CCASE:
NORTHERN COLORADO CONSTRUCTORS
DDATE:
19861003
TTEXT:
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[1] [ATTACHMENT 86-31.WAB]
U.S. Department of Labor Office of Administrative Law Judges
211 Main Street, Suite 600
San Francisco, California 94105
(415) 974-0514
8-454-0514
In the Matter of
Disputes concerning the payment of
prevailing wage rates and overtime
pay, and proper classification by:
NORTHERN COLORADO CONSTRUCTORS, LTD.
Prime Contractor
and CASE NO: 85-DBA-128
A & B ROOFING, INC.
Subcontractor
With respect to laborers and mechanics
employed by the subcontractor A & B
Roofing, Inc. under United States Air
Force Contract No. F05611-820C0121 for
re-roofing the Aero-Science Lab at the Air
Force Academy, Colorado Springs, Colorado
Richard G. McManus Jr., Esquire
Miles, McManus and Epstein
Suite 400 - Sussex Building
1430 Larimer Square
Denver, CO 80202
For Northern Colorado Constructors, Ltd.
Ann M. Noble, Esquire
U.S. Department of Labor
Office of the Solicitor
1585 Federal Office Building
1961 Stout Street
Denver, CO 80294
For Department of Labor
BEFORE: HENRY B. LASKY
Administrative Law Judge
DECISION AND ORDER
This proceeding was initiated by the Order of Reference, dated
September 6, 1985, filed with the Office of Administrative Law
Judges pursuant to Reorganization Plan 14 of 1950 (64 Stat. 1267),
Davis-Bacon Act (40 U.S.C. [sec] 276a et seq.), the Contract Work
Hours and Safety Standards Act (40 U.S.C. [sec] 327 et seq.), and
the [1]
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[2] applicable regulations issued thereunder of 29 C.F.R.
Part 5, section 5.11(b). Pursuant to duly issued notice, the trial
in the matter was held on July 17, 1986 in Denver, Colorado. The
record was held open for the parties to file proposed Findings of
Fact and Conclusions of Law by September 26, 1986. After having
considered the testimony and evidence submitted at trial, I hereby
find the following:
The case arose as a result of an investigation of A & B
Roofing, Inc. (A & B) and covered a period of time in 1982 and
1983. The investigations focused on violation of section 1 of the
Davis-Bacon Act by not paying employees the predetermined minimum
wage for their job classification. A & B submitted inaccurate
payroll records in violation of 29 C.F.R. 5.5(a)(3) and failed to
compensate employees for hours worked ln excess of 8 per day or 40
hours per week ln violation of the Contract Work Hours and Safety
Standard Act (CWHSSA). As a result of the investigation, the
Department of Labor originally claimed that $39,227.49 was due
A & B's employees in back wages; at the trial this amount was
reduced to $18,873.48 because of payments A & B had made to
employees, but not originally credited, or known, by the
Department.
The subcontractor, A & B, did not appear at the hearing to
defend itself, although its former president appeared at a witness
called by the Secretary of Labor. A & B had not requested a
hearing. The prime contractor (via the Small Business
Administration) was Northern Colorado Constructors, Ltd. (NCC).
The funds available for withholding -- in the amount of $10,700.00
-- are being withheld from the prime contractor and the Department
seeks to hold the prime liable for the back wages due A & B's
employees. There is no issue as to debarment in this case. Thus,
the initial question is whether a prime or general contractor can
be held responsible for violations by its subcontractors.
The labor standards provisions of the contract in question
provide that laborers and mechanics "shall be paid" in accordance
with the wage determination "regardless of any contractual
relationship which may be alleged to exist between the contractor
or subcontractor and any such laborers and mechanics." Exhibit 1,
page 8; 29 C.F.R. 5.5(a)(1). This same language appears in section
1(a) of the Davis-Bacon Act. 40 U.S.C. 276a. The Secretary of
Labor's position is simply stated: The government's contract for
the roofing project was with Northern Colorado Constructors and
thus that firm, because of its contractual relationship with the
government, is liable for the monetary payments due its
subcontractor's employees. This position is well founded.
The prime contractor is liable for wage underpayment made by
its subcontractor whether the prime contractor had knowledge of the
violations and despite good faith on the part of the prime
contractor. J.B.L. Construction, 78 DBA 129; Ernest Simpson
Construction Co., 78 DBA 181; Thomas W. Yoder Co./David Schack
d/b/a B & D Masonary Co., 81 DBA 391. [2]
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[3] Respondents have not advanced any reasoning to cause me to
reject the intent of the Act, the terms of the contract and
regulations, and the case law. Consequently, I hold that Northern
Colorado Constructors, Ltd., as the prime contractor on the re-
roofing project at the Aero-Science Laboratory of the Air Force
Academy, is responsible for the violations of the labor standards
provisions of its subcontractors.
The evidence revealed that the wage determination, related to
the contract involved herein, listed roofers but not roofers
helpers, although it did include laborers. Exhibit 1. The
Secretary of Labor presented testimony that the wage determination
was based on a negotiated wage rate (Tr. 116) and presented the
testimony of the local business manager for the Roofers Union
having jurisdiction over the Air Force Academy location. The
business agent testified that roofers perform "every aspect of
roofing" including taking materials to the jobsite and carrying
them at the jobsite (Tr. 19). In addition, roofers tear off, stock,
and clean up the roof (Tr. 19-12). Antonio Medina, owner of A & B
Roofing, testified that all of the employees listed on the
certified payroll records were considered by him to be helpers
since they were not journeymen (Tr. 74-6). The employees testified
that they mopped; carried and delivered roofing materials; took
steps to protect the roofing materials from the elements; laid
paper, gravel, and insulation; and cleaned spilled tar from the
walls of the building (Tr. 26, 31-3, 35, 39, 53-4, 58-9, 60, 74-6,
78, 91). Mr. Medina considered only two of the people on the job
(Larry Valverde and Juan Rodriguez) to be roofers (Tr. 75). The
compliance officer computed back wages on the basis that all
persons listed on the payroll were roofers, with the exception of
Eugene Damian who was listed on those records as a truck driver
(Tr. 100, 102, 112). The determination by the compliance officer
to classify (for the purposes of computing back wages) all the
employees but Damian as roofers was correct. This holding is ln
accord with what has long been the practice in Davis-Bacon cases,
and was re-enunciated by the Wage Appeals Board in Fry Brothers
Corp., CCH - Wage Hours, Administrative Rulings [par] 31,113
(1977), a case where the contractor attempted to pay less skilled
employees handling carpentry tools below the predetermined wage
rate for carpenters:
The Board views this matter as a classical
case of misclassification of the work of
employees covered by the Act....Under
established principles of Davis-Bacon Act
administration, when the wage predetermination
schedule contains only one wage rate for
the carpenter classification without
intermediate rates, it is not permissible
for contractors who come on the project
site, whether organized or unorganized, to
divide work customarily considered to be the
work of the carpenters' craft into several
parts measured according to the contractor [3]
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[4] by his assessment of the degree of skill of
the employee and to pay for such division of
the work at less than the specified rate for
the carpenter's craft.
The logic of Fry applies equally well to roofers. The
compliance officer was correct in computing back wages on the basis
of the roofers rate.
The compliance officer attempted several times both during and
after the investigation to obtain records from A & B Roofing. All
she ever was able to obtain was the certified payroll records and
some canceled checks which neither she, her supervisor, nor
A & B's attorney could discern how, if at all, they were related to
the job at the Air Force Academy (Tr. 99). Although the company's
president testified, he knew little about the payroll records.
During her investigation Compliance Officer Page was able to
interview only one employee. That employee contended that he was
not paid at all for his work on A & B's project at the Air Force
Academy until his attorney filed a complaint against the company
(Tr. 101). Consequently the compliance officer computed back wages
as if the employees had not received any pay. Prior to the trial
the Secretary's representative discovered that employees were, ln
fact, paid $8.00 per hour. Thus, once respondent was given credit
for such payments, the back wage liability was reduced to
$18,873.48.
Respondent argues that there was no credible proof as to the
hours the employees worked or that the employees actually worked on
the jobsite. The compliance officer testified, however, that she
had compared the certified payroll records (from which she obtained
the hours worked for her computations) with the contracting
agency's progress reports and found them to be in agreement (Tr.
115). In addition, when comparing the respondent's logs with the
certified payroll records, she did not find any dates where NCC's
logs reported fewer people on the job than showed up on the
certified payroll records (Tr. 116). Furthermore, the employees'
testimony as to the hours they believed they worked at the Air
Force Academy compared to the hours on the certified payroll
records, while not precisely the same, tends to confirm that the
hours as reported on the certified payroll records did not
overreport the number of hours worked. For example, Miguel Ramirez
said he worked ln July and August 1983 for 180 hours. The
compliance officer computed the back wages based on 99-1/2 hours --
obviously not an over-assessment of hours worked (Tr. 90, 93-4).
Additionally, A & B Roofing submitted the certified payroll records
to the prime contractor, the Respondent. NCC could have examined
the records of hours worked at that time and, if they were
incorrect, had them corrected. See Tr. 68. In light of the
supporting evidence for the hours worked, I accept the hours
reported on the payrolls as correct.
Conversely, I cannot accept the wages paid on the certified
payrolls as being correct. The employees testified that they were [4]
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[5] paid only $8.00 an hour for all jobs both those on and off
the Air Force Academy (Tr. 35, 61, 90). This, coupled with the
employer's testimony that they were "all helpers," with the
exception of Larry Valverde who was supposedly paid $15.00 per hour
as a roofer, leads me to conclude that the employees (all of whom
were lesser skilled than Valverde) were paid $8.00 per hour as
testified to and not the wage determination rate of $14.75.
The witnesses named other persons who worked on the jobsite.
While they did not name each and every person who appears on the
summary of unpaid wages, I am convinced, based on the compliance
officer's testimony and her comparison of the contracting agency's
records and those of NCC with the certified payrolls, that the
persons on the payrolls worked the hours and dates specified and
used in the back wage computations. In cases such as this, where
some of the employees testify and others who are apparently in the
same group do not testify, it is proper and reasonable to conclude
that the non-testifying persons are in the same group (i.e., in
this case, worked as roofers and were paid at only $8.00 per hour).
See Donovan v. Bel-Loc Diner, Inc., 780 F.2d 1113 (4th Cir. 1985);
Brock v. Seto, 790 F.2d 1446 (9th Cir. 1986).
The reasoning of Brock v. Seto applies herein:
Where the employer's records are
inaccurate ant the employee cannot offer
convincing substitutes... the 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..., lt would allow the employer to
keep the benefits of an employee's labors
without paying due compensation....
In this case at bar, the S.O.L. on behalf of the employees,
carried the burden of proof required by establishing that the
employees performed work for which they were improperly compensated
and produced sufficient evidence to show the amount and extent of
that work as a matter of just and reasonable inference. The burden
then shifted to the employer to show the precise number of hours
worked or to present evidence sufficient to negate "the
reasonableness of the inferences to be drawn from the employee's
evidence." See Brock v. Seto, 790 F.2d 1446, 1448; Anderson v. Mt.
Clemens Pottery Co., 328 U.S. 680, 688 (1946). If the employer
fails to make such a showing, the employee is entitled to be
compensated even though the result be only approximate, and the
employer cannot contend that such is "too speculative."
The employer cannot be heard to
complain that the damages lack the exactness
and precision of measurement that would be
possible had he kept records in accordance
with the [FLSA]..." 790 F.2d 1448. [5]
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[6] The Respondent herein has failed to meet its burden of proof
sufficient to negate the evidence and inferences to be drawn there-
from submitted on behalf of the employees.
I conclude that back wages for those persons listed on the
government's summary of unpaid wages are due in the total amount,
as modified by the compliance officer of $18,473.48. Such funds
are to be paid to thee Department of Labor by Respondent NCC within
fifteen days of the date of this Order; a portion of the amount of
back wages can be satisfied by the money being withheld on the
contract, the remainder shall be paid directly from Respondent to
the Department of Labor.
FINDINGS OF FACT
1. At all relevant times Northern Colorado Constructors,
Ltd. was the contractor on United States Air Force Contract No.
F05611-820C0121. That contract called for the re-roofing of the
Aero-Science Lab at the Air Force Academy in Colorado Springs,
Colorado. Northern Colorado Constructors, Ltd. subcontracted with
A & B Roofing, Inc. to re-roof the lab building. The contract
amount was $115,463.16 and contained the requisite labor standards
clauses.
2. A & B Roofing paid its employees $8.00 per hour for all
hours worked. It did not pay dally or weekly overtime. The wage
determination required payment of $14.65 per hour (including fringe
benefits) to roofers ant $11.50 per hour (including fringe
benefits) to truck drivers.
3. The wage determination was based on a negotiated rate for
roofers. A roofers['] job is to perform any and all tasks relating
to a roof including installation of all materials, delivering and
carrying roofing materials, and tearing off old roofs. The
following A & B employees were within the classification of roofers
when they worked at the Air Force Academy in 1982 and/or 1983:
David Aragon, Joaquin Barraza, Clifford Cardenas, Norman Cardenas,
Bob Guerra, Carmelo Hernandez, John Martinez, Charles Medina,
Emilio Meza, Ralph Minarez, Miguel Ramirez, Jose Ramirez, Pete
Rios, Juan Rodriguez, Elberto Rojas, Santos Rojas, Ralph Ruiz, Paul
Salazar, Salvador Sandoval, Fernando Trujillo, Larry Valverde,
Carlos Vasquez, Robert Zavala, and David (last name unknown).
Eugene Damian was a truck driver.
4. All of the employees listed in Findings of Fact 3 were
paid $8.00 per hour worked as recorded on the certified payroll
records.
5. Since the employees were paid less than the predetermined
wage rate, they are due the difference between the two for each
hour of work plus overtime for hours over 40 per week or 8 hours
per day. The total amount of back wage is $18,873.48. [6]
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[7] 6. NCC, as prime contractor on the job, is responsible for
back wages due A & B's employees.
CONCLUSIONS OF LAW
1. The Davis-Bacon Act and the Contract Work Hours and
Safety Standards Act apply to United States Air [Force] Contract
No. F0561l-820C0121. NCC was the general or prime contractor on the
project and, under the Davis-Bacon Act, the regulations, and the
contract was and is responsible for violations of the Act by its
subcontractors.
2. A & B's employees who worked on the project were roofers,
except for one truck driver, because they cleaned the walls
resulting from roofing materials dripping on the walls, mopped tar,
laid paper and insulation, carried materials, tended the tar
kettle, etc. Each of these jobs is a job performed under
negotiated rates by a roofer in the Colorado Springs area where the
Air Force Academy is located.
3. A & B failed to pay its employees the predetermined wage
rate and, instead, paid its employees only $8.00 per hour and did
not pay overtime in violation of the Davis-Bacon Act and the
CWHSSA. The hours worked by the employees were properly recorded
on the certified payroll records. The certified payroll records
were submitted to Northern Colorado Constructors, Ltd. by A & B
Roofing, Inc.
ORDER
1. Respondent NCC shall pay to the Controller General for
disbursement to the appropriate employees of A & B Roofing, Inc.
the sum of $18,873.48. The money being withheld pursuant to the
contract herein, shall be forwarded by the contracting agency to
the Controller General; the remainder of the funds shall be paid
directly by cashier's or certified check to the Controller General
by NCC.
HENRY B. LASKY
Administrative Law Judge
Dated: 3 OCT 1986
San Francisco, California [7]
