U.S. Department of Labor
Administrative Review Board
200 Constitution Avenue, N.W.
Washington, DC 20210
ARB CASE NO. 96-191
DATE: May 28, 1997
In the Matter of:
ATLANTIC ELECTRICAL
SERVICES, AES, INC., and
JAMES R. SEFAH
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
FINAL DECISION AND ORDER
This matter arises under the labor standards provisions of the Federal-Aid Highway Act, 23 U.S.C. § 113(a), a Davis-Bacon Related Act (DBRA), and 29
C.F.R. Parts 5, 7 (1996). It is before the Administrative Review Board on the petition of
James Sefah and AES, Inc. (Petitioners) for review of the August 13, 1996 final ruling letter
issued by the Office of Enforcement Policy, Government Contracts Team, Wage and Hour
Division (Administrator), U.S. Department of Labor.
The Administrator denied the Petitioners' request for early removal
from the debarred bidders list. For the reasons set forth below, the petition for review is
denied and the Administrator's decision is affirmed.
BACKGROUND
On December 7, 1994, the Administrator issued a charging letter to
Petitioners alleging aggravated and willful violations of DBRA. Three copies of the charging
letter were sent to Petitioners in: New Orleans, Louisiana (Certified Mail # P115 448 678);
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Marrero, Louisiana (Certified Mail # P115 448 652); and Harvey, Louisiana (Certified Mail
# P115 448 658). The letters sent to the New Orleans and Marrero addresses were returned
to the Administrator by the United States Postal Service as "Addressee Unknown"
and "Moved, Left No Address." Administrative Record (A.R.) Tab N. The letter
addressed to Petitioners at Harvey, which is Petitioner Sefah's residence, was unclaimed after
an attempt at delivery and two notices. Id.
The Petitioners, as a corporate entity and as an individual, were
debarred by the Comptroller General on April 3, 1995, pursuant to the Administrator's
request. The Petitioners requested early removal from the debarred bidders' list on October
5, 1995. A.R. Tab K. The Wage and Hour Division investigated Petitioners in order to
determine whether early removal from the debarred bidders list was warranted and the
Petitioners' request was denied.
DISCUSSION
The regulation at 29 C.F.R. § 5.12(c) which provides that a
debarred contractor may request removal from the debarment list after six months, requires
the Administrator, Wage and Hour Division, to examine the facts and circumstances
surrounding the violative practices which caused the debarment and to determine if the
debarred person or firm has demonstrated a current responsibility to comply with the requisite
labor standards. Among the factors to be considered are the severity of the violations, the
contractor's attitude toward compliance, and the past compliance history of the firm with the
labor standards provisions applicable to Federal contracts and other Federal labor standards
statutes, such as the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et
seq.
The Administrator reviewed the debarment case file and determined
that the underlying violations were of sufficient gravity as to be properly regarded as
aggravated or willful within the meaning of 29 C.F.R. § 5.12(a)(1). The
Administrator's review of the Petitioners' compliance history prior to the events leading up
to the debarment revealed that there had been four previous violations of DBRA labor
standards, each requiring back wage payments to Petitioners' employees. A.R. Tab A at 2;
Tab F. The Administrator further considered Petitioners' violation of the FLSA in another
business venture (the AES Group, Peanuts Product Division, in Opelika, Alabama),
subsequent to debarment, and determined that these factors taken together were sufficient to
deny the Petitioners' request for early removal. A.R. Tab E at 2.
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We follow precedent in deferring to the Administrator, to whom the
DBRA rulemaking functions are entrusted, as being in the best position to interpret those
rules, and barring an interpretation that is unreasonable, arbitrary or capricious, or a departure
from past practice the Administrator's decision will be upheld. In the Matter of Titan IV
Mobile Service Tower, Wage Appeals Board (WAB) Case No. 89-14, May 10, 1991,
slip op. at 7, citing Udall v. Tallman, 380 U.S. 1, 16-17 (1965). See, In the
Matter of Patton-Tully Transportation Co., WAB Case No. 93-13, May 6, 1994 (Board
is to determine if Wage and Hour's application of a rule is reasonable and not a departure from
past determinations); cf. In the Matter of Bhatt Contracting Co., Inc. and Vijay A. Bhatt,
ARB Case No. 96-124, Order Denying Administrator's Motion to Dismiss and Order
of Remand, issued Sep. 6, 1996 (undue delay by Administrator in requesting petitioner to be
placed on debarment list is breach of Consent Order); In the Matter of Heavy
Constructors Assoc. of the Greater Kansas City Area, WAB Case No. 94-13, issued
Oct. 11, 1994.
Although the Petitioners now contend that they were not at fault in not
responding to the charging letter(s), the debarment became effective in 1995 and Petitioners'
appeal concerning that action at this time, is not timely. Nor are we persuaded by Petitioners'
contention that they have precluded any further violations of DBRA by using an outside
accounting firm to prepare payroll checks for employees. The accounting firm merely
prepares the payroll checks for the Petitioners' employees in reliance on the information
provided to them by Petitioners. Although the Wage and Hour investigation did not uncover
any violations under this method, there is no inherent safeguard to ensure proper payment to
Petitioners' employees. Compare In the Matter of IBEW Local No. 103, ARB
Final Dec. and Order, Case No. 96-123, Nov. 12, 1996, slip op. at 3.
For the reasons stated above, the decision of the Administrator is
affirmed and the petition for review is DISMISSED.
