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Beary Landscaping Inc. v. Shannon

November 18, 2008

BEARY LANDSCAPING INC., ET AL., PLAINTIFFS,
v.
CATHERINE SHANNON, IN HER OFFICIAL CAPACITY AS DIRECTOR OF THE ILLINOIS DEPARTMENT OF LABOR, DEFENDANT.



The opinion of the court was delivered by: James B. Zagel United States District Judge

Judge James B. Zagel

MEMORANDUM OPINION AND ORDER

I. INTRODUCTION

Plaintiffs are landscape construction companies and their individual owners and officers. They seek declaratory and injunctive relief against Defendant Catherine Shannon, the Director of the Illinois Department of Labor (IDOL). The suit relates to the manner in which IDOL implements the Illinois Prevailing Wage Act (IPWA). This case was reassigned to me from Judge Filip. On March 28, 2007, Judge Filip issued an opinion granting in part and denying in part Defendant's motions to dismiss. Thereafter, Plaintiffs filed a second amended complaint. It contains three counts: (I) violation of due process by improper delegation to private parties; (II) violation of due process by failure to afford a hearing; and (III) violation of equal protection of the laws. Defendant has again moved to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). For the reasons outlined below, Defendant's motion to dismiss Count I (violation of due process by improper delegation to private parties) and Defendant's motion to dismiss Count III (deprivation of equal protection) are denied. Plaintiffs voluntarily withdrew Count II, so Defendant's motion to dismiss Count II is denied as moot.

II. FACTUAL BACKGROUND

Plaintiffs seek to enjoin IDOL's application of the IPWA as it relates to the landscaping contracts they perform in the Illinois counties of Cook, DuPage, Grundy, Kane, Kendall, Lake, McHenry, and Will. The IPWA provides that:

[a] wage of no less than the general prevailing hourly rate as paid for work of a similar character in the locality in which the work is performed, shall by paid to all laborers, workers and mechanics employed by or on behalf of any and all public bodies engaged in public works.

IPWA, 820 ILL. COMP. STAT. 103/1.

Section 4(a) of the IPWA further requires that public bodies:

[a]scertain the general prevailing rate of wages in the [county] in which the work is to be performed, for each craft or type of worker or mechanic needed to execute the contract.

Id., 820 ILL. COMP. STAT. 130/3.

According to Plaintiff, prior to 2001, IDOL's policy was to conduct statewide surveys in order to determine the prevailing wage classifications and wage rates in Illinois. Plaintiff alleges, however, that on July 1, 2002, IDOL began collecting wage certification forms and collective bargaining agreements (CBAs) from the trade union it has traditionally recognized as performing a majority of the work in each classification ("Recognized Union"). Plaintiff further asserts that IDOL adopts the wage rates set out in these forms and CBAs without conducting any inquiry into whether they actually constitute the prevailing rates. Pursuant to the IPWA, if a contractor is determined to have paid less than the prevailing wage rate, IDOL issues a Demand Letter. The Demand Letter requires the offending contractor to submit the underpayment and assesses a penalty of 20% of the total underpayment. If the contractor in violation does not submit payment, an additional penalty (equal to 2% of the 20% penalty) is incurred each thirty-day period that IDOL does not receive payment.

Plaintiffs allege that because IDOL accepts without investigation the wage rates submitted by the Recognized Union, IDOL is effectively delegating the task of setting wage rates to a private party without sufficient standards to guide them. This, they argue, is a violation of due process. Additionally, Plaintiffs argue that they have been denied equal protection because they are ...


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