USDOL v. WINSTON ORCHARDS, INC., 1986-SCA-63 (Dep. Sec'y Mar. 21, 1991)
CCASE:
DOL V. WINSTON ORCHARDS INC.
DDATE:
19910321
TTEXT:
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[1] U.S. DEPARTMENT Of LABOR
DEPUTY SECRETARY OF LABOR
WASHINGTON, D.C.
20210
DATE: March 21, 1991
CASE NO. 86-SCA-63
IN THE MATTER OF
U.S. DEPARTMENT OF LABOR,
PLAINTIFF,
WINSTON ORCHARDS, INC.,
A CORPORATION, AND HAROLD
(A/K/A HARRY) WINSTON,
AN INDIVIDUAL,
RESPONDENTS. /FN1/
BEFORE: THE DEPUTY SECRETARY OF LABOR /FN2/
DECISION AND ORDER REMANDING IN PART THE
DECISION OF THE ADMINISTRATIVE LAW JUDGE
This case is before me pursuant to the McNamara-O'Hara Service
Contract Act of 1965, as amended (MOSCA or the Act), 41 U.S.C.
[secs] 351-358 (1988), and the regulations which implement the Act
at 29 C.F.R. Parts 4, 6, and 8 (1990).
On May 31, 1988, Administrative Law Judge (ALJ) Robert J.
Brissenden issued a Decision and Order (D. and O.) finding, inter
alia, that Respondent had underpaid certain employees in [1]
/FN1/ The caption is amended to conform to the parties'
stipulation. Hearing Transcript (T.) 4. For convenience,
Respondents will be referred to in the singular.
/FN2/ The Deputy Secretary has been designated by the Secretary to
perform the functions of the Board of Service Contract Appeals
pending the appointment of a duly constituted Board. 29 C.F.R.
[sec] 8.0 (1990). [1]
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[2] violation of the Act's minimum wage and fringe benefit
requirements, 41 U.S.C. [sec] 351(a)(1) and (2) and 29 C.F.R. [sec]
4.6, and that Respondent had not made the evidentiary showing of
unusual circumstances, required under Section 5(a) of the Act, to
avoid imposition of the Act's debarment sanction. D. and O. at 4,
6. Counsel for the Wage and Hour Administrator petitioned for
review of a portion of the ALJ's decision. The Respondent did not
respond to the petition.
Respondent was awarded a paper mulching services contract (No.
OR-910-CT5-63) valued at $14,250 by the U.S; Department of the
Interior's Bureau of Land Management in 1985. Following an
investigation by the Wage and Hour Division (the Department), an
administrative complaint was filed charging Respondent with failing
to pay its employees required MOSCA minimum wages, fringe benefits,
holiday compensation and overtime pay, /FN3/ amounting to $5,005.89
owed to 15 employees who performed work under the contract. The
ALJ found that underpayments occurred and, finding Respondent
Winston's testimony not credible, D. and O. at 6, that Respondent
had failed to establish unusual circumstances. His decision denied
repayment of the back wages on the basis that the compliance
officer had "miscalculat[ed] the exact amount of money of the
underpayments," and that the Department had thereby failed to meet
its burden of proof. The Department's motion to [2]
/FN3/ The overtime allegation was made under the separate
provisions of the Contract Work Hours and Safety Standards Act
(CWHSSA), 40 U.S.C. [secs] 327-333 (1988). [2]
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[3] reconsider this ruling was denied and the appeal before me
followed.
The ALJ erred in refusing to require payment of the back
wages. It is long established that when, as here, a party's
failure to maintain complete records makes precise calculations
difficult, /FN4/
[t]he solution . . . is not to penalize the employee by
denying him any recovery on the ground that he is unable
to prove the precise extent of uncompensated work. Such
a result would place a premium on an employer's failure
to keep proper records in conformity with his statutory
duty; it would allow the employer to keep the benefits of
an employee's labors without paying due compensation ....
In such a situation we hold that an employee has carried
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.
Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946). This
rationale and its attendant guidance for the presentation of proof,
while developed under the Fair Labor Standards Act of 1938, as
amended, 29 U.S.C. 201-219 (1988), has been consistently approved
and applied in proceedings under other remedial wage standards laws
enforced by the Department. In particular, the Mt. Clemens
formulation has been applied in MOSCA proceedings. See Amcor v.
Brock, 780 F.2d 897, 899-901 (11th Cir. 1986) and American Waste
Removal Co. v. Donovan, 748 F.2d [3]
/FN4/ Respondent admits that his payroll records cannot be relied
upon to reflect accurately the correct number of hours worked by
the covered employees on this contract. See, Respondents' Brief
Following Hearing of Winston Orchards, Inc. at 2, [par] 3. See
also, T. at 53, 57. [3]
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[4] 1406, 1409-1411 (10th Cir. 1984). See also, Sidney W. Johnson,
d/b/a Southwestern Film Service, 81-SCA-1390, Dep. Sec.'s Order of
September 28, 1990.
As the Court concluded in Mt. Clemens, "[u]nless the employer
can provide accurate estimates, it is the duty of the trier of
facts to draw whatever reasonable inference can be drawn from the
employees' evidence . . . ." 328 U.S. 693. Where, as here, the
employer fails to produce evidence of the precise amount of work
performed or that which would negative the reasonableness of the
employees' evidence/inferences, damages may be awarded to the
employees, "even though the result be only approximate." Id. at
688, citing to Note, 43 Col. L. Rev. 355.
The Department presented extensive evidence on the amounts due.
/FN5/ If the ALJ discerned arithmetic miscalculations as to
precise amounts, it was his "duty" to correct those, and if
necessary, draw the "reasonable inferences." Accordingly, this
case IS REMANDED to the ALJ to make those factual findings.
The other rulings by the ALJ were not appealed and they are
hereby affirmed. 29 C.F.R. [secs] 6.19(b), 6.20. Accordingly, the
Comptroller General will be notified to place Respondents'
names [4]
/FN5/ In its post hearing memorandum to the ALJ, the Department
stated that on the basis of the evidence presented, the back wage
liability should be adjusted to reflect $4,829.95 owed to 14
employees. [4]
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[5] on the list of persons and firms ineligible to contract with
the government. 41 U.S.C. [sec] 351(a); 29 C.F.R. [sec] 6.21.
SO ORDERED.
[Roderick DeArment]
Deputy Secretary of Labor
Washington, D.C. [5]
