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CCASE:
INDUSTRIAL MAINTENANCE
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19930405
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[1] BOARD OF SERVICE CONTRACT APPEALS
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
INDUSTRIAL MAINTENANCE BSCA Case No. 92-22
SERVICE, INC., and
J.P. HOLLOMAN
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Anna Maria Farias, Member
DATED: April 5, 1993
DECISION OF THE BOARD OF SERVICE CONTRACT APPEALS
This case is before the Board of Service Contract Appeals on
the petitions of Industrial Maintenance Service, Inc., and its
president, J.P. Holloman (collectively referred to as "IMS") and
the Administrator of the Wage and Hour Division for review of the
March 11, 1987 decision and order issued by Administrative Law
Judge ("ALJ") Bernard J. Gilday, Jr. IMS appealed from the ALJ's
determination that he lacked jurisdiction to rule on a wage
conformance issue. The Administrator also appealed from various
aspects of the ALJ's decision and order. This Board heard oral
argument in this matter on March 2, 1993. /FN1/ For the reasons
stated below, the ALJ's decision and order is affirmed in part,
reversed in part, and remanded for further proceedings consistent
with this decision. [1]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ After the hearing, counsel for IMS submitted a motion to file
a Response to Administrator's Petition for Review, which was
comprised of IMS's original Response with updated citations of
legal authority. That motion is hereby granted. [1]
~2
[2] I. BACKGROUND
A. Introduction
Under a contract that covered the period from August 30, 1984
to September 30, 1985, IMS agreed to perform food and cafeteria
services at the Wright-Patterson Air Force Base in Dayton, Ohio.
The contract was subject to the requirements of the McNamara-O'Hara
Service Contract Act of 1965, as amended (41 U.S.C. [sec] 351 et
seq.; "SCA"). A complaint issued by the Department of Labor on
March 3, 1986 alleged that IMS had violated the SCA by failing to
pay its service employees the requisite minimum wages and fringe
benefits. The complaint also sought to have IMS and Holloman
debarred.
B. The ALJ's decision and order
1. The cashier classification/wage conformance issue
In his decision and order issued on March 11, 1987, the ALJ
addressed the question of an ALJ's authority to entertain and
resolve a wage conformance issue. The parties stipulated that the
wage determination applicable to the contract in this case did not
contain a cashier classification. IMS submitted a timely request
for the addition of a cashier classification at a wage rate of
$5.00 per hour. IMS and the contracting agency were notified on
April 4, 1985 that the requested cashier classification had been
approved, but at a wage rate of $6.46 per hour. From August 30,
1984 to July 3, 1985, the cashiers were paid at the rate IMS had
requested -- $5.00 per hour. IMS paid back wages totaling
$6,894.84; the back wage sum reflected the difference between the
$5.00 wage rate requested by IMS and the $6.46 rate approved by the
Department of Labor.
The ALJ stated that the threshold question was whether review
of the Administrator's final determination on a request for a wage
conformance was within an ALJ's jurisdiction. IMS argued, he
noted, that an ALJ was not precluded from admitting evidence and
rendering a decision on a conformance issue. The ALJ, however,
declined to review the Administrator's conformance ruling (ALJ's
Decision ("ALJD") at p. 9). Accordingly, he found that in failing
to pay the cashiers the approved hourly rate of $6.46, IMS violated
the SCA.
IMS petitioned for review of this portion of the ALJ's
decision and order on June 11, 1987. /FN2/ [2]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ The Board of Service Contract Appeals was established on July
10, 1992 by Secretary's Order No. 3-92. Prior to that date,
petitions for review regarding SCA matters were received by the
Office of Administrative Appeals. [2]
~3
[3] 2. The break in service issue
The record evidence disclosed that the dining facility was
closed for total renovation for 11 months -- from September 30,
1984 to August 31, 1985. The parties stipulated that of 50
employees hired by IMS, 16 individuals claimed that they were
entitled to vacation and health and welfare benefits, based on
employment with a predecessor contractor. IMS paid $5,725.00,
reflecting the difference between basing benefits on each
employee's hire date with a predecessor contractor and basing the
benefits on the employer's hire date with IMS.
The ALJ noted that resolution of this issue centers on 29
C.F.R. 4.173(b), which provides that
if an employee's total length of service adds up to at
least one year, the employee is eligible for vacation
with pay. However, such service must have been rendered
continuously for a period of not less than one year for
vacation eligibility. The term "continuous service" does
not require the combination of two entirely separate
periods of employment. Whether or not there is a break
in the continuity of service so as to make an employee
ineligible for a vacation benefit is dependent upon all
the facts in the particular case. No fixed time period
has been established for determining whether an employee
has a break in service. Rather, as illustrated below,
the reason(s) for an employee's absence from work is the
primary factor in determining whether a break in service
occurred.
The ALJ noted that 29 C.F.R. 4.173(b)(iv) sets forth an example of
a instance in which a break in service did not occur:
A mess hall closed three months for renovation.
Contractor employees were considered to be on temporary
layoff during the renovation period and did not have a
break in service.
The ALJ also stated, however, that the Department of Labor had
not produced employee testimony to show that "a call to return to
work was expected" (ALJD at p. 7). Further, he added, there was
evidence that the dining facility was closed on the day when the
contract of the predecessor contractor expired, and did not re-open
for 11 months. Government food service contracts are generally for
one year, the ALJ stated, and there is a routine lapse of
employment between contractors. However, he stated, an 11-month
hiatus "is neither a usual gap between service contracts nor a
temporary layoff. It is altogether foolhardy to conclude that the
involved sixteen (16) employees would [3]
~4
[4] either refrain from work for practically a full year, or that they
would vacate new positions because they harbored the reasonable
expectation of being recalled and re-employed by [IMS]" (Id.). The ALJ
found that the 16 employees were not entitled to vacation pay and health
and welfare benefits based on their length of service with predecessor
contractors (Id.). He also ordered that IMS be reimbursed $5,725.00,
with interest from the date of payment to the date of reimbursement --
the sum reflecting the difference between basing seniority for the 16
employees on their hire dates with IMS, and basing seniority on the hire
dates with predecessor contractors (Id. at 7, 12).
The Administrator petitioned for review of the ALJ's
determination that the 16 employees were not entitled to benefits
based on their length of service with predecessor contractors, and
of his order that IMS be reimbursed with interest.
3. The Cook III classification
The applicable wage determination did not contain a Cook III
classification. IMS filed a conformance request for an additional
Cook III classification at an hourly wage rate of $6.66; however,
that request was disapproved on April 4, 1985. The ALJ stated that
IMS admitted that a change in 29 C.F.R. 4.152(c) at about the time
of the contract solicitation and bidding precluded them from
obtaining a conformed Cook III classification, and that they were
not entitled to recover $3,908.46 -- the difference between the
$6.66 per hour paid to employees for the disapproved Cook III
classification and the hourly rate of $7.36 which should have been
paid in accordance with the Cook II classification. Accordingly,
the ALJ concluded that a violation of the SCA had been established
(ALJD at p. 4). No party has petitioned for review of this portion
of the ALJ's decision and order.
4. The Cook I/Cook II issue
The Department of Labor claimed that IMS violated the SCA by
compensating employees as Cook II employees at the hourly rate of
$7.36 for that classification, when the employees were actually
performing Cook I duties and should have been paid the Cook I
hourly rate of $8.27. The ALJ concluded, however, that the record
evidence did not support a finding that IMS had violated the SCA by
failing to pay all cooks at the Cook I rate (ALJD at p. 5). The
ALJ also ordered that the contractor be reimbursed $2,951.61, with
interest from the date of payment to the date of reimbursement --
the sum representing the difference between the Cook I rate and the
Cook II rate, along with holiday and overtime pay which IMS was
under no duty to pay to the employees. The Administrator did not
petition for review of the ALJ's determination that IMS did not
violate the SCA by paying employees at the Cook II rate; the
Administrator [4]
~5
[5] has sought review, however, of the ALJ's order that IMS be
reimbursed, with interest.
5. Debarment
The ALJ did not reach the merits of the debarment issue
because of his rulings regarding production of documents by the
Department of Labor. As noted earlier, the Department issued a
complaint in this case on March 3, 1986. A request for production
of documents was filed by IMS on July 25, 1986. The 18-part
document request sought, in Request 1, all documents relating to
the Department's investigation at Wright-Patterson AFB in this
case; Request 2 was for all documents relating to any past
investigations of IMS at Wright-Patterson AFB. In Requests 3-16,
IMS sought all documents relating to each of 14 past investigations
at other military bases. In Requests 17 and 18, IMS sought all
documents compiled in this case by the Area Director of the Wage
and Hour Division or his subordinates, agents and designees; and by
any other members, agents or designees of the Department,
"including any and all reports or recommendations concerning
possible debarment of [IMS] from federal government contracts."
The Department responded to the document request on August 15,
1986. In response to Request 1, the Department stated that it had
produced "all the documents which it is able to produce."
Regarding Request 2, the Department stated that there were no
documents to produce, since there had been no past investigations
of IMS at Wright-Patterson AFB. The Department specified four
objections to Requests 3-16: (a) the requests were burdensome and
oppressive because the documents were located in several area Wage
and Hour offices; (b) some of the documents might have been retired
to federal records archives; (c) efforts to respond to the request
would cause great burden and expense in order to obtain information
which IMS should already possess; (d) the requests call for
production of internal memoranda, opinions and other documents
"which are protected from disclosure by the lawyer's work product
privilege, the executive privilege and the informer's privilege."
The Department objected to Requests 17 and 18 as being too
nonspecific to understand; too general and vague for a response;
and calling for the production of internal memoranda and opinions
"which are protected from disclosure by the lawyer's work product
privilege and the executive privilege."
IMS filed a Motion to Compel Production of Documents dated
September 8, 1986. The Department then filed a Motion for
Protective Order dated September 23, 1986. The ALJ ruled on the
motions in an order dated September 26, 1986. Regarding the
Department's argument that production of the documents would be
burdensome and oppressive, the ALJ ordered the production only of
those documents which could be acquired within 10 days. Regarding
the [5]
~6
[6] informer's privilege, the ALJ specified that "any document which
hereinafter is ordered produced shall first be purged of the name of the
speaker and then any and/or all material which reasonably could tend to
disclose identity shall be obliterated." Regarding the work product
rule, the ALJ stated that "there has been neither any showing by the
Secretary that any document was not prepared in the ordinary course of
business and was created by a Department attorney or his representative
for specific litigation, nor [has IMS] established any hardship or
particularized need." He concluded that the "Work Product Rule is not
and cannot be invoked in this case." the ALJ also concluded that the
executive privilege claim was "meritless" because "prescribed procedure
has not been observed." The ALJ stated:
As grounds for a protective order, Counsel for the
Secretary initially contends that the Department of Labor
may withhold all documents prepared by its officials
containing their mental impressions, conclusions,
opinions or legal theories. In short he maintains that
Executive Privilege protects the documents desired by
[IMS]. However, Executive Privilege is never available
unless it is asserted by the head of the agency or
department or authority. Moreover, it is incumbent upon
he who claims Executive Privilege to designate with
particularity the protected documents and his precise
reasons for preserving and protecting confidentiality must be
clearly stated. (Citations omitted.)
The Department filed a motion for reconsideration of the ALJ's
ruling on the work product rule on October 14, 1986. The
reconsideration request addressed disclosure of one document, the
"Investigation Transmittal Form" dated October 4, 1986; the
Department asserted the lawyer's work product rule as to that
document. The Department also stated that within the next few days
the ALJ would receive from the Wage and Hour Administrator a formal
document asserting the deliberative processes privilege "for all
debarment recommendations contained in all the documents to be
produced by the U.S. Department of Labor in this case." On October
15, 1986, the day after the Department's motion for reconsideration
was filed, the ALJ issued an order denying the motion. The ALJ
stated:
The theory and thrust of the reconsideration motion is,
stated bluntly, that, since I didn't proceed on sound
legal footing in the first instance, I am entitled to
another bite of the apple. The motion for protective
order was a shoot from the hip shotgun blast that
appeared only to omit the espousal and confessor-penitent
privileges. It took the Order issued on September 16,
1986 to educate Counsel and, for the remaining life of
this case, there shall be not further education.
Whatever right, if any, to the [6]
~7
[7] deliberative processes privilege, which obviously is
a principle which has escaped Counsel, was not properly
asserted and has been forfeited. The motion for
reconsideration borders on the frivolous and is disposed
of accordingly.
Also on October 15, 1986, the Wage and Hour Administrator filed a
Formal Claim of Privilege "formally interpos[ing] a claim of the
deliberative processes privilege with respect to these
recommendations concerning debarment made by Wage and Hour Division
staff personnel concerning debarment of [IMS]."
In an order dated October 16, 1986, the ALJ denied the
Administrator's Formal Claim of Privilege. The ALJ stated:
The Administrator's claim of privilege is worthless. It
ignores all for which established and persuasive case law
stands and apparently was constructed without the benefit
of even cursory research. No consideration will be given
to any future attempt to draft in proper and legal form
an assertion of any privilege.
On October 29, 1986 the Department submitted a Response to
Orders, referencing the ALJ's orders of September 26, 1986; October
15, 1986; and October 16, 1986. The response stated that the
Department had complied with the ALJ's orders "to the extent that
all available documents pertaining to the past and present
investigations of [IMS] have been produced," with the documents
purged of informer's privilege information (pursuant to the ALJ's
September 26, 1986 order) and debarment recommendation information.
The response stated:
In the opinion of the Administrator, Wage and Hour
Division, the proper administration and enforcement of
the [SCA] requires that recommendations concerning
debarment under the Act not be disclosed. Accordingly,
in accordance with instructions from the National Office
of the Solicitor, the Department declines to release any
information pertaining to debarment of [IMS] as a result
of either any past or present investigations. . . .
The ALJ issued an order that same day, stating:
There is no place for the opinion of the Administrator in
this case. Her totally dismal attempt to assert a
privilege has heretofore been denied and to substitute an
"opinion" therefor is reprehensible. Neither is the
National Office of the Solicitor directing this case.
The blatant refusal to comply with Orders made herein
demands sanctions which are now imposed and from which
there shall be no retreat. [7]
~8
[8] The ALJ ordered that pursuant to 29 C.F.R. 18.6(d)(2)(i)-(iv),
at the hearing in this matter "no evidence shall be received from
the Secretary on the issue of debarment and any and every reference
heretofore made herein concerning debarment is hereby struck. He
also ordered that "it shall, henceforth, be inferred that each and
every document withheld would have been adverse to the Secretary
and, in accordance with 29 CFR 18.6(d)(2)(ii), the issue of
debarment shall be taken as established adversely to the
Secretary."
At the opening of the hearing in this case on November 12,
1986, the ALJ stated that during the hearing certain rules would
strictly apply, the first of these rules being that "there shall be
no mention by either counsel, or by any witness of the word
`debarment.' " The ALJ noted that once a violation of the SCA has
been established, debarment follows absent a showing of "unusual
circumstances" by the employer. He added, however, that in this
case "it is exceedingly clear that, because of the bold, oblique,
the amazing defiant position that the Solicitor has taken in this
case, that [IMS], very effectively, [has] been denied the
opportunity to establish unusual circumstances." Counsel for the
Department stated that she had a proffer to make regarding
debarment, and the ALJ responded that the proffer "will not be
received." At the close of the hearing counsel for the Department
made a written proffer. The ALJ received the documents "[f]or
record preservation purposes, so that a meaningful review can be
accomplished." He added, however, that "I will not give the
documents any consideration, at all, in light of what I have said.
I consider it to be blatantly defiant conduct."
As noted earlier, in his March 11, 1987 decision and order,
the ALJ concluded that IMS committed two violations of the SCA.
The ALJ acknowledged that debarment ordinarily follows the finding
of a violation absent a showing of "unusual circumstances." He
added, however, that "[t]he disgraceful procedural history of this
case . . . totally precludes any consideration of the sanction of
debarment." He also stated that the Department's refusal to
release the debarment material had deprived IMS of the opportunity
to establish the existence of "unusual circumstances." The ALJ
concluded by stating that the "sanction of debarment is neither
considered nor imposed. The issue of debarment is merely resolved
adversely to the Secretary."
The Administrator has petitioned for review, arguing that the
ALJ erred by ordering the Administrator to produce documents
containing debarment recommendations, and by not considering the
debarment sanction. [8]
~9
[9] II. DISCUSSION
A. The conformance issue
The ALJ in this case declined to review the Wage and Hour
Division's decision regarding the conformed wage rate for the
cashier classification. Accordingly, he found that in paying the
cashiers less than the conformed hourly wage rate of $6.46, IMS
violated the SCA. IMS has petitioned for review of the ALJ's
decision on the wage conformance issue, arguing that the ALJ is
authorized to rule on the conformable rate issue. This Board,
however, concludes that the ALJ's decision not to rule on the
conformed wage rate is consistent with the Board's recent decision
in Executive Suite Services, Inc., BSCA No. 92-26 (Mar. 12, 1993).
In that case, the Board reversed (at pp. 7-8) an ALJ's
determination that he had jurisdiction to decide conformance
issues. The Board stated (Id. at p. 8):
The ALJ in this case was without jurisdiction to decide
questions related to the conformance procedure, and it
would appear that an ALJ's sole function when confronted
with a complaint seeking back wages based on an otherwise
valid and unappealed conformance ruling is to order
payment of back wages computed due based on the conformed
classifications and wage rates.
We adhere in this matter to the precedent established in Executive
Suite Services, Inc., and affirm the ALJ's decision not to review
the Wage and Hour Division's determination regarding the conformed
wage rate for the cashier classification.
B. The break in service issue
The ALJ determined that 16 employees were not entitled to
vacation pay and health and welfare benefits based on their length
of service with predecessor contractors. The ALJ reasoned that
these employees were not engaged in continuous service within the
meaning of 29 C.F.R. 4.173(b), due to the 11-month period during
which the dining facility was closed for renovation. For the
reasons discussed below, the Board concludes that the ALJ erred on
this point.
Section 4.173(b) states that "[w]hether there is a break in
the continuity of service . . . is dependent upon all the facts in
the particular case." The regulation, however, also provides
guidance in evaluating the facts of each case, specifying that
"[n]o fixed time period has been established for determining
whether an employee has a break in service," and that "the
reason(s) for an employee's absence from work is the primary factor
in determining whether a break in service occurred." The
regulation also provides illustrative examples [9]
~10
[10] of situations where it had been determined that a break in service
did, or did not, occur. Thus, for example, in a situation where a mess
hall was closed for three months for renovation, the contractor
employees were deemed to be on temporary layoff during that period and
did not have a break in service. 29 C.F.R. 4.173(b)(1)(iv). On the
other hand, if an employee is discharged for cause, quits or its
otherwise terminated, there would be a break in service even if the
employee were later rehired. 29 C.F.R. 4.173(b)(2).
With these illustrative examples in mind, as well as the
regulatory guidance that the reason for an employee's absence from
work is the primary factor in determining whether a break in
service occurred, the Board concludes that it will not take
exception to the Administrator's position that the 16 employees in
question had continuous service within the meaning of Section
4.173(b). As noted by counsel for the Administrator (Petition, at
p. 33), the testimony at the hearing established that the closing
of the dining facility in this case was a temporary measure
(anticipated to last six months) for the purpose of renovating the
facility. The renovations took nearly twice as long to complete as
originally anticipated, but that does not detract from the fact
that the dining facility was closed only on a temporary basis. The
ALJ erred in placing particular emphasis on the length of time that
the dining facility was closed, for as noted by counsel for the
Administrator (Id.) the length of time devoted to the renovations
was not within the control of the contractor employees. In short,
the Board concludes that the 16 employees who returned to work for
IMS when the facility was reopened are entitled to benefits based
upon their length of service with predecessor contractors.
C. The reimbursement issue
The Administrator also petitioned for review of the portion of
the ALJ's decision and order requiring the Department to reimburse
IMS, with interest, for amounts which were paid by IMS and
distributed to employees by the Department prior to the
commencement of this enforcement proceeding, regarding alleged
violations which the ALJ found IMS did not commit. At this point,
the controversy is confined to the $2,951.61 in back wages paid by
IMS regarding the Cook I/Cook II dispute since, as discussed above,
the Board has reversed the ALJ on the break in service issue.
The Board agrees with the Administrator that the ALJ lacked
authority to order the Department to reimburse IMS, with interest.
As noted by counsel for the Administrator (Petition, at p. 35), the
ALJ was required under principles of sovereign immunity to have
express congressional authorization for such an order. See, e.g.,
Nassau Smelting & Refining Works v. United States, 266 U.S. 101,
106 (1924). The ALJ, however, failed to discuss the doctrine of
sovereign immunity and failed to cite any legal authority for his
order. Further, we can discern no [10]
~11
[11] legal authority for the ALJ's order. This proceeding was initiated
as an enforcement proceeding under the SCA, but nothing in the SCA
authorizes an ALJ to order the Department to pay back an employer. Even
assuming, for the sake of argument, that IMS could state a cause of
action under some other statute, such a claim would have to be
adjudicated in another proceeding and before another tribunal. The
ALJ's authority in this proceeding is limited to adjudication of issues
arising under the SCA.
The ALJ similarly exceeded his authority by ordering the
payment of interest since interest awards, like awards of
principal, may be made against the government only with its
consent. Library of Congress v. Shaw, 478 U.S. 310, 315 (1986).
As noted by counsel for the Administrator (Petition, at pp. 36-37
& n.24), the "general disputes clause" in a government contract
incorporates the Contract Disputes Act into the contract. SCA
regulations (at 29 C.F.R. 4.6(r)), however, specify that labor
standards disputes shall not be subject to the general disputes
clause. Instead, labor standards disputes, such as the instant
case, must be resolved through Department of Labor proceedings.
Thus, while an agency Board of Contract Appeals would be permitted
under the general disputes clause of a contract to award interest
to a contractor in resolving a matter such as, for example, cost
overruns (48 C.F.R. Ch. 1, 33.208), the general disputes clause
does not apply to resolution of labor standards disputes in
Department of Labor proceedings. Accordingly, there is no
governmental consent in this instance to the award of interest on
back wages.
For the above-stated reasons, the order of the ALJ regarding
reimbursement of IMS and payment of interest is reversed. This
Board makes the further observation, as did counsel for the
Administrator at oral argument, that IMS had an avenue for
protecting its access to the amounts paid as back wages owed for
alleged violations upon the ultimate determination in the
enforcement proceedings that alleged violations did not occur.
That is, IMS could have requested that the amounts paid over be
held in escrow, but IMS failed to make such a request in this case.
D. The debarment issue
Although the ALJ found that IMS committed violations of the
SCA, he refused to consider debarment of the company and Holloman
because of what the ALJ termed the Department's "blatantly defiant
conduct" in refusing to produce debarment recommendations made in
the course of Department investigations of IMS. The Board
concludes that the ALJ erred, and remands this matter to the ALJ
with instructions to sustain the privileges asserted by Department
and for resolution of the issue whether IMS and Holloman should be
debarred for violations of the SCA. The Board further orders that
the ALJ proceedings on remand shall be completed within six months
from the date of this decision. [11]
~12
[12] The dispute over production of documents in this case has
been chronicled elsewhere in this decision (see pp. 5-8, supra) and
will not be fully recounted here. It is useful, however, to note
the salient facts. That is, in response to the request for
production of documents the Department produced all available
documents, with the exception of excised information protected by
the informer's privilege (which the ALJ permitted the Department to
invoke), and debarment recommendations. The ALJ refused to permit
the Department to invoke the work product rule, even though he
specifically found that IMS had failed to demonstrate "any hardship
or particularized need" regarding the withheld debarment
recommendations. When the Department cured what the ALJ stated
were defects in assertion of the deliberative processes privilege
by having the agency head (the Administrator) file a formal
invocation of the privilege and by submitting a description of the
privileged documents, the ALJ declared that the Department's
efforts amounted to a "blatant refusal" to comply with his orders
and warranted the imposition of sanctions. The sanction levied by
the ALJ was his order that "no evidence shall be received from the
Secretary on the issue of debarment and any and every reference
heretofore made herein concerning debarment is hereby struck. He
also ordered that "it shall, henceforth, be inferred that each and
every document withheld would have been adverse to the Secretary
and . . . the issue of debarment shall be taken as established
adversely to the Secretary." The ALJ stated that the Department's
refusal to release the debarment recommendations had deprived IMS
of the opportunity to show the existence of "unusual circumstances"
-- a statement utterly at odds with the ALJ's finding with respect
to the work product rule that IMS had failed to make a showing of
"any hardship or particularized need."
Thus, the ALJ committed several errors. He erred by denying
the deliberative processes privilege after the Department cured
what the ALJ perceived to be procedural flaws in the invocation of
the privilege. He erred by denying the Department's claim of
privilege without explaining what errors existed in the merits of
the Department's claim. He erred by failing to recognize that if
he had addressed the merits of the Department's claim he would have
been compelled to acknowledge the wealth of legal authority in
support of the proposition that advisory opinions, recommendations
and deliberations which are part of the government decision-making
process are ordinarily protected from discovery. /FN3/ He erred by
refusing to consider debarment of IMS after he found that IMS had
committed violations of the SCA. He erred by stating that the
refusal to release the debarment recommendations deprived IMS of
the ability to demonstrate the existence of "unusual
circumstances"; that statement is inconsistent with his earlier
finding that IMS had failed to demonstrate a need for those
documents. Further, the ALJ's statement fails to recognize that
the test of [12]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN3/ See, e.g., EPA v. Mink, 410 U.S. 73, 86-87 (1973).
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[13] "unusual circumstances" at 29 C.F.R. 4.188(b)(3) is an
objective, fact-driven test, and the advisory opinions and
recommendations of Wage and Hour staff are essentially irrelevant
to an employer's ability to satisfy that test.
For the foregoing reasons, the decision and order of the ALJ
regarding debarment and the invocation of the work product rule and
deliberative processes privilege is reversed; this matter is
remanded to the ALJ for further proceedings consistent with this
decision.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman;
Ruth E. Peters, Member;
Anna Maria Farias, Member
Gerald F. Krizan, Esq.[,]
Executive Secretary [13]
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