CCASE:
COASTAL ENERGY, INC.
DDATE:
19861002
TTEXT:
~1
[1] [89-07.WAB ATTACHMENT]
U.S. Department of Labor Office of Administrative Law Judges
John W. McCormack Post Office
and Courthouse
Room 409
Boston, Massachusetts 02109
In the Matter of:
Proposed debarment for
labor standards violations by:
COASTAL ENERGY, INC. Case No.: 87-DBA-13
Contractor
DANIEL J. MESSIER
President
With respect to laborers and
mechanics employed by the contractor
under U.S. Department of Housing and
Urban Development Project Nos.
CT 26-PO45-007 (Beardsley Apartments,
Bridgeport, Conn.); MA 1-3 (Bishop
Markham Village, Lowell, Mass.);
MA 6-3 (Hillside Manor, Fall River,
Mass.); MA 24-1 (Hillside Village,
Brockton, Mass.)
Appearances:
Constance Franklin, Esq.
For the Complainant, U.S Dept. of Labor
Nicholas J. Palermo, Jr., Esq.
For Respondents
Before: ANTHONY J. IACOBO
Administrative Law Judge
DECISION AND ORDER - ORDERING DEBARMENT
This proceeding arises from an Order of Reference issued
October 2, 1986 whereby the Assistant Administrator of the Wage and
Hour Division of the U.S. Department of Labor (the Department)
referred this matter for a hearing [1]
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[2] and the issuance of an appropriate decision and order.
The Assistant Administrator found reasonable cause to believe that
Coastal Energy, Inc., and its president, Daniel J. Messier, (hereinafter
sometimes referred to as Coastal or Respondents), have committed
willful and aggravated violations of the U.S. Housing Act of 1937,
as amended, (42 U.S.C. sec. [1]437j), (Act) and pertinent regulations,
and concluded they should be debarred from further participation in
government sponsored contracts. Respondents requested a de novo hearing.
A hearing was held in Boston, Massachusetts on September 22,
23, 27, 28, and October 3 and 4, 1988 at which time the parties
participated. Briefs were filed on November 25, 1988 by both
sides. They were reviewed and specific references to the arguments
raised therein are made, as appropriate.
Coastal was the subcontractor in four projects falling within
the ambit of the Act. These are: the Beardsley Apartments,
Bridgeport[,] Connecticut, and the following Massachusetts based
projects, Bishop Markham Village, Lowell; Hillside Manor, Fall
River; and Hillside Village, Brockton. A complaint was received by
the Wage and Hour Division that Coastal was not paying its
employees the prevailing wages, to which it had agreed under its
contract with the prime contractors and the respective sponsoring
government agencies. This precipitated an investigation of
Coastal's activities on the four projects noted. The instant
proceeding results from the investigation and the aforesaid
conclusions of the Assistant Administrator.
Applicable Law and Regulations
The Act provides, as here pertinent, that all laborers and
mechanics employed in the development of a lower income housing
project are to be paid not less than the wages prevailing in the
locality, as predetermined by the Secretary of Labor pursuant to
the Davis-Bacon Act, (40 U.S.C. 276a) and that the Secretary shall
require certification as to compliance with the above provisions
regarding wages prior to making any payment under such contract. 42
U.S.C. Sec 1437j (1981). The statute's mandate is amplified in
Title 29 of the Code of Federal Regulations, Part 5, which pertains
to the Davis-Bacon and Related Acts, and in which the U.S. Housing
Act of 1937, as amended, is listed. 29 CFR Sec. 5.1, #30.
Generally, as here pertinent, the regulations provide that whenever
a contractor or subcontractor is found to be in aggravated or
willful violations of the labor standards provisions of the Act,
such contractor or subcontractor or any entity in which such
contractor or subcontractor has a substantial interest shall [2]
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[3]
be ineligible for a period not to exceed 3 years to receive any
contracts or subcontracts subject to any of the statutes listed in
sec. 5.1. The term "labor standards" is defined as meaning "the
requirements of the Davis-Bacon Act, the Contract Work Hours and
Safety Standards Act (other than those relating to safety and
health), the Copeland Act, and the prevailing wage provisions of
the other statutes listed in sec. 5.1 and the regulations in Parts
1 and 3 . . ." 29 CFR Sec 5.2(f)
Summary of the Evidence
The Compliance Officer
Mr. Alfred Hammond, a compliance officer of the Wage and Hour
Division of the U.S. Department of Labor testified that, acting on
a complaint received by the Division he was assigned the task of
investigating Respondents. He first met with Coastal officials on
April 26, 1985. TR 243. One of his first actions was to ask for
the "regular payroll journals, which, pursuant to Part 5 of the
Regulations are supposed to show the week in which the work was
performed, the number of hours worked in that week, the rates of
pay, and the number of hours at that rate of pay, and the gross
wages . . . Then there'd be deductions and net pay." TR 244,
260. The records given to Mr. Hammond showed the week worked and
the gross pay but not the hours worked. TR 251, CX 13 (A review of
the Exhibit reveals that with a few exceptions in 1985, the number
of hours worked in any particular day or week are not shown.) He
also interviewed several employees and took statements, inquiring
as to whether or not they had worked on "federal projects", rate
of pay, hours worked, and total length of time worked on any
projects during the prior two years which were the focus of
his investigation. TR 266. During the course of the interviews he
learned that rates varying from $5.00 to $8.40 per hour were paid
to employees on the Brockton and Fall River projects) (Hillside
Village and Hillside Manor, respectively), substantially less than
the prevailing rates. These were aside from the $3.50 per hour
rate paid during travel time to and from the job site. TR 268-269.
He subsequently met with Respondent's counsel who assured that
whatever violations may have occurred would be remedied. Revised
payroll sheets would be made including the i[n]put from personal
conferences with the involved employee. TR 271-275. This resulted
in what were termed the "company sheets" and received as CX 14 and
15. He also contacted the four housing authorities involved in the
subject projects and received copies of the respective pertinent
contracts and certified payrolls. Based on the foregoing documents
and the interviews conducted by mail and in person, Hammond
concluded that improper wages had been paid. That is, the wage
rates he deduced from the company [3]
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[4] sheets, the payroll journals and the interviews did not correspond
with the wage rates specified in the corresponding certified payrolls.
TR 284-298. The calculations are reflected in complainant's Exhibit 1.
In turn the certified payrolls did not always reflect the correct
applicable prevailing wage rate, when compared to the prevailing
wage contained in the applicable contract with the appropriate
housing authority. A comparison of CX 18, for example, the
certified payroll submitted by Coastal for the Brockton project
with CX 20, the contract and modifications, shows that a rate of
$16.80 per hour was paid employees, while the applicable rate, with
fringe benefits, is $15.05 for laborers, and $18.01 (or $20.87) for
asbestos workers. See CX 22 p. 2 and CX 20, Fed. Reg. Vol. 48 No.
79, Friday April 22, 1983, and No. 48, Friday, March 18, 1983.
In demonstrating the method of investigation he employed in
concluding that Respondents were in violation of the Act by
falsifying certified payrolls and paying employees less than the
applicable prevailing wage, Hammond took as an example, John
Baillargeon, whose name is listed in the certified payrolls for
Brockton (Hillside Village)(CX 18), the week ending October 12,
1984, as having worked five hours and at a reported rate of $16.80,
was paid $84.00. The company's payroll journal lists $94.20 as
being paid for that week (or $224.35 for the following week ending
October 19, 1984). CX 13a.
He then considered the hourly rate for a laborer, $15.05 and
that for an asbestos remover $18.01, and struck a balance, to
reflect the proportion of the work effort devoted to each function
and came up with an adjusted rate, $16.41. TR 335. This adjustment
was necessary in order to reflect the distinction in the work
categories of an asbestos laborer, one who removes asbestos covered
fixtures, and an asbestos remover, who removes asbestos from
fixtures which remain on the premises. TR 350. He then compared
the number of hours listed in the certified payrolls with the
number of hours listed in the "company sheets", CX 15, for the
corresponding period and project. This latter exhibit purports to
show the number of hours an employee worked on the four federal
projects during the period at issue. However, inasmuch as the
material was prepared by Respondents as a part of a settlement
procedure with its employees, I do not intend to use the data
therein as evidence of the actual number of hours worked by the
named employees on government projects.
Mr. Hammond sponsored exhibit CX 22, which purports to be a
summary of the wages owed to each of the employees who worked on
the subject four "federal projects" for Coastal and the means by
which Hammond concluded they were not paid [4]
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[5] the appropriate prevailing wage. TR 353-5. In some instances,
he would compare the amounts shown on certified payrolls with the
corresponding amounts which the payroll journals show as being actually
paid the employee. In those instances where the latter amount is less than
that in the corresponding certified payroll, he would, using the
appropriate prevailing wage, calculate the amount due the employee.
TR 363. From his review of the matter, the compliance officer
concluded that the Respondents had falsified certified payrolls
regarding both the number of hours employees worked and the hourly
rate they were paid for their services. TR 413.
On cross examination some doubt was raised as to the source of
the certified payrolls, CX 4 and CX 17, the Bridgeport project,
which, while containing the same information, are not identical.
TR 434-444. This, nevertheless, fails to undermine Complainant's
argument that the appropriate prevailing wage was not paid and that
the averment that it was paid (or in excess), was falsified by
Respondents. Mr. Hammond, for audit purposes, used CX 17. (CX 4
was received at the time of the hearing as the result of a subpoena
served on the Bridgeport Housing Authority.) Further cross
examination and redirect tended to show inconsistencies between
what should have been corresponding entries in the certified
payrolls and the payroll journals. TR 459 et seq. For example, in
the case of Jerry Ellis, who, for the weeks ending March 30, April
6, and April 17, 1984, for work at Hillside Manor, was allegedly
underpaid $512.50 (the total of the difference between the
certified payroll and the journal amounts) (CX 2 1, p. 10 ). It was
also noted, for example that while Mr. Joseph Bostek, recently
graduated from high school, is listed as having worked at the
Lowell project for the week ending June 8, 1984 (CX 21, p. 29),
Coastal's payroll records list the first payroll check as being
paid for the week ending July 6, 1984. CX 13(a) p.2. This latter
date also appears to be the first time Bostek was issued a pay
check. RX 4, p. 24. Nevertheless, Mr. Bostek's name appears as an
employee in the certified payroll for the week ending June 8, 1984
submitted by Coastal and appearing to bear its president's
signature. CX 16, p. 1.
FORMER EMPLOYEES
Five former employees of Coastal testified at the hearing.
The first, Mr. Oliver St. Cyr, is currently working as a carpenter.
He recalled having worked for Coastal in the spring of 1984 (Sic.)
for about one month. TR 82. Included in his work was the removal
of asbestos. He was paid $8.40 per hour while removing asbestos.
TR 85. While engaged in travelling from Coastal's office to the
work site he was paid $3. 50 . TR 94. As here pertinent, he
recalled removing asbestos from pipes and a water holding [5]
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[6]
tank in Bridgeport, Connecticut. It was a housing project
consisting of high rise buildings. TR 86. He was fired when he
confronted his employer with a demand to be paid the prevailing
wage. The wages due him, based on the prevailing wage, were
calculated and paid, and he was fired by Mr. Daniel Messier. TR
92. He later sought reemployment but was never called back. TR 93.
(The payroll journal reveals St. Cyr was issued two checks on March
22, 1985, representing gross wages of $335.30 and $611.22, in the
net amount of $241.86 and $403.29 CX 13(b)).
Mr. Brian Carraher worked for Coastal in the Spring and Summer
of 1984. He removed asbestos from ceilings and pipes for which he
was paid $8.40 per hour. This was later increased to $10. TR 114
As in the case with St. Cyr, there were no fringe benefits. He
referred to a question[n]aire he prepared for the Wage and Hour
Division on May 7 and 21, 1985 to refresh his recollection. CX 7.
As here pertinent, he recalls having worked at the Lowell-Bishop
Markham project. TR 116. His written statement of May 1985 notes
he worked one day at Hillside Manor in Fall River. CX 7. He
removed asbestos from pipes in the basement of apartment buildings.
TR 117. He was advised not to divulge his salary to anyone. He
left Coastal due to dissatisfaction with working conditions
unrelated to the proceeding. TR 123.
Mr. Richard Tola worked for Coastal during the summer of 1984.
He was sixteen years of age at the time. He removed asbestos from
equipment and buildings for which he was paid $8.10 per hour. TR
148. There were no fringe benefits. As here pertinent, he worked
at the Lowell project. His written statement of May 1985 indicates
he also alleged working at the Hillside Manor for about 45 hours.
CX 8. He recalled being paid $5.00 per hour for travel time, later
reduced to $3.50. TR 154.
Mr. Craig R. Halloran worked for Coastal during the summer of
1984, after graduating from high school and before starting
college. He was paid $10 per hour, less for travel time. TR 178
There were no fringe benefits. As here pertinent, he recalled
working in Lowell at the Bishop Markham project. TR 179-180. He
worked there with Tola, Carraher and Bostek. The work days at the
site were 7 to 8 hours long. TR 204.
Mr. Joseph Bostek, presently employed as a Revenue Agent with
the Internal Revenue Service, was employed by Coastal at the Bishop
Markham project during the summer of 1984, removing asbestos for
$10 per hour. TR 209. He was born August 21, 1966, having
graduated in June 1984. He worked during the summer before
starting college. He received no fringe benefits or other
emoluments in addition to his hourly wage and was paid "in the
vicinity of minimum [6]
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[7] wage" for travel time expended between
Coastal's office and the job site. TR 210-211. He recalled
working there with three of the other witnesses and others whose
names he did not recall. The witness related that when he reported
to Daniel Messier he had been approached by an investigator who
inquired about his hourly wage, he was admonished not to reveal his
wage rate to anyone. TR 215. His work hours were recorded by his
reporting them, the hours at the job and those travelling, to a
secretary in the Coastal's office at the end of each evening or at
the next opportunity. TR 225.
Respondent's Witnesses
Mr. Da[n]iel J. Messier testified he is the president of
Coastal Energy, Inc., purchasing the business in June or July 1982,
in part with a $15,000 investment by his parents. At the time,
Coastal was primarily involved in the installation of insulation.
A family member, employed by the Commonwealth of Massachusetts,
Department of Labor and Industries, Division of Occupational
Hygiene, alerted him to the commerc[i]al possibilities of asbestos
removal. TR 627 Mr. Messier researched the prospects, concluded
they were better than Coastal's traditional activity, and embarked
on the business of asbestos removal in 1983. TR 628. Messier,
born on September 15, 1959, is a high school graduate, 1978, and
attended Northeastern University for three years to 1981. He
majored in criminal justice. Since 1983 he and other Coastal
employees have attended various conferences and training programs
on asbestos removal, acquiring a degree of expertise. TR 630.
During the period here at issue, 1984-1985, Daniel Messier's duties
as president required him to try to acquire business by estimating and
submitting bids, checking on the work being performed to assure
quality control, ordering appropriate equipment and supplies, and
keeping abreast of developments in the industry. TR 635-6. As he
became acquainted with the process he came to learn that certain
projects were "rated jobs" while others were not, and the general
contractors with whom he negotiated were not always candid in
providing the necessary information. TR 637. He cited as an
example a letter he wrote on February 3, 1984 to Montle Plumbing
and Heating, a contractor who had misrepresented the Hillside
Manor Housing Project. Upon learning it was "not a private"
project and that a "union" wage had to be paid, Mr. Messier
demanded a renegotiation in the price to be paid for Coastal's
segment of the work. CX 25, p. 4. TR 639. As an example of the
growth of Coastal, he recited the gross revenues for 1983 through
1985 as $109,000, [$]330,000, and $628,000, respectively. TR 648.
Messier noted that he made every effort to cooperate with
Hammond when the compliance officer arrived to conduct [7]
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[8] his investigation TR 650. As a result of his own inquiries Messier
learned of "discrepancies" in the payment of wages to Coastal
employees and took steps to correct the situation. After
conferring with counsel, he decided to contact all former
employees involved in federal projects, made out time sheets
reflecting "what the records best showed" as to their work on the
different projects, "reconstructed" them with input from the
employee and "made a settlement offer." TR 653-7. He cited
examples of employees being paid, as part of the settlement, for
periods when they were not employees. TR 710. As a result of the
investigation Mr. Messier stated that "new wage sheets" were
instituted which identify on a daily basis the project on which
each employee works and the hourly rate. Each worker is required
to sign the statement at the time he is paid his wages. TR 669.
He also sought help from his parents to assist in the "paperwork."
TR 674. Mr. Messier emphasized that he had always paid the
appropriate prevailing wage but recognized he lacked the proper
records to substantiate his assertion. TR 677-8.
Coastal's president also contradicted the testimony of each of
the former employees who testified. St. Cyr, he fired because he
was violating safety procedures by walking around the project with
his contaminated clothing. TR 680-1. Brian Carraher was
characterized as a less than satisfactory employee who had poor
work habits. (TR 682-3). Richard Tola was suspected as having
participated in a basketball game, violating the company's
pollution "containment" standards. TR 684-6. Craig Halloran
performed satisfactorily and failed to complain about his wage rate
at the time of his employment. TR 688. Joseph Bostek was
considered a good employee who was promoted. He had failed to
supervise his crew properly when they were playing basketball,
violating contamination rules. TR 694. Messier also attempted to
explain away the reason for asking his employees not to reveal
their wage level to others, by indicating that it would create
"chaos" due to the desire by all other employees to work on "rated
jobs" rather than lower paying private jobs. Also, some employees
were paid more than others, based on their performance level. TR
695-6.
He specifically denied paying or intending to pay his employees
less than the prevailing wage at any of the projects here at issue.
TR 717. On the other hand, he indicated that at the time, for
example June 10, 1984, he was unsure of the identity of some of
the projects as being federally sponsored or state sponsored,
accounting for incongruities such as filing certified payrolls on
a federal project using state forms (FOOTNOTE 1) TR 721. He also noted
that [8]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
(FOOTNOTE 1) The regulations do not specify any specific form. They
do require specific information. 29 CFR 5.5 [8]
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[9] employees were paid through their luncheon period, although a
distinction was allegedly made between time spent in travel and
time actually spent at the work site. TR 727-8. Employees on the
federal projects were also allowed to use company vehicles for
private purposes and "full time" employees were allegedly paid 50
percent of their health insurance. Others were given cash
advances, from time to time. TR 731-2. The five witnesses, whom
he characterized as summer help, were not considered "full-time."
Mr. Messier's credibility was considerably undermined, in my
opinion, when on cross-examination he proceeded to suggest that a
contract he signed with Shah Construction Company in June 1984 to
perform asbestos removal work at Bishop Markham Village, Lowell,
was not fully read nor understood before he affixed his signature,
despite his sad experience with another contractor, Motle, just
four months before, alluded to hereinabove. TR 791-4, CX 25.
Further, he allegedly did not know the Bishop Markham Village
project was a federally funded project, although he realized, at
the time, it was a publicly funded project and required he pay
employees the prevailing rate. TR 795. On the other hand, he
failed to realize he was required to submit a certified payroll
report. Tr 796. Upon reviewing a number of the pertinent reports
embracing the summer of 1984, he either failed to recognize or
denied signing the certified payrolls. TR 798-9. He,
nevertheless, accepted responsibility for their contents. TR
801-802. Further, Messier acknowledged being aware in the summer
of 1984 that, due to a state audit, his payroll records were
inadequate. TR 806-807.
Testimony of Evelyn Messier
Evelyn Messier, mother of respondent, Daniel Messier, the
president of Coastal, testified that she first began working for
Coastal, at her son's request in August 1985. TR 616. Mrs.
Messier is a vice president of Coastal and had experience as a
bookkeeper for industrial and financial institutions. She found
that Coastal's office operation was disorganized, without clear
lines of authority or control over fiscal matters. She has been
working since that time to rectify matters.
Testimony of Francis Messier
Mr. Francis Messier, father of Coastal's president, Daniel,
testified that he is a senior engineer with Pratt & Whitney
Company, having worked for that firm about 36 years. TR 853. He
also functions as Coastal's comptroller, overseeing the company's
financing and accounting [9]
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[10] functions. TR 854. He embarked on this activity in August 1985.
Prior to this he had only a tangential involvement as an investor
and officer of the company. TR 855. The senior Mr. Messier demonstrated
through exhibit RX 5, the more modern, computer generated, payroll
procedures presently pursued by Coastal, tending to demonstrate detail
and, presumably, precision in the company's present record keeping. TR 865-8.
DISCUSSIONS AND CONCLUSIONS
A review of the foregoing evidence of record requires the
conclusion that Coastal and its president, Daniel Messier,
conducted its affairs, as to payment of prevailing wages to its
employees during the period at issue, with a total disregard for
the requirements of the Act and regulations. The only attention
given to these requirements, it appears, was to violate them by
means of lax record keeping. This loose record keeping appears to
have been the means employed to evade the requirements of the Act
and regulations.
In fact, the only other conclusion is that there was total
indifference to the Act and regulations. Daniel Messier, it
appears, attempted to disavow his failure to meet his
responsibility by suggesting he did not read the contracts he
signed. The argument is made that he was young and inexperienced.
He was both. However, not so young as to not be responsible for
contractual obligations into which he entered. Attempting to
discard his responsibility by suggesting he signed contracts
without reading them or being aware of their contents, other than
the amount of payment to Coastal for its services, is obviously
unacceptable. Further, it led me to be skeptical as to the
remainder of his disavowals. I do not credit this testimony,
especially as it applies to contracts, such as Hillside Village and
Bishop Markham, signed after Messier sent the letter to Motle in
February 1984. CX 25. The provisions of the contracts are clear,
or clearly ascertainable with legal assistance, by anyone
interested in his responsibilities under the contracts. This
conduct, signing contracts while clearly aware that federal rules
and regulations govern certain aspects of the contractor's
responsibilities towards his employees, and then keeping records
which clearly fail to ful[]fill these responsibilities, lend
credence to the testimony of the former employees that they were
knowingly being underpaid by Coastal while working on the federal
projects here at issue and, in at least one instance, were
discharged if they complained.
Some doubt was raised by Respondent as to which certified
payrolls were the "official" ones, or the ones on which one could
rely as reflecting what had been submitted in behalf of Coastal as
the weekly certified payrolls. I [10]
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[11] accept those documents copies of which were submitted by the
respective housing authority as the certified payrolls submitted
by Coastal. CX 4, and CX 16 from the Lowell Housing Authority;
CX 5 and CX 19 from the Fall River Housing Authority; CX 18 and
CX 20 from the Brockton Housing Authority; and CX 4 and CX 17
from the Connecticut Housing Authority. While there may be some
superficial differences in the respective documents, they are
essentially compatible and sufficiently demonstrated to be reliable
and probative as the documents, or copies, submitted in behalf of
Coastal in fulfillment of its obligation under the respective
subcontracts. In any event, regardless of whether one reviews
he above documents or those submitted late in the hearing as CX
26, subpoenaed from Respondent's records, the data contained therein
are false, as they do not represent what was, in fact, the hourly
pay rate of the employees for work performed on the projects here
at issue, nor the time spent working thereon.
Before proceeding further, I shall like to note that I am not
relying on the so-called "company sheets", CX 14 and 15, in
arriving at any of my conclusions in this case. They, in my
opinion, based on the representations of counsel for Respondent and
the testimony of Coastal's president, represent an attempt by
Coastal to "settle" the case by negotiating an agreement with its
former employees and were submitted in the expectation of resolving
the complaint. Any other rule would discourage respondents from
attempting to reconcile differences as promptly as possible with
allegedly underpaid employees. This would run directly opposite
the clear fundamental purpose of the Act and regulations. For
example, under section 5.12(c), a debarred person or firm must
first make "full restitu[]tion" or a request for reinstatement
would "not be considered." 29 CFR Sec. 5.12(c). The argument by
Respondents on this point, repeated on brief, is well taken.
The regulations define "aggravated or willful violation" of
the Act as any intentional falsification of payroll records or
intentional failure to keep accurate records in conformity with
contractual obligations which are part of each of the project
contracts entered into by Respondents. This is distinct from
"innocent" or "inadvert[e]nt" violations. 29 CFR Sec. 5.12.
A review of the corresponding certified payrolls and the
payroll journals demonstrate clear inconsistencies. These are so
frequent and pervasive as to lend support to the testimony of the
former employees of Coastal that they were not paid the applicable
prevailing wage. Respondents argue that inexperience and confusion
are the reasons for the inadequate (they fail to show hours worked
on all projects for any given week by any specific employer) and
[11]
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[12] inconsistent records. In the circumstances I am persuaded
that these inaccuracies and inadequacies are the result of
intentional falsifications and/or total disregard of their
obligation by Coastal and its president. Clearly, in view of these
willful and aggravated violations, debarment for a period of three
years must be imposed.
I shall note some examples of these inconsistencies, which, for
the reasons hereinabove noted, I conclude were intentional
falsifications. In conjunction with understanding comparisons of
the Cash Disbursement Journal (CDJ), Respondents' Exhibit 4; the
payroll journals, CX 13(a) (for 1984) and CX 13(b) (for 1985); and
the certified payrolls, as identified, the point was made by
Respondents that entries made in the certified payrolls reflect the
actual week's labors of an employee while the payroll records
reflect payments made on the following week. TR 535-536. This
point is reiterated by Respondents on brief. My review of CDJ and
the payroll journals indicates they generally correspond as to the
money entries, but the dates may be slightly different. One must
also be mindful of the fact that the CDJ and payroll journal
records reflect wages for [*] all [*] work performed by an employee
for the week, while the certified payrolls reflect work performed
only on the designated federal project. [*Emphasis in original*]
Obviously, then, the amount of wages due as listed in the certified
payrolls should never exceed the amount listed in the CDJ or
payroll journal for the corresponding week, which according to
Respondents is one week later.
With the above in mind, as suggested by Respondent, I reviewed
the record for Jerry Ellis. The certified payroll submitted by
Respondents list him as earning gross wages of $638.00, working 40
hours, five days, eight hours each day, at an hourly rate of
$15.95, on the Hillside Manor project for the week ending April 27,
1984. CX 26. The CDJ reflects that on May 4, 1984, Mr. Ellis was
paid $262.61 based on gross wages of $355. RX 4. The payroll
journal entry for Mr. Ellis for May 4, 1984 is in accord with the
CDJ. EX 13(a). In the circumstances present in this case there is
no explanation for this obvious contradiction of records of
Respondent's own making, except that the certified payroll entry is
false.
Douglas Hume, listed in the certified payroll supplied by
respondents (CX 26) as having worked at Hillside Manor for the week
ending January 27, 1984, four days, eight hours each day, at a rate
of $15.95 per hour, was entitled to a gross pay of $510.40. The
CDJ for February 3,1984, credits him with gross wages of $325. RX
4. For the week ending February 3, 1984, the certified payroll
shows Mr. Hume as entitled to gross wages of $255.20. [12]
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[13] At the hearing, Respondents argued that Mr. Bostek, one
of the former employees who testified[,] was not an employee
until late June or early July because that is when the CDJ first
lists him as receiving a paycheck. He was paid, on July 6, 1984,
$228.43, based on gross wages of $319. Yet, the certified payroll,
dated June 10, 1984, signed by Coastal's president, lists Bostek as
an employee for the week ending June 8, 1984, having worked at the
Bishop Markham project three days for a total of 23 hours at a wage
of $16.80, entitled to gross wages of $386.40. This, to say the
least, undermines the argument advanced by Respondents that Bostek
is a liar exaggerating his period of employment. How can
"inaccurate" recordkeeping anticipate an employee one month in
advance? A possible explanation is that although the document is
dated June 10, 1984, it is stamped "Received" November 9, 1984 by
Shah Construction Company. CX 26.
There are numerous other instances of "inaccuracies" which I
hold to be intentional falsifications. I shall review but two
more, using the certified payroll records submitted by Coastal in
response to the Department's subpoena. Joseph Spring, for work
performed at Beardsley Terrace, the week ending March 22, 1985, is
shown as working 26 hours and entitled to gross wages of $458.38,
CX 26. Coastal's payroll journal shows Spring as having gross
wages of $338.40 and $393.10 for the weeks ending March 22 and 29,
1985, respectively. CX 13(b).
Joseph Peltier is shown on the certified payroll for the
Hillside Village project, for the week ending October 19, 1984, as
being entitled to wages of $201.60. The pa[yr]oll journal and the
CDJ show him as earning gross wages for the week ending October 26,
1984 of $147.60 CX 18, CX 13(a) and CX 26.
While irrelevant to the issues before me, dealing with past
transgressions, I believe it necessary to observe that the relative
promptness with which Respondents attempted to rectify their
violations, as witnessed by the payment of underpaid wages to its
employees with relative alacrity and the simultaneous institution
of better record keeping procedures, should be noted by any
subsequent reviewing authority considering any future petition for
curtailment of the debarment period, under Sec. 5.12(c). 2[9] CFR
Sec 5.12(c). The Wage and Hour Division has the capacity to review
Respondent's operations since 1985 and provide the assessment
necessary for any consideration of abating the debarment period.
ORDER
Considering all the circumstances demonstrated by the credible
evidence in this case, I conclude that Respondents' violations of
the Act and regulations were repeated, [13]
~14
[14] widespread, willful, and considering the size of the operation
at the time, substantial. It is therefore Ordered: Respondents Coastal
Energy, Inc., and its president, Daniel J. Messier, and any entity
in which Daniel J. Messier has a substantial interest, be debarred
for a period not to exceed three years for aggravated and willful
violations of the U.S. Housing Act of 1937, as amended, and the
regulations promulgated thereunder.
ANTHONY J. IACOBO
Administrative Law Judge
NOTICE TO THE PARTIES
This Decision and Order, pursuant to 29 CFR Sec 6.34, may be
appealed by filing an appropriate timely pleading with the Wage
Appeals Board, U.S. Department of Labor, 200 Constitution Avenue,
N.W., Washington, D.C. 20210.
Dated: DEC 6 1988
Boston, Massachusetts
AJI/maq [14]
