The U.S. Court of Appeals for the Third Circuit upheld a $2.45 million judgment against a federal contractor for “recklessly” violating prevailing wage laws. The Farfield Company was sued for misclassifying and underpaying construction workers on federally funded projects, in violation of the federal Davis Bacon Act (“DBA”). When the contractor falsely certified that its weekly payrolls complied with its DBA wage obligations, the Court also imposed liability on the contractor under the federal False Claims Act (“FCA”).
The case is U.S. ex rel. International Brotherhood of Electrical Workers Local Union No. 98 v. The Farfield Company, 5 F.4th 315 (3d Cir. 2021). A copy of the opinion can be found here.
What Are the Davis Bacon Act and False Claims Act?
The Davis-Bacon Act requires that federal contractors pay their construction worker employees the “prevailing wage” rates for the type of work the employee performs. For example, a worker who performs electrical work must be paid at the prevailing electrician rate; a worker who performs plumbing work must be paid the prevailing plumber rate; and so on. The DBA also requires that federal contractors submit weekly “certified payrolls” in which the contractor must state for each worker: the days and hours worked; the classification of work performed, and the wage rates paid. The weekly certified payrolls also require that a federal contractor certify that the information contained therein is complete and accurate and that each worker “has been paid not less than the applicable [prevailing] wage rates.”
The False Claims Act imposes liability and damages on a federal contractor that “knowingly” uses a false record or statement material to a false or fraudulent claim. Both the Justice Department and private individuals or organizations (referred to as “relators”) may file an FCA action. Where a federal contractor is found to have violated the FCA, the FCA imposes statutory penalties on a per-violation basis, plus three times the amount of actual damages, and an award of a relator’s attorneys’ fees and costs.
Who Can File a Class Action Under the Prevailing Wage Laws?
Any worker or labor union may bring a False Claims Act case against a federal contractor if they are aware of “reckless” misclassification and/or underpayments of construction worker employees on federally funded projects in violation of the Davis Bacon Act.
What Happened in the Farfield Case?
In the Farfield case, the contractor improperly misclassified and underpaid employees who performed electrical “lineman” work tasks at the lower-paid “laborer” classification. At least one Farfield executive knew that the employees should have been paid at the “lineman” classification.
The Court of Appeals noted that proper classification of workers played only a minor role in Farfield’s assignment of tasks and that most work crews were not limited in the type of work they performed. This resulted in workers being paid at the “laborer” rate despite performing electric “lineman” work. Based on these facts, the Court of Appeals ruled that Farfield “recklessly” ignored its obligations to pay employees in accordance with the DBA.
Because Farfield acted recklessly with regard to its DBA obligations, while at the same time stating in its certified payrolls that it paid its workers in compliance with the DBA, the Court also found that Farfield acted with reckless disregard as to the “truth or falsity” of its certified payrolls. Accordingly, the Court held Farfield liable under the FCA.
Why Did the Court Award $2.45 Million in Damages?
The Court found that Farfield underpaid its employees in the total amount of $159,273.54. The Court tripled that amount for a total “damages” award of $477,820.62. The Court also imposed a civil penalty of $5,500.00 for each of Farfield’s 105 weekly false certified payrolls, totaling $577,500.00 in penalties. The Court then ordered that Local 98 was entitled to $316,596.19 of the total recovery (with the remainder going to the United States), plus an award for its attorneys’ fees and costs expended.
Who Represented the Labor Union in the Prevailing Wage Action?
While at their prior firm, Goodley McCarthy attorneys James E. Goodley and Ryan P. McCarthy represented the Plaintiff-Relator, IBEW Local 98, at the District Court and Third Circuit. Goodley McCarthy regularly represent employees in cases against government contractors for violating prevailing wage laws.
How Can I Join A Prevailing Wage Class Action?
If you believe that you have not been paid the proper prevailing wages on a public project, or if you are a union investigating the payment practices of nonunion contractors on a federally funded project, please contact We Stop Wage Theft at 844-696-7492 (toll-free) or email us at [email protected] or you can fill out the form on this page.
We will promptly review your claim and advise whether you have a viable FCA/DBA case.
Do I Have to Pay Attorney’s Fees?
No. We Stop Wage Theft attorneys handle claims for unpaid wages on a contingent fee basis. In other words, the lawyers don’t get paid fees unless they get money for you.