HOMER L. DUNN, DECORATING, INC., 1982-DBA-24 (ALJ Dec. 9, 1986)
CCASE:
HOMER L. DUNN DECORATING
DDATE:
19861209
TTEXT:
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[1] [87-03.WAB ATTACHMENT 2 OF 2]
U.S. Department of Labor Office of Administrative Law Judges
Commercial (415) 974-0514 211 Main Street, Suite 600
Government 8-454-0514 San Francisco California 94105
In the Matter of
HOMER L. DUNN DECORATING, INC., CASE NO. 82-DBA-24
HOMER L. DUNN, President and
Owner, Respondents.
Joseph Bednarik, Esq., Office of the Solicitor, United States
Department of Labor, Room 3247 Federal Building
300 North Los Angeles Street, Los Angeles, California 90012
For the Complainant
George J. Tichy, II, Esq., Gordon A. Letter, Esq.
Littler, Mendelson, Fastiff & Tichy, A Professional Corporation
1925 Century Park East, Suite 850
Los Angeles, California 90067-2709
Before: VIVIAN SCHRETER MURRAY
Administrative Law Judge
SUPPLEMENTARY DECISION AND ORDER
History of the case
A Decision and Order on the merits of the above referenced
matter was issued on July 19, 1985. Sometime subsequent thereto,
the respondent retained new counsel and on August 19, 1985, moved
for an extension of time within which to file exceptions to the
Decision and Order issued. Such motion was granted by Mr. Bulger
who extended the time to September 24, 1985.
On August 21, 1985, the government filed a Motion to Amend the
Decision and Order to include an Order and/or Recommended Order
debarring the respondent rather than a finding that the respondent
was subject to debarment, a finding which had previously been made
pursuant to specific request of the Department of Labor. It was
subsequently determined by a Judge whom I had authorized to act in [1]
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[2] my absence, that the 40 day rule for filing exceptions
should not begin to run until I had had an opportunity to rule on
the government's Motion to Amend the Decision and Order. This
conference call with Judge Halpern took Place sometime in
September, 1985.
On October 15, 1985, respondent by his newly retained counsel,
Mr. Letter filed a Motion to Reopen the Record for Admission of
Testimony, which Motion was denied by a Decision issued October 28,
1985 for the reasons stated therein.
On April 10, 1986, the parties filed a Joint Stipulation
wherein the respondent again sought reopening of the record for
receipt of evidence clearly available at the time of the first
trial as was indicated in the decision denying the October 15, 1985
motion. The government waived its objection to such reopening but
retained its right to object to the admission of any additional
evidence and reserved rights of rebuttal and impeachment. In
summary, the parties proposed to reopen the record, each apparently
for his own distinct purpose and without proper grounds for so
doing.
To clarify and resolve this situation, a conference call was
had with the parties on April 21, 1986. At such time, the parties
were advised that a full and complete record had been made at the
time of hearing, that no proper grounds for reopening had been set
forth and that relitigation of the case would not be permitted.
However, although the record made provided a fully adequate basis
for an order and or recommendation on the issue of debarment,
neither party had made oral or written argument on that issue.
Accordingly, it was agreed that the parties would submit written
briefs on the debarment issue, which I would consider in
conjunction with the relevant evidence before issuing a
supplementary decision, recommendation or order. Consequently, as
of that date, April 21, 1986, the government's motion to amend was
deemed to have been withdrawn. Exceptions to this supplementary
decision may be filed within the usual time frame.
Debarment
On June 24, 1986, both parties timely filed their post hearing
briefs on the issue of debarment, which is the sole issue
considered herein.
The Department of Labor alleges and respondents confirm that
Dunn & Dunn Decorating were experienced in the performance of
government contracts having performed work on approximately 42
projects, over a perio[d] of approximately thirteen years. (See
page 2, Resp. Brief in Opposition to Debarment and supplementary [2]
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[3] documentation). The government alleges that between 1973 and
1980, respondent was found in violation of the Davis-Bacon or
related Acts on ten separate contracts. (See, Post-Hearing Brief of
the Department of Labor at 2). All of that evidence is not before
me. It is nevertheless clear and the respondents admit prior
violations, which counsel characterizes as "minor problems". (See
page 2, Resp. Brief and specifically footnote 1.). The government's
more detailed account of the admitted violations however (See
Government's Brief at 2, 3), indicates that the violations are not
fairly categorized as "minor problems", since they involved
recordkeeping violations, failure to pay prevailing wage rates
under Davis-Bacon and deductions from pay checks which exceeded the
reasonable costs allowed by the regulations, deemed a violation of
the Copeland Anti-Kickback Act.
In the instant case, as the government states the respondent
was found to have failed to pay the prevailing wage on three
contracts, failed to pay overtime wages on four contracts, failed
to keep accurate records of hours worked on all contracts with the
exception of the China Lake contract and was deemed to have
violated the Copeland Anti-Kickback Act on two contracts by virtue
of having conducted a for[e]seeably inadequate inquiry of reported
kickbacks. Notwithstanding respondents' allegations to the
contrary, where violations were found in this case, evidence of
such violations was both persuasive and overwhelming. I see no
reason to reiterate the complete, specific and detailed findings
set forth in the decision, which are here incorporated by
reference. The government was held strictly to its burden of proof
notwithstanding the fact that the employer, who fails to keep
accurate records, is in no position to complain of lack of
precision in assessing back wages when such assessments are
necessitated by the his own failure to comply with recordkeeping
provisions. JosePh Morton Company v. GSA, 77-GB-109, 31880. In
such circumstance the burden of proof shifts to the employer to
show that proper wages were paid for the hours worked. Anderson
v. Mount Clem[e]n's Pottery Co, 328 U.S. 684, 687 (1964); Joseph
Morton Company v. GSA, supra.
There can be no doubt in this case, as in the Hirchert case
/FN1/, cited by the government that the respondents herein have
substantial prior experience, gained during the past 12 to 13
years, with the performance of government contracts and should by
this time have known and accustomed themselves to complying with
posting and recordkeeping requirements, in order that all employees
are made aware and are paid the correct predetermined hourly rate.[3]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ In re Marvin E. Hirchert, WAB 77-17, CCH Labor Law Reports,
[par] 31,357 (1978).
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[4] for all hours worked as well as correct overtime pay. The
extent of the violations found herein in light of the respondents'
substantial past experience suggests gross negligence and willful
neglect of the responsibilities imposed by the Act for the
protection of the employees.
The respondents fail to show unusual facts, circumstances or
conditions, which might reasonably have caused or contributed to
oversight or inadvertent failure to pa~ proper wages. Rather
respondents argue the excellence of the work performed over the
years and allege recent compliance and future intent of compliance
with the Act. The excellence of the work performed is not at issue
here and in any event is largely due to the skill of respondents'
employees, who in this instance, have been inadequately
recompensed, exploited and intimidated. Davis-Bacon and the
Copeland Anti-Kickback Act were specifically designed to protect
employees and the labor force at large from exploitation by
unscrupulous contractors, not to assure the government's
satisfaction with the work performed. Such response does not
address the relevant issue.
Of equal if not greater concern are the kickback violations
found herein. Respondent by his attorney contends that the
preponder[a]nce of the evidence supports the conclusion that no
kickbacks were paid. (See Resp. Brief at 6, 7). In this respect,
the respondents discuss bias of the government's Thai witnesses
and the denials by four Dunn employees that kickbacks were
demanded. The potential bias of all witnesses was considered and
as well credibility findings were specifically made in the prior
Decision and the evidence bearing thereon carefully weighed.
Consistent with my prior findings, I find the conduct of Dunn with
regard to his grossly inadequate inquiry of reported kickbacks to
be thoroug[h]ly reprehensible and a complete abdication of his
responsibility toward his employees. Such conduct is more than
ordinarily reprehensible where an employer is dealing with
frightened immigrants who are not only ignorant of their rights
under the law but are under obvious and substantial disabilities
with regard to their ability to ascertain their rights or to
enforce them. Current counsel for the respondent was not present
at the hearing and is accordingly ignorant of and unable to
appreciate the manifest fear and trembling of the Thai witnesses,
including those who appeared for the respondents.
In the alternative, respondents argue that even if Jimmy
received kickbacks respondents did not benefit from such payments
and respondents' responsibility for his foreman's conduct should
not be found to constitute grounds for debarment. (Resp. Brief at
7). This contention is at best frivolous. But for the respondents'
gross negligence, lack of supervision, and failure to [4]
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[5] conduct a reasonably proper inquiry into the allegations of
kickback this condition would not have existed in the first place
or if it did occur would have been corrected upon proper
investigation. The conduct of the foreman, within the scope of his
employment, is certainly attributable to the employer and to the
unreasonable laxness of the employer's supervision. It is further
my opinion that the continued employment of the aforesaid foreman
by the employer, absent evidence of his total reeducation and
reform, at least undercuts the alleged good faith and intent of the
respondent to comply with the relevant legislation, if it does not
preclude compliance.
Considering the respondents['] long and extensive experience
in the performance of government contracts, the nature and extent
of the violations established herein are properly characterized as
flagrant and wilful violations. It is precisely this conduct which
the governing legislation was designed to terminate and prevent.
For the above stated reasons, consistent with findings set
forth in the Decision initially issued, I find the respondents
herein to be in aggravated and wilful violation of the Davis-Bacon
Act and the Copeland Anti-Kickback Act.
Accordingly, pursuant to 29 CFR [sec] 6.33(b)(2) of the
applicable regulations, it is hereby,
ORDERED: That for wilful and aggravated violation of the
Copeland Anti-Kickback Act, the respondents herein shall be
subjected to the ineligible list provisions as provided in 29
C.F.R. [sec] 5.12(a)(1).
It is further recommended: That the respondents be subjected
to the ineligible list provisions of [sec] 3(a) of the Act.
Dated this 9th day of December, 1986 at San Francisco, California.
VIVIAN SCHRETER MURRAY
Administrative Law Judge
VSM:brt [5]
