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

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### . -'$C STEPHEN J. KENNEY, and CORY KENNEY, jointly, individually,and d/b/a 8:' xiti 

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### iggl STEPHEN J. KENNEY CONTRACTORS, R Defendants and Appellants. ' . 1 L--1ZJC Ca- j,. _ - ti.LrL 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 theThirteenth Judicial District, In and for the County of Big Horn, The HonorableWilliam J. Speare, Judge presiding.

COUNSEL OF RECORD: ForAppellant: 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, 1991Justice R. C. McDonough delivered the Opinion of the Court. StephenJ. Kenneyd/b/a StephenJ. Kenney Contractors appeals froman order of theThirteenth JudicialDistrict,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 successfullybid on the project and onMay 21, 1982 signed a constructioncontractwith 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 failedtopay its employees accordingto theprescribed 2rates 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 requiredby the contract. The Department sought damages in the formof unpaidwages, onbehalf of the employees,andpenalties for its failure to comply with the express terms of the contract. Later, several employeesofKenney Contractors filed theirown 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-BaconAct." Sections 18-2-401

## - 432,MCA. This act requires contractorsonpublicprojects topay theiremployees "the standard prevailing rate of wages 

# . .. applicable to thedistrict inwhich 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 topay itsworkers according to the standardprevailing wages determined by the Department. A full and complete list indollar amounts of these specific wages was appended to the contract. Kenney Contractors maintains that it isnotbound topay these wages because the wage rates were not adopted in compliance with the Montana Administrative ProcedureAct. 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 theprovision is illegal,Kenney Contractorsargues, it was not required tocomply with its mandate and this Court is precluded from enforcing its language. See, e.q. MPH Company and Tropic Industriesv. 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 setwages. 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 areno genuine issues of factand because Kenney Contractors is contractually bound to pay the wage rates, the Department aswell 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:

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Chief Justice 

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