H. P. CONNOR AND CO., INC., 1987-DBA-67 (ALJ Nov. 15, 1989)
CCASE:
H. P. CONNOR AND COMPANY, INC.
DDATE:
19891115
TTEXT:
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[1] [90-07.ALJ]
U. S. Department of Labor Office of Administrative Law Judges
1111 20th Street, N. W.
Washington, D. C. 20036
In the matter of disputes concerning Date Issued: 15 NOV 1989
the payment of prevailing wage rates
by:
H. P. CONNOR AND COMPANY, INC., Case No.: 87-DBA-67
Prime Contractor,
and
Proposed debarment for labor
standards violations by:
H. P. CONNOR AND COMPANY, INC.
HERMAN P. CONNOR,
President and Owner
With respect to laborers and mechanics
employed by the Prime Contractor on
Army Contract No. DABT-35-83-C-0247 for
rehabilitation of the Army Reserve
Center in Camden, New Jersey
Appearances: Donald R. Hobbs, Esq.
For the Employer
James A. Magenheimer, Esq.
Harold Lemar, Esq.
For the U.S. Department of Labor
DECISION AND ORDER
This matter was referred to the Office of Administrative Law
Judges by the Administrator, Wage and Hour Division, Employment
Standards Administration, U.S. Department of Labor, for a hearing
pursuant to 29 C.F.R. 5.11(b) and 5.12(b) on disputes concerning
the payment of prevailing wage rates and proposed debarment
arising under the Davis-Bacon Act, 40 U.S.C. 276(a) et. seq., and
the applicable regulations issued thereunder at 29 C.F.R. Part 5.
Specifically, the complaint charges the subcontractor with
failure to pay the following employees amounts indicated between
May 1985 and July 1985.
Name Gross Amount Due
John Best $ 807.38
John Jackson 81.48
Lloyd Keen 277.60
Robert Lawson 721.24 [1]
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[2] Elisha Means 721.24
Melvin Newton 1032.08
Ernest Price 236.67
Mel Ross 5154.64
LeRoy White 1032.08
Branko Dimonski 835.12
Trajko Dimonski 455.52
TOTAL $11355.05
In addition to restitution of back wages, the Administrator
seeks debarment of the contractor, H. P. Connor.
A hearing was held in New York, New York, on January 9 and
10, 1989, at which time the parties were given the full
opportunity to present evidence. The record was left open to
admit the filing of closing arguments. Subsequently, on March
30, 1989, the respondent filed findings of fact and conclusions
of law. In addition, on March 28, 1989, the Department of Labor
filed a post-hearing memorandum.
The Evidence
The record, in this case, includes weekly payroll reports
on forms provided by the U.S. Department of Labor, Wage and Hour
Division, for the period from the week ending May 31, 1985 to the
week ending June 22, 1985. Reported therein are wages paid by
H.P. Connor and Company on the U.S. Army Reserve Center, Camden,
New Jersey, project at various times to the following employees:
No. Name, Addresses Classification
& Social Security
Number
1 John Best Mason
136 Franklin Ave.
Mt. Vernon, NY
XXX-XX-XXXX
2 Lloyd Keen Laborer
24 Brooklyn Ave.
Roosevelt, NY
XXX-XX-XXXX
3 Robert Lawson Mason
734 So. 6th Ave.
Mt. Vernon, NY
XXX-XX-XXXX
4 Elisha Means Mason
20 East 4th St.
Mt. Vernon, NY
XXX-XX-XXXX [2]
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[3]
5 Ernest Price Laborer
344 So. 2nd St.
Mt. Vernon, NY
XXX-XX-XXXX
6 John Jackson Laborer
306 Cooper St.
Camden, NJ
XXX-XX-XXXX
Wages were reported for the following weeks for the
employees indicated:
Week ending Employees Nos.
5/31/85 1, 3, 4
6/7/85 1, 3, 4
6/15/85 1, 2, 3, 4, 5
6/22/85 1, 2, 3, 4, 5, 6
According to these payroll records for the period from the
week ending May 31, 1985, each mason was paid $20.88 per hour for
16 hours of work. One hundred and fifty dollars was added per
mason for meals. There was no pay listing for the laborers
during this period. For the period for the week ending June 7,
1985, each mason was paid $26.93 per hour for 16 hours of work.
According to payroll, each mason's pay was deducted $300.00 for
advances during this period. For the period from the week ending
June 15, 1985, each mason was paid $20.88 per hour for 32 hours
of work. Each laborer, with the exception of employee no. 6 was
paid $20.88 per hour for 32 hours. There is no pay listing with
regard to employee no. 6 for this week. There is a notation that
employees 1, 3 and 4 were overpaid by eight hours and that the
pay of employee no. 2 was deducted $60.00 for a cash advance.
For the period from the week ending June 22, 1985, each mason was
paid $20.88 per hour for 32 hours of work. There is a notation
that each mason (employees 1, 3 and 4) were overpaid by eight
hours the previous week. Two of the three laborers (employees 2
and 5) were paid $20.88 per hour for 32 hours. One laborer
(employee 6) was paid $12.00 per hour for 28 hours but $100.00
was deducted for a cash advance.
Arthur Brantl, a former Compliance Specialist, with the
Wage and Hour Division of the U.S. Department of Labor, testified
that he conducted an investigation of the work performed under
this contract beginning around May, June or July of 1985. (Tr.
34a). Mr. Brantl's investigation entailed reviewing contract [3]
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[4] provisions, examining checks, interviewing employees, and
reviewing certified payroll records. Upon a review of the wage
determinations, Mr. Brantl testified that the determination
provided for the following prevailing wage rates and fringe
benefits:
Classification Basic Hourly Fringe Benefits Total
Rate
Laborer $12.10 $2.81 $14.91
Truck Driver $11.85 $2.54 $14.39
Brick Layer/Mason $15.76 $3.22 $18.98
Sheet Metal $18.28 $2.94 $21.22
Mr. Brantl testified that the employees were not paid the
proper wage rate, that there were violations with respect to
recordkeeping; namely, that certain employees are not listed on
the certified payroll reports and that some hours worked were
unreported. (Tr. 349-350). As a result of his investigation,
Mr. Brantl determined that the total amount of back wages due to
the employees by H. P. Connor was $11,778.33. (FOOTNOTE 1) He stated that
he calculated the underpayments for Lloyd Keen and Ernest Price on
their having worked 80 hours on the contract part of which was as
sheet metal workers. Mr. Brantl further testified that he did
not consult daily logs or visit the job site when determining
proper wage rates and hours worked.
H. P. Connor, president of H. P. Connor and Company, testified
that he was under contract by the U. S. Army to perform work at the
Camden Training Center. Connor testified that he subsequently
hired Stucco Unlimited, who were certified applicators, to plaster
and install the siding system at the training center. Stucco
Unlimited subsequently abandoned the job testified Connor. (Tr.
461). Connor further testified that he then surveyed the Camden
facility with a Mr. Trajko Dimovski, but that neither Mr. Dinovski,
or his son, Branko, ever did any work at the site.
Connor next testified that following Stucco's walkout, Mr. Mel
Ross contacted him, requesting work. He stated that Ross told him
that he was a certified applicator, but that Ross would [4]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
(FOOTNOTE 1) With regard to the amount of back wages due these employees,
in their post-hearing memorandum, the Department of Labor revised
the amount of back wages requested from $11,778.33 to $9,538.47
based on their inability to sustain their burden of proof with
regard to employees John Best, Robert Lawson, and Elisha Means. [4]
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[5] not allow Connor to see his license. (Tr. 462). However, Ross
did show the license to John Rex and Ken Don, the contracting
officers. (Tr. 462). Connor testified that Ross agreed to do
work on the job and that he maintained subcontractor's status.
(Tr. 466). Ross never signed a subcontract agreement with Connor.
(Tr. 468). Connor also stated that he constantly gave Ross money
for payroll, meals, traveling expenses, etc., and that he would
distribute the money and that Ross would then distribute the money
to his "fellas." (Tr. 472-474). He further testified that "Mel's
employees" would complain to him (Connor) that they would never
receive the money. Conner further testified that the Army sent him
a letter indicating that he had failed to provide a licensed
applicator. Subsequently, on June 21, 1985, he fired Mel and "his
people" from the job at Camden.
Six of the claimed "employees" of Connor for whom nonpayment
or underpayments were asserted, testified at the hearing. These
employees were Trajko Dimovski, Branko Dimovski, Melvin Newton,
John Best, Robert Lawson, and Mel Ross.
Mr. Trajko Dimovski testified at the hearing that he
performed work at the Camden location. (Tr. 44). Mr. Dimovski
stated that he was working as a subcontractor in a hospital in
Carney where Mr. Connor was the prime contractor. While working
on this location, he testified that Connor asked him to help him
out with the job at the Army Reserve Center in Camden. (Tr. 45).
He stated that Connor agreed to pay he and his son $20.00 an hour
(Tr. 47). Dimovski further testified that his duties at the
reserve center included fixing the cracks in the stucco on the
outside of the building and that this work constituted "masonry".
(Tr. 53). Working with him on the project in addition to his
son, Branko, was his son's friend, Adolpho Rodriguez. (Tr. 54).
Mr. Dimovski ultimately sent a bill to Mr. Connor which indicated
the days and hours worked and the amounts owed. (Tr. 54, pl. 6).
Mr. Dimovski claims that neither he or his son has received any
money for their work at the Camden Army Facility. (Tr. 55). As
his father previously testified, Branko Dimovski also stated that
he performed repair work for Connor at the Army Reserve Center in
Camden. (Tr. 83-85). He further testified that he, too, received
no money or benefits, for the six days that he worked on the job.
(Tr. 88)~ He generally "worked together" with his father. He
expected to get paid through his father and anticipated having to
pay his own taxes. (Tr. 112-113). Both father and son explained
that the job at Camden was not a contractual arrangement due to the
fact that when they were employed by Connor, the job was "pretty
much completed." (Tr. 93).
On the request of H. P. Connor that Ross come to Camden to
finish the job there, Ross testified that he gathered some workers
(Tr. 237-238), who subsequently went to complete the job [5]
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[6] at the Army Reserve Center in Camden. Ross was a certified applicator
for the Spc Installation System, and further testified that he
typically worked as a contractor. (Tr. 233). He stated that he
did some hands on work on the job.
Ross also testified that while he was at the Camden site he
was "running the project" and that he was the "in between". This
meant that if one of the workers had a problem he would talk to
Ross who would then relay it to Connor. (Tr. 255). Ross further
stated that he gave the men money and received cash payments for
materials from Connor.
Melvin Newton testified that he also performed work in June,
1985, at the Army Reserve Center in Camden. (Tr. 117). He stated
that he worked there for 11 days at the request of Mel Ross, who
Newton testified was the foreman on the job. Newton further stated
that the agreement with regard to salary at the Camden job was
$70.00 a day plus room and $15.00 a day for food. However, Newton
stated that he received approximately $200.00 total for his work.
Newton also testified that his duties at Camden involved moving
scaffolds and mixing mortar. He said that the workers began their
duties at approximately 8:00 a.m. and ended at 4:30 p.m. He stated
that on the Camden job, he worked with Mr. Lawson, Mr. Best, Leroy
White, Mel Ross and Elijah Means. Mr. Newton's "understanding" was
that he was working for H. P. Connor at the Camden facility. The
record includes a "Request To Work Other Than Normal Working Hours"
form (DX 17) which shows that permission was sought to allow
workers, including Mel Newton and Leroy White, to perform work on
June 1 and 2, 1985. It includes also a listing, marked "Paid In
Full" (DX 33) which indicates that Melvin Newton and Leroy White
worked on June 1 and 2 as well as May 28, 29, 30 and 31.
Although John Best and Robert Lawson also testified at the
hearing, as previously stated, the Department of Labor has since
withdrawn their request for the payment of back wages to these two
employees.
The amount of $11,355.05 has been withheld under the contract
by the Department of the Army to cover any wages due to any
underpaid employees. (Tr. 452).
FINDINGS AND CONCLUSIONS
The testimony in this case is in direct conflict. The
Employer claims that he paid the purported employees even more
than the prevailing wage requires under the contract. Those who
testified in this case claim that they were underpaid or in the
instance of Mel Ross and the Dimovskis, never paid at all for the
work performed. [6]
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[7] With regard to Trajko and Branko Dimovski, H. P. Connor
claims that they never worked at the Camden facility. The
Dimovskis contend, on the other hand, that they did, in fact,
work at the site and that they never received any money for the
work completed.
Assuming that they did work at the Camden site, the threshold
inquiry in the case of the Dimovskis is whether they were
independent contractors or employees of the prime contractor, H. P.
Connor. The courts have developed several factors which should be
considered in determining whether an employment or independent
contractor relationship exists. They are (1) the degree of control
exercised by the employers over the workers, (2) the workers'
opportunity for profit or loss and their investment in the
business, (3) the degree of skill and independent initiative
required to perform the work, (4) the permanence or duration of the
working relationship, and (5) the extent to which the work is an
integral part of the employer's business. Brock v. Superior Care,
Inc., 840 F.2d 1054 (2nd Cir. 1988). The ultimate concern is
whether "as a-matter of economic reality, the workers depend upon
someone else[']s business for the opportunity to render service or
are in business for themselves. See, Bartels v. Birmingham, 332
U.S. 126, 130 (1947).
I conclude from Trajko Dimovski's testimony at the hearing
that he was, in fact, an independent contractor on the Camden site,
and as such, is not entitled to wage payments under the Davis-Bacon
Act. Trajko testified that he worked generally as a contractor,
and, thus, was in business for himself. Further, his working
relationship with H. P. Connor was certainly a temporary one of
limited duration; he was only hired by H. P. Connor to make repairs
on the Camden job. He "billed" Connors for the purported work
which is normally the practice of one who is in business for
himself rather than an employee. He worked without supervision.
Finally, Dimovski had no investment in H. P. Connor's business as
he was merely doing some repair work for him and had no financial
stake in Connor's contracting business. Thus, based on several of
the factors set out in Brock, it becomes clear that Trajko
Dimovski's status was that of an independent contractor on the
Camden site.
Similarly, Branko Dimovski was also an independent contractor
on the Camden job. It was Branko Dimovski's testimony that he was
working with his father at the Camden site and that he had worked
with his father for "some time" indicating that they were partners
in the business. He further testified that they were not
supervised on the job but supervised themselves, and paid their own
taxes, facts which add support to the conclusion that he was not an
employee of H. P. Connor but was a partner in an independent
contractor situation. [7]
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[8] Based on the evidence at the hearing that Mel Ross (1)
possessed the certified applicator license necessary to install
the system, (2) appeared to supervise and maintain control over
his men, and (3) had consistently been involved in subcontracting
work, I find that he also maintains subcontractor status and that
under the Davis-Bacon Act is not an employee entitled to
wages. (FOOTNOTE 2)
Although I further find that Melvin Newton, Leroy White,
Ernest Price, and John Jackson were Ross' employees, it is well
settled that under the Davis-Bacon Act the prime contractor remains
liable for subcontractor's underpayment of wages and benefits.
1018 Development CompanY/Pracdell Associates, Inc., 79 DBA 231, ALJ
6/6/80. Thus, should I find that these employees were underpaid,
the employer, H. P. Connor is liable for the underpayment.
With regard to John Jackson, the certified payrolls indicate
that he was paid $12.00 per hour as a laborer for 28 hours during
the week ending June 22, 1985. The prevailing wage rate and fringe
benefits for a laborer total $14.91. (EXP-2). Thus, Jackson was
underpaid by $2.91 per hour. H. P. Conner did not rebut the
evidence of this underpayment in any evidence or testimony
presented at the hearing. Thus, I find that Jackson is in fact
owed $81.48 based on this underpayment.
Melvin Newton testified at the hearing that he too, worked
on the contract for 11 days in June, 1985. Mr. Newton does not
appear on the payrolls; however, there are fellow employees who
testified to the fact that Newton did work on the project and other
documentary evidence of record corroborates at least six days of
such employment. Newton further testified that he was paid a total
of $200.00. Based on this figure, Brantl computed Newton's back
wages based on the payment of 32 hours (4 days) at the rate of
$8.75 per hour ($70.00 per day) or $280.00 gross pay. Brantl
determined that based on the wage rate of $8.75 paid and the rate
of $14.91 for laborers the difference due for four days was
$197.12. With regard to the remaining seven days for which Brantl
also determined Newton was owed wages, Connors has offered no
evidence to rebut the corroborated testimony that Newton did, in
fact, work these additional seven days. Thus, I find that Newton
is owed an additional $834.96 for these seven days or a total of
$1,032.08, as alleged. [8]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
(FOOTNOTE 2) Even if I did not find Ross to be a subcontractor, I would
conclude that he was an exempt managerial employee under 29 C.F.R.
[sec] 5.2(m) and Part 541 in that he was clearly considered to be
a foreman by the other employees and his testimony was too vague to
quantitate the percentage of any hands-on work as being twenty
percent (20%) or more. [8]
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[9] John Best and Mel Ross testified that Leroy White also
worked on the contract and there is evidence in the record
corroborating the co-workers' testimony. However, Mr. Brantl's
conclusion regarding the amount of time White worked under the
contract was based exclusively on the evidence used to calculate
the back wages owed to Melvin Newton and is speculative. Mr.
White did not testify and there is evidence substantiating that
he worked only for six days. Connor has not documented what, if
any, payment had been made to White. Accordingly, I hold that he
is owed $715.68, i.e., 48 hours at $14.91 per hour.
With regard to employees Lloyd Keen and Ernest Price, the
Government has failed to sustain its burden that they were
underpaid at the Camden job site. Although Brantl concluded that
both Keen and Price were paid for fewer hours than they actually
worked, were improperly classified, and were paid at an incorrect
rate, upon review of the evidence of record, I am at a loss to
determine the basis for Brantl's figures. For example, Brantl
determined that both employees worked as masons, sheet metal
workers, and laborers. This conclusion is not supported by the
evidence of record. Neither Keen nor Price are listed in the
other documentary evidence which I relied on for finding
additional work hours for Newton and White, i.e., the "Request To
Work" and "Paid In Full" lists. None of the witnesses identified
either Keen or Price by name as co-workers on the job. Unlike
Mt. Clemens it is contended, nevertheless, that the compliance
officer's conclusions should be adequate evidence under the
rationale of Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680
(1946) as applied to the Davis-Bacon Act by In the Matter of
Structural Services a/k/a Unique Services Engineering Co., WAB
No. 82-13 (June 22, 1983). These cases hold, in effect, that
where an employer fails to keep accurate records, it is only
necessary to produce sufficient [evidence] from which the amount
and extent of work may be inferred. However, I find the instant
case to be distinguishable for in Mt. Clemens the record included
the testimony of the employee himself and in Structural Services
the Board noted that there was "evidence in the record that
substantiates the compliance officer's reconstruction of back
wages." There is no such evidence here. Assuming that Brantl
derived this information from interviews with Keen and Price, I
find that "in the absence of corroborating evidence, he has
failed to adequately prove that his calculations and determinations
are accurate."
The Secretary seeks debar[]ment of H. P. Connor from
contracting with the Government for a period of three years. This
issue may appear to be moot as it has already been recommended by
Administrative Law Judge Robert D. Kaplan in a Decision and Order
issued on January 26, 1988 in Case Nos. 86-DBA-64 and 86-DBA-101
that they be so debarred. However, I still consider it appropriate
to dispose of the issue in this particular case particularly
because I am not aware of Judge Kaplan's recommendation having been
finalized. [9]
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[10] The record shows clearly that there had been falsification
of official payroll records and underpayment of wages involving at
least three employees. It is contended that such conduct
constitutes disregard of the respondents' obligations under the
Act to such employees. I agree. See e.g., Ace Contracting
Company, Inc., WAB Case No. 76-23 (May 30, 1980); Cosmic
Construction Co., Inc., WAB Case No. 79-19 (September 2, 1980).
ORDER
1. From the funds withheld under the contract there shall be
transmitted to the Comptroller General the amount of $994.28 for
payment to employees in the respective amounts listed below:
1. John Jackson - $81.48
2. Melvin Newton - $197.12
3. Leroy White - $715.68
2. It is hereby RECOMMENDED pursuant to the Davis-Bacon Act
and 29 C.F.R. [sec] 5.12(a)(2) that it be ORDERED that the
following company and individual 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
JOEL R. WILLIAMS
Administrative Law Judge [10]
