PRYOR'S COURT, INC., 1981-SCA-1355 (Dep. Sec'y May 11, 1988)
CCASE:
PRYOR'S COURT, INC.
DDATE:
19880511
TTEXT:
~1
[1] U.S. DEPARTMENT OF LABOR
DEPUTY SECRETARY OF LABOR
WASHINGTON, D.C.
20210
DATE: May 11, 1988
CASE NO. 81-SCA-1355
IN THE MATTER OF
PRYOR'S COURT, INC.,
TRADING AS PRYOR'S COURT
REFUSE SERVICE, AND FREDERICK
PRYOR AND LOUISE PRYOR, INDIVIDUALLY
AND AS OFFICERS THEREOF,
RESPONDENTS
BEFORE: THE DEPUTY SECRETARY OF LABOR
DECISION AND ORDER
This proceeding arises under the McNamara-O'Hara Service
Contract Act, as amended, 41 U.S.C. [secs] 351-358 (1982) (the
Act), and the regulations issued thereunder, 29 C.F.R. Parts 4, 6
and 8 (1987). By the provisions of 29 C.F.R. [sec] 8.0 (1985),
until such time as the Board of Service Contract Appeals is
designated, the Board's functions shall be performed by the
Secretary or the Secretary's designee. The Secretary has
designated me to fulfill this responsibility, which includes the
review of recommended decisions under the Act.
This case was previously before me after a recommended
decision and order (D. and O.) by Administrative Law Judge (ALJ)
George A. Fath on October 28, 1983. Upon review of the case I
found that: 1) employees were entitled to double time for holiday
and not merely time and one-half as paid by Pryor's Court; 2)
certain employees were not paid proper amounts of vacation pay; 3)
health and welfare benefits [1]
~2
[2] required by the contract had not been paid in their entirety
and were not separately recorded; 4) pay increases required in
the second year of the contract had not been paid; 5) adequate
records were not kept; 6) Respondents Frederick and Louise Pryor
were individually liable for payments due; and 7) the interest
rate on payments due to employees should be paid at the adjusted
prime rate established by the Secretary of the Treasury pursuant
to 26 U.S.C. [sec] 6621 (1982). Decision and Order of the Under
Secretary, issued December 4, 1985 (Remand Order). The case was
remanded to the ALJ in order that the amounts due from Respondents
could be recalculated with consideration to be given as to whether
there were unusual circumstances which would justify relieving
Respondents from the ineligible bidders list sanction of section
5(a) of the Act. Id.
On January 9, 1987, ALJ Fath issued a Decision and Order after
Remand (Remand D. and O.) finding a revised amount due to employees
and finding that interest on that amount should be calculated as
directed by the order of December 4, 1985, remand order. The ALJ
also recommended debarment of Respondents.
On February 3, 1987, Respondents filed a Petition for Review
and on March 26, 1987, counsel for the Administrator filed a Motion
for Extension of Time to April 17, 1987; and on April 16, 1987,
filed a further Motion for Extension of Time to April 27, 1987. I
now grant these motions nunc pro [2]
~3
[3] tunc and accept the Statement of the Administrator filed
on April 26, 1987.
Respondent's Petition for Review lists ten assignments of
[e]rror:
1. There is no jurisdiction in this administrative
proceeding to adjudicate alleged underpayments under the
Act.
2. The claim for underpayments is barred by the statute
of limitations.
3. There were no violations of the minimum wage rate
provisions of the Act.
4. There were no violations of the vacation pay
provisions of the Act.
5. There were no violations of the holiday pay
provisions of the Act.
6. There were no violations of the health and welfare
provisions of the Act.
7. The award of interest is contrary to law and
inequitable.
8. Unusual circumstances exist upon which to grant
relief from debarment.
9. Frederick Pryor is not individually liable for
underpayments under the Act.
10. Louise Pryor is not individually liable for
underpayments under the Act.
I will consider these claims in order. [3]
~4
[4] 1. Respondents' claim that this administrative
proceeding has no jurisdiction to adjudicate
underpayments under the Act should have been raised at an
earlier stage. In any event it is denied. There are few
things clearer than that Section 4(a) of the Service
Contract Act makes the Walsh-Healy Public Contracts Act,
41 U.S.C. [secs] 35-45 (1982), applicable to the SCA and
gives the Secretary authority to make findings of fact as
to the amount of monetary violations by service
contractors, 41 U.S.C. [sec] 39 (1982). Literally
hundreds of cases reach this result and Respondents cite
no authority to the contrary.
2. Respondents maintain that the claim for underpayments
is barred by the statute of limitations because
administrative proceedings do not operate to toll the
statute of limitations. Respondents correctly cite 28
U.S.C. [sec] 2415 (Supp. III 1985) as establishing a six
year statute of limitation. However, Respondents fail to
consider the pertinent language of Section 2415(a) which
reads in part:
Subject to the provisions of section 2416 of this title,
and except as otherwise provided by Congress, every
action for money damages brought by the United States or
an officer or agency thereof which is founded upon any
contract express or implied in law or fact, shall be
barred unless the complaint is filed within six [4]
~5
[5] years after the right of action accrues [*] or within
one year after final decisions have been rendered in
applicable administrative proceedings required by
contract or by law, whichever is later....
[*](emphasis supplied)[*]. I find that there is no bar to this
proceeding.
Points 3., 4., 5. and 6. are covered by my previous
ruling of December 4, 1985. Remand Order at 3-6. These
items were not in issue on remand and I need not further
consider them now. /FN1/
7. The award for interest is a proper one. The purpose
of the interest is to restore the employees to the
position they would have occupied had proper payments
been made timely. The adjusted prime rate has been
established as the appropriate interest rate to do this
in numerous cases under several laws. Interest is a
necessary factor in making employees whole for damages
caused by the contractor's violations. See Remand Order
at 6-7.
8. Respondents argue that unusual circumstances exist in
that any violations are de minim[i]s and inadvertent.
They allege that they have a good prior record, have
cooperated in the investigation and have attempted in
good faith to resolve the legitimate issues. They also
continue [5]
/FN1/ Were I to consider these issues, I should reach the same
conclusion as before as no new evidence or argument has been
presented. [5]
~6
[6] to allege that no violations occurred and that they are victims
of a vendetta.
The record in this case simply does not support Respondents'
assertions. It is established that Respondents failed to pay for
holidays, failed to make proper payments for vacations and health
and welfare benefits, kept inadequate records and did not grant the
pay increase required by the contract. They advance no evidence of
what their "good faith" consists of, and de minimus is hardly
suggested by the number of kinds of violations and by the sizeable
amounts still owed to their employees. In addition there was
clearly culpable negligence as shown by Respondent Frederick
Pryor's admission that he did not even read the entire contract and
notice his obligations. Transcript (T.) at 290-294. Respondents
have failed to meet their burden of proof on this issue, 29 C.F.R.
[sec] 4.188(b)(1), and the record is clear that they cannot
establish the absences of aggravated circumstances or the existence
of prerequisites, i.e. repayment of moneys due, required before I
can consider the other factors which, if established, may justify
a finding of unusual circumstances. 29 C.F.R. [sec] 4.188(b)(3)(i)
and (ii). Accordingly, I do not find that unusual circumstances
exist.
9. and 10. Based on the ALJ's D. and O., my order of
December 4, 1985, found both Frederick and Louise Pryor
to be "parties responsible" as defined by Section 3(a) of
the Act and 29 C.F.R. [sec] 4.187(e) [6]
~7
[7] of the Regulations. Respondents offer no additional
matter on this subject and the responsibility of the sole
owner and manager is beyond argument in any event. Frederick
Pryor's own testimony indicates Louise Pryor had some
hand in management, T. at 283, and I will not disturb the
ALJ's finding on this point.
Therefore, I order Respondents to pay to the Department of
Labor the sum of $23,019.81, as shown in Schedule A of the ALJ's
Order of January 9, 1987, with interest thereon compiled under the
provision of 26 U.S.C. [sec] 6621 and continuing until paid, these
funds to be distributed to the employee as identified on Schedule
A.
I find no "unusual circumstances" to relieve Respondents
Pryor's Court, Inc., trading as Pryor's Court Refuse Service,
Frederick Pryor and Louise Pryor from the sanction of section 5(a)
of the Act. Accordingly, their names will be forwarded to the
Comptroller General as provided by the Act.
SO ORDERED.
[Dennis E. Whitfield]
Deputy Secretary of Labor
Washington, D. C. [7]
