SJC hears dispute over whether Veolia�maintenance and replacements trigger Massachusetts prevailing-wage law

During oral argument in SJC-13804, the Supreme Judicial Court considered whether the phrase "the construction and design of improvements" in Section 6 of the 1997 special act that governs the Springfield Water and Sewer Commission should be read to incorporate the definition of "construction" under Massachusetts' Prevailing Wage Act.

Terence Coles, counsel for the appellants Jeremiah Nicholls et al., told the court the First Circuit certified a question asking what that statutory phrase means and argued it should be read "the same meaning as construction under the Prevailing Wage Act." Coles said the record shows Veolia performs replacement work at the commissionincluding large items such as aeration basins, bridges and pumpsand that past agency interpretations and case law treating replacement or repaving as an "improvement" support prevailing-wage coverage. "The improvements that are occurring at the Springfield Water and Sewer Commission's facilities that get performed by Veolia fall under what the court and the administrative agency charged with interpreting the Prevailing Wage Act have," Coles said.

A justice pressed whether the word "and" in the phrase is conjunctive (requiring both design and construction) or distributive (covering either activity). Coles said his reading treats the phrase distributively so that work falling under the Prevailing Wage Act would qualify even if it is not both design and construction.

Barry Miller, counsel for Veolia, argued the special act must be read as a whole and noted Section 1 broadly excludes Chapter 149 procurement rules so the legislature could authorize a long-term outsourcing arrangement. Miller said the statute and the service contract distinguish between Article 8 operating services (the 20-year operations and maintenance work) and Article 10 initial capital improvements, and that the Department of Labor Standards' prevailing-rate sheet in the record describes rates for "initial capital improvements," not day-to-day operations. "Article 8 is incompatible with the Prevailing Wage Act. Article 10 is not," Miller told the court.

Miller also urged the court to consider administrative and practical consequences: if routine replacement and maintenance were classified as prevailing-wage construction, the same employees might perform some tasks paid under prevailing-wage rates and other tasks paid at non-prevailing rates, producing a burdensome classification regime. He pointed to record entries showing routine tasks (testing eyewash stations, changing filters, charging iPad batteries, shoveling snow) to illustrate the predominance of operational duties.

Both sides cited precedent and administrative practice. Coles invoked decisions and agency interpretations (including Mariano) that the Prevailing Wage Act can encompass replacement work that "betters" an existing way; Miller relied on Metcalf-related incompatibility reasoning and the contract's separate articles to argue the legislature and relevant agencies intended to confine prevailing wages to discrete, initial capital construction projects. The justices questioned whether the court should adopt the Prevailing Wage Act definition wholesale or instead construe the special-act phrase independently, and they probed the role of the contract and agency materials in interpreting statutory purpose and scope.

The outcome will determine whether large-scale replacement and major repair work performed under the Springfield contract must be paid at prevailing-wage rates or whether those activities fall within the statute's exclusion for long-term operations and maintenance. The court did not announce a decision at argument; a written opinion will follow.