SYSTEMS ENGINEERING ASSOCIATES
CORP. (SEACOR), 1987-SCA-OM-3 (Dep. Sec'y July 26, 1988)
CCASE:
SYSTEMS ENGINEERING ASSOCIATES
DDATE:
19880726
TTEXT:
~1
[1] U.S. DEPARTMENT OF LABOR
DEPUTY SECRETARY OF LABOR
WASHINGTON, D.C.
20210
DATE: July 26, 1988
CASE NO. 87-SCA-OM-3
IN THE MATTER OF
SYSTEMS ENGINEERING ASSOCIATES
CORPORATION (SEACOR)
and
ADMINISTRATOR, WAGE AND HOUR
DIVISION, EMPLOYMENT STANDARDS
ADMINISTRATION, UNITED STATES
DEPARTMENT OF LABOR.
BEFORE: THE DEPUTY SECRETARY OF LABOR
DECISION AND ORDER
This matter is before me /FN1/ pursuant to the Service
Contract Act of 1965, as amended (the Act), 41 U.S.C. [secs]
351-358 (1982), and the rules and regulations promulgated
thereunder, 29 C.F.R. Parts 4 and 8 (1987). Petitioner, Systems
Engineering Associates Corporation (SEACOR), seeks review of the
December 24, 1986, final decision of the Wage and Hour
Administrator which denied Petitioner's request for a hearing on
the issue of arms-length negotiations under 29 C.F.R. [sec] 4.11.
SEACOR requested the hearing under Section 4(c) of the Act, 41
U.S.C. [sec] 353(c), claiming that a collective bargaining
agreement (CBA) between Dyn Logistics, Inc., and the International
Union of Operating Engineers, Local 387 (the Union) which formed
the basis for Wage Determination (WD 81-784) (Rev 4) issued July
30, 1984, was not [1]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ 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 (1987); Department of Labor Executive Level Conforming
Amendments of 1986, Pub. L. No. 99-619 (November 6, 1986). [1]
~2
[2] entered into as a result of "arms-length negotiations" as
required by the Act. 41 U.S.C. [sec] 353(c)(3). SEACOR was the
successful bidder and awarded the contract effective October 1,
1984, succeeding Dyn Logistics as the contractor providing
technical and warehouse services to the United States Navy at
Portsmouth, Virginia.
The pertinent regulations governing the granting or denying a
request for hearing are found at 29 C.F.R. [sec] 4.11(b)(2)(i) and
(ii) as follows:
(2) Pursuant to Section 4(b) of the Act, requests for a
hearing shall not be considered unless received as
specified below except in those situations where the
Administrator determines that extraordinary circumstances
exist:
(i) For advertised contracts, prior to 10 days before
the award of the contract;
(ii) For negotiated contracts with provisions extending
the term by option, prior to the commencement date of the
contract or the follow-up option period, as the case may
be.
In its appeal, Petitioner acknowledges that its May 14, 1986,
request for a hearing did not meet the time limitation
requirements. Petitioner argues that extraordinary circumstances
exist and that the Administrator erred by ruling otherwise and
denying the request for hearing. Petitioner also argues that
denial of a hearing violates the due process requirements of the
Constitution and the Administrative Procedure Act.
Petitioner asserts that it discovered
evidence of 'unusual' conduct between the predecessor
contractor, Dyn Logistics, Inc., and Local 387 as a
result of an unfair labor practice investigation
conducted by the National Labor Relations Board. This
investigation was not conducted until over a year after
SEACOR was [2]
~3
[3] initially awarded the I.S.S.O.P. [/FN2/] contract.
This evidence was newly discovered and so compelling as
to constitute extraordinary circumstances. The Administrator,
pursuant to Section 4(b) of the Act and the implementing
regulations, [*] must [*] direct a hearing, or a least convene
an investigation, concerning the extraordinary circumstances
involved herein.
Memorandum of Law in Support of SEACOR's Petition for Review
(Petitioner's Memorandum) st 3 [*](emphasis added)[*].
The question is whether the Administrator erred in finding
that extraordinary circumstances did not exist to grant
Petitioner's request for a hearing. In its May 14, 1986, request
for a hearing under Section 4(c), Petitioner stated the following:
The extraordinary circumstances which exist to trigger
this request are as follows:
(1) On December 8, 1985, SEACOR filed unfair labor
practice charges with the National Labor Relations Board
alleging that Dyn Logistics, Inc. violated [sec] 8(a)(2)
of the National Labor Relations Act by rendering unlawful
support to Local 387.
(2) The investigation of that unfair labor practice
charge revealed that Dyn Logistics, Inc. prematurely
entered into a collective bargaining agreement with Local
387 on March 29, 1984 with the wages and benefits to
become effective after the expiration of the October 1,
1984 contract.
(3) The investigation also revealed evidence of
collusion between Dyn Logistics, Inc. and Local 387 as
follows:
(a) For no apparent reason, in March, 1984,
Dyn Logistics, Inc. required all employees as
a term and condition of employment to become
and remain members of Local 387. Such a
clause is most unusual in that locality.
(b) Dyn Logistics hired the son of John
Bateman, Business Agent for Local 387, as an
employee. [3]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ Intra-Fleet Support Services Operations Program [3]
~4
[4] (c) Between April 1, 1984 and October 1,
1984, Dyn Logistics, Inc. paid Robert Fields
as a forklift operator when, in fact, Mr.
Fields was serving only as a steward for Local
387. During the regular work day, although
Fields was on the Dyn Logistics payroll, he
was not performing services for the contract.
However, Mr. Fields was accorded preference
for all overtime opportunities. To the best
of SEACOR's knowledge, information and belief,
Mr. Fields was not qualified to operate a
forklift truck.
Administrative Record (A.R.), Exhibit D.
Petitioner claims that the NLRB investigation revealed that
Dyn Logistics, Inc. prematurely entered into a CBA with Local 387
and also revealed evidence of collusion between Dyn Logistics and
Local 387. The NLRB denied Petitioner's unfair labor practice
charges and dismissed SEACOR's December 1985 charge, see A.R.
Exhibit E at 3, n.3, and an election challenge based on the same
arguments, A.R. Exhibit E. Although SEACOR claims that the issues
examined by the NLRB were not identical to the issues raised in
this petition, it is clear from the record that SEACOR is raising
the same issues with the Administrator that it raised with the
NLRB.
The Administrator, in a motion to dismiss, points out that
Petitioner could have ascertained items (2) and 3(a) (quoted above)
from reading the CBA which was available to Petitioner prior to the
contract award in 1984. Thus the date of the contract and its
provision for union membership cannot constitute "newly discovered"
information which might support a finding of "extraordinary
circumstances." The Administrator, however, reviewed Petitioner's
other contentions and determined that Petitioner had failed to
provide [[4]
~5
[5] "information which supports a conclusion that there was collusion,"
/FN3/ A.R., Exh. A at 2, and noted that their similar charges had been
rejected by the NLRB. Id. at 3; A.R., Exh. E at 3, n.3.
It appears that the Administrator, the Administrator's
counsel, and the Petitioner have confused the question of whether
there are "extraordinary circumstances" sufficient to warrant
consideration of Petitioner's untimely hearing request with the
merits of the claims which Petitioner seeks to have heard. The
regulations provide that a finding (on the merits) is limited to
the methods delineated in [sec] 4.11(a) as follows:
A [*] finding [*] as to whether a collective bargaining
agreement or particular wages and fringe benefits therein
are reached as a result of arm's-length negotiations may
be made through [*] investigation, hearing, [] or
[] otherwise pursuant to the Secretary's authority under
Section 4(a) of the Act [*].
[*](emphasis added)[*]. Absent Petitioner's meeting the time
limitation of 29 C.F.R. [sec] 4.11(b) (2)(i) and (ii), and absent
the Administrator's determination that extraordinary circumstances
exist, a denial of Petitioner's request is in order. Consideration
of the merits and a "finding" in the Administrator's decision that
there is not sufficient evidence of an absence of arms-length
negotiations is unnecessary. [5]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN3/ The Administrative Record reveals that the Director of the
Division of Wage Determinations twice wrote to Petitioner's counsel
who submitted the May 14, 1986, request suggesting that additional
information be provided. A. R., Exhibits B, C. The Administrative
Record reveals nothing further was offered by Petitioner to support
its claim of "extraordinary circumstances" before the
Administrator.
My appellate review is based on the record before the Administrator
and the parties' filings before me, excepting new evidence, which
cannot be the basis for an appellate disposition. 29 C.F.R.
[secs] 8.1(d), 8.8(b). [5]
~6
[6] Upon review, I find no basis to disturb the Administrator's
determination that Petitioner had not presented sufficient indicia
of "extraordinary circumstances" which would warrant waiving the
time limits of 29 C.F.R. [sec] 4.11(b)(2) and invoking the
investigation and/or hearing procedure of subsection 4.11(c).
As to Petitioner's claim that denying a hearing or
investigation of the charges which Petitioner sought to raise 19
months after beginning work on the contract, constitutes a denial
of due process, this claim, if seriously asserted, is denied.
Petitioner neglected to raise its claims timely; sought to invoke
the Part 4 procedure by claiming an exception to the rule, and
failed to provide supplemental support for its request. The
Administrator considered all of Petitioner's points and concluded
that extraordinary circumstances do not exist to justify a hearing
at this late date. There is no basis for finding that Petitioner
was denied its due process rights.
Accordingly, the Administrator's denial of Petitioner's
request for hearing is affirmed, the motion to dismiss IS GRANTED
and the petition IS DISMISSED. /FN4/
SO ORDERED.
[Dennis E. Whitfield]
Deputy Secretary of Labor
Washington, D. C. [6]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN4/ Having affirmed the Administrator's determination that
extraordinary circumstances do not exist, I do not address the
issue of whether or not the CBA between Dyn Logistics, Inc., and
Local 387 was reached as the result of arm's-length negotiations. [6]
