listing factors that may be considered “[ w]hen the words of a law are not explicit”). In addition, we strictly construe “ provisions that provide for a

(Footnote continued from previous page.) deliveries to state

- fund ed projects because of disputes” about the prev ailing wage requirements

. Minn. Office of Admin. Hrgs. , Proposed Amendments to Rules Governing Prevailing Wages: Trucking, Minnesota Rules, Chap ter 5200, Report of the Administrative Law Judge, OAH 12

- 1900

- 13145

- 1, 2001 WL 702292, at *6, *11 (Jan. 30, 2001) (ALJ Report). Consequently, the definition and examples in Rule 5200.1106 were intended to clarify that deliveries to project sites constitut e “work under a contract.” See infra § III

. I t is not “that simple,” as the dis sent claims , to classify deliveries of asphalt cement from a commercial oil refinery to a contractor’s facility . To b egin with, these deliveries are not obvious “construction activities ” under Minn. R. 5200.1106 , subp. 2(A). See ALJ Report at *11 ( stating that the delivery of “ mineral aggregates to an asphalt or ready mix production facility ” does not constitute a “construction activity” ) ; c f. 26 C.F.R. § 1.199

- 3 (2015) (spec ifying that “[a] ctiv ities constituting construction” for purposes of determining domestic production gross receipts under the Internal Revenue Code generally “ do not include tangential services such as

. . . delivering materials, even if the tangential ser vices are essential for construction”). Moreover, because the contractor’ s facilities serve the general public in addition to public works project s , it may not always be clear to aggregate suppliers or to the truckers which deliveries contain construction materials that will be used for state highway project s . For example, a ccording to Wayne, the bills of lading for the deliveries of asphalt cement here were issued by the refinery, and Wayne did not know at the time that any of the deliveries were related to a state highway project.15

penalty .” Brekke v. THM Biomedical, Inc. , 683 N.W.2d 771, 774 (Minn. 2004); see also Chatfield v. Henderson , 252 Minn. 404, 410, 90 N.W.2d 227, 232 (1958). 7 In previous cases involving the interpretation of an ambiguous administrative rule ,

w e have relied on statements of need and reasonableness (SONAR s) “ as evidence of the extrinsic factors listed in Minn. Stat. § 645.16 .” Troyer , 806 N.W.2d a t 27 ; see Minn. Stat. § 14.131 (2014) (stating that “the agency must prepare

. . . a statement of the need for and reasonableness of the rule ,” including “a description of the classes of persons who probably will be affected ” and the “ probable costs of com plying with the proposed rule ”)

. For example, i n Citizens Advocating , we examined “ the rulemaking record ,” including
SONAR s , “ to determi ne what the rulemakers intended.” 713 N.W.2d at 830. We proceed to do the same here. Since the enactment of the Pre vailing Wage Act in 1973 , the Department of Labor and Industry (DLI) has worked with MnDOT, often “closely,” in promulgating the
administrative rules that interpre t the Prevailing Wage Act . 199 4 SONAR 2

. Pursuant to

7 Generally, we defer to an agency’s reasonable, longstanding interpretation of an ambiguous rule. Annandale , 731 N.W.2d at 513

- 14, 516. On the other hand, when an agency’s interpretation of an ambiguous rule is recent or h as not been consistent but is instead tantamount to a litigation position, deference is not appropriate. Id. at 521. We have explained that an agency’s consistent and longstanding interpretation “ may have encouraged reliance by the public ” and may signal the delegating authority ’s view “ either that the interpretation is correct or that the authority has wil lingly acquiesced to the agency’ s interpretation ”; but , when the agency interpretation is more recent, “ any reliance interest is diminished, and change d or new interpretations may be the product of political opportunism rather than good

- faith efforts at interpretation .” Id. at 528. Because the broad interpretation of “work under the contract” now advanced by MnDOT is not a longstanding interpretation o f Minn. R. 5200.1106, the broad interpretation does not warrant deference. Indeed, MnDOT does not even argue that we must defer to its interpretation of the rule.16

M inn. Stat. § 177.44, subd. 3, DLI has identified five general “classes of labor” for state highway projects that are subject to the prevailing wage requirements : laborers, power equipment operators , truck drivers, special equipment, and special crafts. Minn. R.
5200.1040 . For each general class, the rules provide specific codes and cl assifications that contractors are required to use in “ documenting classes of labor .” Minn. R. 5200.1100, subp. 1(A); see id. , subp. 4 (addressing truck drivers). Significantly , in 1995, DLI described the sub part addressing truck drivers as identifying “ the individual trucks which may be used to haul material to, from, or about a construction project .” 1995 SONAR 23 (emphasis added). In other words, DLI did not consider hauling materials between two off

- proj ect sites , in preparation for construction, to be subject to the prevailing wage requirements. Rather, DLI expressed its understanding that only truck drivers hauling materials to, from, or about a construction project were performing work subject to the prevailing wage requirements

. I n 200 1 , DLI promulgated Minn. R. 5200.1106 to further clarify the application of the prevailing wage requirements to truck drivers . 2000 SONAR 3, 8, 23

- 26, 33

- 34. According to DLI , the promulgation of Rule 5200.1106 was m eant to ensure that the Prevailing Wage Act covered “labor costs associated with the hauling of asphalt, concrete, aggregate, and borrow to highway construction sites

. ” 2000 SONAR 8

. With respect to the hauling activities that are listed in Minn. R. 5200 .1106, subp. 3(B) , as examples of “work under the contract , ” DLI explained that the examples were “intended
to ensure that drivers [were] paid prevailing wages for hauling both to and from the
construction site

. ” 2000 SONAR 35 (emphasis added)

. In partic ular, the example in17

Minn. R. 5200.1106, subp. 3(B)(5) , on which MnDOT now relies

— “the delivery of materials or products by trucks hired by a contractor, subcontractor, or agent thereof , fr om a commercial establishment”

— was intended to clarify that the pay ment of prevailing wages for hauling materials to the project site was required , “even when [trucks hired by the contractor were] delivering from a commercial establishment .” 2000
SONAR 36. 8 Th us, according to the 2000 SONAR, the language “on the site of or to or from a public works project,” which is part of the definition of “work under the contract” in Minn. R. 5200.1106, subp. 2(A), was intended to apply to all six examples of hauling activities in Minn. R. 5200.1106, subp. 3(B), even example (5), whi ch does not specifically reference the project work site

. In sum, t he rulemaking history of Minn. R. 5200.1106 makes it clear that DLI
considered only those truck drivers who are hauling materials “on the site of or to or from a public works project” to be engaging in “construction activit ies ” that constitute “work
under a contract” under the Prevailing Wage Act

. Indeed, a t o ral argument, MnDOT admitted that it had never previously attempted to apply the Act to the types of hauling activit ies at issue here : deliveries of asphalt concrete from oil refineries to the facilities

8 This clari fication was necessary, DLI believed , to distinguish these types o f hauling acti vities from the hauling activities that fall within the scope of the commercial establishment ex c eption. 2000 SONAR 36; see Minn. Stat. § 177.44, subd. 2 (providing that drivers hauling materials “ by or for commercial establishments ” fall within the scope of the commercial establishment ex c eption (emphasis added)). DLI sought to clarify that drivers hauling materials on behalf of the contractor , albeit departing from a comme rcial establishment, are covered by the prevailing wage requirements , as made clea r by the example in Minn. R. 5200.1106, subp. 3(B)(5). 2000 SONAR 36. Thus, the example in subpart 3(B) (5) was intended to distinguish hauling activities from a commercial establishment to the project site from exempt hauling activities.18

of prime contractor s . MnDOT submitted , however, that this was evidence not of its interpretation of the A ct , but was merely a matter of “non

- enforcement

. ” But , as the Supreme Court h as recognize d, although agency enforcement power cannot simply “evaporate through lack of administrative exercise ,” it is also true that “ the want of assertion of power by those who presumably would be alert to exercise it, is equally significant in determ ining whether such power was actually conferred .” Fed . Trade Comm’n v. Bunte Bros. , Inc. , 312 U.S. 349, 3 51

- 52 (1941) ( concluding that the Federal Trade Commission ’s 25

- year - long failure to assert the power it was then claiming was a “powerful indication” of the scope of the act at issue)

. In even clearer terms, in Bank a merica Corp. v. United States , the Court underscored the significance of an agency’s in consistent enforcement histor y, noting that the Federal Trade Commission had “made no attempt” in 60 years to enforc e an act with respect to activities it was claiming

w ere covered, despite those activities being “ widespread and a matter of public record throughout the period

. ” 462 U.S. 122, 130 (1983). Th e Court found it “difficult to believe” that the FTC, the Department of Justice, and Congress all would have “overlook ed or ignore d the pervasive and open practice [at issue] had it been thought contrary to the law.” Id. at 130

- 31. We likewise find it difficult to believe that DLI , MnDOT , and the Legi slature all happened to overlook or ignore open and pervasive hauling activities

—hauling activities that are customary in the construction industry

— for more than two decades had they understood that those hauling activities r equire d the payment of prevaili ng wages .19

I nterpreting “work under the contract” narro wly also is consistent with our rules of construction pertaining to the interpretation of sta tutes that impose penalties. See, e .g. , Brekke , 683 N.W.2d at 774

. In light of the focus on “hauling activi ties on the site of or to or from a public works project” in Minn. R. 5200.1106 , subp. 2(A), we decline to interpret “work under the contract” broadly t o cover hauling activities that are not to, from, or on the project work site

— activities MnDOT has never previously treated as construction activities subject to the Prevailing Wage Act

. And although MnDOT cites the criminal penalty provision in Minn. Stat. § 177.44, subd. 6, as evidence of “the important purpose” the Act serves, “ i t is reasonable that a fa ir warning should be given” when a statute imposes criminal penalties, and “so far as possible the line should be
clear

. ” McBoyle , 283 U.S. at 27 ; s ee also State v. Rick , 835 N.W.2d 478, 486 (Minn.
2013 ) (articulating the rule that “ ‘no citizen should be held accountable for a violation of a statute whose commands are uncertain’ ” ( quoting United States v. Santos , 553 U.S. 507, 514 (2008 ) ) ) . In this case, the line between covered and non

- covered h auling activit ies was not clear with respect to deliveries of construction materials that are not to or from a project work site

. In accordance with DLI’s longstanding interpretation of the phrase “work under the contract,” as expressed through the rulemaking history, as well as our rule of narrow
construction th at applies when a statute imposes penalties, we hold that Minn. R. 5200.1106 requires that hauling activities be to, from, or at the site of a public works project in order to constitute “work under a contract” within the meaning of the Prevailing Wage Act

. Because the hauling activities of Donovan and Wayne were not to,20

from, or on the p roject work sites, th e hauling activities do not constitute “work under the contract” subject to the prevailing wage requirements

. Therefore, we reverse the decision of t he court of appeals , which affirmed summary judgment in favor of MnDOT

. Reversed

.

HUDSON, J., not having been a member of this court at the time of submission, took no part in the consideration or decision of this case.
C HUTICH, J., took no part in the consideration or decision of this case.D

- 1 D I S S E N T LILLEHAUG, Justice (dissenting). The requirements in the Minnesota Prevailing Wage Act (MPWA) for state highway projects are straightforward. So is the administrative rule that implements them.
A lab orer working for a contractor or subcontractor that has agreed “to do all or part of the work under a contract” is entitled to be paid at the prevailing wage rate. In these cases, prime contractors entered into contracts with the Minnesota Department of
T ransportation (MnDOT) to do state highway work. Each prime contractor entered into contracts with subcontractors to do some of the work. To do their work, the subcontractors employed laborers to haul asphalt cement. It follows that, under the MPWA, the laborers, who were performing “work under a contract,” were entitled to be paid at the prevailing wage rate. Rather than apply this logic, the court generates a fog of ambiguity. The purported ambiguity allows the court to carve out an exception to the MPWA: prevailing wages need not be paid for hauling activities that are not “to, from, or on the site” of the project. This judicially created exception violates the plain language of the statute and the implementing rule. Therefore, I respectfully dis sent. I. The dispute in this case centers on the interpretation of Minn. Stat. § 177.44 (2014), which is part of the MPWA, Minn. Stat. §§ 177.41

– .44 (2014). Section 177.44 covers wages and hours for work performed under state highway contracts. Interpre ting a statute presents a question of law that we review de novo. Gerber v. Gerber , 714 N.W.2dD

- 2

702, 704 (Minn. 2006). If the statute is unambiguous, we apply the statute’s plain meaning. Brayton v. Pawlenty , 781 N.W.2d 357, 363 (Minn. 2010). The statu te provides: A laborer or mechanic employed by a contractor, subcontractor, agent, or other person doing or contracting to do all or part of the work under a contract based on bids as provided in Minnesota Statutes 1971, section 161.32, to which the stat e is a party, for the construction or maintenance of a highway . . . must be paid at least the prevailing wage rate in the same or most similar trade or occupation in the area. Minn. Stat. § 177.44, subd. 1. The words “work under a contract” are not unc lear. At a minimum, they include the work performed on the state highway project by a prime contractor and by the prime contractor’s subcontractors. The opinion of the court presents no argument to the contrary. Applying the unambiguous statute to the f acts in this case is not a difficult task. As the court describes, MnDOT contracted for two state highway projects with prime contractors SMC and Hardrives. SMC and Hardrives each subcontracted with Donovan to furnish and deliver asphalt cement for the p rojects. Hardrives also subcontracted with Wayne to deliver asphalt cement. Thus, Donovan and Wayne, both subcontractors, were “contracting to do . . . part of the work under a contract” with MnDOT. Their laborers, who were truck drivers, were entitled to be paid at the prevailing wage rate. It is just that simple.
II. Instead of reading the statute as it is written, the court essentially amends it by misinterpreting the administrative rule that implements the statute, Minn. R. 5200.1106D

- 3

(2015). The co urt carves out an exception for hauling activities that are not “to, from, or on the site of” the highway project. But there is absolutely nothing in the statute that even hints at such an exception. The judicially created exception conflicts with our f oundational rule of statutory interpretation that we do not, and cannot, add to a statute words intentionally or inadvertently omitted by the Legislature. See Rohmiller v. Hart , 811 N.W.2d 585, 590 (Minn. 2012); Genin v. 1996 Mercury Marquis , 622 N.W.2d 1 14, 117 (Minn. 2001). If a

carve - out to the MPWA excluding its application to off

- site hauling activities is desirable as a matter of policy, that job is for the Legislature. See Axelberg v. Comm’r of Pub. Safety , 848 N.W.2d 206, 212 (Minn. 2014) (“[W]e must read this state’s laws as they are, not as some argue they should be.”) The statute plainly covers the work of, and benefits the laborers of, subcontractors on state highway projects. If the rule contained the exception the court carves out today, it would violate the statute. Administrative agencies may adopt regulations to implement or make specific the language of a statute, but they may not adopt conflicting rules. See Billion v. Comm’r of Revenue , 827 N.W.2d 773, 781 (Minn. 2013 ); Spe cial Sc h. Dist. No. 1 v. Dunham , 498 N.W.2d 441, 445 (Minn. 1993) (stating that “[i]t is elemental that when an administrative rule conflicts with the plain meaning of a statute, the statute controls”). An administrative rule “cannot subvert the primary purpose behind the legislation,” Weber v. City of Inver Grove Heights , 461 N.W.2d 918, 922 (Minn. 1990), which in the case of the MPWA includes extending the prevailing

- wage requirement to all work performed under state highway contracts, see Minn. Stat. § 177.41 (“It is therefore theD

- 4

policy of this state that wages of laborers, workers, and mechanics on projects financed in whole or part by state funds should be comparable to wages paid for similar work in the community as a whole.”). The court’s interpretation o f the rule violates the statute. Properly read, the rule is consistent with the statute. Each of the first three subparts of the rule shows that the hauling work covered by the statute and the rule need not be to, from, or at the site to trigger the requi rement that the subcontractor pay its laborers at the prevailing wage rate. Subpart 1 of the rule makes clear that, on state highway projects, “the prevailing wage rate . . . must be paid for work under the contract.” Minn. R. 5200.1106, subp. 1.
There i s no exception for off

- site hauling. Subpart 2(A) defines “work under the contract” broadly as “all construction activities associated with the public works project.”
Id ., subp. 2(A). And subpart 2(B) defines “contract” broadly as including “project
pro posals, plans, and specifications, and all requirements for labor, equipment, and materials found in such proposals, plans, and specifications.” Id ., subp. 2(B). Again , there is no exception for off

- site hauling; “all” means all. Subpart 2(A) elaborate s on the meaning of “under the contract”: the phrase includes not only “any required hauling activities on the site or to or from a public works project” but also (using the word “and”) “work conducted pursuant to a contract

. . . regardless of whether th e construction activity or work is performed by the prime contractor, subcontractor, trucking broker, trucking firms, independent contractor, or employee or agent of any of the foregoing entities, and regardless of which entity or person hires or contracts with another.” Id ., subp. 2(A). The word “and” is one ofD

- 5

inclusion, not exclusion. Lennartson v. Anoka

– Hennepin Indep. Sch. Dist. No. 11 , 662 N.W.2d 125, 130 (Minn. 2003) (noting that the term “and” “ is the type of language that is typically associated with a conjunctive rule ”). Plainly, subparts 1, 2(A), and 2(B) of the rule apply to all activities under the contract. There is no exception in these subparts for off

- site hauling. Subpart 3(B) of the rule reinforces this reading. The subpart provi des six examples of hauling activities “included in hours worked and considered work under the contract.” Minn. R. 5200.1106, subp. 3(B). Examples (1) through (4) and example (6) reference hauling to, from, or at the construction site and thus do not app ly here. But example (5) is exactly on point: “the delivery of materials or products by trucks hired by a contractor, subcontractor, or agent thereof, from a commercial establishment.” Id ., subp. 3(B)(5). Subcontractors Donovan and Wayne were deliveri ng materials or products by trucks from commercial establishments

— in this case, asphalt cement from refineries. Their hauling fits squarely within example (5). By reading example (5) out of the rule, the court ignores the Legislature’s command that “[e]v ery law shall be construed, if possible, to give effect to all its provisions.” Minn. Stat. § 645.16 (2014). To create ambiguity, the court points to the references in subparts 2(A) and 3(B) to hauling to, from, or on the construction site. But these re ferences do not generate a reasonable alternative interpretation. All of the words on which the court relies are words of inclusion

— on - site hauling work is “included and considered work under the contract”

— and are not words excluding off

- site hauling. Mi nn. R. 5200.1106, subp. 3(B). The court seems to be adopting a new principle of interpretation, whichD

- 6

could be phrased as: inclusions expressed shall be construed to exclude all others . This is a mutation of the doctrine of expressio unius est exclusio alterius , the canon of construction (to be applied only after ambiguity is found) that “[e]xceptions expressed in a law shall be construed to exclude all others,” Minn. Stat. § 645.19 (2014). Indeed, the rule anticipates and answers the court’s misunderst anding. Subpart 3 provides that the examples of “work under the contract” apply “[w]ithout limiting the application of [the rule] to other situations.” Minn. R. 5200.1106, subp. 3. Plainly, the rule is not limited to hauling to, from, or on the site.
I II. Although not relevant to my plain

- meaning textual analysis, I cannot help but observe that the court’s new rule of law that off

- site hauling is not “work under the contract” produces two ironies. First, it allows Donovan to escape the prevailing

- wage requirement on the very same projects for which Donovan and its prime contractors received Disadvantaged Business Enterprise (DBE) credit for the same labor and material Donovan furnished

—

under the contract. See 49 C.F.R. § 26 (2015) (allowing contractor s to receive credit for employing DBEs). The second irony is that, had the subcontractors not been paid for their work, they could have made claim on, and been paid through, the prime contractors’ payment bonds. Such bonds, generally required on state co nstruction projects, are for the benefit of subcontractors “engaged under, or to perform the contract . . . .” Minn. Stat. § 574.26, subd. 2 (2014).D

- 7

In other words, by the court’s new rule of law, the subcontractors get the statutory benefits of working under a state contract, but the laborers performing the work for them do not. Such asymmetry is unwarranted. 1
IV. Because I would affirm the court of appeals’ decision that, in these cases, the subcontractor hauling services were “work under the contra ct,” I would reach the second issue: whether the prime contractors were “commercial establishments” under the MPWA and the rule. They were not. Although the MPWA does not contain an exception for all off

- site hauling, it does expressly exempt one form of hauling. The prevailing wage rate need not be paid for “the delivery of materials or products by or for commercial establishments which have a fixed place of business from which they regularly supply the processed or manufactured materials or products.” Minn. Stat. § 177.44, subd. 2 (emphasis added). I agree with the district courts and with the court of appeals that, in this case, SMC and Hardrives were contractors, not “commercial establishments.” In these cases, the
commercial establishments were t he refineries from which the subcontractors were delivering asphalt cement to the prime contractors. Donovan’s and Wayne’s deliveries

were from the refineries, not by or for the refineries. Thus, the exception is inapplicable.

1 T oday’s dec ision appears to be influenced by the fact that the executive branch has not consistently enforced the statute and the r ule. But variations in executive enforcement policy from one administration to another do not and cannot alter our judicial function.D

- 8

Accordingly, the court sho uld have affirmed the court of appeals in all respects.

STRAS, Justice (dissenting). I join in the dissent of Justice Lillehaug.