[Cite as Bergman v. Monarch Constr. Co., 124 Ohio St.3d 534, 2010-Ohio-622.]




          BERGMAN ET AL., APPELLANTS, v. MONARCH CONSTRUCTION
                            COMPANY, APPELLEE, ET AL.
                     [Cite as Bergman v. Monarch Constr. Co.,
                        124 Ohio St.3d 534, 2010-Ohio-622.]
Prevailing-wage law — R.C. 4115.10(A) — Penalty for noncompliance in
        employee-initiated action.
  (Nos. 2009-0558 and 2009-0649 — Submitted November 18, 2009 — Decided
                                    March 2, 2010.)
     APPEAL from and CERTIFIED by the Court of Appeals for Butler County,
                        No. CA2008-02-044, 2009-Ohio-551.
                                __________________
                              SYLLABUS OF THE COURT
In an employee-initiated action to enforce the prevailing-wage law, the penalties
        set forth in R.C. 4115.10(A) are mandatory penalties that must be imposed
        against a party found to have violated the prevailing-wage law if the
        violation has not resulted from the exceptions specified in R.C.
        4115.13(C).
                                __________________
        CUPP, J.
        {¶ 1} We are asked to determine whether, in an employee-initiated
enforcement action, the penalties set forth in R.C. 4115.10(A) are mandatory
penalties that must be imposed against a party found to have violated the
prevailing-wage law if the violation has not resulted from the exceptions specified
in R.C. 4115.13(C). We conclude that the penalties in the foregoing circumstance
are mandatory. Accordingly, we reverse the court of appeals’ judgment and
remand this matter to the trial court for further proceedings.
                            SUPREME COURT OF OHIO




                                         I
        {¶ 2} Monarch Construction Company, appellee, a general contractor,
entered into a contract with Miami University to build student housing. Monarch
subsequently contracted with Don Salyers Masonry, Inc. (“Salyers”) to work on
the project, which was a public improvement. Because of that status, Monarch
and Salyers were required to pay their employees the wages determined pursuant
to R.C. Chapter 4115.
        {¶ 3} After an investigation, the Department of Commerce issued an
initial determination that Salyers had underpaid employees and that Salyers and
Monarch were liable for $368,266.34 in back wages and $368,266.34 in penalties.
The department notified Monarch of the result by sending it a copy of the
determination, which was Monarch's first notice of the investigation.
        {¶ 4} Plaintiffs, 36 underpaid employees who decided not to assign their
claims to the Department of Commerce for collection, filed suit on February 21,
2006, under R.C. 4115.10(A). Before trial, Miami University was dismissed from
the case on its motion, and the court entered a default judgment against Salyers.
        {¶ 5} After a bench trial, the court found Monarch liable for back pay
but denied the plaintiffs’ request to penalize Monarch an additional 25 percent of
the back wages it owed, as set forth in R.C. 4115.10(A). The court held that the
25 percent penalty was discretionary and that because Monarch had cooperated as
soon as it received notice of Salyers’s violation, the penalty was not warranted.
The court also refused to impose a penalty equal to 75 percent of the back wages
owed, to be paid to the director of commerce. The court reasoned that this
penalty was also discretionary and that the circumstances of the case did not
warrant it.
        {¶ 6} The appellate court affirmed.        We acknowledged a certified
conflict and accepted review under our discretionary jurisdiction. 121 Ohio St.3d
1497, 2009-Ohio-2511, 907 N.E.2d 321; 121 Ohio St.3d 1500, 2009-Ohio-2511,




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907 N.E.2d 324. Appellants are five of the original underpaid employees: Doug
Bergman, Shawn Adams, Ricky Smith, Scott Brackett, and Andrew Sykes.
                                                 II
         {¶ 7} The issue in this case involves the statutory interpretation of R.C.
4115.10(A).1       This statute provides: "No person, firm, corporation, or public
authority that constructs a public improvement * * * shall violate the wage
provisions of sections 4115.03 to 4115.16 of the Revised Code * * *. Any
employee upon any public improvement, except an employee to whom or on
behalf of whom restitution is made pursuant to division (C) of section 4115.13 of
the Revised Code, who is paid less than the fixed rate of wages applicable thereto
may recover from such person, firm, corporation, or public authority * * * the
difference between the fixed rate of wages and the amount paid to the employee
and in addition thereto a sum equal to twenty-five per cent of that difference. The
person, firm, corporation, or public authority who fails to pay the rate of wages so
fixed also shall pay a penalty to the director of seventy-five per cent of the
difference between the fixed rate of wages and the amount paid to the employees
on the public improvement."
         {¶ 8} Based on the language of R.C. 4115.10(A), appellants claim that
the appellate court erred when it affirmed the trial court’s decision not to award
them an additional 25 percent penalty on the amount of the underpaid wages.
They contend that the 25 percent penalty is required by R.C. 4115.10(A). They
also assert that the appellate court erred when it affirmed the trial court’s decision
not to require Monarch to pay a 75 percent penalty on the amount of the
underpaid wages to the director of commerce. Upon consideration of the merits
argued by the parties, we agree that the appellate court misconstrued the statute.

1. When we accepted this discretionary appeal, we accepted three propositions of law. The
second proposition of law reflects the penalty issue presented in the conflict certification. Upon
consideration of this matter, and our resolution of the conflict and its corresponding proposition of
law, we dismiss the first and third propositions of law as having been improvidently accepted.




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                                        III
       {¶ 9} A court’s paramount concern in construing a statute is the intent of
the legislature. State ex rel. Musial v. N. Olmsted, 106 Ohio St.3d 459, 2005-
Ohio-5521, 835 N.E.2d 1243, ¶ 23. In this regard, “it is the duty of this court to
give effect to the words used, not to delete words used or to insert words not
used” and to read those words and phrases in context according to the rules of
grammar and common usage. Cleveland Elec. Illum. Co. v. Cleveland (1988), 37
Ohio St.3d 50, 524 N.E.2d 441, paragraph three of the syllabus; R.C. 1.42.
       {¶ 10} We have previously stated that the legislative intent of the
prevailing-wage law in R.C. Chapter 4115 is to “provide a comprehensive,
uniform framework for, inter alia, worker rights and remedies vis-a-vis private
contractors, sub-contractors and materialmen engaged in the construction of
public improvements in this state.” State ex rel. Evans v. Moore (1982), 69 Ohio
St.2d 88, 91, 23 O.O.3d 145, 431 N.E.2d 311 (plurality opinion). “[T]he primary
purpose of the prevailing wage law is to support the integrity of the collective
bargaining process by preventing the undercutting of employee wages in the
private construction sector.” Id. To achieve this end, R.C. Chapter 4115 provides
to employees who have been denied the prevailing wage a comprehensive
statutory procedure of administrative and civil proceedings to ensure an
employer’s compliance with the prevailing-wage laws. State ex rel. Harris v.
Williams (1985), 18 Ohio St.3d 198, 200, 18 OBR 263, 480 N.E.2d 471.
Supporting the administrative and civil proceedings are statutory deterrents in the
form of civil and criminal penalties. State ex rel. Evans v. Moore, 69 Ohio St.2d
at 91, 23 O.O.3d 145, 431 N.E.2d 311. It is with this primary purpose in mind
that we review this matter.
                                        IV
       {¶ 11} The general rule of the prevailing-wage law is that an employer
shall not violate the wage provisions of R.C. Chapter 4115 or require an employee




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to work for less than the “rate of wages so fixed.” R.C. 4115.10(A). If the
employer violates this proscription and pays an employee less than the prevailing
wage, the employee has several options to recoup his underpayment.                         The
employee can institute an enforcement action under R.C. 4115.10(A) or assign to
the director of commerce the right to institute an enforcement action under R.C.
4115.10(B). In the event the employee does not institute an enforcement action or
assign his or her rights to the director of commerce within the statutorily specified
time, the director then has the obligation to “bring any legal action necessary to
collect any amounts owed to employees and the director.” R.C. 4115.10(C); see
generally Harris v. Van Hoose (1990), 49 Ohio St.3d 24, 26-27, 550 N.E.2d 461.2
        {¶ 12} For the employee-initiated enforcement action under R.C.
4115.10(A), the remedy for the underpayment of wages is plainly set forth: the
employee is entitled to “the difference between the fixed rate of wages and the
amount paid to the employee and in addition thereto a sum equal to twenty-five
per cent of that difference.” In addition, the underpaying employer “also shall
pay a penalty to the director of seventy-five per cent of the difference between the
fixed rate of wages and the amount paid to the employee.” Id.
        {¶ 13} The appellate court’s rationale that the R.C. 4115.10(A) penalties
were discretionary was based on its interpretation that the phrase “may recover”
gives the trial court discretion to deny recovery to the employee. In this regard,
the court stated that “there does not seem to be any clear intent from the
legislators that they intended their choice of the word ‘may’ [in R.C. 4115.10(A)]
to actually mean ‘shall’ or that the 25 percent penalty is anything but
discretionary.” Bergman v. Monarch Constr. Co., 2009-Ohio-551, ¶ 76.



2. An interested party may also file a complaint with the director of commerce alleging
prevailing-wage violations. R.C. 4115.16. Proceedings instituted in this manner also implicate
the remedies specified in R.C. 4115.03 to 4115.16. Unions and trade associations are “interested
parties” for the purposes of R.C. 4115.16. R.C. 4115.03(F).




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        {¶ 14} However, the appellate court misread R.C. 4115.10(A).                      The
phrase “may recover” within R.C. 4115.10(A) pertains to the choice the underpaid
employee has to enforce his or her right to recover the underpayment. It vests
with the employee the discretion of whether to commence an action for restitution
of the underpayment. See R.C. 4115.10(A), (B), and (C). Correspondingly, if the
employee chooses to enforce his or her statutory right to recover the unpaid
wages, and proves the case, then the statutory penalties follow as a matter of
course and are mandatory. R.C. 4115.10(A). This interpretation reflects the
legislative intent of R.C. Chapter 4115, State ex rel. Harris v. Williams, 18 Ohio
St.3d at 200, 18 OBR 263, 480 N.E.2d 471, and gives force and effect to the basic
rule contained in R.C. 4115.10(A): an employer shall not violate the prevailing-
wage laws or pay an employee “less than the rate of wages so fixed.”
        {¶ 15} To deny an underpaid employee the additional 25 percent penalty
is contrary to the language of R.C. 4115.10(A).                  From its inception, the
prevailing-wage law has required employers who violated it to pay a penalty on
the amount of the back wages owed. G.C. 17-6.3 The only variation through the
years has been to whom the penalty is paid. Initially, the penalty was a payment
of 100 percent of the back wages to the underpaid employee. Id. In 1994, the
terms of the penalty were altered, but to change only the allocation of the penalty:
it was to be apportioned between the underpaid employee and the director of
commerce, in an attempt to fund a newly created penalty-enforcement fund. R.C.
4115.10(A); 1994 Am.Sub.H.B. No. 350, 145 Ohio Laws, Part III, 5572, 5575.


3. {¶ a} As it was originally enacted in 1931, the penalty section read:
   {¶ b} “Any contractor or sub-contractor who shall violate the wage provisions of such
contract, or who shall suffer, permit or require any employee to work for less than the rate of
wages so fixed, shall be fined not less than $50.00 or more than $500.00. Any employee upon any
public improvement who is paid less than the fixed rate of wages applicable thereto may recover
from the contractor or sub-contractor the difference between the fixed rate of wages and the
amount paid to him, and in addition thereto a penalty equal in amount to such difference.” G.C.
17-6, 1931 H.B. No. 3, Section 4, 114 Ohio Laws 117, eff. July 27, 1931.




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                                January Term, 2010




       {¶ 16} The statute is also clear in its direction with regard to the 75
percent penalty: it shall be paid to the director of commerce, and it is used for
enforcement of the prevailing-wage laws. R.C. 4115.10(A). A basic rule of
statutory construction is that “shall” is “construed as mandatory unless there
appears a clear and unequivocal legislative intent” otherwise. Dorrian v. Scioto
Conservancy Dist. (1971), 27 Ohio St.2d 102, 56 O.O.2d 58, 271 N.E.2d 834,
paragraph one of the syllabus; R.C. 1.42 (“Words and phrases shall be read in
context and construed according to the rules of grammar and common usage”). In
this case, the “clear and unequivocal legislative intent” as expressed in the statute
is that the 75 percent penalty is to be paid whenever the director of commerce
determines that there has been a prevailing-wage underpayment and the
determination becomes final.
       {¶ 17} Finally, within the prevailing-wage legislation, there is only one
exception to the payment of the penalties. According to R.C. 4115.13(C), when
the director of commerce finds that a wage underpayment is the result of a
misinterpretation of the prevailing-wage statutes or an erroneous preparation of
the payroll documents, provided restitution of the underpayment is made, no
further proceedings will occur and no penalties are assessed.          Because this
provision does not apply to Monarch in this case, there is no authority for the
mandatory penalty to be waived.
                                         V
       {¶ 18} We hold that in an employee-initiated action to enforce the
prevailing-wage law, the penalties set forth in R.C. 4115.10(A) are mandatory
penalties that must be imposed against a party found to have violated the
prevailing-wage statutes if the violation has not resulted from the exceptions
specified in R.C. 4115.13(C).




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       {¶ 19} Based on the foregoing, the judgment of the court of appeals is
reversed and the cause is remanded to the trial court for further proceedings
consistent with this opinion.
                                                              Judgment reversed
                                                            and cause remanded.
       MOYER, C.J., and PFEIFER, O’CONNOR, and LANZINGER, JJ., concur.
       LUNDBERG STRATTON and O’DONNELL, JJ., dissent.
                                 __________________
       LUNDBERG STRATTON, J., dissenting.
       {¶ 20} Because I believe that the 25 percent penalty set forth in R.C.
4115.10(A) is discretionary in an employee-initiated action to enforce the
prevailing-wage law and that the employee is not entitled to recover the 75
percent penalty that is intended for the director of commerce, I respectfully
dissent.
       {¶ 21} The plaintiffs filed this action to recover unpaid prevailing wages
from their employer, Don Salyers Masonry, Inc. (“Salyers”), for work performed
on a public improvement project at Miami University.             Salyers was a
subcontractor hired by Monarch Construction Company, the general contractor.
Both Monarch and Miami University were also named defendants. The case
arose after the Ohio Department of Commerce conducted an investigation into
whether Salyers had paid its employees the prevailing-wage rate on the project.
The department eventually determined that Salyers had violated Ohio’s
prevailing-wage law. On December 12, 2005, the department notified Salyers and
Monarch of the deficiencies.        This was the first that Monarch knew of the
investigation that had begun months earlier.
       {¶ 22} The trial court dismissed Miami University per Civ.R. 12(B)(6)
and issued a default judgment against Salyers. Following a bench trial, the court
ordered Monarch to pay the plaintiffs the back wages, less an amount for fringe




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                                January Term, 2010




benefits already paid. However, the trial court refused to award the penalties
under R.C. 4115.10(A), on the basis that they were discretionary and not
warranted in the case. The court explained its reasoning: “[T]he testimony at
trial and the evidence before this Court indicates [sic] that Salyers repeatedly
assured Monarch that [it] was paying the prevailing wage to its employees. In
addition, Monarch reviewed Salyers’ payroll records, and confirmed the correct
prevailing wage rate with Miami University. Finally, once Monarch learned of
the investigation and determination against Salyers, it cooperated with the
[department], and took all steps necessary to ensure the [department] had all the
correct documentation.”
       {¶ 23} The court of appeals affirmed. The appellate court relied on the
plain language of R.C. 4115.10(A), which states that “the employees ‘may
recover’ a penalty equal to 25 percent of wages owed,” and applying well-
established rules of statutory construction, the appellate court construed “may
recover” as being permissive or discretionary. 2009-Ohio-551, ¶ 74. Thus, the
appellate court held that the trial court had discretion to deny the penalty.
       {¶ 24} I agree that the plain language of the statute and the General
Assembly’s repeated use of both “may” and “shall” throughout the prevailing-
wage statutes supports the appellate court’s interpretation. The sentence at issue
in R.C. 4115.10(A) provides that an employee who is paid less than the applicable
fixed rate of wages on the project “may recover * * * the difference between the
fixed rate of wages and the amount paid to the employee and in addition thereto a
sum equal to twenty-five per cent of that difference.” (Emphasis added.) Later in
that section, in discussing remedies, R.C. 4115.10(A) also states that the
employee “may file” to recover. The majority rejects the appellate court’s plain
reading of the statute in favor of an interpretation that “may recover” “pertains to
the choice the underpaid employee has to enforce his right to recover the




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underpayment.” However, there is nothing in the statute that connects the verb
“may recover” to the employee’s choices of how to collect unpaid wages.
           {¶ 25} I agree that an employee does have a choice either to file suit to
recover for a prevailing-wage violation, R.C. 4115.10(A), or to assign the claim to
the Department of Commerce to file, R.C. 4115.10(B). The employer also may
do nothing, in which case the department may bring legal action to collect the
wages. R.C. 4115.10(C). However, there is no language in the statute that
supports the majority’s interpretation that “may recover” pertains only to the
employee’s choice of methods to recover wages, which is addressed later in the
statute.
           {¶ 26} We have long held that “[i]n statutory construction, the word
‘may’ shall be construed as permissive and the word ‘shall’ shall be construed as
mandatory unless there appears a clear and unequivocal legislative intent that they
receive a construction other than their ordinary usage.”         Dorrian v. Scioto
Conservancy Dist. (1971), 27 Ohio St.2d 102, 56 O.O.2d 58, 271 N.E.2d 834,
paragraph one of the syllabus; R.C. 1.42. The General Assembly’s use of the
word “may” before the word “recover” indicates that recovery is discretionary.
Also, “may recover” must be read in the context of the entire sentence, which
pertains to what the employee may recover, not how to recover.
           {¶ 27} Furthermore, the General Assembly has used both “may” and
“shall” throughout the prevailing-wage statutory scheme.        For example, R.C.
4115.10(B) provides that an employee may file a complaint with the director and
that the director shall take an assignment of a claim for the assigning employee.
R.C. 4115.16(D) provides that a court shall award attorney fees and costs to the
prevailing party when there is a violation but may award costs and fees to the
prevailing party if the court finds that there was no violation and that the action
was unreasonable or lacked foundation. I believe that the General Assembly
clearly intended that these terms be given their ordinary meaning. Thus, I believe




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                                 January Term, 2010




it is contrary to the plain language of the statute that the employee’s recovery of a
25 percent penalty is mandatory.
       {¶ 28} In addition, I do not believe that the plaintiff in an employee-
initiated action is entitled to recover the 75 percent penalty that is paid to the
director once there has been a final determination of a prevailing-wage
underpayment. R.C. 4115.10(A) provides that the person or entity that fails to
pay the prevailing wage “shall pay a penalty to the director.” (Emphasis added.)
“The director shall bring any legal action necessary to collect any amounts owed
to the employees and the director.” R.C. 4115.10(C). The statute, however, has
no similar provision authorizing the employee to pursue and recover the amounts
owed to the employee and the penalty that is payable to the director. And as a
practical matter, if the employee is entitled to recover the 75 percent, is it paid to
the plaintiff/employee, who then becomes responsible for giving it to the director,
or must it be paid directly to the nonparty director? For these reasons, I do not
believe that the employee is the real party in interest and entitled to pursue the
penalty that is payable to the director.
       {¶ 29} In conclusion, when Monarch questioned whether Salyers was
complying with prevailing-wage laws, the general contractor was assured by both
Miami University and Salyers that it was. Months later, when Monarch learned
of the department’s determination, it obtained wage and fringe-benefit
information from Salyers’s files for the department. Monarch cooperated with the
department in settlement negotiations involving employees who chose not to file
suit. I believe that these efforts demonstrate why the General Assembly intended
for the penalty against the employer to be discretionary.
       {¶ 30} Consequently, I respectfully dissent and would affirm the
judgment of the court of appeals.
       O’DONNELL, J., concurs in the foregoing opinion.
                               __________________



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                             SUPREME COURT OF OHIO




       Cosme, D’Angelo & Szollosi Co., L.P.A., and Joseph M. D’Angelo, for
appellants.
       Taft, Stettinius & Hollister, L.L.P., Gregory Parker Rogers, and Matthew
R. Byrne, for appellee.
       Benesch, Friedlander, Coplan & Aranoff, L.L.P., N. Victor Goodman, and
Mark D. Tucker, urging reversal for amicus curiae, Ohio State Building &
Construction Trades Council.
       Richard Cordray, Attorney General, Benjamin C. Mizer, Solicitor General,
Alexandra T. Schimmer, Chief Deputy Solicitor General, and Susan M. Sullivan,
Dan E. Belville, and Lindsay M. Sestile, Assistant Attorneys General, urging
reversal for amicus curiae state of Ohio.
       Ross, Brittain & Schonberg Co., L.P.A., Alan G. Ross, and Nick A.
Nykulak, urging affirmance for amici curiae ABC of Ohio, Inc., and Northern
Ohio Chapter of Associated Builders & Contractors, Inc.
       Schottenstein, Zox & Dunn and Roger L. Sabo, urging affirmance for
amici curiae Associated General Contractors of Ohio and Allied Construction
Industries.
                            ______________________




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