APPEAL from a judgment of the Superior Court of Fresno County. Jeff Hamilton, Judge. (Super. Ct. No. 09CECG01198)
The opinion of the court was delivered by: Wiseman, Acting P.J.
Truxell & Valentino Landscape v. Baker
NOT TO BE PUBLISHED IN THE OFFICAL REPORT
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
Appellant Truxell & Valentino Landscape Development, Inc. (Truxell), removed and replaced landscaping at Clovis West High School. The job included the construction of a large paved area with cement walkways and cement seating areas. Truxell paid its employees at the prevailing wage rate for landscape workers for the entire job. Respondents and Real Party in Interest Department of Industrial Relations, Division of Labor Standards Enforcement (DLSE), issued a wage-and-penalty assessment, finding that the workers who performed the cement work were misclassified and should have been paid the prevailing wage for cement masons. The assessment included the difference in wages plus penalties.
After a hearing, respondent Director of the Department of Industrial Relations (Director)*fn1 modified and affirmed the wage assessment, imposed liquidated damages, and remanded the case to the DLSE for a redetermination of the penalties. The DLSE redetermined the amount of the penalties, and Truxell did not request review by the Director. Truxell filed a petition for a writ of mandate in the superior court seeking reversal of all the relief ordered. The court denied the petition.
Truxell appeals from the denial, asking us to hold that the misclassification finding was not supported by substantial evidence and that the penalties were excessive, amounting to an abuse of discretion. Truxell also argues that, even if its position on the classification is wrong, it had a reasonable belief that the law supported its position, and that liquidated damages therefore cannot properly be imposed.
We hold that substantial evidence supports the agency finding on the misclassification issue. Further, Truxell forfeited its claim on the issue of penalties when it decided not to request administrative review of the redetermination of the penalties. We agree with Truxell, however, that there was a reasonable (though mistaken) basis in law and fact for its position on the classification of the workers, and that liquidated damages therefore were not appropriate. We reverse the judgment and direct the superior court to grant relief on the liquidated damages issue.
FACTUAL AND PROCEDURAL HISTORIES
Truxell entered into a contract with Clovis Unified School District on June 19, 2006, to carry out "[s]ite and [l]andscape [i]mprovements" at Clovis West High School. The work was divided roughly into thirds: One-third was grading and the removal of existing landscaping; another one-third was the installation of a new underground irrigation system and the planting of new trees, shrubs and grass; and the remaining one-third was cement work.
The cement work, as described in the Director's written decision, included "the construction of curbing, sidewalks, seating walls, mowstrips, concrete stairs, and disabled ramps, and the installation of bollards," which are removable cement posts used to control vehicle access. Blueprints and photographs of all these concrete features are included in the administrative record. The photographs indicate that "seating wall[s]" are low walls, usually located at borders between sidewalks and planted areas, on which students can sit. "Mowstrips" are narrow strips of concrete separating lawns from other areas.
For the cement work, Truxell hired a separate crew of seven workers and a supervisor. Truxell's regular employees did the balance of the work. At least five of the workers hired for the cement work had experience as cement masons, ranging between two and 20 years. Truxell paid the crew that did the cement work at the same wage rates as it paid the remaining workers, the rates for landscape tradesmen and landscape assistant journeymen, which ranged from $14 to $25 per hour. The applicable rate for cement masons would have been about $40 per hour. Truxell's president, John Valentino, stated in a letter to Deputy Labor Commissioner Rachel Farmer that he believed paying all the workers at the lower rates was appropriate because "all the work on this project is covered by a landscape contractors license (C-27), and as such, we consider it all landscape work."*fn2
The DLSE conducted an investigation to determine whether the cement workers were classified correctly. As the parties agree, the classification question is controlled by the scope-of-work provisions of the governing collective bargaining agreements for landscape workers and cement masons. The scope of work for landscape workers is as follows:
"The Landscape industry is defined as follows: Decorative landscaping, such as decoration walls, pools, ponds, fountains, reflection units, low voltage lighting displays, hand grade landscape areas, tractor grade landscape areas, finish rake landscape areas, spread top soil, build mounds, trench for irrigation manual or power, layout for irrigation backfill trenches, asphalt, plant shrubs, trees, vines, set boulders, seed lawns, lay sod, use ground covers such as flatted plant materials, rock rip rap, colored rocks, crushed rock, pea gravel, and any other landscapeable ground covers, installation of header boards and cement mowing edges, soil preparation such as wood shavings, fertilizers (organic, chemical or synthetic), top dress ground cover areas with bark of any woods residual or other specified top dressing, watering of plants and all clearing and clean up prior to and after landscaping.
"A. In addition to the above Paragraph, the work covered shall include but not be limited to all work involved in the distribution, laying, and installation of landscaping irrigation pipe, the installation of low voltage automatic irrigation and lawn sprinkler systems, including but not limited to the installation of automatic controllers, valves, sensors, master control panels, display boards, junction boxes and conductors including all components thereof.
"B. Installation of valve boxes, thrust blocks, both precast and poured in place, pipe hangers and supports, incidental to the installation of the entire piping system.
"C. Start-up testing, flushing, purging, water balancing, placing into operation all piping equipment, fixtures and appurtenances installed under the Agreement.
"D. Any line inside a structure which provides water to work covered by this Agreement, including piping for ornamental pools and fountains when performed in conjunction with landscaping.
"E. All piping for ornamental stream beds, and waterways.
"F. All swimming pools in connection with single family residential units, condominiums, town house[s], apartment houses, including remodels, additions, all service and repair, mobile home parks, and motels and hotels up to four stories in height may be performed under the terms and conditions and wage and fringe rates of this Agreement. All other swimming pool piping shall be done by Building Trades Journeyman and Apprentices only, who may be dispatched out of UA Local 355, at no less than the wage and fringe rate of the UA Local Union Master Labor Agreement having jurisdiction in the geographical area where the work is being performed. The Hiring Hall provisions contained in the Local Union's Master Labor Agreement where the work is being performed shall not apply.
"G. All temporary irrigation and lawn sprinkler systems and all types of hydro mulching and erosion control.
"H. This Agreement may be used to cover maintenance and plant establishment. Plant establishment as such work is described in the [employer's] contract documents shall be work covered by this agreement. This work may be performed exclusively by all classifications outlined in this agreement without the supervision of a Journeyman except for Apprentice which would require the supervision of a Journeyman. No ratios.
"I. Trenchers are covered by this Agreement provided the Trencher is of 35 horsepower or less.
"J. The installation of playground equipment and prefabricated park service equipment."
The scope of work for cement masons provides:
"Without limiting the scope of the work covered hereby, it is agreed that Cement [Masons'] work shall include but shall not be limited to all the following construction work:
"(1) All building construction, including but not limited to the construction, erection, alteration, repair, modification, demolition, addition or improvement in ...