In the recent case of Nicholls v. Veolia Water Contract Operation USA, Inc. (Docket No. 13804), the Supreme Judicial Court of Massachusetts addressed an employment dispute in which employees alleged entitlement to so-called “prevailing wages.” The project at issue was governed by St. 1997, c. 155, (the “Special Act”), which requires compliance with the separate Prevailing Wage Act (“PWA”), G. L. c. §§ 26-27H, for work involving “construction and design of improvements.” In Nicholls, the SJC concluded that the employees’ work did not fall within the Special Act’s ambit, and thus, was not subject to the PWA requirements.
The dispute arose from a 2020 contract between the Springfield Water & Sewer Commission and Veolia, a wastewater treatment services company. Veolia’s employees performed operation, maintenance, repair, and replacement services at the SW&SC facility and were paid according to collective bargaining agreements.
In 2025, the employees filed a complaint in the Superior Court to recover unpaid wages for their repair and maintenance work, arguing that the work fell under the PWA. Veolia responded that the Special Act exempted Veolia from PWA compliance, and it removed the case to the United States District Court. After the District Court granted summary judgment in favor of Veolia, the employees appealed to the United States Court of Appeals for the First Circuit, which then certified two questions to the SJC.
The first question asked the SJC to interpret the phrase “construction and design of improvements” as used in § 6 of the Special Act. Because the PWA’s broad definition of “construction” includes certain repair work, the employees argued that their work at the SW&SC facility entitled them to prevailing wages. The SJC, however, concluded that the Special Act did not borrow the PWA’s definition of “construction.” Instead, the Special Act required prevailing wages only for the “construction and design of improvements.”
The SJC reasoned that that the Special Act’s use of the phrase “construction and design of improvements” – as opposed to just “construction” – evinces the intent that the statute be read narrowly. The SJC also determined that the term “improvement” has a specialized meaning that excludes the kind of ordinary repairs, day-to-day operations, and maintenance conducted by the Veolia employees.
The second question asked the SJC to determine whether the Special Act is incompatible with the PWA because of the SJC’s earlier PWA decision in the case of Metcalf v. BSC Group, Inc., 214 N.E.3d 1043. There, the SJC held that professional-services contracts between certain workers for the MassDOT were not “contract[s] for the construction of public works,” so the workers’ wages were not subject to PWA. In the present case, the SJC found that Metcalf did not control because it involved a different statute with much broader language; here, the Special Act expressly requires prevailing wages for the different context of “construction and design of improvements.”
The takeaway from Nicholls is that both the Special Act and the PWA are alive and well, and are applicable in different contexts. The PWA scope is very broad, and contains an expansive concept of construction work, including routine repairs. The Special Act is less broad, and is limited to the design and construction of improvements – e.g., renovation, expansion – as opposed to mere repair or maintenance.
For questions on this decision, please contact Michael Sullivan or any member of Prince Lobel’s Construction group.
With many thanks to summer law clerk Ejun Kim for her assistance with this piece.