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<![CDATA[
CCASE:
CRC DEVELOP. CORP. & DON H. PLUMBING CO.
DDATE:
19771031
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
CRC DEVELOPMENT CORPORATION WAB Case Nos. 77-01
and 77-13
DON HARRIS PLUMBING CO.
Project No. 063-35135 PM
Northwood Apartments
Jacksonville, FL Dated: October 31, 1977
APPEARANCES:
Robert E. Kellner, Esquire
for CRC Development Corporation
Don Harris
for Don Harris Plumbing Co.
Thomas X. Dunn, Esquire,
Terry Yellig, Esquire
for Building and Construction
Trades Department, AFL-CIO
George E. Rivers, Esquire,
Ronald S. Robins, Esquire
for Wage and Hour Division,
U.S. Department of Labor
BEFORE: Alfred L. Ganna, Chairman, William T. Evans, Member
Thomas M. Phelan, Member
DECISION OF THE WAGE APPEALS BOARD
Petitions were filed separately by CRC Development Corporation
and Don Harris Plumbing Company and consolidated as provided [1]
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[2] by regulations, 29 CFR [sec] 7.13.
A hearing on the issues was held on August 30, 1977. All
interested parties were present.
CRC Development Corporation was the prime contractor on HUD
housing project FLA 10-7 in Fort Lauderdale, Florida. Two
subcontractors to CRC began work on the project in January 1975,
and in July 1975. The Wage and Hour Division of the U.S.
Department of Labor commenced an investigation of the project in
response to a complaint of labor standards violations thereon. The
results of the investigation showed that the two subcontractors had
employed apprentices in excess of the ratio required by section
5.5(a)(4)(i) of Title 29 of the Code of Federal Regulations. Back
wages computed for each apprentice employed outside the ratio
totaled $14,949.07. On May 6, 1976, the attorney for the
subcontractors wrote to the Assistant Administrator requesting
review of the decision to withhold the back wages. On August 3,
1977, the Assistant Administrator issued a ruling denying a [sec]
5.11(b) evidentiary hearing stating that Section 5.5(a)(4)(i)
prohibits the use of apprentices on any project to which the
regulations apply in excess of the ratio of apprentices to
journeymen as provided for under the terms of the registered
apprenticeship agreement.
Don Harris Plumbing Company was a plumbing subcontractor on
a HUD project, Northwood Apartments, in Jacksonville, Florida,
from May 1975 to March 1976. Certified payrolls submitted by [2]
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[3] Don Harris showed that apprentices in excess of the applicable
apprenticeship ratio permitted by Section 5.5(a)(4)(i) of
Regulations, Part 5, worked in most weeks at the job. In May 1976,
the HUD Area Director in Jacksonville, Florida notified Don Harris
that restitution at the rate determined for the classification in
the amount of $9,452.28 was due to the excess apprentices. Don
Harris objected to making restitution and requested a waiver from
HUD on the basis that he had not been informed of the possible
violations. However, applicable labor standards pertaining to the
project, including Section 5.5(a)(4)(i), were included in the
contract. The hearing file contains a letter from the HUD Area
Office to the HUD National Office acknowledging that Don Harris had
not been advised of the allowable ratio of apprentices to
journeymen at preconstruction conferences and he had not been
advised of violations on the payrolls as the job progressed. The
HUD Area Office endorsed Don Harris' request for a waiver. On
October 12, 1976, HUD denied Don Harris' request for a waiver
stating that HUD was not authorized to waive regulatory
requirements promulgated by the Department of Labor. Thereafter,
Don Harris requested an evidentiary hearing under Section 5.11(b),
Title 29, CFR. The Assistant to the Secretary for Labor Relations
at HUD concurred in this request. However, the Assistant
Administrator, Wage and Hour Division, on February 23, 1977,
advised Don Harris [3]
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[4] that his request for a hearing was denied
due to the lack of a factual dispute in the case.
The Board finds that while it may be said that Section
5.5(a)(4)(i) which provides in part:
. . . The allowable ratio of apprentices to journeymen
men in any craft classification shall not be greater
than the ratio permitted to the contractor as to his
entire work force under the registered program . . .
is not clear as it could be, it must be recognized that this
provision has been in effect since the 1950's and has been
interpreted consistently by the Department to mean that the
allowable ratio had to be maintained on each construction project
subject to the Davis-Bacon Act and related acts. /FN1/ It was
never intended that on a project subject to the Davis-Bacon Act a
contractor would be able to utilize all his apprentices, thereby
displacing journeymen entitled to work on the job. This would
defeat the purpose of the statutes enacted to protect the interests
of laborers and mechanics employed on government financed or
assisted projects.
In addition to the above-mentioned interpretive Bulletin the
Department has circulated at least two All-Agency Memoranda to all
contracting agencies explaining the Department's interpretation.
It is difficult to understand, however, why Section 5.5(a)(4)(i)
has not been reworded with more specificity as to its intent, [4]
ÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ All-Agency Bulletin of the Bureau of Apprenticeship, U.S.
Department of Labor, identified as Exhibit B in the Statement on
behalf of the Assistant Administrator. [4]
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[5] particularly in view of other changes that have been made in
this section of the Regulations. As far back as 1960 the Acting
Solicitor of Labor expressed his view that the provision in
question at this hearing needed clarification. However, it is
noted that at the same time he upheld the Department's position
on a matter under review which was similar to the present
instances.
It is also difficult to understand why the Department of
Housing and Urban Development's Area and Regional Offices could
not provide the petitioners with guidance and instruction with
reference to this matter. HUD is obligated to require the
contractors to conform to the labor standards contained in their
contracts and should have promptly informed both petitioners of
their erroneous actions. If there is any explanation of HUD's
failure in this regard the Board is not aware of it since no
representative of HUD attended the hearing despite timely notice
of the hearing to their General Counsel's Office and Labor
Relations Office.
With reference to CRC's contention that CRC should not be
required to pay excess apprentices at the journeyman's wage rate,
Section 5.5(a)(4)(i) is clear that the excess apprentices who are
performing the work of the craft and using the tools of the trade
are entitled to the journeyman's wage rate. [5]
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[6] The decisions of the Assistant Administrator to both
petitioners are hereby affirmed.
BY ORDER OF THE BOARD
Craig Bulger, Executive Secretary
Wage Appeals Board [6]
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