No. 90-316 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1990 

GEORGE DAVID LIX, LEONARD PERKINS, 

RICHARD LEN PITSCH, and all other persons 

known and unknown, but similarly situated, 

Plaintiffs and Respondents, I -+.a -. 

-v- , 3 . ' f"j" i, . -'$C 

STEPHEN J. KENNEY, and CORY KENNEY, 

jointly, individually, and d/b/a 8 :' xiti I[ x: iggl 

STEPHEN J. KENNEY CONTRACTORS, R Defendants and Appellants. ' . L- -1ZJC C a- j, . _ 1 - ti .L rL La 6,". ., . , 

DAVID L. HUNTER and THE DEPARTMENT OF 

LABOR AND INDUSTRY, 

Plaintiff and Respondent, 

STEPHEN J. KENNEY d/b/a STEPHEN J. KENNEY 

CONTRACTORS, 

Defendant and Appellant. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Big Horn, 

The Honorable William J. Speare, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Randall G. Nelson and Laurence R. Martin; Felt, 

Martin, Frazier & Lovas; Billings, Montana 

For Respondent: 

William Richardson, Butte, Montana 

David Scott; Dept. of Labor & Industry; Helena, 

Montana 

Filed: 

Submitted on Briefs: November 29, 1990 

Decided: January 10, 1991 
Justice R. C. McDonough delivered the Opinion of the Court. 

Stephen J. Kenney d/b/a Stephen J. Kenney Contractors appeals 

from an order of the Thirteenth Judicial District, Big Horn County, 

granting summary judgment in favor of the Department of Labor and 

Industry (Department) and George Lix, Leonard Perkins and Richard 

Pitsch, employees of Kenney Contractors. In its order, the 

District Court held that Kenney Contractors was liable for back 

wages, costs, penalties as required by § 39-3-206, MCA, and 

attorneys' fees. We affirm. 

The sole issue on appeal is: 

Whether the District Court erred when it ruled that Kenney 

Contractors was bound by a contractual provision requiring it to 

pay its employees certain hourly wages. 

In 1982, the City of Hardin solicited bids to build a 

pumphouse and river intake structure. The project qualified as a 

public works project subject to Montana's Little Davis-Bacon Act. 

See 85 18-2-401 through 432, MCA. 

In March of 1982, Kenney Contractors successfully bid on the 

project and on May 21, 1982 signed a construction contract with the 

City. The contract, which was agreed to by all parties, contained 

a schedule of specific prevailing wage rates such as $15.90 per 

hour, for a journeyman electrician. These rates were minimum wage 

determinations based on job classifications common in the 

construction industry. They were established by the Department 

pursuant to 5 18-2-402(l), MCA. It is undisputed that Kenney 

Contractors failed to pay its employees according to the prescribed 

2 
rates in the contract. 

On August 22, 1983, the Department filed a complaint against 

Kenney Contractors alleging that it failed to pay the wage rates 

as required by the contract. The Department sought damages in the 

form of unpaid wages, on behalf of the employees, and penalties for 

its failure to comply with the express terms of the contract. 

Later, several employees of Kenney Contractors filed their own 

complaint, in which they sought damages for unpaid wages. The 

individual plaintiffs also sought permission to intervene in the 

Department's action against Kenney Contractors and to join their 

claims to the Departmentst claim. On February 9, 1988, the 

District Court consolidated the two cases. 

All parties moved for summary judgment. Following the 

submission of written briefs and hearing oral argument, the 

District Court granted partial summary judgment in favor of the 

Department and the employees. This appeal followed. 

As stated above, the pumphouse and river intake structure 

qualified as a public works project under the Montana "Little 

Davis-Bacon Act." Sections 18-2-401 - 432, MCA. This act requires 

contractors on public projects to pay their employees "the standard 

prevailing rate of wages . . . applicable to the district in which 

the work is being performed. 'I Section 18-2-403 (2) , MCA. 

In compliance with this mandate, the Department required a 

provision to be included in the contract, which directed Kenney 

Contractors to pay its workers according to the standard prevailing 

wages determined by the Department. A full and complete list in 
dollar amounts of these specific wages was appended to the 

contract. 

Kenney Contractors maintains that it is not bound to pay these 

wages because the wage rates were not adopted in compliance with 

the Montana Administrative Procedure Act. See 55 2-4-101 through 

711, MCA. Therefore, because the rates were not determined in 

compliance with the law, Kenney Contractors argues that their 

inclusion constitutes an illegal provision in the contract. 

Because the provision is illegal, Kenney Contractors argues, it was 

not required to comply with its mandate and this Court is precluded 

from enforcing its language. See, e.q. MPH Company and Tropic 

Industries v. Imagineering, Inc. and Bill R. Williams (1990), 47 

St.Rep. 947, 792 P.2d 1081. 

We disagree with this argument. Kenney Contractors relies 

heavily upon a district court case which held the Department of 

Labor did not have express rule making authority to determine 

standard prevailing wage rates. Therefore its determinations of 

these standards lacked the force of law. See Townsend Electric 

Inc. v. Dept. of Labor and Industry, First Judicial District No. 

47160 (1983). 

The decision in that case is not, however, applicable to the 

facts here. In the case now before us, Kenney Contractors 

expressly agreed to pay wage rates contained in the contract that 

it voluntarily executed with the City of Hardin. Therefore the 

issue presented for our review is one of contract law. It has 

nothing to do with administrative rule making authority. 
Furthermore, it is uncontested that Kenney Contractors failed to 

pay the contractually set wages. We disagree with its assumption 

that the wage provisions were illegal. These provisions were not 

contrary to law, public policy or good morals. See 5 28-2-701, 

MCA . 

We therefore hold that the District Court properly granted 

summary judgment. There are no genuine issues of fact and because 

Kenney Contractors is contractually bound to pay the wage rates, 

the Department as well as the individual employees are entitled to 

judgment as a matter of law. The order of the District Court is 

affirmed. 1 

..-' 

A" 

We Concur: I/#- <#/ ,[. '- 

Chief Justice 1 I 

Justices