Contractor may face additional penalties

Court upholds ruling on prevailing wage violations against Glenn O. Hawbaker

The Pennsylvania Superior Court on Thursday upheld a decision by a Centre County judge that cleared the way for possible additional penalties against Glenn O. Hawbaker Inc. for violations of the Pennsylvania Prevailing Wage Act.

Hawbaker is a State College firm that "is primarily a highway and bridge construction contractor," according to the opinion handed down by a three-judge panel of the Superior Court.

In 2021, Pennsylvania's Attorney General charged the firm with four counts of theft by failure to make required disposition of funds for improperly using money earmarked for specific employee retirement accounts to fund the retirement accounts of all their employees, executives and owners.

The AG charged that Hawbaker "stole fringe benefit funds from those employees who worked on projects requiring prevailing wage rates under state and federal law."

On Aug. 2, 2021, the AG and Hawbaker entered into a plea agreement, under which the company pleaded no contest to the charges and agreed to pay restitution of $20.6 million to the employee-victims.

The firm also agreed to serve a five-year probationary term.

A no-contest plea means the defendant is not admitting guilt.

The agreement also stated that no additional criminal charges would be brought stemming from the company's conduct during the years 2015-18.

In addition, a corporate monitor, Alfred B. Robinson Jr., was to assure the company's compliance with state and federal prevailing wage requirements throughout the probationary period.

PennDOT attempted to bar Hawbaker from bidding on projects requiring the payment of prevailing wages, but a state appeals court enjoined the state transportation agency from pursuing the debarment. The ruling was later overturned by the Supreme Court.

However, as that issue was being litigated, the Pennsylvania Department of Labor and Industry, which provides oversight of the prevailing wage laws, charged that after the plea agreement was entered, a worker filed a complaint that Hawbaker was again violating the law by charging the company's training costs as fringe benefits to their workers.

The department contended the new charges covered the years 2019-22.

It sought Hawbaker's debarment from public contacts for three years and additional civil penalties.

Hawbaker challenged the new charges, contending they violated the plea agreement that placed enforcement of the prevailing wage laws with the corporate monitor.

Centre County Judge Julia R. Rater rejected that argument, which resulted in the present appeal before the Superior Court.

Hawbaker argued in its appeal that the corporate monitor was the "sole and exclusive arbiter of (Hawbaker's) prevailing wage practices and the company's compliance during the period between Jan. 1, 2019, through the end of the probationary period.

The Superior Court panel including Judges Mary Jane Bowes, Judith F. Olson and Victor P. Stabile stated, "The crux of (Hawbaker's) argument is the indication that the decision of the corporate monitor as to GOH's compliance is final."

The Centre County judge, however, determined the role of corporate monitor is the equivalent of a probation officer, assisting in the company's rehabilitation, but without board powers to interpret federal and state wage laws.

"Significantly, it is beyond peradventure that the (attorney general as part of the plea bargain) was not representing the United States or any federal agencies in this criminal action, and thus could not have bargained away their rights," the panel stated.

The appeals court concluded that "we discern no term evincing a promise that (Hawbaker) was immune from civil consequences for prevailing wage violations allegedly occurring in 2019 through 2022."

The appeals court then rejected Hawbaker's attempt to enjoin the Department of Labor and Industry from moving forward with its new charges against the company.

A spokesperson for Hawbaker indicated Friday that the company will seek Supreme Court review of the Superior Court decision.

Review by the state's highest court is optional.