ALL SUN SOLAR ENERGY CO., 1986-DBA-202 (ALJ Mar. 17 1988)
CCASE:
ALL SUN SOLAR ENERGY COMPANY
DDATE:
19880317
TTEXT:
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[1] [88-20.WAB ATTACHMENT]
U.S. Department of Labor Office of Administrative Law Judges
211 Main Street - Suite 600
San Francisco, California 94105
DATE ISSUED: MAR 17 1988
CASE NO: 86-DBA-202
IN THE MATTER OF
PROPOSED DEBARMENT FOR LABOR
STANDARDS VIOLATIONS BY:
ALL SUN SOLAR ENERGY COMPANY
Subcontractor
GIORA BELKIN
President
WITH RESPECT TO LABORERS AND MECHANICS
EMPLOYED BY THE SUBCONTRACTORS UNDER
U.S. DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT - PROJECT NO: 122-35528-PM-L8
ANTELOPE VALLEY, LANCASTER, CALIFORNIA
Moshe A. Young, Esquire
For the Respondent
Felix J. Catena, Esquire
For the Department of Labor
BEFORE: HENRY B. LASKY
Administrative Law Judge
AMENDED DECISION AND ORDER
This is an action under the United States Housing Act 42
U.S.C. 1737(j), as amended and recodified (hereinafter, the "Act"),
and its implementing regulations, 29 C.F.R. Parts 5 and 6, the
National Housing Act, as amended, 12 U.S.C. 1715(c), and the
Contract Work Hours and Safety Standards Act (CWHSSA), 40 U.S.C.
327-332. The notification letter, dated February 6, 1986, having
alleged certain violations of the Act, resulting in a total sum of
$37,670.23 due to certain employees of Respondent which sum was
paid by the prime contractor, and Respondent having failed to deny
the existence of said violations, the only issue presented for
adjudication was whether Respondent All Sun Solar Energy Company
and Giora Belkin, individually, should be debarred from further
federal contracts for a period not to exceed three years pursuant
to 29 C.F.R. Section 5.12. After appropriate notice, a hearing was
held in Ventura, California, on February 10, 1988. [1]
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[2] FINDINGS OF FACT
1. All Sun Solar Energy Company, Inc., hereinafter referred
to as All Sun was a subcontractor on a contract issued under the
Department of Housing and Urban Development Project No.
122-35528-PM-L8, in Antelope Valley, Lancaster, California.
(Department of Labor's Exhibit A, p. 2. Hereinafter "DOL").
2. The contract under which All Sun held a subcontract was
issued by the California Housing Finance Agency to Goldrich and
Kest, prime contractor, and identified as CHFA 82-44-5 and was
awarded on November 11, 1982 (DOL's Exhibit A, p. 2).
3. The subcontract held by All Sun thereunder was issued in
the amount of $220,000.00 (DOL's Exhibit A, p. 2).
4. During the period November 20, 1982 to March 5, 1983, All
Sun was a small company consisting of 7 employees (DOL's Exhibit A
(4); Tr. p. 32).
5. The contract referred to in paragraphs 2 and 3 above
required the payment of wages pursuant to the provisions and
requirements as set forth in the United States Housing Acts
(42 U.S.C. 1437(c)) and the Contract Work Hours and Safety
Standards Act (40 U.S.C. 327-332). (DOL's Exhibit A, p. 2).
6. All Sun was required to pay its employees the wage rates
set forth in Wage Determination CA-81-5129, dated July 6, 1981.
(DOL's Exhibit A, p. 2).
7. Employees of All Sun performed work on the contract
referred to in paragraphs 2 and 3 above during the period from
November 20, 1982, through March 5, 1983. (DOL's Exhibit A, p. 2).
8. On or about November 11, 1982, All Sun filed its
Subcontractors Certification Concerning Labor Standards and
Prevailing Wage Requirements. (DOL's Exhibit A, p. 2).
9. During the period from November 20, 1982, through March
5, 1983, All Sun submitted certified payroll forms purporting[] to
show that All Sun was paying its employees in compliance with the
wage determination referred to in paragraph 5 above. (DOL's
Exhibit A, p. 2).
10. The certified payrolls submitted by All Sun throughout
the period November 20, 1982 to March 5, 1983, were signed by Giora
Belkin, as president of All Sun. (DOL's Exhibit A, p. 3; Tr. p.
17).
11. During the period from November 20, 1982, through March
5, 1983, All Sun paid its employees performing work on the contract
referred to in paragraphs 2 and 3 above at rates less than the rate
of pay set forth in the applicable wage determination. (DOL's
Exhibit A, p. 3). [2]
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[3] 12. During the period from November 20, 1982, through
March 5, 1983, All Sun failed to pay its employees performing work
on the contract referred to in paragraphs 2 and 3 above at least
one and one-half the required hourly rates of pay for hours worked
in excess of 40 per week in that no pay at a premium rate was paid
for overtime hours. DOL's Exhibit A, p. 3).
13. By signing the certified payroll reports throughout the
period November 20, 1982 to March 5, 1983, Giora Belkin, as
president of All Sun, personally certified the following:
(a) That he (Belkin) paid or supervised the payment of
the persons employed by All Sun throughout the relevant
period;
(b) That all persons employed on said project referred
to in paragraphs 2 and 3 above were paid the full weekly
wages earned;
(c) That payrolls submitted for the relevant period
(November 20, 1982 to March 5, 1983) were correct and
complete;
(d) That the wage rates for laborers and mechanics
contained in the certified payrolls were not less than
the minimum wage rates shown in the contract. (DOL's
Exhibit A (3)).
14. That contrary to said certifications referred to in
subparagraphs 13(b), (c), & (d) above, all persons employed on said
project referred to in paragraphs 2 and 3 above were not paid the
full weekly wages earned; that the payrolls submitted for the
relevant period (November 20, 1982 to March 5, 1983) were not
correct and complete; and that the wage rates for laborers and
mechanics contained in the certified payrolls were less than the
minimum wage rates shown in the contract.
15. Giora Belkin, as president of All Sun, signed the
Subcontractor's Certification Concerning Labor Standards and
Prevailing Wage Requirements authorizing himself to compile the
weekly payroll report, execute the "weekly statement of
compliance", distribute the wages to the employees and to complete
the various forms pertaining to the prevailing wage requirements on
behalf of the corporation. (DOL's Exhibit A (2) at p. 22).
16. The Court does not find credible Mr. Belkin's assertions
that he was not president nor a responsible official of All Sun
during the relevant period. Mr. Belkin testified that during a
portion of the time in question he was not president of the company
nor the responsible managing officer of the company.
Notwithstanding such testimony he certified and acted in such
capacities to the contrary.
17. Giora Belkin had knowledge of the contract referred to in
paragraphs 2 and 3 above, together with its wage determination
rates due employees of All Sun. (Tr. p. 75). [3]
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[4] 18. Giora Belkin, as president of All Sun, submitted
certified payrolls to the contracting agency which were falsified
in a manner to conceal the prevailing wage and overtime violations
(Tr. p. 90).
19. Giora Belkin failed to explain the falsification of the
certified payrolls he signed and submitted (Tr. p. 81 and 82).
20. All Sun and its officers were well aware that they were
violating the provisions of the Act, and yet, failed to take any
corrective action (Tr. pp. 14 & 16).
21. An investigation was conducted by the Wage and Hour
Division, Employment Standards Administration, United States
Department of Labor, during August 1984 through January 1985, to
determine whether All Sun's employment and pay practices were in
compliance with the United States Housing Act, National Housing Act
and CWHSSA (DOL's Exhibit A, p. 3).
22. Pursuant to said investigation, violations were found
(e.g. unpaid wages in the amount of $37,670.23, and falsification
of records) and upon demand by the Department of Labor, the prime
contractor, Goldrich and Kest, paid the full amount of the unpaid
back wages referred to above (DOL's Exhibit A, p. 4; Exhibit A (4);
Tr. pp. 14 and 17).
CONCLUSIONS OF LAW
1. The Department of Labor regulations at 29 C.F.R. Section
5.12(a)(1) provide that the Secretary may impose debarment on a
contractor or subcontractor who is found "to be in aggravated or
willful violation of the labor standards" set out in 29 C.F.R.
Section 5.1.
2. The United Housing Act and the National Housing Act are
among those statutes listed at Section 5.1.
3. All Sun, acting through its president, Giora Belkin,
violated the provisions of the Act in that:
(a) They failed to pay their employees the predetermined
rate as set forth in the Wage Determination;
(b) They failed to pay overtime for all hours over 40 in
a workweek; and
(c) They submitted falsified certified payrolls to
simulate compliance with the recordkeeping and prevailing
wage provisions of the Act.
4. The following have been held to constitute "aggravated and
willful" violations of the Davis-Bacon related Acts pursuant to 29
C.F.R. Section 5.12(a)(1): [4]
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[5] (a) The submission of falsified payrolls to
simulate proper payment;
(b) Failure to pay prevailing rates;
(c) Failure to pay overtime.
Matter of Wilfred G. Gooden Construction Corp., WAB Case No. 86-03
(October 1, 1986); Early and Sons, Inc., WAB Case No. 86-25
(January 29, 1987); Bay State Wiring Co., WAB Case No. 76-08 (June
14, 1977; Cosmic Construction Co., Inc., WAB 79-18, (September 2,
1980); Marvin E. Hirchert d/b/a M & H Construction Co., WAB 77-17,
(October 16, 1978); Maddox Paint Contracting Co., WAB 77-10,
(December 14, 1977).
5. Mr. Belkin's contention that he was unaware of any
violations since he was not involved in the day to day operation of
the company in without merit. The Board has held that a partner
cannot take cover behind the actions of his partners, agents or
employees. Partners must be responsible for all the acts of the
partnership. Camilo A. Padreda General Contractor, Inc., and
Camilo A. Padreda, President, WAB Case No. 87-01, (August 3, 1987),
citing P.J. Stella Construction Corp and My Glass Company WAB Case
No. 80-13 (March 1, 1984).
6. Furthermore, Mr. Belkin's contention that he did not
intend to violate the Act (and therefore should be relieved from
debarment) since he had no knowledge that the certified payrolls he
signed were inaccurate is of no consequence. The Wage Appeals
Board has held that submission of false certified payrolls cannot
be explained by lack of intent or of experience when the contractor
or subcontractor simulated compliance with the Davis-Bacon Act's
Labor Standards provisions. Thomas L. Moore, President, an[d]
T.A.M., Inc., WAB Case No. 79-05 (August 16, 1979[)].
7. The failure of Mr. Belkin (and All Sun) to explain the
falsification of the certified payrolls defeats any possible
consideration toward relieving them from, or diminishing, the
debarment period (Matter of Wilfred G. Gooden Construction Corp.,
WAB Case No. 86-03 (October 1, 1986). In Gooden, the Wage Appeals
Board affirmed a finding by the Administrative Law Judge of
aggravated and willful violation resulting from the submission of
falsified payrolls to simulate proper payment, and debarred for the
full period the president of the firm and the firm itself under 29
C.F.R. Section 5.12(a)(1). The Board held that it could not even
consider relieving the petitioners from, or diminishing, the
debarment period since petitioner failed to explain the
falsification referred to above. Furthermore, the Board held that
the failure to disclose any explanation was tantamount to
deliberate and intentional falsification sufficient to debar
petitioners under 29 C.F.R. Section 5.12(a)(1). [5]
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[6] ORDER
(1) In accordance with the Findings of Fact and Conclusions
of Law entered herein, Respondent's All Sun Solar Energy Company,
and Giora Belkin, individually, be placed on the ineligible list
pursuant to 29 C.F.R. Section 5.12(a)(1), for a period of three
years.
HENRY B. LASKY
Administrative Law Judge
San Francisco, California [6]
