Court of Appeal Rules: Company Can Sue Competitors for Failure to Pay Prevailing Wages


Monday, February 23, 2015


Building companies can sue a competitor whose violations of the prevailing wage law allegedly enabled it to submit lower bids and thereby gain contracts that would otherwise have gone to the plaintiffs, this district’s Court of Appeal ruled Friday.

Div. Eight, in a 2-1 decision, overturned a Riverside Superior Court judge’s ruling dismissing the suit by Roy Allan Slurry Seal, Inc. and Doug Martin Contracting, Inc. against American Asphalt South, Inc. The suit is one of five that the plaintiffs have filed, claiming that American Asphalt interfered with prospective economic advantage by unfairly underbidding on 23 contracts with Riverside County and with 16 cities in that county and Los Angeles, San Bernardino, Orange and San Diego counties.

The complaints also included claims for predatory pricing under the Unfair Practices Act, and sought injunctive relief under the Unfair Competition Law, but the appeals court Friday said those claims were correctly dismissed.

The successful bids on the contracts totaled $14.6 million. The plaintiffs claimed that if the difference between the wages required by Labor Code §§1770 and 1771, and those actually paid by the defendant, were added to the defendant’s bids, each of the contracts would have gone to one of the plaintiffs, rather than to the defendant.

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