ALL TEMP INSULATION CO., 1984-DBA-60 (ALJ June 1, 1987)
CCASE:
ALL TEMP INSULATION
DDATE:
19870601
TTEXT:
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[1] [87-26.WAB ATTACHMENT]
U.S. Department of Labor Office of Administrative Law Judges
211 Main Street, Suite 600
(415) 974-0514 San Francisco, California 94105
FTS 8 454-0514
DATE: 01 JUN 1987
CASE NO.: 84-DBA-60
IN THE MATTER OF
ALL TEMP INSULATION CO.,
SUBCONTRACTOR
ARTURO S. ESCOBAR,
CO-OWNER
CARLOS R. ESCOBAR,
CO-OWNER
(Appearances): Rebecca A. Siegel, Esq.
O/Solicitor - USDOL
525 Griffin St., Suite 501
Dallas, TX 75202
For the Government
Carlos R. Escobar, Pro se
3200 Gateway East
El Paso, TX 79932
For the Respondent
Before: Joseph A. Matera
Administrative Law Judge
RECOMMENDED DECISION AND ORDER
This proceeding was heard pursuant to the Davis-Bacon Act
[40 U.S.C. 276(a)] et seq. and the Copeland Act, and the applicable
regulations issued thereunder at 29 C.F.R. Part 5. The hearing
arose as a result of an investigation of All Temp Insulation
Company by a compliance officer for the Wage and Hour Division,
U.S. Department of Labor (DOL) which covered the period of time
from February, 1980 to February, 1982. (Tr. 64). Upon respondent's timely
request a trial of this matter was held in El Paso, Texas on [1]
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[2] January 6, 1987, at which the parties presented witnesses
and extensive documentary evidence, with full rights of cross-
examination and oral argument afforded. The primary issue before
me is whether All-Temp Insulation Company and its co-owners, Arturo
Escobar and Carlos Escobar, should be debarred from receiving
further contracts under the Davis-Bacon and related acts for the
statutory period. (Tr. 12). At the conclusion of the trial the
parties were directed to submit to me proposed findings of fact,
conclusions of law and a proposed order to be post-marked no later
than April 27, 1987. (Tr. 134, 141). On April 8, 1987 Stipulations
of Fact and Law, and the proposed Findings of Fact, Conclusions of
Law and Order were received from counsel for the DOL. To date, no
such proposed findings have been received from respondent.
I have reviewed the entire record in this case including the
stipulations of the parties, the documentary and testimonial
evidence. Upon review I find that the proposed findings set forth
by the DOL accurately set forth the relevant circumstances of this
case, with the consequent conclusions of law, which I also adopt as
my own with slight modification. In consideration of the entire
record and my opportunity to observe the demeanor, appearance and
testimony of the witnesses, I make the following findings of fact,
conclusions of law and order.
I. Stipulations of Fact and Law
The following Stipulations of Fact and Law were agreed to by
the parties and entered into the record at the hearing in this
matter on January 6, 1987. (Tr. 5-10, 26). [2]
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[3] 1. Respondents All Temp Insulation Co. (All Temp), and
Arturo S. Escobar and Carlos R. Escobar (Escobars), co-owners of
All Temp, were operating as subcontractor under Urban General
Contractors, Inc., the prime contractor, pursuant to Contract No.
DACA63-80-C-0056 from approximately February 1980 to February
1982, which contract required Respondents to perform construction
work, specifically insulation work, on the mechanical system of
William Beaumont Army Medical Center at Fort Bliss, Texas.
2. Respondents, pursuant to the contract and performance
thereof, as specified in Stipulation No. 1 supra, are covered by
the provisions of the Davis-Bacon Act, 40 U.S.C. [sec] 276(a) et
seq., and related acts and regulations, including The Copeland Act,
40 U.S.C. [sec] 276[c] et seq.
3. Jurisdiction of this action is properly conferred in
this Court under the provisions of the Davis-Bacon Act, the
Copeland Act, and the regulations promulgated in 29 C.F.R.
Part 5.
4. The contract under which Respondents operated, as specified
in Stipulation No. 1 supra, included Wage Determination
No. TX7[]9-4045 which includes the applicable wage rate owed to
asbestos and insulation workers for the area in which Respondents
were performing the contract.
5. In order to assist in the performance of the contract
as specified in Stipulation No. 1 supra, Respondents employed the
following employees: Daniel Alvarez; Ramon Gonzales, Jr.; and
Enrique Luevano. [3]
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[4] 6. In the summer of 1980, Respondents were investigated by
Corps of Engineers Compliance Officer Irene Delgado, who determined
that Respondents' employee Daniel Alvarez had been underpaid by
$555.11 for his work in the performance of the contract, as
specified in Stipulation No. 5 supra. Pursuant to this
investigation, the Corps of Engineers ordered Respondents to pay
this amount to Alvarez. Pursuant to that order, Arturo Escobar
signed a check for $555.11 dated March 9, 1981, which he presented
to Alvarez. Subsequently, Alvarez cashed the check and returned the
$555.11 to Arturo Escobar.
7. The employees, as specified in Stipulation No. 5 supra,
did handle insulation materials during the term of their employment
pursuant to the contract, as specified in Stipulation No. 1 supra.
8. Pursuant to an investigation conducted on or about November
1981 by the Wage and Hour Division, U. S. Department of Labor, the
Wage and Hour Division determined that Respondents owed back wages
to the three employees, as specified in Stipulations Nos. 5-7
supra, in the amount of $8,636.73.
9. Pursuant to the investigation, as specified in Stipulation
No. 8 supra, Respondents paid the three employees the amount of
$8,636.73.
10. Pursuant to the investigation, as specified in Stipulation
No. 8 supra, the Wage and Hour Division determined that Respondents
submitted certified payroll records to the prime contractor and
contracting agency, pursuant to the contract as specified in
Stipulation No. 1 supra, which inaccurately [4]
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[5] reflected the wages actually paid by Respondent to the three
employees, as specified in Stipulation No. 5 supra, in that the records
reflected that Respondents paid the employees higher wages than actually
were paid.
11. Respondents submitted certified payroll records to the
prime contractor and contracting agency, pursuant to the
contract, as specified in Stipulation No. 1 supra, which
inaccurately reflected the disposition of the $555.11 check
presented to employee Alvarez, as specified in Stipulation No. 6
supra, in that the payroll records reflected that Alvarez received
and retained this amount as back wages.
12. James L. Williams, Compliance Officer for the Wage and
Hour Division, U. S. Department of Labor, qualifies as an expert
witness for purposes of his testimony regarding this action against
Respondents. (Tr.26)
II. Findings of Fact
1. The contracting agency for the contract under which
Respondents operated, as specified in Stipulation No. 1 supra, is
the Corps of Engineers. (Tr. 39)
2. For the period from on or about February 1980 to February
1982, Respondents' employees, Ramon Gonzalez, Jr., Enrique Luevano,
and Daniel Alvarez, in the performance of their jobs for
Respondents, performed duties involving insulation of the heating
and cooling system, including using a brush for application of
CP-30, a sealant, to the duct joints of the heating and cooling
system, pursuant to the contract as specified in Stipulation No. 1
supra. (Tr. 28-29, 36, 61) [5]
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[6] 3. Under Wage Determination No. TX79-4045, persons
performing the work of journeyman insulator and asbestos are
entitled to be paid a wage of $11.01 per hour. (Tr. 30)
4. The wage rate of $11.01 per hour for journeyman insulator
or asbestos work, included in Wage Determination No. TX79-4045, is
based on the prevailing wage rate in the area in which such work is
performed, which includes the prevailing union wage rate for such
work. (Tr. 30-32, 102-103)
5. On or about January 27, 1982, Respondents' employee
Daniel Alvarez reported to Compliance Officer Williams that all
of his duties as Respondents' employee involved insulation of the
heating and cooling systems, pursuant to the contract as specified
in Stipulation No. 1 supra, and that Respondents paid him
approximately $5.00 to $6.00 per hour for the performance of such
duties. (Tr. 32)
6. During the period from on or about February 1980 to
February 1982, Respondents' employees Gonzalez and Luevano
performed duties involving insulation, pursuant to the contract as
specified in Stipulation No. 1 supra, for approximately 47 3/4
hours. (Tr. 33)
7. For the period from on or about February 1980 to February
1982, pursuant to their work under the contract as specified in
Stipulations Nos. 1 and 5 supra, Respondent paid the following
wages to its employees:
Employee Hourly Wage Rate Paid
Enrique Luevano $3.35 - 4.25
Ramon Gonzalez, Jr. $3.35 - 4.25
Daniel Alvarez $4.00 - 6.00
(Tr. 32, 37, 38, 74-75, 90) [6]
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[7] 8. For the period from on or about February 1980 to February
1982, Respondents' original payroll records showed that Respondents
paid employee Daniel Alvarez wages of $5.00 - 6.00 per hour and
employee Ramon Gonzalez, Jr. wages of $3.35 - 4.25 per hour,
whereas Respondents' certified payroll records showed that
Respondents paid Alvarez $6.84 - 11.01 per hour and Gonzalez
approximately $6.84 per hour. (Tr. 40)
9. Daniel Alvarez was required by Respondents to return to
Respondents the $555.11 in cash, after Alvarez cashed the check
as specified in Stipulation No. 7 supra. (Tr. 52)
10. Respondent Arturo Escobar instructed his employees Ramon
Gonzalez, Jr., and Enrique Luevano to tell the Department of Labor
that they were being paid wages by Respondents higher than those
actually paid by Respondents. (Tr. 75-90).
11. Respondents' three employees, as specified in Stipulation
No. 5 supra, in the course of their work under the contract as
specified in Stipulation No. 1 supra, regularly and usually
performed duties involving insulation of a heating and cooling
system and the use of tools of trade of insulation workers. (Tr.
68-89)
12. For purposes of job classification, the terms insulator
and asbestos worker are identical in meaning and substance. (Tr.
96)
13. Compliance Officer James L. Williams did not promise or
advise Respondents that he would not pursue the results of his
investigation subsequent to any conference with Respondents, nor
promise or advise that he would not recommend debarment as a
consequence of his investigation. (Tr. 63, 134) [7]
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[8] 14. Of the seven contracts alleged to be entered into between
Respondents and the Corps of Engineers, Respondent states that
Respondents have completed 90% of performance on two contracts,
nearly completed performance on four contracts, and not begun
performance on one contract. (Tr. 130)
III. Conclusions of Law
1. The contract and performance thereof, as specified in
Stipulation No. 1 supra, are subject to the provisions of the
Davis-Bacon Act, 40 U.S.C. [sec] 276a et seq[.] (Davis-Bacon Act),
and the Copeland Act, [40] U.S.C. [sec] [276c] (Copeland Act).
2. Jurisdiction of this cause of action is properly conferred
in this Court under the provisions of the Davis-Bacon Act, the
Copeland Act, and the regulations promulgated pursuant thereto in
29 C.F.R. Part 5.
3. Where a wage determination rate for a job classification
is based on the negotiated rate for union practices in the area,
the duties ascribed to the job classification will be the same as
those contemplated by the union practice. Matter of Indianhead
Construction Company, Inc., Lab. L. Rep. (CCH) [par] 31,336 (1979),
citing WH Op. 202, Lab. L. Rep. (CCH) [par] 30,841 (1973).
4. The determination as to which job classification a laborer
or mechanic belongs is based in the work actually performed by him,
not on his skill or experience. Fra[m]lau Corporation, WAB Case No.
70-05 (April 19, 1971); Matter of Titan Atlantic Construction
Corp., et al., Lab. L. Rep. (CCH) [par] 31,238 (1978); and Fry
Brothers Corp., WAB Case No. 76-06 (June 14, 1977).
5. During the course of their employment by Respondent,
pursuant to the contract as specified in Stipulation No. 1 supra,
three of Respondents' employees -- Enrique Luevano, Ramon Gonzalez, [8]
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[9] Jr., and Daniel Alvarez -- regularly performed the duties of
and used the tools of trade of an insulator; therefore, these three
employees must be classified as insulators for purposes of
payment of wages.
6. Based on Respondents' original and certified payroll
records and the testimony presented at trial, there is substantial
evidence to show that Respondents did not classify their three
employees, as named in Conclusion of Law No. 3 supra, as insulators
for purposes of payment of wages.
7. Based on Respondents' original and certified payroll
records and the testimony presented at trial, there is substantial
evidence to show that Respondents paid their three employees, as
named in Conclusion of Law No. 3 supra, at a wage rate less than
that wage rate to be paid for the job classification of insulator,
as required by the applicable Wage Determination, as specified in
Stipulation No. 3 supra.
8. Based on Respondents' certified payroll records, as
specified in Stipulation No. 11 supra, and the testimony presented
at trial, there is substantial evidence to conclude that
Respondents' employee Daniel Alvarez did not receive and retain
the amount of $555.11, presented to him by Respondents and owed
to him as back wages, as specified in Stipulation No. 6 supra,
and that Respondents required Alvarez to return to them this
amount of back wages owed to him. Respondents' action constitutes
a kickback within the meaning of the Copeland Act.
9. Therefore, it is concluded that:
a. Respondents violated the minimum wage requirements of
the Davis-Bacon Act with respect to its employees, as named in [9]
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[10] Stipulation No. 5 supra, by failing to classify and pay
them as insulators, thereby disregarding their obligations to their
employees;
b. Respondents violated the recordkeeping requirements
of the Davis-Bacon Act by failing to accurately classify and
reflect the actual wages paid, including those wages kicked back
to them as specified in Conclusion No. 8 supra, to their employees,
as named in Stipulation N[o]. 5 supra, thereby disregarding their
obligations to their employees;
c. Respondents committed a willful and aggravated
violation of the provisions of the Copeland Act by requiring
employee Daniel Alvarez to kick back to them a portion of back
wages owed and paid to Alvarez;
d. Respondents should be debarred, in accordance with
the provisions of 29 C.F.R. [sec] 5.12, for their disregard of
obligations to employees in violation of the Davis-Bacon Act, and
for their willful and aggravated violation of the Copeland Act. Ace
Contractors Company, Inc., WAB 76-23 (May 30, 1980); Cosmic
Construction Company, Inc., WAB 79-19 (Sept. 2, 1980); Thomas L.
Moore, W[A]B 79-05 (Aug. 16, 1979); Marco Construction Company and
Joe R. Mar[ti]nez, WAB 77[-]31 (April 24, 1978); Marvin E.
Hirchert, WAB 77-17 (October 16, 1978); and Bay State Wiring Co.,
WAB 76-08 (June 14, 1977). [10]
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[11] ORDER
Upon consideration of the entire record, it is
ORDERED that Respondents All Temp Insulation Co., Arturo S.
Escobar, and Carlos R. Escobar are debarred for a period not to
exceed three years from the date of publication by the Comptroller
General from receipt or award of any contract or subcontract
subject to the statutes, or the labor standards provisions of the
statutes, listed in 29 CFR [sec] 5.1.
DATED this 1st day of June, 1987.
JOSEPH A. MATERA
Administrative Law Judge [11]
