CCASE:
MAST CONSTRUCTION
DDATE:
19840412
TTEXT:
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[1] [84-22.WAB ATTACHMENT 1 OF 2]
U.S. Department of Labor Office of Administrative Law Judges
John W. McCormack Post Office
and Courthouse
Room 409
Boston, Massachusetts 02109
In the Matter of
Disputes concerning the payment of
prevailing wage rates and proper
classifications by:
MAST CONSTRUCTION, INC.
Prime Contractor
DUN-RITE CONSTRUCTION CORPORATION
Subcontractor
&
Proposed debarment for labor standards
violations by:
DUN-RITE CON[S]TRUCTION CORPORATION
Subcontractor
ARTHUR ENTWISTLE, JR., Owner
With respect to laborers and mechanics
employed by the above subcontractor under
U.S. Department of Housing and Urban
Development Project Nos. 016-35054-LDP-SR
L8 (Colony Apts.), 016-35051-LDP-L8 (Medina
Village), 016-57007-221-LDP-SR-L8 (New
Cities) Providence, Rhode Island; 016-35050
LDP-SR-L8 (San Souci), Central Falls,
Rhode Island.
Appearances:
John E. Fornaro, Jr., Esq.
600 Putnam Pike
Greenville, RI 02828
For the Respondents and Dun-Rite Construction Corp.
Merle Hyman, Esq.
Office of the Solicitor
U.S. Department of Labor
J.F.K. Federal Building
Boston, MA 02203
For U.S. Department of Labor
Before: Anthony J. Iacobo
Administrative Law Judge [1]
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[2] DECISION AND ORDER
This is a proceeding under the Davis-Bacon Act (40 U.S.C.
[sec] 276(a), et seq.) and U.S. Department of Labor regulations 29
C.F.R. Part 5. An order of reference was issued on April 23,
1982, by the Administrator of the Wage and Hour Division
referring the case to this Office for hearing. A hearing was
held on January 11, 12, 13, and 14, 1983. The case initially
involved (a) disputes concerning the payment of prevailing
wage rates and proper classifications by the Prime Contractor
and Subcontractor and (b) the proposed debarment for
aggravated or willful labor standards violations by the
subcontractor and its owner, Arthur Entwistle, Jr.[] On January
13, 1983 the parties, that is, the Subcontractor and the
Department, reached a settlement on the payment of
classifications issues which was formally memorialized by an
agreement dated January 31, 1983 and submitted for approval on
June 29, 1983. This was approved by the undersigned by order
dated July 16, 1983. While, under the terms of the agreement
the subcontractor agreed to pay certain named employees
specified amounts in back wages totalling $30,000.00, it was
specifically stipulated that: The issue of whether debarment
of the Respondents /FN1/ from future government contracts is
appropriate in this case remains to be determined based on the
evidence presented at the hearing. The settlement of the wage
claims is made without admitting liability [i]n the past of
respondents and without precluding the evidence concerning
violations presented at the hearing from being considered for
purposes of a determination concerning debarment. (Page 2,
paragraph 2 of the Agreement). The subcontractor (Dun-Rite[])
and the Department are the two parties who participated
actively in this proceeding. After numerous extensions were
granted at the request of one or both parties, the last brief
was received on March 23, 1984, and the record was closed.
Background of the Case
Mast Construction, Inc., was the prime contractor in four
projects sponsored in whole or in part by assistance from the
U.S. Department of Housing and Urban Development (HUD). These
will be referred to as Colony Apartments, Medina Village, New
Cities, and San Souci. Dun-Rite is a subcontra[c]tor in these
four projects. The case was instituted by virtue of complaints
filed regarding the appropriateness of the job classification
and payment of wages of a number of alleged employees of
Dun-Rite. [2]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ Identified as Dun-Rite Construction Corporation
(Dun-Rite) and Arthur Entwistle, Jr., owner. [2]
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[3] Applicable Law and Regulations
The Davis-Bacon Act applies to construction work financed
by the Federal Government under contracts amounting to more
than $2,000.00. The parties agreed this requirement was met.
It is designed to insure that employees working on Federal
Government sponsored projects receive at the least, wages
commensurate with the activity which they perform and, to that
end, it requires payment to various classes of laborers and
mechanics of minimum wage rates determined by the Secretary of
Labor to be prevailing for similar employees in the particular
locality. It also provides for debarment.
Section 5.6(b)(1) of Part 5 of the Regulations provides,
as here pertinent, for the debarment (for three years [40
U.S.C. [sec] 276a-2(a)]) of a subcontractor found to be in
"aggravated or willful" violation of the duly enacted labor
standar[d]s. As part of the contractu[]al agreement between the
sponsoring government agency and the contractor, there is a
recitation of the applicable provisions of law and regulations,
which the contractor agrees to observe. JX 1-4. (2[9] C.F.R.
[sec] 5.5(a)). These include the payment of wages one and one-half
times the applicable basic hourly wage rate (prevailing wage)
for all hours over eight in one day and/or forty in one week
(time and one-half). The subcon[]tractor agrees to abide by
these requirements. JX 5-8, Article IX. Also included is the
requirement that a subcontractor must provide a weekly payroll
certifying that the provisions of [sec] 5.5(a) of Regulations, 2[9]
C.F.R. Part 5 are being met. (2[9] C.F.R. [sec] 5.5(a)(3)(ii)(B)).
Included among the statutes whose terms are to be observed are
The Contract Work Hours and Safety Standards Act (40 U.S.C.
327-332) and the National Housing Act (12 U.S.C. 1715c). The
former, as here pertinent, provides for the payment of "time
and one-half" for any work exceeding eight ho[ur]s in any one day
and forty hours in any one week for work performed pursuant to
a contract involving public works of the United States. The
latter, as here pertinent, includes the same provisions
regarding the pay of laborers and mechanics employed in the
construction of housing subject to the Act. The Respondent
does not dispute that the above statutory provisions apply.
Summary of Evidence
The parties agreed that all the employees in question were
either carpenters or wrecking laborers. TR 4; that the work
involved demolition, exterior siding, roofing and, on the
Medina job, the installation of windows. It was also agreed
that the applicable hourly rates for each category for each
project is as follows: [3]
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[4] Residential Carpenters Wrecking Laborers
Basic Fringes Basic Fringes
San Souci $8.20 $9.80 $8.25 $9.70
New Cities 8.20 9.80 8.25 9.70
Medina 8.40 10.00 8.95 10.75
Colony 8.40 10.00 8.95 10.75
The San Souci and New Cities projects sometimes called Central
Falls and Thurbers Avenue, respectively were started in
December 1978; the Medina Village and Colony Apartments
projects (sometimes called Cranston S[tr]eet and Public Street,
respectively) were started in September 1979.
A number of witnesses were called by the parties. Mr.
Robert Paquet was employed by Dun-Rite from March 1979 to early
1980. He performed some demolition work but mostly applied
exterior siding. This was performed, in part, on government
sponsored projects during the summer of 1979. TR 17. He was
paid the "equivalent" of $5.00 per hour, in cash. While not
recalling the project names, he remembered they were in
Central Falls (San Souci) and Cranston Street (Medina
Village). Most of his work for Dun-Rite was on private jobs.
TR 18. At Cranston Street, he installed siding, primarily. He
usually worked an 8-hour day. On those occasions when he
worked longer, he was not given any time and one-half. TR 19.
At Central Falls he installed siding. He was not paid any time
and one-half for extra hours worked beyond 8 in one day or 40
in one week. TR 21. He kept his own personal record of the
hours worked. He allowed the Department of Labor (DOL)
compliance officer, a Mr. Daley, to transcribe it. TR 21. The
witness recognized the copy (CX 1) as a copy of his records
although unable to attest to the accuracy of the exhibit. TR
23. The authenticity and accuracy of the exhibit was later
attested to by Mr. Daley. TR 684. Mr. Paquet kept his record
by making daily entries at the end of each day so as to have
data on which he could calculate his income tax liability. TR
25. He was unsure whether he ever filled out a time card; it
would not be a usual practice. Generally, he would merely
report his hours to a foreman on the job or to Mr. Entwistle on
a p[ie]ce of paper. He recalls working with other individuals,
some of whose names he recalled as Bill Brousseau, Don Frigon,
and Ed Brousseau, the latter, a son-in-law of Mr. Entwistle.
TR 29. In his statement to Mr. Daley, Mr. Paquet alleged he
often worked overtime, that is, more than 8 hours in one day or
more than 40 hours per week, but was paid straight time. RX [4]
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[5] 4. The infer[]ence advanced by the Department is that Dun-Rite
would cut the actual time in half to make it appear the
individual was being paid $10.00 per hour, when, in fact, he
was being paid $5.00. A review of Dun-Rite[']s payroll records
and the transcription for the weeks ending January 12, 19 and
26, 1980 appear to support Mr. Paquet's testimony. (CX 11).
It is noted that "private jobs" are not listed on the payroll
and those noted as federal projects, such as Central Falls (San
Souci) are included, but at only one-half the hours Mr. Paquet
had recorded.
Mr. Joseph Frye began working for Dun-Rite in the summer
of 1979 and left its employ in the fall of the same year. TR
49. He was rehired a few months later, in the winter of 1980,
but was unable to recall the date or how long he worked. In
1979 he was hired to work on the New Cities project to install
siding. He was paid $9.80 per hour. This does not jibe
precisely with the payroll records which show him earning from
$9.70 to $10.00. CX 10. He worked a "regular" eight-hour day,
forty hours per week. Again, the records fail to show any more
than 37-1/2 hours worked in any one week. There was no
overtime worked. TR 51. In the winter, he worked as a
carpenter and roofer on the Medina project and was paid $6.00
per hour, paid in cash. TR 51-52. He indicated he did not
keep his own timecard, which was kept by one of the owner's
sons. He testified that he accepted the reduced wages, paid in
cash, without complaint. TR 55.
Mr. Fred Boyle worked for Dun-Rite from "the winter" of
1978. TR 127. He worked on the Thurbers Avenue (New Cities)
job doing demolition work, stripping the roof shingles and the
siding from houses. He worked from about 7:30 a.m. to 4:30
p.m., with one-half hour for lunch, at times. He explained
that the work day was limited by the relatively short period of
daylight in the winter months. During the summer months he did
not work on government projects. TR 128. His hours were kept
by one of his bosses. It was written down. In the fall,
November or so, he was put on the Medina project and worked
until March of the following year. TR 131. On this project he
made out and signed his own time cards. TR 132. He reviewed
timecards and stated they accurately reflect the hours spent
by him on the job. TR 135. What I find noteworthy is that
while the witness spoke in terms of working an eight-hour work
day (TR 130), a review of the worker's forty-one time cards,
submitted by Dun-Rite, fails to show one day where he is shown
to have worked seven or more hours - summer or winter. RX 8.
Mr. William Brousseau worked for Dun-Rite from about April
1, 1979 to the first or second week of January, 1980. TR 144.
He worked on the Thurbers Avenue (New Cities), Central Falls
(San Souci), and the Medina projects. He worked on demolition
and siding. His siblings have married into Mr. Entwistle's [5]
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[6] family. He generally worked from 8:00 a.m. to 4:00 p.m. with
usually one-half hour for lunch. He didn't work much at Medina
Village. TR 145. He was at first reluctant to give his hourly
wage because he was paid the amount to which he had agreed and
which he considered fair. TR 146. He later stated, however,
that he was paid at a rate of $7.00 per hour. TR 148. He was
paid the same rate on private jobs. His timecards for the
period from June 23, 1979 to January 26, 1980, with some
omissions were introduced into evidence as (RX 10). TR 149.
These were identified by the witness as being his and as
accurately showing the hours worked. TR 148. Nevertheless, a
review of the cards clearly shows he was rarely listed as
working the seven and one-half hours per day alleged. RX 10.
Including the summer months, he never worked a 40-hour week, if
one were to accept the timecards as accurate. RX 10. In fact,
during the entire summer of 1979, if one were to accept the
payroll ledger's time-figures as accurate, this individual
never worked more than 36 hours in any week. CX 10.
Mr. John Charbonneau worked for Dun-Rite from approximately
late November 1978 to February 2, 1979 at the San Souci and the New
Cities projects as a demolition laborer earning four dollars per
hour. TR 165. Despite working more than eight hours per day on
occasion and more than forty hours per week in a majority of the
nine or ten weeks he was employed, he was paid only straight time.
TR 166. His time was kept in a 3" x 5" black book by Mr. Bob Eddy,
a son-in-law of Mr. Entwistle. He was introduced to the job by
Steve Plante, with whom he worked. He never formally asked Mr.
Entwistle for a job, but was paid for his labors by check
starting in January. He was told by a person whose identity he
could not recall that in the event of an inquiry by a federal
investigator he should state his salary was "Nine Dollars and
change an hour..." TR 168.
Mr. Alan D. Prout worked for Dun-Rite for two weeks in
1979, installing siding for which he was paid $9.80 per hour.
However, when he first approached Mr. Entwistle for work he was
asked to accept $5.00 per hour. Mr. Prout refused this,
knowing the prevailing wage to be $9.80. TR 258. He was hired
and after two weeks, laid off, due alle[]ged, to lack of work.
TR 259. Joseph Jones, Jr., also worked for Dun-Rite for two
weeks, installing siding at $9.80 per hour. TR 263. He worked
in South Providence and Central Falls (San Souci). He, too,
was asked, at first, to accept $5.00 per hour by Mr. Entwistle. TR
264.
Mr. Lawrence D. Jenkins testified that he first worked for
Dun-Rite in September 1978. TR 308. He was originally from
Massachusetts. He worked on the Thurbers Avenue (New Cities)
Central Falls (San Souci), Cranston Street (Medina), and Colony
projects until February or March 1980. At first he was [6]
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[7] generally doing demolition work. TR 311. Later, he was taught
to apply roofing and siding. TR 313. He testified that he
often worked in excess of eight hours per day and worked
Saturdays about six hours, at least one-half the time. TR
314. He identified members of the Entwistle family and Mr.
David Etchison, as among those with whom he worked. He was
paid in cash, usually $150.00 per week, sometimes $200.00. TR
315. Later, he indicates he was paid $200.00 per week. TR
321. He was paid on the basis of "... whatever he wanted to
give me, or whatever he felt I, you know, I earned." Ibid. At
one time Mr. Entwistle attempted to negotiate a set price with
the witness for certain demolition work, but the price offered
was too low and Mr. Jenkins declined to work on that basis. TR
319. In his statement to Mr. Daley he states that he did
engage in work for a set price on sever[a]l occasions in the
beginning. RX 20. He was advised by two of Mr. Entwistle's
sons to tell any investigator that he was being paid at a $9.80
per hour rate. TR 320. He was paid by check on one occasion.
TR 323-324. He was never given a W-2 form. TR 324. The
witness was unsure as to dates, for example, he first gives
October as the start of work at Thurbers Avenue (New Cities),
he later changes this to December. TR 327-328. He also
appears to have been identified as using another name - Ahmad
Raheim - TR 628, although he denied using it. He also stated
he may have worked until April or May 1980 (TR 340),
contradicting earlier testimony. TR 311. Yet, he stated he
knew he was not receiving proper compensation for his work and
complained to Mr. Daley, although still in Dun-Rite's employ at
the time. TR 348. Again, he was unsure of the date. It
appears that in many particulars he was either unsure or
retracted the details of earlier statements. For example, he
admitted using the term "aluminum siding" because he couldn't
think of the term for the hard plastic from which the siding
was, in fact, made. TR 371. He appeared as an individual who
felt he had been wronged and wanted to prove it without much
concern for the accuracy of the details.
Mr. Donald Frigon worked for Dun-Rite from January 1978
until some time in 1980, working on the New Cities, San Souci,
and Medina projects. He stated he worked as a "laborer" doing
some demolition work, siding and roofing. He occasionally
worked more than eight hours a day. His time was kept for him
and he was paid $5.00 per hour, by check. TR 74. He failed to
demonstrate a clear recollection about some of the details of
his employment such as the dates he worked at various
projects. He was clear, however, that he was never personally
told to cut his hours in half because the payroll would show
him earning ten dollars per hour, instead of the five dollars
he was, in fact, paid. TR 83. This testimony is quite
contradictory of his signed statement of October 14, 1980,
where he states he worked more than eight hours a day quite
often and "about 8 or 9 weeks were 45 to 50 hours each." CX 7, [7]
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[8] p. 3. The signed statement is credited by me. It appears to
have been voluntarily made. As I shall note hereinafter, the
testimony of the investigator, Mr. Daley, was most creditable
and his investigatory procedures were fair and designed to
obtain the unvarnished facts from the interrogees. CX 15.
Mr. Alfred S. Plante, Jr., worked for Dun-Rite from about
1976 to sometime in 1980. He functioned as a working foreman.
He has known Mr. Entwistle since boyhood. At one time or
another he worked at all four projects (TR 181), initially at
Thurbers Avenue and Central Falls, doing demolition work. This
went on for about four or five months. TR 185. Some of the
time he and others worked in excess of eight hours per day, but
this was not often due to the strenuous nature of demolition
work. TR 185. As a "boss" he would keep track of the work
hours of his crew and report them to Mr. Entwistle. TR 187.
Workers would be paid by check and in cash. He recited the
rates of pay of various other employees and none was at or
above the stipulated prevailing wages. TR 188-192. He also
explained that the hours reported on the timecards would be
contrived by taking the actual number of hours worked by an
employee and reducing it so as to obtain the same salary at the
rate of ten dollars per hour as would have been obtained had
the actual hours worked been multiplied by the actual rate of
pay. TR 192-193. At one time he was ostensibly laid off but
continued working and being paid in cash. This was towards the
end of the Medina Project. TR 194. He, too, declared that he
was paid straight time, despite working in excess of eight
hours per day or forty hours per week. TR 212-214. Mr. Plante
has the disadvantage of having been shown, among other
character flaws, to be an alcoholic, and possibly having taken
funds without authority. TR 767. He also acknowledged
spending time off the job site, while on the payroll "clock."
TR 403. Nevertheless, his testimony concerning the
Respondent's willful falsification of timecards and payroll
records so as to hide the fact that employees were not being
paid prevailing wages and appropriate overtime rates of pay,
was persuasive. It was consistent with the testimony of other
credible witnesses and had, in my view, the ring of truth.
These findings and conclusions are made despite the testimony
of Mr. Anthony DePetrillo, an old acquaintance, former friend
and brother-in-law, who corroborated other testimony indicating
that Mr. Plante was an alcoholic who could not be trusted. TR 803.
Mr. Fred Entwistle, nephew of the Mr. Entwistle, testified to the
effect that Mr. Plante was often seen during mid-day away from the
job-site at which he should have been working, the site b[e]ing
about one-half hour away. TR 776. Mr. Raymond Bois, Mr. Entwistle's
son-in-law, testified he knew Alfred Plante and had worked with him
on the Medina project. Mr. Bois worked on the project from February
1980 until its completion, sometime in the summer. TR 753.
He estimated that Mr. Plante would come in late twenty-five to [8]
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[9] thirty percent of the time and would leave early with
equal frequency. TR 754. Ten percent of the time Mr. Plante would
be inebriated. He believed they had worked together at that
project about two or three months. TR 759.
Mr. David Etchison has worked for Dun-Rite for more than
five years. He contradicted Mr. Jenkins' testimony to some
degree. He characterized him as being a subcontractor doing
demolition on the Thurbers Avenue job (New Cities) the only
place he worked. TR 774. He, too, identified Mr. Jenkins as
using the name Ahmad Raheim. Ibid. He also corroborated Mr.
Bois' testimony regarding Mr. Plante's work habits. Implicit
in his answers was the assumption that he, Etchison, worked an
eight-hour day but he would not be aware whether Mr. Plante did
or not. TR 779. He confirmed that he was paid $10.00 per
hour. Ibid. He usually started work at 8:00 a.m. and would
stop at 4:30 or 5:00 p.m., taking one-half to one hour for
lunch. TR 787-788. In the winter the day would be shortened
by darkness. He asserted he had never worked more than forty
hours per week, nor more than eight hours per day. TR 791. He
was paid in cash on some occasions.
Mrs. Susan Entwistle Bois testified she was one of the
Dun-Rite bookkeepers who prepared the payroll. TR 740. She
explained that, on occasion she would fill out the timecards
from information supplied on the telephone. This was because
the worker had failed to submit a timecard with the necessary
particulars. TR 743. Prior to June 16, 1979, timecards were
not used but, by means of various sized pieces of paper,
essentially the same procedure was followed. She made out the
certified payroll and knew that immediate family members were
paid a base rate of $10.00 per hour. TR 748. Others were
originally paid $9.70 or $9.80 per hour but eventually, for
simplicity sake, all were paid at the $10.00 rate, the sole
exception being those working in South Providence (Medina).
Ibid.
Mr. Peter Castriotta, custodian of the records for Mast
Construction, the contractor, explained how the superintendent's
report[s] were kept. Their purpose is to keep office bound
supervisors abreast of progress in the field. The reports were
compared with photocopies of those reports which were inconsistent
with the information gleaned from Dun-Rite's weekly certified
payroll reports. Usually the sup[er]intendents reported larger
numbers of Dun-Rite personnel, than reported by Dun-Rite. In each
instance, except (CX 5) (New Cities), it appeared that there was a
one in three ratio of inconsistency. In the New Cities project,
the inconsistencies of the weekly payroll to the superintendents'
daily reports were approximately 15%. TR 66. Mr. Castriotta
acknowledged that the superintendents on the job each varied
somewhat in the way the information would be recorded. This was
especially so as [9]
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[10] to the time of day when the information would be obtain[ed] and
entered. The report would identify the project, give temperature and
weather of the day, the number subcontractors on the job, the number of
employees of each, the kind of work being done. They are designed to
enable the general contractor's office person to get a general idea what
was going on in the field without a physical inspection each project.
They were "not made for accuracy" but he believed they did reflect with
some reliability the identity of the subcontractors on the job on any
specific day. Details of how the reports were made out were supplied by
three other Mast employees.
Mr. John Baccasie was employed as a superintendent for
Mast Const[r]uction during the time here at issue. TR 103. He
worked at Medina and San Souci. He indicated that he made out
some of the daily reports referred to by Mr. Castriotta. The
time of day during which he would devote to the daily report
would vary with the various demands of the job on that
particular day. He would try to take a "head count" of the
workers for each subcontractor on the job at the time. About
twenty-five percent of the time he would ask the foreman. TR
105. He would show that a subcontractor was on the job if any
of his employees showed up on the job and were present at the
time the visual inspection was being made. He disavowed any
suggestion that the report would show that the subcontractor's
men necessarily were there all day long. In fact, they may be
listed although they may not stay to do any work. However, he
would note in the report the nature of their work if he saw
them working. TR 107. He acknowledged, further, that if
someone worked on Saturdays or on days after he left the job
site, they possibly would not be listed in his report.
Mr. Charles Camelli, another superintendent of Mast
Construction during the relevant period, worked at the four
projects here at issue. He essentially confirmed the testimony
of Mr. Baccasie, that is, his method of filling out the report
was similar and he would consider them accurate for the
purpose of reflecting the degree of activity at a particular
project but not reliable as to the amount of time spent by any
particular employee.
Mr. James Decsaris, a foreman for Mast Construction, also
testified. His testimony was essentially along the same lines
as the two prior witnesses. However, he was a bit more clear
in his testimony to the effect that if a subcontractor's crew
would show up on a job site and then leave without doing
anything, he would probably show that no work was being done in
his report. He would notice, however, if a subcontractor kept
showing up and no progress was being made; he would probably
report it to the "office". TR 120-121. He also acknowledged
that on the Medina job Dun-Rite had problems with the timely
delivery of windows. [10]
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[11] Mr. Arthur Entwistle, Jr., president and owner of Dun-Rite
Construction Corporation, acknowledged he is aware of his
responsibility to keep track of the rates of pay of his
employees and their hours of work. TR 423. He brought with
him to the hearing, in answer to the Department's subpoena,
various timecards, checks, and other payroll-related
documents. He acknowledged having no timecards or payroll
checks for the month of December 1978. TR 424. One reason,
being that work on one project did not start until the second
week of December and on another, the last week of the month.
In any event, timecards were not kept for employees until
"after the government investigation." TR 425. This is after a
visit by Mr. Daley in mid-June 1979. Wages were computed on
the basis of time records kept by the employees themselves and
submitted to the payroll clerk either orally or by means of any
available piece of paper. At least during the period of
December 1, 1978 through September 30, 1980 no time book was
kept. TR 428. The earliest timecards apparently date from
June 16, 1979. Dun-Rite Const[r]uction Corporation was
incorporated in 1978. However, prior to the incorporation Mr.
Entwistle acknowledged the existence of a "Dun-Rite
Construction," an enterprise operated from Mr. Entwistle's home
by his son, Arthur Entwistle, III, who operated as a
subcontractor of Mast Construction in another government-
sponsored project. Further, Mr. Entwistle admitted being aware
of the term "prevailing wages required to be paid on a
government sub-contract", inasmuch as he considered this factor
in helping his son cal[]culate the amount pro[f]ferred as a bid on
subcontracts involving government projects. TR 437. When
the operation became too large for his son to handle, Mr.
Entwistle incorporated his own business and took over. Many of
his son's former employees became employees of the Respondent's
firm. He agrees that he was aware of his obligation to pay
"prevailing wages" as a subcontractor in each of the subject four
projects at the time he obtained the subcontract. TR 438. During
the years 1979 and 1980 Mr. Entwistle also did "private" jobs,
i.e., those where no government funds, as such, were involved. In
those instances, employees did not fill out timecards for the
number of hours spent on such jobs. TR 440. They were paid in
cash without any deductions and without any record kept for tax
purposes. Thus, there were no timecards kept nor would the
payments be reflected in the payroll ledgers. TR 445. "Government"
work was done up to about June 1980. TR 446. He asserts that his
employees were listed as "carpenters" and paid $10.00 per
hour. (The prevailing wage and fringe benefits was stipulated
as being $10.00 for this class of person. TR 7. He also
admitted that certified payrolls were not submitted if only a
few hours were spent on a job during any particular week.
Another element in his method of business operation was to pay
no social security taxes for employees who are paid in
cash and whose records did not go "through the payroll". TR [11]
~12
[12] 467. The Internal Revenue Service was similarly ignored. TR
468. Timecards for employees often would not show which
project the employee worked; this was allegedly rectified by
the office personnel when they made out the certified payroll
reports, by asking Mr. Entwistle's sons, who worked with and
supervised other employees. TR 470. They were usually
identified as the working foreman on the various jobs by the
other witnesses. Yet, they were allegedly paid at the same
hourly rates as non-supervisory personnel. While alleging
concern about the accuracy of these reports, on the one hand,
Mr. Entwistle later stated "I never gave a thought as to how
accurate" the payroll reports needed to be. TR 482. It was
also brought out that the contractor's superintendent's reports
were at variance with the certified payroll reports of
Dun-Rite, apparently listing greater numbers of employees than
reported by Dun-Rite.
In another aspect of Dun-Rite's operations, various
individuals would be retained on some occasions as "employees"
and on others as "sub-contractors." The distinction being
whether they were being paid at the particular time on an
hourly basis or given a set dollar amount for a specific job.
TR 543. Contrary to his earlier testimony, it appears that
Mr. Entwistle would to a significant degree pay individual
employees by check as well as by cash for work done on
"private" jobs. TR 545. If paid by check the check would not
be reflected in the payroll book or records. The only record
would be in a certain checkbook he kept at home. In essence he
kept few, if any, written records on operations involving
non-government projects, except allegedly, a private non[-]
written knowledge of his own income for his own tax liability.
TR 546. Further, some employees on government jobs who worked
in excess of 8 hours per day were admittedly not paid time and
one-half for the additional time. This is substantiated by the
certified payroll. (Joseph Frye, September 19, 1979, JX 10).
Mr. Entwistle ascribed it to the irregular practice used by
employees in reporting their time on the timecards. TR []
564-565. (That employees would overlook occasions when they
would be entitled to time and one-half, taxes the credibility
of the undersigned beyond its bounds.). On the other hand, he
occasionally would give money to employees for work done on
government contracts, without keeping records. TR 567. There
were a number of discrepancies between the timecards of the
employees and the corresponding certified payrolls submitted by
Dun-Rite. TR 577-579.
On examination by his counsel, Mr. Entwistle, while
apparently attempting to explain the tolerance, informality,
and generosity of his working relationship with his employees,
nevertheless, admitted to paying Mr. Jenkins on a "per house"
basis at the New Cities site rather than at an hourly rate. TR
591. No timecards were kept for Mr. Charboneau's work on the [12]
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[13] Central Falls job, he being paid by another employee, Mr.
Plante, from sums requested from Mr. Entwistle. In doing so,
Mr. Entwistle was apparently relinquishing all responsibility
regarding observance of wage and hour regulations to an
individual whom he indicated was absent from the job 50% of the
time, and who was often inebriated. TR 607-608. He also
explained that the workers often would move from one job site
to another during the day as circumstances required. For
example, they might run out of building materials, such as
shingles, at one site and so move to another, in order to keep
busy. This led to some discrepancies as to attributing the
correct number of hours, by job site, to any particular
employee. TR 613-614. Further, he noted that during one
period on the Medina project, his employees were engaged in
their own "side" jobs in the vicinity which, due to the
dispersed nature of the Medina project, could easily lead a
supervisor from Mast Construction to conclude they were working
on the Medina project. TR 619. Mr. Entwistle, in effect,
acknowledged that while he was aware of a responsibility to
keep records of his employees' wages in "private" jobs, he was
unaware of the precise nature of this responsibility. TR 632.
It was implicit in the answers, however, that he made no effort
to ascertain what the precise nature of his responsibility
might be. This attitude is also reflected in his acknowledgement
that he took no steps to assure the accuracy of the certified
weekly payroll records he submitted to the contractor. TR 648.
Mr. Richard Daley, a compliance officer of the Department
of Labor was present and testified that his job is to enforce
the Fair Labor Standards Act, [t]he Davis-Bacon Act, the Contract
Work [] Hours [] [and] Safety [] Standards Act, and other wage and
hour laws. He conducted two investigations of Respondent Dun-Rite,
the first started in June 1979 and the other in September
1980. Investigations usually involve looking back a period of
two years. However, where there had been an earlier
investigation of a firm operating by the name of "Dun-Rite" at
the same address, which was concluded in October 1977, his
investigation used this latter date as a starting point. TR
673. Noting various omissions and discrepancies in the
respondent's records, Mr. Daley, on July 12, 1979, apprised
Mr. Entwistle of the violations and his responsibilities as an
employer under the three aforementioned statutes. TR 677. At
the time Mr. Entwistle allegedly admitted underpaying Mess[]rs.
Jason Mete, John Charbonneau and Richard Holmes, paying the
first two $6.00 per hour and the other $5.00. The variance
from prevailing wages was defended on the basis that they were
not sufficiently skilled to be paid a higher rate. TR 678. In
August 1979 Mr. Daley "submitted" the file to the Area
Director. The file was reassigned to Mr. Daley in September
1980, for a further investigation, based on further complaints. He
was given access to various records including [13]
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[14] timecards, a payroll summary and various checks. He subsequently
reviewed Mast's records and a personal record kept by Mr. Robert Paquet
and made a transcription. CX 1. Timecards for "non-government" jobs
were not produced. TR 687. He also described the techniques he
employed in obtaining statements from employees interviewed to assure
accuracy and candidness. He asserted that he employed these techniques
in obtaining the statement of the various individuals interviewed.
Conclusions
My review of the evidence in support of respondent's
position, both oral and documentary, as it pertains to the
employees who testified, leads to one particularly striking
realization - virtually no one appears to have ever worked for
Dun-Rite a full forty-hour week on a government-sponsored
project during the long late spring, summer, and early fall
days of April through September. Some of the employees, as we
have seen, testified to working overtime, and but for
exceptional circumstances, most all worked at least a regular
forty-hour week. The Dun-Rite records fail to support this.
It is interesting to note, for example, that Mr. Etchison, a
long-time employee of Dun-Rite was reported as working for
$9.70 per hour for forty-hours, during the weeks ending
December 21 and 28, 1978 on the New Cities project. JX 9. One
would expect that during this wintery period, with some of the
shortest days of the year, that the number of hours worked
would be relatively short. This same employee, who is close to
the Entwistle family, however, does not appear to have ever
worked a forty-hour week on any other project during the
"prime-time" of the construction industry. However, if one
were to accept the testimony of Mr. Plante, that Mr. Etchison
was paid $8.00 per hour, the number of hours reported for Mr.
Etchison would be more compatible with a full work-week, which
is more likely, given the industry and the time of year.
Mr. Entwistle attempts to explain away the fact that the
timecards and certified payroll only rarely showed any employee
working a full forty-day week by attributing disrupted work
days to weather, lack of building materials and lack of
receptacles for debris, ("dumpsters"). TR 602-603. He would
paint a picture of constant confusion, transfer of personnel
from one site to another, switching from private to government
projects, interruptions and curtailments for all sorts of
reasons, all leading up to the near-impossibility of an
employee working an eight-hour day and, especially, a forty-
hour week. His penchant for not keeping records of much
consequence on "private" jobs, of course, enables him to
maintain that part of any particular employee's wages or work-
time may not be recorded because timecards are not kept for
non-government projects. This kind of "indifference" towards
records and accounts is also manifested in the listing of all [14]
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[15] employees as carpenters at $10.00 per hour on the
certified payrolls of the Medina and Colony projects, despite
acknowledging that demolition was being done on both projects
for which the stipulated applicable wage was $10.75. Mr. Fred
Boyle is one such employee. TR 132. These factors and the
abundant significant inconsistencies evident between the
certified payrolls of Dun-Rite and the Mast superintendent's
reports leads one to doubt the veracity of Mr. Entwistle's
testimony regarding the rate of pay he allegedly paid
employees. In contrast, the testimony of employee-witnesses,
as we have seen, seems geared to eight-hour work days. Mr.
Boyle testified to this. Yet, his timecards fail to reflect
any eight-hour days. Mr. William Brousseau, an individual not
unfriendly to Mr. Entwistle, reluctantly testified he was not
paid the $10.00 per hour which was reported. It is obvious
despite his contradictory testimony, that he was reported as
working fewer hours than he actually worked, so as to offset
the ten-dollar hourly rate he allegedly was receiving. Of all
the former employees, the testimony of Robert Paquet was among
the most convincing testimony I heard during the entire
hearing. The directness of his testimony, the responsiveness
of his answers, the methodic sense of orderliness reflected in
his own personal record keeping, convince me, without any doubt
whatsoever, that Dun-Rite, through Mr. Entwistle was embarked
on a deliberate scheme to willfully ignore the responsibilities
imposed by the Davis-Bacon Act. Mr. Daley's testimony is also
found most persuasive. The written statements he obtained, as
alluded to earlier, were obtained in as fair a manner as can be
expected in the circumstances. It is clear that he did not
hold the expectation of monetary gain as a reward for obtaining
damning statements. The admissions which he stated were made
to him by Mr. Entwistle regarding the underpayment of certain
employees because that was all they were worth is credited by
me. In short, the Department has shown that Dun-Rite and Mr.
Entwistle embarked on a conscious course of action to evade and
ignore the laws and regulations they had agreed to honor as
condition to their participation in the government-sponsored
projects.
Respondent[']s case is bottomed on several propositions
(Respondents Brief, p. 3). The three arguments raised dealing
with credibility of the complaining employees and the
investigator, the method of the investigation, and the gravity
of the violations are rejected. The testimony of enough
witnesses, as noted above, is sufficiently credible as to
clearly establish that violations occurred. Respondent's
counsel argues that the Department must prove its case by
something more than by a fair preponderance of the evidence.
Citing Santosky v. Kramer, 102 S. Ct. 1388 (1982) and Anderson
v. Mt. Clemens Pottery Co., 328 U.S. 680 (1945). The first
case cited deals with the rights of parents to their children.
The Court concluded that the state, in attempting to sever [15]
~16
[16] parental rights, must support child neglect allegations by
"clear and convincing evidence. It mandates this "intermediate
standard when the individual interests at stake are ". . . both
'particularly important' and 'more substantial than mere loss of
money'", Ibid at 1396. Here, debarment means "the mere loss of
money." It would seem that Santosky v. Kramer does not support
Respondent's position. To the contrary, it seems to be legitimate
authority for the contrary position. The Anderson case is closer
to the point, at least since it deals with alleged violations of
the Fair Labor Standards Act of 1938. While it affirms that the
burden is on the employee to show a violation of the Act, the Court
clearly holds that consistent with the remedial nature of the
statute, the public policy it embodies "militate(s) against making
that burden (of proof) an impossible hurdle for the employee.", at
687. The "preponderance of the evidence" test appears to be the
one applied. Further, its application was to be such as to
allow a "just and reasonable inference" to be drawn from the
evidence presented, rather than the more stringent test which
was applied by the Circuit Court of Appeals and rejected by the
Supreme Court. Here, the evidence of violations, being "clear
and convincing" is well beyond the level of proof required.
Respondent attempts to show that the investigation was
improperly carried out because it embraced a number of
employees who were related to Mr. Entwistle and thus, the sums
due Mr. Entwistle and withheld by the Department were larger
than otherwise justified. It is also claimed that Mr. Daley
arbitrarily believed the complaining employees rather than
Respondent. I see nothing irregular in the manner in which
Mr. Daley carried out his duties. The amount of money withheld
is an admin[i]strative function where the sound discretion of the
administrators of the Act must be respected. The total lack of
timecards during the beginning of Dun-Rite's work as a
subcontractor, the slipshod records, when they were kept, the
admission to him by Mr. Entwistle that certain employees were
knowingly not being paid prevailing wages, in fact, the entire
malodorous situation revealed by the investigation entirely
warranted its scope and his conclusions and actions.
Lastly, counsel attempts to describe the widespread
irregularities as not willful[]. My conclusions, stated
hereinabove, provide an answer to this averment. The
violations by Mr. Entwistle stem from both an intentional
course of conduct to violate the terms of his subcontract to
abide by the provisions of the above-noted statutes and from a
cavalier disregard of his responsibilities thereunder. This
was done by willfull[y] failing to pay the prevailing wage rate
to most of his employees and by falsifying payroll records,
including the certified payroll report, to hide the prevailing
wage violations and, it seems, the actual number of employees
working on a site at any one time. [16]
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[17] ORDER
IT IS THEREFORE ORDERED that pursuant to the provisions of
Section 3(a) of the Davis-Bacon Act, respondents Dun-Rite
Construction Corporation and Arthur Entwistle, Jr., its
president and owner, be debarred for a period of three years
for violations of the National Housing Act (12 U.S.C. Section
1715c), the Contract Work Hours Safety Standards Act (40
U.S.C. Section 327 et seq.), and the Department of Labor
Regulations 29 C.F.R. Part 5.
ANTHONY J. IACOBO
Administrative Law Judge
Dated: APR 12 1984
Boston, Massachusetts
AJI:rlb
Notice to the Parties
This decision and order shall become final unless,
within 20 days after it is served on the parties, exceptions
thereto are filed with the Chief Administrative Law Judge,
U.S. Department of Labor, Office of Administrative Law Judges,
1111-20th Street, N.W., Washington, D.C. 20036. [17]
