|
<![CDATA[
CCASE:
NATIONAL ELECTRO-COATINGS
DDATE:
19860417
TTEXT:
~1
[1] THE UNDER SECRETARY OF LABOR
WASHINGTON, D.C.
20210
In the Matter of
NATIONAL ELECTRO-COATINGS, INC.,
a Corporation, and
ROBERT W. SCHNEIDER and AMY Case No. SCA-983
EVA HUNTER, individually
and jointly
Respondents
In the Matter of
Disputes concerning the payment
of overtime and record keeping by
NATIONAL ELECTRO-COATINGS, INC. Case No. 79-DB-188, 197
Contractor
With respect to laborers and mechanics
employed by it under U.S. General
Services Administration Contract Nos.
GS-O1W-00334, GS-03W-70309,
GSW-5FWR-80157, GS-09W-67553,
GS-10W-65323, GSW-5-FWR-70170,
GS-07W-75029, GS-05W-66222,
GSW-5FWR-70168, GS-05-55949,
GS-10W-55164, and GS-04W-60257,
General Services Administration,
Region 7.
Decision of the Under Secretary
This matter is before me on a petition for review, filed by
respondents, pursuant to the McNamara-O'Hara Service Contract Act
of 1965 (SCA), as amended, 41 U.S.C. [secs] 351-358 (1982), and the
regulations issued thereunder at 29 C.F.R. Parts 4 and 6
(1985)./FN1/[1]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ On February 24, 1984, the Secretary designated the Under
Secretary to perform the function of the Board of Service Contract
Appeals. 29 C.F.R. [sec] 8.0 (1985). [1]
~2
[2] After a hearing on April 7 through 9, 1980, Administrative
Law Judge (ALJ) Freeman C. Murray found that respondents had
violated the SCA and Contract Work Hours and Safety Standards Act
(CWHSSA) by failing to pay the prevailing minimum wage, required
overtime and failing to keep adequate records. /FN2/ D. & O. at 32
and 33. He ordered respondents to pay the Employment Standards
Administration of the Department of Labor (Department), $82,294.33
reflecting underpayments to the affected employees. Id. at 33. The
ALJ also found that the violations were not the result of "unusual
circumstances" and recommended that respondents be placed on the
list of ineligible bidders pursuant to Section 5(a) of the SCA.
Respondents filed with the Wage-Hour Administrator an
Application for Relief from the Ineligible List Provision, as well
as exceptions to the Decisions of the Administrative Law Judge. On
June 18, 1985, the Deputy Wage-Hour Administrator issued the
decision on behalf of the Administrator, affirming in all respects
the ALJ's decision concerning the violations and the recommendation
for debarment.
Respondents appealed the Deputy Administrator's decision,
contending that the basis for determining the amount of
underpayments was faulty and urging relief from the debarment
sanction. Although the time period for filing a petition for review
of the Administrator's decision has expired, 29 C.F.R. [sec] 6.20
(1985), [2]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ Decision and Order of Administrative Law Judge, April 18,
1981 (D. & O.). [2]
~3
[3] the petition has been accepted for review. /FN3/ The Associate
Solicitor for Fair Labor Standards has submitted a response to
respondents' petition.
Respondents contend that the Department's method used for
reconstructing the hours worked by employees and the relatively
small number of employees who testified at the hearing did not
properly support the finding of the ALJ and Administrator regarding
underpayments. In its response, the Department contends that the
back wage issue is not a proper matter to be considered in this
appeal because, under the regulations in effect at the time of the
appeal to the Administrator, the Administrator's decision
pertaining to the substantive violations was final and not subject
to further administrative review. 29 C.F.R. [sec] 6.11 (1980).
Under the regulations then in effect, only the issue of debarment
could be considered by the Secretary. 29 C.F.R. [sec] 6.12 (1980).
The government's argument has merit and its interpretation of
the regulations is supportable. However, due to the length of time
between the ALJ's decision and the Deputy Administrator's decision,
and given the fact that the Deputy Administrator's [3]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN3/ Respondents requested that their late filed petition be
accepted because the previous attorney had given up his license to
practice law and the present attorney did not receive the case file
soon enough to make a timely filing. Due to these somewhat unique
circumstances, and in order to give respondents full consideration
in this matter, the late filing has been accepted for the
record.[3]
~4
[4] decision was issued more than a year after the effective date
of the revised regulations, See 49 Fed. Reg. 10,627 (Mar. 21,
1984), I will consider respondents' petition with regard to both
the substantive violations and the debarment issue.
The first argument challenges the appropriateness of
reconstructing the hours worked by employees in the absence of an
accurate record of hours. It was respondents' own failure to
maintain accurate records of hours worked which necessitated the
use of information furnished by employees to determine the number
of hours worked. Therefore, respondents are not in a position to
object to the calculation of the underpayments because they might
be somewhat imprecise. In the Matter of Ernest Roman and Contract
Maintenance, Inc., SCA-275 (Decision of the Assistant Secretary)
(August 19, 1975). See also Anderson v. Mt. Clemens Pottery Co.,
328 U.S. 680, 687-688, (1946) (construing record keeping
requirements of the Fair Labor Standards Act). Respondents also
argue that the 19 month period between the start of the
investigation and filing of the order of reference worked to their
detriment because witnesses could not be located. In addition they
contend that, by not being afforded the right to confront and
cross-examine approximately 100 witnesses, their due process rights
were denied. I find no support for these arguments. The
Department's case included testimony from five employees;
respondents offered only one employee [4]
~5
[5] witness. Respondents, as the employer, certainly had at least as
much access to employees, if not more, than the Department. Respondents
were free to call as many employees as they wished in order to support
their case. Having elected to present only one witness, respondents are
hardly in a position to claim prejudice because the Department did not
require 100 employees to testify.
In fact, the record indicates that respondents had the
opportunity to review the government's back wage computations for
each employee. Respondent Amy Hunter, who was in charge of the
payroll, reviewed the computations and, based on her review,
necessary changes were made. The Compliance Officer testified as
follows:
Q. Do you know if the company has ever been provided
with the actual transcription sheets t hat you prepared?
A. I am not certain whether this was done at the
conference on the 7th or whether it was done
approximately a week later when Miss Hunter asked to
review the findings and I agreed to also review each
finding on an individual basis and to make corrections if
necessary.
Q. And did you make any changes?
A. I believe there were some changes made.
Transcript at 133-134.
I find that respondents had ample opportunity to refute the
amount of underpayments and to set forth different computations
based on better evidence than that offered by the government.
Having failed to do so, there is no basis for respondents'
contending that they were in any way denied the opportunity to
present their case. [5]
~6
[6] Turning now to the debarment issue, relief can only be
granted if it is found that the violations involved "unusual
circumstances." The paramount case in establishing the guidelines
for determining the [existence] of unusual circumstances is
Washington Moving and Storage company, No. SCA-168, Assistant
Secretary (August 16, 1973), aff'd, by the Secretary (March 12,
1974). These guidelines were reviewed by both the ALJ and
Administrator in their decisions and need not be specifically
reiterated herein. Respondents argue that both Eva Hunter and
Robert Schneider were found by the ALJ to have given forthright and
straightforward testimony; that the General Services Administration
contracts at issue contained only incorporation clauses pertaining
to the SCA wage provisions rather than being an integral part of
the contract; that respondent Schneider was not an experienced
government contractor; and that respondents bad looked to the
contracting agencies rather than the Department of Labor for advice
concerning payroll practices.
These arguments were previously posed to the ALJ, the Deputy
Administrator or both and were given due consideration before
finding that unusual circumstances did not exist. Specifically,
while forthright and straightforward testimony by respondents is
laudable, it is hardly enough to offset the extensive number and
amount of violations which had occurred and which continued even
after respondents were advised by the Wage and Hour Division that
such practices were not in compliance. [Similarly], [6]
~7
[7]inexperience, misinterpretation of the contract, or not knowing
where to seek advice are not among those factors which could be
considered to constitute unusual circumstances. Even if they were,
the continuation of the violations after conferences with the
appropriate authorities would nullify such a defense.
Respondents would bolster their defense by asserting that now
they regularly consult the Department to insure compliance, and
that since the violations at issue here, they have conformed to all
statutory and regulatory requirements. Respondents brief submitted
October 30, 1985, at 6. The Department disputes this contention,
noting that the Department of Labor has issued a complaint against
this same contractor, charging it with violations under an SCA
contract awarded subsequent to the events herein. Whatever the
outcome of these later charges, the conduct at issue here is
respondents' action under these contracts. There is nothing in the
record to justify the claim that "unusual circumstances" should
excuse respondents for their failure to pay proper wages and
benefits and to maintain proper records.
In summary, I find that the decisions of the ALJ and
Administrator were correct regarding the substantive violations and
I AFFIRM the order that respondents pay to the Employment Standards
Administration $82,294.33 representing underpayment to employees.
That order shall be carried out immediately. In addition I AFFIRM
the Administrator's finding that there [7]
~8
[8] are no unusual circumstances to justify relief from being placed on
the list of ineligible bidders pursuant to SCA Section 5(a). 41 U.S.C.
[sec] 354(a). The Comptroller General shall be notified accordingly.
SO ORDERED.
[Dennis E. Whitfield]
Under Secretary of Labor
Dated: APR 17 1986
Washington, D.C. [8]
]]>
|
