that Respondent paid less than the minimum prevailing wage to six drivers engaged in performing a mail hauling contract with the U.S. Postal Service (USPS), seeks to recover the alleged underpayments, and to debar Respondent from contracting with the U.S. Government for three years. While Respondent's positions are not entirely clear, he appears to contend that Nationwide was a partnership, that the mail hauling contract was not with him but with the partnership, and that the drivers were all partners of the contracting entity and were therefore not bound by the prevailing wage provisions of the contract. He also appears to argue that he was denied due process, that this action is time barred, and that the withholding of funds was improper or illegal.

   The case was heard in San Francisco on September 11, 1997. Respondent appeared pro se. Both sides filed post trial briefs or proposed findings. Although the respondent's filing was tardy, it was considered.

   The following facts were established by the DOL without challenge by Respondent:

   1. In July of 1989, contract No. 95034 (hereinafter referred to as the contract) was entered into between Nationwide and USPS requiring Nationwide to haul mail for the USPS in the San Jose, San Martin, Morgan Hill, and Gilroy corridor in California for the sum of $60,000 per year.

   2. Both the SCA and Wage Determination #77-194 were incorporated - into the contract, and the contract was expressly made subject to both.

   3. Wage Determination #77-194 set forth minimum prevailing wages which were required to be paid to service employees engaged in mail hauling under the contract. The minimum wages were $11.72 per hour, plus $.90 per hour for fringe benefits, and $.77 per hour for "other" remuneration, for a total wage package of $13.39 per hour.

   4. At all times from September 9, 1989 through February 16, 1991, Donald Glaude was a partner and business manager of the partnership known as D's Nationwide Industrial Services and was a signatory of the contract with USPS. Glaude directed the operations of the business, including the payment of wages, salaries, or other remunerations to persons working on the contract,

   5. Pursuant to the contract, the following persons drove, maintained, loaded and unloaded trucks, and hauled mail during the following periods:

          James Casares          3/10/90 -  2/16/91
          Salvador Covarrubias   5/19/90 -  9/29/90
          Orlando Flintroy       9/17/89 - 12/29/89
          Royal Glaude          12/23/89 -  5/19/90
          Alan Yoshikawa         3/10/90 -  5/19/90

   6. In 1991, after some complaints from Nationwide's competitors to the effect that it was not paying the prevailing wages, the DOL, through George Wedemeyer of the Wage and Hour Division, investigated Nationwide to ascertain whether the drivers were being paid the prevailing wage.

   7. Wedemeyer obtained records from Respondent of moneys actually paid to the drivers, and obtained statements from individual drivers.

   8. Because Respondent was unable to provide Wedemeyer with records of hours worked by the drivers, Wederneyer obtained that information from USPS records.

   9. To arrive at the amounts of back wages allegedly due to each driver, Wedemeyer divided the number of hours worked by each driver each month into the amount paid to him during that month, and for the first 40 hours each week subtracted that hourly rate from $13.39. With respect to overtime, i.e. hours worked over 40 in a workweek, Wedemeyer subtracted the hourly rate paid from $11.72, i.e. the base rate without fringe and other benefits,

   10. Wedemeyer's calculations of total alleged underpayments to the six: drivers were as follows:

               1)  James L. Casares        $17,342.92
               2)  Salvador Covarrubias    $ 3,101.41
               3)  Orlando Flintroy        $ 4,288.86
               4)  Royal Glaude            $ 1,182.92
               5)  Alan Yoshikawa          $ 1,492.21 
               6)  Victor McCoy             $   63.60
                                     Total $27,471.92

   11. On or about April 12, 1991, Respondent and Nationwide were notified by certified mail that the DOL had determined that they had violated the wage provisions of the SCA.

   12. On April 23, 1991, the USPS canceled the contract on the grounds of performance default, and pursuant to a request from the DOL and 41 U.S.C. §352(a), withheld the total amount available for withholding on the contract at the time of the default, to wit $37,099.50.

   13. On July 24, 1991, Respondent entered into a verbal agreement with the DOL to pay the backwages set forth in paragraph 10 in 14 monthly installments.

   14. Respondent and/or Nationwide made only one payment of $4000 pursuant the agreement, but the check bounced and was returned to Respondent on October 2, 1991.

   15. Because the $3,099.50 withheld under the USPS contract was inadequate to cover the amounts of the alleged underpayments, on October 3, 1991, the DOL sought to withhold additional moneys from the Department of the Navy due to Respondent or Nationwide under a Navy grounds maintenance contract at Treasure Island.

   16. On October 4, 1991, the Department of the Navy withheld $10,961.23 on the Treasure Island contract with Respondent.

   17. Respondent never signed an authorization permitting the DOL to distribute the withheld funds to the allegedly underpaid service employees.

   The factual disputes between the parties focused on the identity of Nationwide's partners and their respective equity interests in the partnership. The evidence presented was as follows:

   Respondent submitted a document entitled "D's Nationwide Industrial Services Partnerships Agreement" which listed Vick McCoy as a 20% partner and "Manager of Trucking." On a questionnaire he signed under penalty of perjury on August 17, 1989, Respondent represented that he and four other persons, Hedrick, Lugman, McCall and McCoy, were each equal partners of Nationwide. However, at the opening conference with Wedemeyer, Glaude represented himself to be a 51% partner, Hedrick as a 25% partner, McCoy as a 4% partner, and drivers Casares, Covarrubias, and Royal Glaude as 1% partners. Wedemeyer's memorandum of an oral statement by Victor McCoy says that he was a 5% partner, and that he drove on as needed basis "maybe twice per month for 4 weeks", and that his duties then consisted of driving, fueling and doing maintenance on his truck. The memorandum says that he put up his house as collateral so that Nationwide could purchase a truck, but that he had never drawn any money out of the business. The memorandum of the statement was not signed by McCoy.

   Mr. Casares testified that he drove two shifts, and was initially paid a monthly salary of $900 which was later increased to ,000, and eventually to ,500. He said that he signed a paper saying he was a 1% partner, but he received no partnership profits, and had no managerial or administrative duties.

   Mr. Covarrubias testified he was paid a monthly salary, and that he was a 1% partner. But he said that he did not receive any partnership profits, and had no managerial or administrative duties.

   Mr, Yoshikawa denied at trial that he ever had discussed partnership with anyone at Nationwide.

   Mr. Flintroy testified that he worked for Glaude for several months, and that he was promised to be paid fixed amounts per route driven, and that percentage pay was never discussed with him. I construe his testimony to mean that he neither discussed nor agreed to be a partner.

   There was no evidence presented by Respondent to support his apparent contention that Flintroy and Yoshikawa were also partners.

   On the basis of the above summarized evidence, I make the following additional findings of fact:

   18. Drivers Flintroy and Yoshikawa were not partners in Nationwide and had no managerial, executive or professional duties.

   19. Drivers Casares, Covanubias, and Royal Glaude were each a 1% partner in Nationwide, but none of them had any bona fide managerial, executive or professional duties;

   20. Victor McCoy was a 20% partner some of the time and a 4% or 5% partner some of the time during the performance of the contract. The most reliable evidence about his duties or position in Nationwide appears on the Partnership Agreement which designated him as Manager of Trucking and a 20% partner. I infer from the above that driving was not his primary function or significant duty and that he was employed by Nationwide not as a driver but in a bona fide executive capacity within the meaning of 29 C.F.R. §541.1

   Based on the foregoing findings of fact, I make the following legal conclusions:

   A. The contract, which was subject to the provisions of the SCA, and the incorporated wage determination, imposed on the contractor a duty to pay all service employees who were performing the contract wages and benefits totaling at least $13.39 for regular hours and $11.72 for overtime hours. 29 C.F.R. §4.188(b)(4).

   B. A "service employee" is "any person engaged in the performance of [the] contract other than any person employed in a bona fide executive, administrative or professional capacity as those terms are defined in Part 541 of Title 29 [of the C.F.R.]... [The term "service employees" includes] all such persons regardless of any contractual relationship that may be alleged to exist between a contractor or subcontractor and such persons." 41 U.S.C. §357.

   C. "[A] person's status as an 'owner-operator'... is immaterial... under the [SCA] and all such persons performing the work of service employees must be compensated in accordance with the [SCA's] requirements". 29 C.F.R. §4.155.

   D. The responsibilities of the drivers listed in paragraph 5 of the findings above for the truck and the route individually assigned to them, were not executive, administrative or professional duties contemplated by 29 C.F.R. §541 et seq.

   E. The drivers listed in paragraph 5 of the findings above, who had neither a 20% partnership interest, nor executive, administrative or professional duties, were service employees within the meaning of the SCA and were required to be compensated at the rates set forth in paragraph A.

   F. Since Victor McCoy was the Manager of Trucking and at least some of the time a 20%, partner, and only an occasional driver, he was not a service employee, and was therefore not required to be compensated at the rates set forth in paragraph A.

   G. USPS records are sufficient proof of hours worked for back wage reconstruction purposes, since Respondent has not retained records from which the actual number of hours worked by each employee could be ascertained. Ray v. Department of Labor, 26 WH Cases 1244, 1246 (C.D. Ill. 1984); In re Grover, 22 WH Cases 1299, 1302-1306 (1976).

   H. 41 U.S.C. §352(a) provides, in relevant part, that "any violation of the contract . . . shall render the party responsible therefor liable for a sum equal to the amount of any ... underpayment of compensation due to any employee engaged in the performance of such contract." The term "party responsible" includes "each signatory to a subject contact as well as persons, not necessarily signatory to the contract, who control, or are responsible for control of the entity which executed the contracts." In re Grover, supra at 1310. Accordingly, as managing partner and signatory to the contract, Donald Glaude is personally liable for any underpayments found herein,

   I. Neither Glaude nor Nationwide has a properly interest in the uninterrupted transmittal of payments under the SCA. The withheld funds are not considered forfeited until an Administrative Law Judge makes a finding that violations have occurred, and that the service employees are entitled to all or some of those funds. Therefore Respondent was not denied due process by the pre-hearing withhold of funds from the USPS and the U.S. Navy. Ray v. Department of Labor, 26 WH Cases 1244, 1246, citing McCasland v. U.S. Postal Service, 82 CCH Labor Cases, ¶33,607, 23 WH Cases 588 (N.D. N.Y. 1977).

   J. Since actions by the DOL under the SCA are subject to a 6-year statute of limitations, DOL's complaint in this case filed on June 5, 1995, was timely.

   K. The equitable defense of ]aches may not be asserted in this administrative action.

   L. Respondent failed to pay service employees employed in performance of the contract, the minimum wages and the fringe and other benefits required by the contract, the SCA and 29 C.F.R. §4.6, having underpaid them in the following amounts:

          James Casares:         $17,342.92
          Salvador Covarrubias:   $3,101.41
          Orlando Flintroy:       $4,288.86
          Royal Glaude:           ,182.92
          Alan Yoshikawa:         ,492.21

   M. By reason of the above listed violations, Nationwide and its principal Donald M. Glaude, are each, jointly and severally liable for a sum equal to the total amount of the underpayments to the service employees who performed services on the contract, to wit $27,408.32, minus the $14,060.73 previously withheld, or a net of $13,347.59.

   N. By reason of the violations outlined above, Nationwide and its principal Donald M. Glaude, are subject to the provisions of 41 U.S.C. §354(a) whereunder they may be denied the award of any contract -with the United States until three years have elapsed from the date of publication by the Comptroller General of a list naming them as having been found to have violated the SCA.

   O. To avoid debarment, the party resisting it has the burden of showing facts which may militate against the debarment sanction. In re Oneida Building Services, Inc., 83-SCA 5, 1991 WL 733683 (L.B.S.C.A., January 8, 1991). No such facts or circumstances have been shown by Respondent. While Respondent argued that cancellation of the contract by DOL and the subsequent withholding of funds resulted in his inability to pay his service employees after April of 1991, he has shown no circumstances which may tend to excuse underpayments prior to that date. Respondent's reliance on his belief, even if held in good faith, that the 1% partnership interest of some of his drivers relieved him of an obligation to pay them the prevailing wage, is not an unusual circumstance mitigating his violations. In re Ayres, 87-SCA-83, 1991 WL 733681 (Sec'y June 26, 1991).

   1. The Department of Labor is authorized to collect a total of $13,347.59 as set forth in paragraph M above, from Donald M. Glaude, and or D's Nationwide Industrial Services, in accordance with 29 CFR §4.187 and, in particular, §4.187(c).

   2. The persons listed in paragraph L above shall be paid the amounts indicated therein, by the Department of Labor, Wage and Hour Division, from funds, if any, obtained from Donald M. Glaude and/or D's Nationwide Industrial Services. Any sum not paid to an employee because of inability to do so within three years shall be covered into the Treasury of the United States as miscellaneous receipts.

   3. The US Postal Service is is hereby ORDERED to release the $3,099.50 previously withheld to the Wage and Hour Division of the U.S. Department of Labor for distribution to the employees listed in paragraph L in accordance with the preceding paragraph.

   4. The U.S. Navy is hereby ORDERED to release the $10,961.23 previously withheld to the Wage and Hour Division to be distributed to the employees listed in paragraph L in accordance with paragraph 2 of this Order.

   5. Donald M. Glaude, D's Nationwide Industrial Services, and any firm, partnership, or association in which Donald M. Glaude has a substantial interest, shall be debarred and ineligible to receive any contract or subcontract subject to any of the statutes listed at 29 C.F.R. §5.1 for a period of three years from the date of publication by the Comptroller General of his name on the ineligible list pursuant to 29 C.F.R. §5.12(a)(1), §6.19(b)(2).

      ALEXANDER KARST
      Administrative Law Judge

Dated: JAN 08 1998
San Francisco, California

AK:nc

NOTE Within 40 days after the date of this Decision and Order, any aggrieved party may filed petition for review with the Administrative Review Board, United States Department of Labor, Suite R-4309, 200 Constitution Avenue, N.W., Washington, D.C. 20210. See 29 C.F.R. §6.20 and 61 Fed. Reg. 19982 (May 3, 1996). A copy of any such petition must also be provided to the Chief Administrative Law Judge, Office of Administrative Law Judges, 800 K. Street, N.W., Washington, D.C., 20001-8002.