Force (USAF) awarded a contract for the renovation of two buildings at McGuire AFB, located in Wrightstown, New Jersey, to Star Brite. Plaintiff's Exhibit (PX) 1. Star Brite's work on the project consisted of demolition of walls and duct work; installation of windows; and plumbing. T. 123-124; 244-5; 306; 755-757. Construction work commenced in November 1992 (PX 6) and was completed in April 1995, T. 878. The contract was subject to the prevailing wage labor standards provisions of the Act. See PX 1.

    A. Jurisdiction and standard of review

   This Board has jurisdiction, inter alia, to hear and decide appeals taken from ALJs' decisions and orders concerning questions of law and fact arising under the DBA (and numerous related Acts incorporating DBA prevailing wage requirements; see 29 C.F.R. §5.1). 29 C.F.R. §7.1(b). In accordance with the Administrative Procedure Act, the Board, in reviewing an ALJ's decision, acts with "all the powers [the Secretary] would have in making the initial decision. . . ." 5 U.S.C. §557(b) (1994); see also 29 C.F.R. §7.1(d) ("In considering the matters within the scope of its jurisdiction the Board shall act as the authorized representative of the Secretary of Labor. The Board shall act as fully and finally as might the Secretary of Labor concerning such matters.") Thus, "the Board reviews the ALJ's findings de novo." Sundex, Ltd. and Joseph J. Bonavire, ARB Case No. 98-130, Dec. 30, 1999, slip op. at 4 and cases cited therein.

   B. The merits of Star Brite's Petition for Review

      1) Prevailing wage violations

   Central to the question of whether the ALJ properly determined the amounts of back wages owed employees is the underlying determination that the employees' testimony was credible and mutually corroborative. Petitioners exhaustively argue that the amounts of wages determined due are in error because the ALJ failed to appropriately view their testimony. See Pet'r Brf. at 4-34.

well founded; as explained by the WAB in one case embracing the "clear error" doctrine:

it must be remembered that the ALJ heard and observed the witnesses during the hearing. It is for the trial judge to make determinations of credibility, and an appeals body such as the Wage Appeals Board should be loathe to reverse credibility findings unless clear error is shown.

Homer L. Dunn Decorating, Inc., WAB Case No. 87-03, Mar. 10, 1989, slip op. at 3. Accord, Permis Construction Corporation, WAB Case No. 88-11, July 31, 1991, slip op. at 4 ("[T]he Board is reluctant to set aside an ALJ's findings of fact or credibility determinations absent clear error. . . ."); Energy Engineering and Controls, Inc., WAB Case No. 92-19, Mar. 31, 1993, slip op. at 5 (Citing Milnor Construction Corporation, WAB Case No. 91-21, Sep. 12, 1991, slip op. at 4: "The ALJ is in the unique position to judge the quality of testimony and the demeanor of witnesses during a hearing. In the absence of clear error on the part of an ALJ, the Board is reluctant to set aside 'credibility resolutions and factual findings and the weight [] accorded to the record evidence.'").

   The Supreme Court has long sanctioned this approach to appellate review by administrative agencies. In Universal Camera v. NLRB, 340 U.S. 474 (1950), the Court quoted from a report of the Attorney General's Committee on Administrative Procedures and made the following explication of the "clear error" principle of appellate review of findings of fact and credibility of witnesses:

Conclusions, interpretations, law and policy should of course, be open to full review. On the other hand, on matters which the hearing commissioner, having heard the evidence and seen the witnesses, is best qualified to decide, the agency should be reluctant to disturb his findings unless error is clearly shown.

Id. at 494.

   In the case before us, the simple fact of the matter is that the ALJ made specific findings that the testimony of Steve and Ken Senecheria and Rekeda was credible, as well as being supported by Senecheria's calendar (maintained contemporaneously with construction on the project) which showed days and daily hours worked by these three employees as well as one non- testifying employee, Tilton. We have reviewed the record including the transcript of three days of hearing and find no basis to conclude that the ALJ committed clear error in choosing to credit the testimony of the Senecherias, Rekeda, and the four plumbing workers. Petitioners' argument that the ALJ should not have found these witnesses to be credible does not rise to the level of demonstrating clear error, and we will not disturb the ALJ's findings of fact, given that his findings were largely based on his determinations of the credibility of the witnesses.

   Whether the ALJ properly found that back wages were due the four workers (Graef, Ferrrin, Schenkel, and Tencza) who performed plumbing work on the project presents another issue. Petitioners do not argue that these individuals were properly paid the required prevailing rate for plumbers; they were, in fact, paid nothing by Star Brite for the hours they worked on the McGuire AFB contract. Star Brite contends that these workers were not Star Brite employees,

but were, in fact, employees of a subcontractor. Thus, Star Brite argues that it was not required to pay the workers, since they were not directly employed by Star Brite. We reject this argument as baseless.

   Even if the four plumbing crew workers were employees of a subcontractor, it is clear that the Act requires that Star Brite as the prime contractor is ultimately responsible for payment of prevailing rates to all workers on the contract. The DBA in part mandates that

the contractor or his subcontractor shall pay all mechanics and laborers employed directly upon the site of the work, . . . the full amount . . ., regardless of any contractual relationship which may be alleged to exist between the contractor, subcontractor and such laborers and mechanics. . . .

40 U.S.C. §276a; emphasis added. Thus, under the DBA it is simply not relevant whether the four employees on the plumbing crew were employed by a subcontractor to Star Brite or were in fact directly employed by Petitioners. The fact that the workers were engaged in construction of the McGuire AFB project triggered their coverage under the prevailing wage provisions of the Act; lack of a traditional employee/employer relationship between Star Brite and these workers did not absolve Star Brite from the responsibility to insure that they were compensated in accordance with the requirements of the Act. See Thomas J. Clements, Inc., WAB Case No. 84-12, Jan. 25, 1985 (affirming ALJ decision holding contractor responsible for payment of prevailing wages to alleged independent contractors).

   The evidence of prevailing wage underpayments presented by the Administrator was clearly sufficient to establish the fact that Star Brite committed wage violations of the Act. Under long established precedent, the WAB has held that where an employer has failed to maintain accurate records of hours worked and wages paid, application of the principles set forth in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), is appropriate to determine back wage claims arising under the DBA and its related Acts. As the WAB explained, under Mt. Clemens:

an employee who seeks to recover unpaid wages "has the burden of proving that he performed work for which he was not properly compensated." 328 U.S. at 687.

    However, where an employer's records are inaccurate or incomplete, employees are not to be penalized by denying them back wages simply because they cannot prove the precise amount of uncompensated work. In such circumstances, an employee meets his burden "if he proves that he has in fact performed work for which he was improperly compensated and if he produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference." 328 U.S. at 687. The employer then has the burden to demonstrate the precise number of hours worked or to present evidence sufficient to negate "the reasonableness of the inference to be drawn from the employee's evidence." 328 U.S. at 688. In the absence of such a showing,

the court "may then award damages to the employee, even though the result be only approximate." Id. Furthermore, Mt. Clemens Pottery provides specific guidance on the responsibilities of the trier of fact: "Unless the employer can provide accurate estimates [of hours worked], it is the duty of the trier of facts to draw whatever reasonable inferences can be drawn from the employees' evidence . . . ." Id. at 693.

Apollo Mechanical, Inc., WAB Case No. 90-42, Mar. 13, 1991, slip op. at 2-3. See also P.B.M.C., Inc., WAB Case No. 87-57, Feb. 8, 1991; Tratoros Construction Corp., WAB Case No. 92-03, Apr. 28, 1993, slip op. at 6.

   Here, in the absence of accurate employer records, the ALJ properly credited the testimony of the workers who testified that they had not been paid the required prevailing rates on the McGuire AFB contract. The testimony was also supported by the calendar which recorded the hours worked on the project. Given the fact that Star Brite failed to maintain accurate records of hours worked and wages paid, the ALJ was fully justified in basing his findings on the testimony of the employees, as corroborated by Steve Senecheria's calendar.

      2) Debarment

    In addition to the provisions requiring payment of prevailing wages, the DBA provides for the further sanction of debarment, i.e. placement of certain violators' names on a list of persons and firms ineligible to receive federal contracts and subcontracts for a period of three years. Debarment under the Act is mandated for those "persons or firms . . . found to have disregarded their obligations to employees and subcontractors." 40 U.S.C. §276-2(a); emphasis supplied. The Department of Labor's regulations implementing the DBA reemphasize and mirror the Act's language requiring debarment for those contractors found to have disregarded their obligations to either subcontractors or employees. 29 C.F.R. §5.12(a)(2).

   While neither the Act nor the regulation defines the term of "disregard" of obligations, we have endorsed the principle as long interpreted by the WAB that the term encompasses at least the underpayment of prevailing wages coupled with the submission of falsified certified payrolls which masks the underpayments. Sundex, Ltd., supra at 7. See also Marvin E. Hirchert, WAB Case No. 77-17, Oct. 16, 1977; Howell Construction, Inc., WAB Case No. 93-12, May 31, 1994.

   In this case, the ALJ found that in addition to underpaying certain of its employees on the project, Star Brite also submitted certified payrolls to the contracting agency that had been falsified to feign compliance with the DBA prevailing wage requirements. D. and O. at 5- 6. Substantial probative evidence (including the employee testimony accepted as credible and establishing wage underpayments, as well as documentary evidence) supports the ALJ's findings and recommended debarment order. In short, the testimony of employees Steve and Ken Senecheria and Rekeda (whose testimony also applied to Tilton's situation) established that they were paid flat daily amounts of wages which fell far short of the required prevailing wage for the numbers of hours that they worked. The credible testimony of the workers on the plumbing crew established that they worked on the McGuire AFB project and were paid nothing at all.

   In contrast, the certified payrolls indicated that the employees (not including the plumbing crew) were paid at the required prevailing hourly rates for the hours that were reported to have been worked. However, when the hours reported on the certified payrolls were compared to the employees' testimony, the certified payrolls were seen to understate the numbers of hours worked by approximately one-half. The calendar maintained by Steve Senerchia corroborates the employees' testimony concerning the numbers of hours which they actually worked.

   The certified payrolls found by the ALJ to have been falsified were signed by either Star Brite's principal, Smilios, or the firm's accountant/bookkeeper. However, Star Brite and Smilios remained responsible for even the certified payrolls which were not signed by Smilios. Petitioners are liable for the actions of their subordinates, such as Star Brite's accountant/bookkeeper. Marvin E. Hirchert, supra; Mark S. Harris, Inc., WAB Case No. 88-40, Mar. 28, 1991.

   We agree with the ALJ's conclusions that Star Brite did not compensate its employees on the McGuire AFB project at the required prevailing rates; failed to maintain accurate records; and submitted falsified certified payroll records to the contracting agency. Thus, Star Brite's violations fell squarely within the criteria for which debarment is warranted: "Underpayment of wages and falsification of records are serious violations of law, fully justifying debarment." Sundex, Ltd., supra at 7.

      3)Alleged prejudicial delay prior to hearing

   The amount of elapsed time between the significant procedural events in this matter is undisputed. The Wage and Hour Division's investigation commenced with an opening conference between the investigator and Smilios on April 8, 1993. T. 340. By October 1993, the investigation was concluded and the investigator reported his findings of violations to Smilios at a final conference. T. 556-557. The Wage and Hour Division's official notice to Star Brite charging violations was issued in May 1996 and an Order of Reference initiating proceedings before the Office of Administrative Law Judges was issued in March 1997. D. and O. at 7. As previously noted, the hearing in this case was conducted between October 22 and 24, 1997.

   Star Brite urges that this Board "should find that the extreme delay in this matter creates a presumption of improper treatment with or without the showing of palpable injury to Star Brite." Pet'r Brf. at 70. We reject this argument for the following reasons.

   The WAB had several opportunities to address the questions of whether, and after how long, a delay might provide a defense against the Wage and Hour Division's pursuit of back wage and debarment liability before an ALJ. In our view, the three leading WAB cases concerning alleged prejudice stemming from delay in conducting an administrative hearing under the DBA or its related Acts are Public Developers Corp., WAB Case No. 94-02, July 29, 1994, Tom Rob, Inc., WAB Case No. 94-03, June 21, 1994, and J. Slotnik Co., WAB Case No. 80-05, Mar. 22, 1983.

Tom Rob, supra at 7. Concluding that the first three factors had been shown by the contractor, the Board proceeded to rule that a respondent allegedly aggrieved by delay in a DBA administrative proceeding "must show actual prejudice, not just allege potential prejudice." Id. at 9. In order to be able to demonstrate such actual prejudice, the Board reasoned that a hearing on the merits of the case was necessary and remanded the matter to the ALJ for further action.

   Finally, the Board addressed similar issues of delay and prejudice in Public Developers. Again, the Board remanded the case to the ALJ for findings concerning the existence of actual prejudice engendered by the delay in the underlying fact-finding process. Significantly, the WAB further addressed the limitations inherent in the "presumption of prejudice" doctrine first announced in Slotnik. In this respect, the Board stressed that:

only the most extraordinary circumstances would warrant application of a presumption of prejudice. First, as the Board stated in J. Slotnik, the delay in the case must be "extreme." Second, the Board in J. Slotnik properly emphasized the need to balance the interests of the employees who may be owed back wages with the interests of the employer. Thus, the application of a presumption of prejudice should not be seen as a device to be used in the ordinary case to relieve the employer of the obligation to demonstrate actual prejudice. Instead, the application of a presumption of prejudice should be reserved for those rare cases where, after a review of the record evidence and the parties' contentions, it appears that the egregious delay in the proceedings has operated to deprive the factfinder of the ability to determine whether the respondent has suffered actual prejudice.

Public Developers, supra at 13.

   Having presented this overview of the precedent governing the finding of "administrative delay" and prejudice, we proceed to examine the merits of Star Brite's claim of prejudice. Here, there was approximately a three-year delay from the commencement of the Wage and Hour Division's investigation in April, 1993 and the sending of the notice of violation in May, 1996. Additionally, the Order of Reference commencing the administrative hearing process was not issued until March, 1997.

   It is significant in this case that the ALJ conducted a hearing on the merits of the Wage and Hour Division's claims and granted Star Brite the opportunity to prove that it had experienced actual prejudice in the presentation of its defense. Citing, Slotnik and Public Developers, the ALJ specifically concluded that Star Brite had "failed to establish those elements of injury and/or disadvantage caused by such delay necessary for a proper invocation of the doctrine of laches." D. and O. at 8. We agree with this finding.

   The Board has thoroughly examined Star Brite's extensive argument concerning the existence of prejudice to its defense as occasioned by the delay in this matter. See Pet'r Brf. at 55-70. Petitioners largely base their argument on lengthy citation to the hearing record, purporting to demonstrate that the passage of time had blurred the memories of, largely, the Administrator's witnesses, including the investigator and the employees. However, as discussed, supra, the testimony of the workers was largely consistent and, more importantly, was specifically found by the ALJ to be credible. Further, the mere fact that such a large number of witnesses and the investigator were available for hearing and were subject to direct and cross examination belies the existence of any prejudice to Star Brite's defense. We reject Star Brite's assertion that the record demonstrates actual prejudice because "[t]he type of evidence critical to DOL's case and the Respondent's efforts to rebut the case is testimonial evidence and it can clearly be seen that the passage of time has resulted in key government witnesses' inability to remember

salient facts during their cross examinations." Id. at 70. To the contrary, we view the record as fully supporting the ALJ's credibility findings; simply, the salient facts were that the employees were paid less than the required prevailing rates and the certified payrolls falsely reflected that the employees were paid in compliance with the Act. Moreover, much of the probative evidence in this case as viewed by the ALJ was not even testimony; rather, it was documentary. Specifically, the certified payrolls submitted by Star Brite were at variance from the company's own internal payroll information as well as from Steve Senecheria's calendar (and the testimony of the eight employees). These two sets of documents were significant and probative evidence; Star Brite itself controlled this information at one time or another and the mere passage of time could not prejudice the defense.

   Ultimately, Star Brite's argument-in-chief regarding prejudice to its defense appears to be a one sentence plea that this Board "should find that the extreme delay in this matter creates a presumption of improper treatment with or without the showing of palpable injury to Star Brite." Id. at 70. However, although we cannot condone the delay of almost four years leading up to the filing of the Order of Reference, neither can we conclude that the delay was so extreme as to create a presumption of prejudice. As the record demonstrates, this is not one of those "rare cases where, after a review of the record evidence and the parties' contentions, it appears that the egregious delay in the proceedings has operated to deprive the factfinder of the ability to determine whether the respondent has suffered actual prejudice." Public Developers, supra at 13. Petitioners concede that "the delay periods [in this matter] certainly fall within the parameters and fact patterns of [Public Developers] and J. Slotnik." Id. at 62. As previously noted, these are two cases where the WAB specifically refused to find a presumption of prejudice based merely on the passage of time.

   In short, we reaffirm the principles recently adopted by this Board in KP & L Electrical Contractors, Inc., et al., ARB Case No. 99-039, May 31, 2000. In that matter, we endorsed the WAB's reasoning in the line of cases, discussed above, which clarify the circumstances under which an administrative proceeding conducted pursuant to the Act may be dismissed where extreme delay prejudices a party's ability to present a defense to the Wage and Hour Division's allegations concerning liability for back wages and/or debarment. In KP & L, the respondents presented only general arguments that the mere passage of time had prejudiced their defense. However, the Board concluded that "[s]uch generalized claims of prejudice simply do not suffice." Id., slip op. at 6. Similarly, in the present case, Star Brite has failed to demonstrate in any fashion that Petitioners suffered any prejudice in the preparation and presentation of a defense to the administrative charges. Accordingly, we find that there is no basis to dismiss this matter on the basis of delay in the administrative hearing process.

      4) The ALJ's evidentiary rulings

   Petitioners have also raised on appeal the questions of whether the ALJ erred at hearing on several evidentiary rulings, and whether the ALJ erred in the conduct of pre-hearing discovery. These errors, alleges Star Brite, so prejudiced its defense in the hearing below that this Board should reverse the findings and conclusions of the ALJ and remand this matter to the ALJ for a new hearing.

   A brief summary of these alleged errors is in order. First, Star Brite alleges that it was prejudicial error for the ALJ to admit testimony proffered by counsel for the Administrator of Suzanne Edgars (a USAF contract specialist), John Warner (another Wage and Hour Division investigator who investigated Star Brite on another contract), and James Quinslik (a former Star Brite employee not alleged to be due back wages in this proceeding). However, whether this testimony could be deemed objectionable had the ALJ based his decision upon it is not in question here. The ALJ made no mention at all of any of these witnesses' testimony in his decision and, as discussed previously, there is ample credible and substantial evidence (specifically referenced by the ALJ) which otherwise supports the findings and conclusions that correct prevailing wages were not paid to the affected employees and that the Petitioners prepared and submitted to the contracting agency certified payrolls falsely reflecting compliance with DBA wage requirements. Thus, there was no prejudice to Star Brite occasioned by the admission of this testimony.

   Next, Star Bright argues that the ALJ's receipt into evidence of two pieces of documentary evidence and a tape recording constituted prejudicial error. The first document was an interview statement prepared by the Wage and Hour Division's investigator on the McGuire AFB project. This statement was taken from employee Ken Senerchia by the investigator at the time of the investigation. PX-24. The second document was the aforementioned calendar maintained by Steve Senerchia as Star Brite's on-site foremen and employee which contained Senerchia's recording of the hours worked by himself and the other employees on the project. Petitioners' chief objection to these documents is apparently that they were not provided to them prior to the hearing.

   Finally, Star Brite raises an objection to the fact that the ALJ permitted two witnesses, Quinslik and Warner, to testify about certain documents that were never received into evidence. Petitioners argue that the mere fact that the ALJ heard such testimony about excluded documents was prejudicial. We disagree because the ALJ did not rely on this testimony in his decision. The documents, having not been admitted, formed no part of the basis for the ALJ's decision.

   When examining questions of possible error committed by a trier of fact in the handling of evidence, the Board must emphasize that, in general, an ALJ has broad discretion in the types and quality of evidence which is admitted at hearing. Sweeping authority accorded an ALJ in the conduct of hearings is specified in the regulations governing proceedings conducted before the Department of Labor's Office of Administrative Law Judges. See 29 C.F.R. §18.29. Based on our review of the record before us, we conclude that the ALJ did not abuse his discretion in the conduct of the hearing.

   The ALJ's March 5, 1998 D. and O. finding Petitioners liable for $15,290.43 in back wages and directing placement of the names of Star Brite Construction Company, Inc. and Kostas Smilios on the list of parties ineligible to receive federal contracts and subcontracts for a period of three years is affirmed. The Petition for Review is DENIED. It is hereby ORDERED:

1) That Petitioners shall pay the following DBA back wages to the following persons who worked on the McGuire AFB contract:

         a)       Graef                   ,264.82

         b)       Ferrin                     343.53

         c)       Rekeda                     104.92

         d)       Schenkel                   843.21

         e)       Senerchia, Ken            4,526.40

         f)       Senerchia, Steve          6,853.43

         g)       Tencza                    1,249.20

         h)       Tilton                      104.92

2. That the Administrator shall transmit the names of Petitioners Star Brite Construction Company, Inc. and Kostas Smilios to the Comptroller General of the United States for placement on the list of

persons and firms ineligible to receive federal contracts or subcontracts for a period of three years.

   SO ORDERED.

      PAUL GREENBERG
      Chair

      E. COOPER BROWN
      Member

      CYNTHIA L. ATTWOOD       Member