ARB CASE NO. 02-119
ALJ CASE NO. 01-SCA-21
DATE: September 30, 2003
In the Matter of:
STEPHEN W. YATES, Individually
and Jointly as Operating Manager of
TRANSPORTATION VENTURES #1,
LLC and TRANSPORTATION
VENTURES #2, LLC>
In re: Contract Nos. HCR 75796,
HCR 75958, and HCR 75910 with the
United States Postal Service
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
Appearances:
For Petitioners: Don W. Duran, Esq., Lufkin, Texas
For Administrator, Wage and Hour Division: Roger W. Wilkinson, Esq., Douglas J. Davidson, Esq., Steven J. Mandel, Esq., Howard M. Radzely, Esq., Acting Solicitor, U.S. Department of Labor, Washington, D.C.
FINAL DECISION AND ORDER
This matter is before the Administrative Review Board pursuant to the statutory authority of the McNamara-O'Hara Service Contract Act of 1965, as amended (SCA or the Act), 41 U.S.C. § 351 et seq. (2000). Our jurisdiction to hear and decide appellate matters under the Act is established by the regulations at 29 C.F.R. Parts 4 and 8 (2003) and Secretary's Order (SO) 1-2002, 67 Fed. Reg. 64,272 (Oct. 17, 2002).1
1 From July 1992 until May 3, 1996, our predecessor, the Board of Service Contract Appeals, rendered final agency decisions pursuant to the SCA. Under SO 2-96, 61 Fed. Reg. 19,978 (May 3, 1996), the Secretary of Labor established the Administrative Review Board and delegated to this Board jurisdiction to hear and decide administrative appeals arising under, inter alia, the SCA. SO 2-96 has been superceded by subsequent orders amending and updating the provisions relevant to the composition of the Board and its jurisdiction; however, the delegation with respect to the Act is essentially unchanged. The current delegation of authority is set forth in SO 1-2002.
2 The USPS contracts, award dates, and wage determinations are: HCR 75796 (mail hauling and related services between Nacogdoches, Texas and Stephen F. Austin State University located in Nacogdoches, Texas), awarded August 21, 1993, containing Wage Determination (WD) No. 77-193, Revision (Rev.) No. 18, dated August 13, 1993; HCR 75958 (mail hauling and related services between Lufkin and Woodville, Texas), awarded June 23, 1995, containing WD No. 77-193, Rev. No. 22, dated March 31, 1995; and HCR 75910 (mail hauling and related services between Lufkin and Houston, Texas), awarded August 11, 1995, containing WD No. 77-193, Rev. No. 22.
3 As noted by counsel for the Administrator, "Petitioners do not directly challenge the ALJ's acceptance of the Department of Labor's back wage calculations. . . . . In addition, it is not disputed that Petitioners failed to keep accurate records." Administrator's Statement in Opposition to Petition for Review at 14. At hearing, the parties agreed to formulas for computing back wages (if the truck drivers were found to be service employees). Tr. 130-135. Accordingly, the Board accepts the ALJ's back wage findings as being a "just and reasonable inference" of the back wages due the four truck drivers. See Anderson v. Mt. Clemens Pottery, Co., 328 U.S. 680, 687 (1946); see also Amcor v. Brock, 780 F.2d 897, 901 (11th Cir. 1986) (applying the principles of Anderson v. Mt. Clemens Pottery Co. to a case arising under the SCA).
4 41 U.S.C. § 356 exempts specified contracts, none of which are relevant to the instant case. Additionally, 41 U.S.C. § 353(b) authorizes the Secretary of Labor to provide reasonable limitations and make rules allowing exemptions. Relevant limitations or exemptions are discussed under the pertinent heading below.
5 There is some question whether the truck drivers were bona fide"partners" in a legal sense. None of the drivers contributed any capital to the LLCs, and they would lose "membership" in the LLCs if they ceased to drive for the enterprises. We note that Petitioners now argue that the four mail truck drivers "were in business for themselves as members of the LLCs just as if they were partners." Pet. for Rev. at 5 (emphasis added).
6 For a period of time prior to establishment of this Board, the Deputy Secretary of Labor final agency issued decisions under the SCA. During a vacancy in that position, the Secretary of Labor issued the final decision and order in Ayres, among other matters.
7 In his decision and order, the ALJ briefly addressed some of the major criteria established at 29 C.F.R. Part 541 and their application to the facts of Yates's LLC employment scheme. The ALJ noted that the standards for executive employee exemption require that employees have management as their primary duty; that they regularly direct the work of other employees; that they have the authority to hire and fire, that they must regularly exercise discretionary powers; and they must not devote more than a small percentage of time to non-managerial duties. D. & O. at 8. The ALJ held that the drivers did not meet these requirements, stating "Yates' attempt to cloak his four drivers with the title of ‘partner' does not exempt them from the requirements . . ." of the SCA. Id.
8 The SCA requires debarment of responsible parties for any SCA violation unless the service contractor demonstrates that "unusual circumstances" were present. 41 U.S.C. § 354(a). Although not defined in the Act, a standard for determining the existence of "unusual circumstances" is found in the regulations at 29 C.F.R. § 4.188(b). However, at the hearing, Yates stipulated that Petitioners would not contest the absence of "unusual circumstances." See D. & O. at 10; Tr. at 135.