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<![CDATA[
CCASE:
VICION CORPORATION V. SOL
DDATE:
19651215
TTEXT:
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[1] UNITED STATES OF AMERICA
DEPARTMENT OF LABOR
DECISIONS AND ORDERS OF THE WAGE APPEALS BOARD
In the Matter of
VICON CORPORATION WAB Case
No. 65-03
The Appeal of VICON CORPORATION,
now known as HOPKINS CONSTRUCTION Dated
COMPANY, INC. AND LEWIS A. HOPKINS December 15, 1965
Mr. Hugh B. Horton,
for the petitioner.
Mr. Paul A. Tenney,
for the Solicitor of Labor.
Before Rothman and Barker. Member Smith not participating.
[DECISION]
I
The Wage Appeals Board has before it a petition dated July 2,
1965, filed by the Hopkins Construction Company, Inc., Western
Permaglaze, Inc., and Lewis A. Hopkins (hereinafter referred to as
the Petitioner) for review of a decision of the Solicitor of Labor
dated June 16, 1965, to the effect that Vicon Corporation, now
known as the Hopkins Construction Company, had: (1) committed
willful violations of the former Eight Hour Laws /FN1/ within the
meaning of 29 CFR 5.6(b), which provides under such circumstances
for debarment up to three years from contracts subject to any
statutes subject to Reorganization Plan No. 14 of 1950, 5 U.S.C.
1332-note, and [1]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ 37 Stat. 133 (1912), 54 Stat. 884 (1940). The former Eight
Hour Laws are recodified in the Contract Work Hours Standards Act
(40 U.S.C. 327-330.)
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[2] (2) appeared to have disregarded its obligations to its
employees within the meaning of section 3(a) of the Davis-Bacon
Act, which directs that under such circumstances the contractor
shall not be eligible to receive any Federal contracts for three
years when findings to this effect are made by the Comptroller
General. The aforementioned decision of the Solicitor had affirmed
an initial decision by a hearing officer dated January 13, 1965.
The Wage Appeals Board has jurisdiction under Secretary of Labor
Order No. 32-63 (29 CFR 118.761 and 29 CFR 7.10(b)).
II.
The Vicon Corporation (hereinafter referred to as Vicon) was
in the business of applying a floor covering product called
"Torginol". This is a clear liquid composition coating for various
types of floor which provides a seamless, tough, elastic, glossy
covering that is highly resistant to wear and to a number of
corrosive substances. "Torginol" may be applied by brush, trowel,
spray, urethane, "squeege[e]", or lamb's wool applicators. Each of
these methods was used by Vicon except spraying.
During 1962 and 1963, Vicon was awarded three fixed-price
subcontracts by J. A. Jones Construction Company, a construction
service contractor to the Atomic Energy Commission's Richland
Operations Office on the Hanford Project [2]
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[3] under A.E.C. cost-type Contract No. AT(45-1)-687. This contract
is subject to the Davis-Bacon Act to the extent that construction work is
performed thereunder. The numbers and dates of Vicon's subcontracts
under J. A. Jones are as follows:
JAJ 133 -- April 8, 1962
JAJ 156 -- October 17, 1962
JAJ 164 -- January 11, 1963
JAJ-D-84089 -- April 9, 1963
Vicon also performed under Purchase Order No. H3G-888-61279,
which was issued by the General Electric Company prime operations
contractor for the AEC's Richland Operations Office. The purchase
order was subject to the former Eight Hour laws.
In April 1963, AEC examined payrolls which had been submitted
under subcontract JAJ-164. The examination disclosed that Vicon
employees were classified as "applicators", and were shown to have
been paid at a wage rate of $4.00 per hour. The "general
superintendent" and "assistant superintendent" were also shown to
have been paid the same wage rate. A.E.C. determined that the work
involved should have been classified as that of soft floor layers
(linoleum). The prescribed minimum wage rate for soft floor layers
(linoleum) under the various contracts subject to the Davis-Bacon
Act was $3.70 per hour. A subsequent investigation by the
contracting agency revealed that most of the employees were paid
wage rates substantially less than the $4.00 per hour listed on [3]
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[4] the payrolls which had been submitted to it under
contractual and regulatory requirements. The wage rates found to
have been actually paid ranged from $1.50 per hour upward. Also,
the working hours and days shown on the submitted payrolls did not
fully correspond with those found to have been actually worked. As
a result, the AEC found underpayments of 11 employees totalling
$1,551.07 under the Davis-Bacon Act. Similarly, AEC found
underpayments to 9 employees totalling $176.40 under the former
Eight Hour laws. Vicon made full voluntary restitution in these
amounts. In addition, it paid penalties under the Eight Hour Laws
totalling $215.00.
For willfully and knowingly filing false payrolls with AEC
under Subcontract JAJ-164, Vicon and Lewis Hopkins were convicted
of violations of the False Statement Act (18 U.S.C. 1001). United
States v. Hopkins Construction Company, formerly known as Vicon
Corporation and Lewis A. Hopkins, No. C-4989, Wash. E.D.S.D.
January 7, 1965.
III.
The petitioner contends that Vicon did make an effort to
comply with the Davis-Bacon Act, despite a contrary finding by the
hearing officer, which was affirmed by the Solicitor. Vicon's
difficulty was, it is asserted, that there was no minimum wage rate
in the subcontracts involved which seemed to relate to the
application of Torginol. Vicon sought guidance as to local
practice from at least one local union. But Vicon did not take up
the matter with the contracting agency under [4]
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[5] the applicable additional classifications procedure. /FN2/ Mr. Hopkins
indicated that he knew of the "additional classifications" procedure
available under contracts subject to the Davis-Bacon Act. Mr.
Hopkins indicates that he did not use the procedure, because the
period of performance under his subcontracts was brief, and he had
previously experienced delays in using the procedure under the
Federal contracts.
As already indicated, Vicon listed its employees on the
submitted payrolls as "applicators", and showed their payment at
$4.00 an hour. According to Mr. Hopkins, the rate of $4.00 was
selected only because it was a "good, round" figure. Also, as
indicated, the hours shown on the submitted payrolls did not
correspond to those actually worked. The petitioner's explanation
for this is that Torginol is similar to the materials involved in
"glue sniffing" episodes. For this reason, the work was scheduled
at odd hours.
The petitioner also contends that the falsified payrolls,
which relate to both the violations of the Davis-Bacon Act and the
former Eight Hour Laws, were not intended to conceal labor
standards violations. In support of this, it points to the
patently atypical listing of Vicon's superintendent and assistant
superintendent at the same wages shown to have been [5]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ The procedure was published in 29 CFR 5.6(c) at the time of
Vicon's performance. The procedure is now at 29 CFR 5.5(a)(1)(ii)
(Jan. 4, 1964, 29 F.R. 99). See also 41 CFR 9-12.5001-4. [5]
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[6] paid to other workmen. The petitioner indicates that, because
of business pressures, Mr. Hopkins was unable to give his personal
attention to the submission of payrolls. The intimation is that he
was simply anxious to have this "paperwork" completed.
On the other hand, the Solicitor's representative suggests
that either Mr. Hopkins, or someone under his direction or control,
apparently thought that an appropriate minimum wage for the work
was at least in the vicinity of $4.00. Yet much less was actually
paid. He also expressed the view that, if Vicon did not think the
$4.00 minimum wage was appropriate, it had a duty to seek the
establishment of a conformable minimum wage under the applicable
"additional classification" procedure in order to comply with the
Davis-Bacon Act, and that that duty had been breached here.
Further, he emphasizes the fact that the payrolls submitted by
Vicon did not show the actual wage standards under the
subcontracts.
IV.
From the foregoing alone, we would be inclined to agree with
the Solicitor that there would appear to have been a disregard of
obligations to employees within the meaning of section 3(a) of the
Davis-Bacon Act and willful violations of the former Eight Hour
Laws within the meaning of 29 CFR 5.6(b). Carelessness or lack of
concern with paperwork may be one thing, but gross and wilful
disregard of the obligation [6]
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[7] to pay required wages and deliberate falsification of the amount
actually paid, is still another matter. The virtually random selection
of a wage rate to be shown on payrolls for submission to a contracting
agency which purport to meet obligations under the Davis-Bacon Act
coupled with the actual payment of wage rates less than those so shown
would seem normally to be enough to show bad faith or gross carelessness
in the observance of minimum wage obligations under the Davis-Bacon
Act or overtime obligations under the former Eight Hour Laws. See
Comptroller General's letter B-3368, March 19, 1957. See also BNA
Wage and Hour Cases Cumulative Digest [sec] 165.3055, regarding the
weight given the falsification of records in similar debarment
proceedings under the Walsh-Healey Public Contracts Act.
V.
There is material in the record, however, which may affect the
inference to be drawn from the facts and circumstances described
above, but which are not shown by the record to have been before
the Solicitor. We refer to the information offered by the
petitioner relating to the general course of conduct of Mr. Hopkins
with regard to contract labor standards compliance on recent
Federal construction subject to the Davis-Bacon Act. From 1950 to
1962, Mr. Hopkins undertook construction totalling $21,299,325.19
on 169 jobs. Many of these were Federal construction projects. No
labor standards violations [7]
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[8] were reported regarding this work. Also, statements from persons
representing labor, management, and the public have expressed confidence
in the integrity and fairness of the petitioner concerning his labor
matters.
In his written presentation to the Board, the Solicitor noted
that the petitioner's presentation suffered from a lack of
information as to his performance on recent or current contracts.
In a letter addressed to the Board dated September 15, 1985, the
petitioner appended a list of five Federal contracts completed
since 1963. Counsel for the Office of the Solicitor indicated at
the hearing that no reports of labor standards violations had been
submitted to that Office concerning these contracts. Further, he
indicated that an investigation had been recently conducted by the
Department's Wage and Hour and Public Contracts Divisions of the
petitioner's performance under Atomic Energy Contract AT(45-1)-1824
the largest of the listed contracts, which was completed in
September, 1965. No labor standards violations were found. The
Solicitor's decision preceded this investigation.
VI.
The information discussed under V above is also relevant to
the matter of whether or not the petitioner has demonstrated a
current responsibility to comply with the labor standards statutes
subject to Reorganization Plan No. 14 of 1950. As we read 29 CFR
5.6(b)(1), this is an appropriate [8]
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[9] test in cases not only subsequent to any debarment, but also before
any possible debarment. See Copper Plumbing and Heating Company v.
Campbell, 290 F.2d 368, 15 WH Cases 34 (C.A.D.C. 1961).
VII.
For the reasons set forth in V and VI, the case is hereby
remanded to the Office of the Solicitor for findings and
conclusions consistent therewith.
Stuart Rothman, Member
Clarence D. Barker, Member [9]
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