CCASE:
H.P. CONNOR & COMPANY
DDATE:
19880126
TTEXT:
~1
U.S. Department of Labor Office of Administrative Law Judges
2600 Mt. Ephraim Avenue
Camden, New Jersey 08104
DATE: January 26, 1988
CASE NOS. 86-DBA-64 and
86-DBA-101
IN THE MATTER OF
CASE NO. 86-DBA-64
Proposed debarment for Labor
standards violation by:
H.P. CONNOR & COMPANY, INC.
Prime Contractor
HERMAN P. CONNOR, President
CONSOLIDATED WITH
CASE NO. 86-DBA-101
IN THE MATTER OF
Disputes concerning the payment of
prevailing wage rates by:
H.P. CONNOR & COMPANY, INC.
GRAY ELECTRIC a/k/a GRAY ELECTRICAL
CORPORATION, INC., Subcontractor
and
Proposed debarment for labor
standards violations by:
GRAY ELECTRIC a/k/a GRAY ELECTRICAL
CORPORATION, INC.
HERBERT GRAY, President
Herbert Gray, Pro Se
Donald R. Hobbs, Esq.
For H.P. Connor & Company, Inc.
and Herman P. Connor
James A. Magenheimer, Esq.
For the U.S. Department of Labor
BEFORE: ROBERT D. KAPLAN
Administrative Law Judge [1]
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[2] DECISION AND ORDER
I. Procedural Background
On March 4, 1986 Deputy Chief Judge E. Earl Thomas of the U.S.
Department of Labor, Office of Administrative Law Judges, issued a
Pre-Hearing Order in Case No. 86-DBA-64 (ALJ 2) /FN1/ based on the
Employment Standards Administration's Order of Reference issued on
November 4, 1985. (ALJ 1). The Order sets forth that this case
involves the following contracts with H.P. Connor & Company, Inc.
(Connor Co.) and its president, Herman P. Connor (Connor) /FN2/:
Interior painting of the Peter Rodino Federal Building,
Newark, New Jersey (GSA Contract No. GS-02B-23177)
Reconstruction of Animal Research Facility, VA Medical
Center, East Orange, New Jersey (GSA Contract No.
V561C-341)
Interior Painting of Westfield, New Jersey Post Office
(U.S.P.S. Contract No. 335671-82-W-1433)
On April 25, 1986 Judge Thomas issued a Pre-Hearing Order in
Case No. 86-DBA-101 (ALJ 10) based on the Order of Reference issued
on February 21, 1986. (ALJ 9) The Order sets forth that this case
involves the above-noted contract for the reconstruction of the VA
Animal Research Facility with respect to Gray Electric a/k/a Gray
Electrical Corporation, Inc.(Gray Electric), and its president,
Herbert Gray. /FN3/
In Case No. 86-DBA-64 the U.S. Department of Labor (DOL)
alleges violations of the Davis-Bacon Act, 40 U.S.C. [sec] 276, et
seq., and the U.S. Postal Reorganization Act, as amended, 39 U.S.C.
[sec] 410(b)(C). In case No. 86-DBA-101 DOL alleges violations of
the Davis-Bacon Act as well as the Copeland Anti-Kickback Act, 40
U.S.C. [sec] 276c.
DOL seeks debarment of Connor Co., Connor, Gray Electric and
Herbert Gray, as well as authorization to make payment of
$14,009.27 from funds withheld from Connor to certain employees who
performed work on the VA Animal Research Facility job. [2]
/FN1/ The following abbreviations are used herein: Administrative
Law Judge's Exhibit - ALJ; Complainant DOL's Exhibit - CX;
Respondent Connor's Exhibit - RC; Respondent Gray's Exhibit - RG;
Joint Exhibit - JX; Transcript of the hearing on May 6 and 7, 1987
- Tr.
/FN2/ For purposes of simplicity of expression, Connor Co. and
Connor will be referred to collectively as "Connor" on occasion.
/FN3/ Gray Electric and Herbert Gray will be referred to
collectively as "Gray" on occasion. [2]
~3
[3] On December 22, 1986 Judge Thomas issued a Decision and
Order dismissing Gray Electric's request for hearing in Case No.
86-DBA-101. (ALJ 12) At the hearing on May 6, 1987 I overruled
this dismissal and DOL waived Gray Electric's and Herbert Gray's
failure to have filed an answer. Therefore, Gray was permitted to
fully participate in the hearing. (See footnote 5, infra.)
After due notice, a hearing was held before me in Cranford, New
Jersey on May 6 and May 7, 1987. At the hearing I consolidated the
two cases for purposes of hearing. (Tr. 10) All parties
participated fully in the hearing.
The regulations at 29 C.F.R. Part 5 are applicable herein.
II. FINDINGS OF FACT AND CONCLUSIONS OF LAW
A. Stipulation of the Parties
At the outset of the hearing, the parties entered into the
following stipulation:
H.P. Connor & Co. served as prime contractor on two contracts
awarded by the General Service Administration one calling for the
interior painting of the Peter Rodino Federal Building in Newark,
New Jersey (#GS-02B-23177) and the other for the reconstruction of
the animal research facility at the Veterans Administration Medical
Center in East Orange, New Jersey (#V561C-341). Both contracts
were subject to the requirements of the Davis-Bacon Act. H.P.
Connor & Co. also served as prime contractor on a project for the
U.S. Postal Service in Westfield, New Jersey. This contract
(#335671-82-W-1433) was funded under the provisions of the U.S.
Postal Reorganization Act. All three contracts were for amounts
exceeding $2,000.00. (JX 1; Tr 43-44)
I find that the evidence of record fully supports each fact set
forth in the above stipulation of the parties. I further conclude
that the legal positions set forth in the stipulation are correct.
B. The Contracts
1. Painting of the Rodino Federal Building
Four persons who performed work at the Rodino Building are
involved in DOL's allegations of violations by Connor: Henry Rufus
Boggs, Roderick Bell, Walter Johnson and Oliver Ring. The
following underpayments of wages are alleged:
Boggs - $ 61.95
Bell - $ 25.71
Johnson - $ 2,144.89
Ring - $ 2,706.00 [3]
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[4] Connor Co. previously made restitution to its direct employees
Bell, Boggs, and Ring. Johnson, who was employed by Connor's
subcontractor F. Foster & Co., was previously paid by DOL out of
funds withheld under the contract with the consent of Connor.
(ALJ 3)
The period covered by this contract was approximately September
1982 through June 1983. Henry Boggs testified that he worked on
the job for Connor for several weeks beginning about November 9,
1982 performing interior painting. Boggs recorded most of his
hours worked. Bruce Braverman, Compliance Specialist with the Wage
and Hour Division of DOL, testified that he conducted an
investigation of the work performed, the records maintained and the
payments made for work on the job. Braverman stated that he
compared Boggs' own records with the sign-in/sign-out book on the
job as well as the certified payroll sheets submitted by Connor,
and found the wage underpayments set forth above. Braverman also
testified that since the records are incomplete it is possible that
the underpayment was larger than that which he found. It appears
that the underpayment was due to payment of an hourly rate of
$11.00 versus the prevailing wage of $13.18, and errors in the
recording of hours worked and amounts actually paid. (Tr 262-68;
CX 3, 4, 9).
In his proposed findings of fact and conclusions of law
submitted post-hearing, Connor's counsel does not attempt to
contradict the testimony of Boggs or Braverman with respect to
prevailing wage, hours worked by Boggs, amounts paid by Connor or
the amount of the underpayment calculated - but rather merely took
the position that Connor was not responsible for paying Boggs
because Boggs was employed by an alleged subcontractor on the job,
Oliver Ring. In support of this contention counsel refers to the
Form 1566 which Connor had Ring sign. (RC 5) /FN4/ Connor
testified that he "disputed the Braverman findings" but agreed to
pay the underpayment "to keep peace" with DOL. However, Connor
presented no specific rebuttal of Braverman's calculations, but
simply took the position that Boggs was not his employee. Connor
further relied on the assertion that Boggs was "only the
subcontractor to Mr. Ring." Connor relied on a Boggs written
"quote" for doing certain work for Ring. (RC 7) However, Boggs
testified that he had given Ring this quote for work on the 16th
floor of the building (which Boggs never performed) and that he had
worked on other portions of the building for Connor. (Tr 153-54)
In fact, the quote contains reference to "16 Floor" while Connor's
contracts with Ring covered the 10th and 12th floors. (RC 5, 7; CX
16, 17; Tr 413) [4]
/FN4/ The Form 1566 provides that the subcontractor acknowledges
the inclusion in the subcontract of various statutory clauses,
including "Davis-Bacon Act." (Tr 413-14) [4]
~5
[5] I find that even if all Connor's assertions with respect to
Boggs were correct, Connor is responsible for the uncontroverted
underpayment. Connor has conceded that Boggs performed manual
work - whether directly for Connor, or as someone working for
Connor's alleged subcontractor, King. The mere fact that Connor
obtained a Form 1566 from King does not absolve Connor from
responsibility for any underpayment to an employee of Ring, even if
King were a subcontractor. Connor, as prime contractor, is
responsible for "compliance by any subcontractor . . . with all
contract clauses in 29 C.F.R. 5.5." (29 C.F.R. [sec] 5.5(a)(6)).
Roderick Bell did not testify at the hearing, but Braverman
testified that Bell had been employed on the job directly by
Connor. (Tr 252-53) Braverman further stated he found errors in
Connor's payroll records regarding the hours worked and wages paid,
resulting in an underpayment to Boggs. (Tr 263, 266) Counsel for
Connor takes the same position regarding Bell as he does for Boggs.
However, Connor did not disavow Bell as his own employee -- he did
not specifically address this question in his testimony. (Tr 408)
Connor simply testified that he "disputed the Braverman findings"
about Bell, Boggs, and Ring and that he believed the calculations
on which wage payments were based at this job were accurate. (Tr
408)
Walker Johnson testified that he had worked on the job for
Connor's subcontractor Fred Foster (F. Foster & Co.). Johnson
stated he worked about three to four weeks, had been promised $10
or $11 per hour, was paid a total of $300, and finally quit because
Foster never paid the balance owed him. (Tr 163-77) Braverman
testified that Foster had up to five employees on the job and that
Braverman found evidence establishing that only Johnson was
underpaid. Braverman explained that his calculations showed
Johnson worked over 180 hours on the job, whose prevailing wage was
$13.18 per hour, and Johnson was paid a total of $300. (Tr 242-47)
Brave[r]man also testified that when Mr. Foster was advised by him
that the Foster payroll records were inaccurate, Mr. Foster told
him that Foster had not prepared the payroll records but had signed
these in blank and turned them over to Connor Co. which completed
the payroll and submitted the records to DOL. (Tr 248, 348-49)
The position of counsel for Connor set forth post-hearing
regarding Johnson is similar to his assertions with respect to
Boggs and Bell, viz., that Johnson was employed by a subcontractor
not by Connor, and that the subcontractor signed a Form 1566. In
addition, counsel asserts that Connor "was never directly involved
with Fred Foster" and, finally, points out that Mr. Foster did not
testify at the hearing. Connor testified that he himself was not
directly involved with Foster, but conceded that he had contracted
work on the job to Foster. (Tr 399) Connor was asked by his
counsel whether Connor Co. was involved in preparing payrolls from
information submitted by Foster and testified: [5]
~6
[6] No. No more than we just collect them and try to verify
them . . . . I would personally go down and look at the
book myself and I would send Donna [Pleasant]. And we
would verify it. We had a lot of people there,
[checking] the sign-in and sign-out [book].
(Tr 400-401) In essence, Connor testified that Connor Co. made
every effort to assure that the Foster payroll records were
correct, and he believed that they were accurate, based on those
efforts. (Tr 401-403)
On the other hand, Braverman's calculations were based on
Johnson's own written record of the dates and hours he had worked
on the job. (CX 5) The certified payrolls contain substantially
different information. (CX 7) Braverman testified that Foster
told him that Foster submitted records to Connor who prepared the
certified payroll. (Tr 24)
I have no basis for refuting Johnson's records other than
Connor's statement that his company double-checked and found
Foster's payroll records to be accurate. Based on the record as a
whole and the demeanor of the witnesses, I credit Johnson's
testimony, his record of the hours he worked on the job and,
ultimately, Braverman's calculation of underpayment based on those
records. Once again, Connor's position that it is not responsible
for the underpayments by its subcontractors is erroneous under 29
C.F.R. [sec] 5.5(a)(6).
Oliver King did not testify at the hearing. Although King had
contracting agreements with Connor, Braverman testified that King
himself also performed work on the job "with a paint brush in his
hand." (Tr 252) Braverman stated that he found the payroll records
submitted by Connor (which in places list King as a "Painter" at
$13.18 per hour) were not accurate with respect to hours worked,
wages paid, and deductions. (Tr 263, 316-18; CX 9) Braverman
explained that his calculations were based on his examination of
the sign-in/sign-out book on the job and the certified payrolls.
Braverman calculated the amount King should have been paid as a
hands-on painter and subtracted the amount he was to be paid under
his subcontracting agreements with Connor to arrive at the total
underpayment. (Tr 262-65)
Counsel for Connor, post-hearing, asserts the position that
Connor is not responsible for paying King the prevailing wage
because he was a subcontractor who signed a Form 1566. (Also see
Tr 318.) In his testimony, Connor conceded that King performed at
least some of the painting work himself. (Tr 414) No evidence was
presented by Connor to refute Braverman's calculations of the
underpayment involving King. [6]
~7
[7] There is no question that an individual who performed manual
labor on the job for Connor was entitled to be paid the prevailing
wage, regardless of whether he is called an employee or has a
contract and is denominated a "subcontractor," as the Davis-Bacon
Act does not distinguish between "laborers" or "mechanics" based on
whether or not they are also subcontractors. Connor has conceded
that King performed painting on the job with brush-in hand, and has
not refuted Braverman's underpayment calculation. Therefore, I
find that King was not properly paid and that Connor is responsible
for the underpayment amount determined by Braverman.
2. Reconstruction of the VA Animal Research Facility
Although it appears that the overall prime contractor for the
VA Animal Research Facility reconstruction job was the U.S. Small
Business Administration, Connor was also a prime or general
contractor on that job. Connor in turn subcontracted the
electrical work to Gray. The prevailing wage for electricians on
the job was $16.63 an hour which later was "modified" to $16.67.
(CX 12, 13; Tr 276-77, 354)
Four persons who performed electrical reconstruction work for
Gray at the Animal Research Facility are involved in DOL's
allegations of violations by Connor and Gray: /FN5/ Abdul Amin,
Ronnie Gray (the son of Herbert Gray), Lucius Hall, and Victor
Springer. The following underpayments of wages are alleged:
Amin - $ 5,268.35
R. Gray - $ 6,848.00
Hall - $ 732.52
Springer - $ 1,160.40
(See ALJ 15 and Compliance Specialist Braverman's calculations, CX
15.)
The entire amount of the back wages alleged, $14,009.27, was
withheld from Connor under the contract. DOL seeks a determination
herein authorizing release of these funds to the workers. DOL also
seeks debarment of Connor and Gray because of the underpayment as
well as alleged "kickbacks." [7]
/FN5/ As noted, default judgment was initially entered against Gray
because of the failure to have filed any answer to DOL's
"information." This action was in the form of an order by Judge
Thomas dismissing Gray's request for hearing on December 22, 1986.
(ALJ 12) However, Mr. Gray appeared at the hearing at which time
he requested the right to participate in the proceedings, stating
that he had not received some of the government's mailings to him.
Counsel for DOL agreed that Gray never received Judge Thomas' Order
to Show Cause. Based on all the circumstances, I abrogated the
default judgment, reinstated Gray's request for hearing, and
permitted Gray to participate fully in the hearing. (Tr 19-42) [7]
~8
[8] The period covered by the contract is approximately November
24, 1981 to February 1983. The period of the contract during which
the alleged underpayment occurred was the workweek ending January
30, 1982, through February 5, 1983.
Abdul Amin testified that as an employee of Gray he performed
electrical demolition work on the job for three months or more,
eight hours a day, but also did other work for Gray during that
time period. During the first three weeks on the job Gray gave
Amin paychecks drawn on a Connor account for amounts of $300 or
more. Gray got Amin to cash the Connor paychecks and give Gray
the cash. Gray then returned $150 in cash to Amin. Amin testified
that the same thing occurred with Lucius Hall and several other
unnamed Gray employees. Amin also stated that additional Connor
paychecks on which Amin was payee were forged by Gray and the
entire proceeds kept by Gray. After getting a W-2 form from Connor
which overstated Amin's earnings from Connor, Amin telephoned
Connor to complain. Subsequently, Amin filed charges against Gray
with the National Labor Relations Board and the state labor
relations board. (Tr 196-211)
Ronnie Gray did not testify at the hearing. Braverman
testified about how he calculated the underpayment owed to Ronnie
Gray. (Tr 292, 297)
Lucius Hall testified that he worked on the job for about ten
days and was paid $150 a week. Hall also related that he and other
employees on the job cashed checks at Gray's behest, gave Gray the
cash, and in turn were given $150 in cash out of the proceeds by
Gray. (Tr 181-195)
Victor Springer testified that he worked as an electrician on
the job about six weeks, full-time. However, he may have worked on
other small jobs for Gray during that time. For about the first
two or three weeks he was paid $280 a week by Gray. Later he got
$400 a week. He stated that he was paid with a check drawn on a
Gray account as well as with cash. Springer knew nothing about
employees' checks being cashed for Gray. (Tr 215-225) Braverman
explained how he calculated the underpayments for Springer. (Tr
300-301)
Connor's counsel essentially contends that Connor had no
knowledge of how Gray was paying the employees on the job. On the
other hand, it appears that even had Gray's employees received the
entire amount of the Connor paychecks they would have been
underpaid: the payroll records maintained for a time by Connor on
this job contain an hourly rate of $14.57 rather than the
prevailing wage of $16.63 or $16.67. (CX 14) Counsel concedes,
however, that notwithstanding Connor's lack of knowledge, Connor is
ultimately responsible for Gray's underpayments of wages. (Tr
286)[8]
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[9] Herbert Gray testified that his employees performed work on
the job over an eight-month period. The payroll records he
submitted cover the period January 30, 1982 through February 27,
1983. (RG 1) Gray stated that he had no records of payments to
employees or withholding available to him at the time of the
hearing because he had lost them and because his general foreman on
the job, David Witherspoon, failed to appear at the hearing as he
had promised Gray. According to Gray, he and Witherspoon had
maintained separate but essentially duplicate records of wage
payments. However, Gray stated he agreed that he had underpaid
Victor Springer and Ronnie Gray. But Gray believes he owes no
money to Abdul Amin and Lucius Hall. On the contrary, Gray stated
that Amin and Hall owe him money. (Tr 457-58), 461-64) Further,
Gray testified that he does not agree with the underpayment amounts
calculated by Braverman for Springer and Ronnie Gray -- but Gray
offered no other calculations or amounts as the correct
underpayments to those persons. (Tr 464-66)
With respect to the testimony of Amin and Hall about their
cashing checks and giving the proceeds to Gray, Mr. Gray testified:
The only thing I would say as far as that with me taking
money from them, well, they might have owed me some
money, Mr. Amin or somebody else. But I never cashed
their check and took their money from them. I never did.
(Tr 455) Gray further testified that almost daily Amin and Hall
borrowed money from him, and he implied that Witherspoon was the
only person who had personal knowledge of those details. (Tr 456)
Connor testified that he obtained a Form 1566 from Gray and had
discussed with Gray the Davis-Bacon Act's requirements. Connor
stated that the SBA, as prime contractor, supplied him with the
prevailing wage on the job. (Tr 417-18, 420-22) In the beginning
Mr. Gray asked Connor to pay Gray's employees for Gray. For
several weeks Connor did this by check, but he thinks he paid the
fringe benefit amounts in cash. (Tr 422-23, 425) During the
course of the work on the job, according to Connor, Braverman and
a union representative came to Connor and advised him that the
hourly rate being paid was too low. Connor testified that he
increased the rate to comply with Braverman's request "to try to
keep peace.n (Tr 424) Connor testified that he asked Gray to pay
"more" and that "we paid more, $19.00 an hour." Connor stated, "I
paid prevailing wage plus a couple dollars extra for insurance and
to make sure they had enough." (Tr 425)
Connor first testified that during the several weeks he paid
Gray's employees. Connor Co. prepared the payroll records and
submitted them to the government. But thereafter, when Gray paid
his own employees, Connor had nothing to do with preparing the
payrolls. (Tr 423, 425-26) [9]
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[10] I find it difficult to believe that Connor would have paid
several dollars more per hour than was required, merely to keep
peace. I also find it difficult to believe that Connor paid the
Gray employees the fringe benefit amounts in cash, as he testified.
Nowhere did Connor offer a rational explanation why he would do
these things. Further, Connor conceded he has no knowledge about
the accuracy of the payroll records maintained by Gray. Connor
offered no records to show exactly what his company paid these
persons during the weeks when he was paying them directly.
Finally, Connor offered no documentary or other evidence
corroborating that SBA had advised him of a lower prevailing
wage.
Based on the foregoing, I discredit Connor's assertion that he
believed Gray's employees were being paid the proper prevailing
wage. On the other hand, there is insufficient evidence to
establish that Connor had known that Gray was cashing Connor's
paychecks and was, in effect, obtaining "kickbacks~ in this
fashion.
I find Mr. Gray totally unbeliev[]able. He has no records
other than payroll records showing hours worked on the job. His
only response to the several allegations that he received kickbacks
from his employees is that "they might have owed me some money."
I find that neither Connor nor Gray has adequately refuted
Braverman's wage underpayment calculations regarding Amin,
Ronnie Gray, Hall, and Springer. These underpayments were
substantially due to less than the prevailing wage rate being paid.
As conceded by Connor, since Connor was the contractor to Gray,
Connor is ultimately responsible for paying the underpayments.
Gray, of course, is primarily responsible for the underpayments.
3. Painting of the Westfield, New Jersey, Post Office
Connor was the prime contractor on the job involving interior
painting of the Westfield, New Jersey, post office. He contracted
some of this work to Stevens Painting Company, which appears to be
an unincorporated business whose principals were Dimitrios
Tsetsekas and his son, Steven. The period covered by the Contract
and the underpayments was approximately July 1982 to August 1982.
The DOL alleges that the underpayments resulted from Stevens
paying hourly wages of from $7.50 to $10.77, whereas the prevailing
wage was $13.18 per hour. The following underpayments of wages are
alleged:
Lekatis - $437.08
Parkas - $437.08
Steven Tsetsekas - $760.19
DOL advises that these amounts were paid subsequently by Stevens.
(ALJ 3) [10]
Dimitrios Tsetsekas was born in Greece and came to the United
States in 1967. At the hearing he understood and spoke English
with some difficulty.
At the hearing, Tsetsekas testified that upon entering into
their agreement for Stevens to perform the painting, Mr. Connor and
he never discussed the prevailing wage or the amount that Stevens
should or would pay its employees. Stevens paid each employee on
the job $70 per day for seven hours of work, according to Mr.
Tsetsekas. The evidence contains payroll records for the employees
which state that they were paid an hourly rate of $13.18. (CX 1)
/FN6/ Mr. Tsetsekas testified that he signed the payroll forms in
blank after being called and asked to come into the Connor's office
by the latter's employee "Donna." He testified that he told Donna
the names, addresses and hours of his employees, and that he was
paying his employees $70 per day; and she told him she would put
the wage information on the payroll records and submit them to the
government. (Tr 70-83, 95-96)
Mr. Tsetsekas conceded, upon cross-examination, that he had
received copies of the filled-in payroll records from Donna after
he had completed the painting job. But he stated that he did not
understand them and, it appears, he threw them away. (Tr 84-92)
Connor testified that he had Stevens Painting Company sign a
Form 1566 requiring it to pay the appropriate prevailing wage rate.
(Tr 391-92; RC 2) Connor further testified he knew of no incorrect
payroll records, and contended that Connor Co. would not have been
paid by the government had there been any errors in these records.
(Tr 433) As noted above, Mr. Connor testified that Donna Pleasant
was employed by him; he and Donna tried to verify the hours worked
by persons on the Rodino Building job; Donna worked in Connor's
office, and she would "check the payrolls [and] would monitor"
payrolls. (Tr 401-404, 440-42) Furthermore, Donna Pleasant is
listed as a "supervisor" for Connor on the Rodino Building payroll
records. (CX 9)
Connor's defense here relies on the Form 1566 signed by Mr.
Tsetsekas, as well as his own ignorance that Stevens was not paying
the proper wage rate and the assertion that Connor Co. would not
have been paid under the contract by the government had there been
anything remiss in the wage payments by Stevens. However, there
has [11]
~11
/FN6/ At the hearing, Braverman testified that the correct
prevailing wage was $14.18, referring to a wage determination dated
May 7, 1983 that increased the rate by $1.00. (Tr 230-232; CX 6)
As this increase occurred after Stevens work on the job had been
completed, I find that the correct prevailing wage was $13.18, as
initially alleged by DOL. [11]
~12
[12] been no direct rebuttal of Mr. Tsetsekas' testimony that the
Connor payroll "monitor," Donna Pleasant -- who at least at some
time was a supervisor for Connor -- knowingly inserted the wrong
wages in his payroll records. Consequently, I find that Donna
Pleasant knowingly placed incorrect wage information in the Stevens
Painting Company payroll records. I further find that in doing so
she was acting on behalf of Connor and that, therefore, these
fraudulent acts are attributable to Connor Co. and Connor.
B. The Remedy and Penalty
As noted above, Connor and Gray are responsible for the wage
underpayments on the VA Animal Research Facility job calculated by
Braverman. Accordingly, I find that the monies withheld from
Connor -- $14,009.27 -- should be used to reimburse Abdul Amin,
Ronnie Gray, Lucius Hall, and Victor Springer the amounts they were
underpaid on the VA job. As also noted, the employees on the
Rodino Building job already have been reimbursed: Roderick Bell,
Henry Boggs, and Oliver Ring were paid by Connor; and Walter
Johnson was paid by DOL out of funds withheld from Connor, with the
latter's consent. Stevens' employees have been reimbursed by that
company.
The next question is what, if any, penalty should be imposed on
Connor and Gray. DOL urges that Connor, Connor Co., Herbert Gray
and Gray Electric be debarred from obtaining government contracts
for the three years provided by [sec] 3(a) of the Davis-Bacon Act,
40 U.S.C. [sec] 276(a)-(2).
Section 3(a) of the Davis-Bacon Act and 29 C.F.R. [sec]
5.12(a)(2) authorize and direct the Comptroller General of the
United States to distribute a list to all Departments of the
Government giving the names of persons or firms whom he has found
to have disregarded their obligations to their employees or
subcontractors under the Act. No contract or subcontract shall be
awarded to such persons or firms, or to any firm, corporation,
partnership, or association in which such persons or firms have an
interest, until three years have elapsed from the date of
publication of the list containing the names of such persons or
firms.
Furthermore, 29 C.F.R. [sec] 5.12(a)(1) provides that whenever
any contractor or subcontractor is found by the Secretary of Labor
to be in "aggravated or willful violation" of the pay provisions of
any of the applicable statutes (other than the Davis-Bacon Act)
listed in [sec] 5.1, which includes the Postal Reorganization Act,
(the applicable Act in the Westfield Post Office job) such
contractor or subcontractor, or any firm, corporation, partnership,
or association in which such contractor or subcontractor has a
substantial interest shall be ineligible for a period not to exceed
three years (from the date of publication by the Comptroller
General of the United States) to receive any contracts or
subcontracts subject to any of the statutes listed in [sec]
5.1. [12]
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[13] Under 29 C.F.R. [sec] 5.5(a)(6), Connor, as prime
contractor, is responsible for "compliance by any subcontractor
. . . with all the contract clauses in 29 C.F.R. [sec] 5.5" which
includes the requirement to pay all laborers in accordance with
applicable prevailing wages.
In the case of Herbert Gray and Gray Electric, the evidence is
quite clear that the employees were not paid the prevailing wage
and that Mr. Gray personally arranged that several of them would
return to him monies which they had earned and to which they were
entitled. Mr. Gray's defense that, perhaps, these employees owed
him money is at best feeble; I do not credit his testimony. Thus,
I find that Mr. Gray and Gray Electric violated the Davis-Bacon Act
by disregarding their obligations to their employees.
With respect to Connor and Connor Co., the evidence is also
quite clear that their own and their subcontractors' employees were
not properly paid on the Rodino Building and the VA Animal Research
facility jobs. The law is also unequivocal that Connor and Connor
Co. are responsible for their subcontractors' violations. Thus,
Connor and Connor Co. disregarded their obligations to employees
under the Davis-Bacon Act. The conduct of Herbert Gray, Gray
Electric a/k/a Gray Electrical Corporation, Herman P. Connor, and
H.P. Connor & Company, Inc. in violation of the Davis-Bacon Act
warrants their debarment for three years, as provided by [sec] 3(a)
of the Act and the regulations at 5 C.F.R. [sec] 5.12(a)(2).
The remaining question is whether the conduct of Connor and
Connor Co. with respect to the Westfield Post Office job
constitutes "willful or aggravated" violations warranting debarment
under 29 C.F.R. [sec] 5.12(a)(1). Although there is no statutory
definition of this debarment standard, the cases have generally
held that record falsification, failure to pay the required
overtime, and payment of wages below the wage dete[r]mination rate
constitute reasons for dete[r]mining that the violations were of a
willful and aggravated nature. In the matter of Marvin E.
Hirchert, WAB 77-17 (10/16/78), CCH Labor Law Reporter, Transfer
Binder (1978 1981), [par] 31,353. Moreover, it has been
established that such things as the lack of knowledge of
bookkeeping errors, the expansion of the business, the payment of
back wages, and compliance under other contracts do not
suffice as excuses to preclude debarment for the willful and
aggravated violations. Id.; In the Matter of Ace Contracting
Company, Inc., WAB 76-23 (5/30/80), CCH Labor Law Reporter,
Transfer Binder (1978-1981), [par] 31,357.
Even accepting Mr. Connor's assertion of his personal ignorance
that the employees at the Westfield Post Office were underpaid, the
evidence plainly shows that Connor[], through Donna Pleasant,
knowingly falsified the Stevens Painting Company payroll records.
Consequently, I find that Connor[] and Connor[] Co. were in
aggravated or willful [13][14] violation of the Postal
Reorganization Act by their conduct involving the employees of
Stevens Painting Company, both by the attributable knowledge of
their conduct relating to Stevens' employees and by the
blatant nature of such misconduct.
The aggravated or willful violations by Herman P. Connor and
H.P. Connor & Company, Inc. of the Postal Reorganization Act
warrants their debarment for the maximum of three years under 29
C.F.R. [sec] 5.12(a)(1). /FN7/
ORDERS
It is hereby RECOMMENDED pursuant to the Davis-Bacon Act and 29
C.F.R. [sec] 5.12(b)(1) that it be ORDERED that the following
companies and individuals be debarred and ineligible to receive any
contracts or subcontracts subject to any of the statutes listed in
29 C.F.R. [sec] 5.1 for a period of three years from the date of
publication by the Comptroller General of their names on the
ineligible list:
H. P. Connor & Company, Inc.
Herman P. Connor
Gray Electric a/k/a Gray Electrical Corporation, Inc.
Herbert Gray
It is hereby ORDERED pursuant to the U.S. Postal Reorganization
Act and 29 C.F.R. [sec] 5.12(b)(1) that the following companies and
individuals be, and they hereby are, debarred and ineligible to
receive any contracts or subcontracts subject to any of the
statutes listed in 29 C.F.R. [sec] 5.1 for a period of three years
from the date of publication by the Comptroller General of their
names on the ineligible list:
H.P. Connor & Company, Inc.
Herman P. Connor [14]
~14
/FN7/ Although as noted, in Case No. 86-DBA-101 DOL initially
alleged violations of the Copeland Anti-Kickback Act, the DOL's
post-hearing brief made no request for remedy under that statute,
nor any other reference to it. Therefore, I make no findings with
respect to that statute. [14]
~15
[15] It is hereby further ORDERED pursuant to the Davis-Bacon
Act and 29 C.F.R. [secs] 5.9 and 5.10(a) that the U.S. Department
of Labor shall pay, from the total of $14,009.27 withheld from
H. P. Connor Company, Inc., the following persons the specified
sums:
Abdul Amin - $5,268.35
Ronnie Gray - $6,848.00
Lucius Hall - $ 732.52
Victor Springer - $1,160.40
ROBERT D. KAPLAN
Administrative Law Judge
DATED : January 26, 1988 Camden, New Jersey [15]
