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<![CDATA[
CCASE:
AMERICAN MUTUAL PROTECTIVE BUREAU
DDATE:
19780913
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
AMERICAN MUTUAL PROTECTIVE BUREAU WAB Case No. 77-05
Oakland, California
Contract No. GS-09B-0-1410
Labor File No. CAL-75-120 Dated: September 13, 1978
Decision by: Alfred L. Ganna, Chairman, William T. Evans, Member
Thomas P. Phelan, Member
DECISION BY THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition
of American Mutual Protective Bureau for review of the assessment
by the General Services Administration (GSA) of $2,300 as
liquidated damages for violations of the Contract Work Hours and
Safety Standards Act (CWHSSA) on a GSA contract in San Francisco,
California.
In October, 1973, petitioner entered into a contract
pursuant to the Service Contract Act to provide guard services for
GSA. The contract contained the usual CWHSSA requirements that
time and one-half be paid for all hours over 8 hours per day and 40
hours per week. An investigation of petitioner's performance on
the contract by the Wage and Hour Division revealed petitioner had
paid only full-time for hours worked in excess of 8 hours per day
from October 1973 [1]
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[2] to January 1974. Upon being informed of the violations, petitioner
came into compliance and paid $969.82 in back wages to 25 employees.
According to the Statement of the Solicitor, at the final conference
between petitioner and a representative of the Wage and Hour Division
petitioner agreed to pay the back wages and was notified of the
potential liability for liquidated damages for the CWHSSA violations, as
required by 40 U.S.C. 328. Based on the statutory standard, $2,300 was
computed as liquidated damages due to the CWHSSA violations. Pursuant
to the provisions of Regulations, 29 CFR [sec] 5.8 GSA recommended ln
January 1975, that liquidated damages not be assessed because full
restitution had been made, but in March 1975, Wage and Hour determined
that petitioner had not met the standards for waiver set out in 40
U.S.C. 330, stating that the CWHSSA violations were not inadvertent and
petitioner had not exercised due care. GSA thereupon requested that
petitioner forward the $2,300 liquidated damages. Petitioner objected
to payment of the sum claimed but GSA again demanded payment of the
liquidated damage, whereupon petitioner filed a Petition for Review with
this Board.
The full Board considered this matter in executive session
on the basis of the Petition for Review and Objections to Wage and
Hour Division Statement filed on behalf of petitioner and two
Statements for the Wage and Hour Division filed by the Solicitor of
Labor. [2]
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[3] From a review of the Petition and subsequent Objections
filed by petitioner, this appeal is based on the long delay of the
Government in prosecuting this claim which petitioner states
resulted in witnesses no longer being available or able to recall
the facts out of which the claim for liquidated damages arose, that
to assess liquidated damages where the violations were innocent is
unconscionable, [that] there were no damages to GSA, and finally,
that liqu[id]ated damages constitute an unlawful penalty.
The Solicitor of Labor argues that the Board should summarily
uphold the assessment of liquidated damages because the statutory
requirements permit waiver of liquidated damages only where the
contractor violated the statute inadvertently notwithstanding the
exercise of due care and that petitioner does not meet these
requirements.
It seems to the Board that the Regulations, 29 CFR [sec] 5.8,
are clear that a contractor assessed liquidated damages may be
relieved of liability for their payment only under circumstances
where the contractor violated the provisions of CWHSSA
inadvertently notwithstanding the exercise of due care on his part.
Since it appears that petitioner paid his employees for time and
one-half for all hour[s] over 40 in a workweek it seems reasonable
to suppose that petitioner's failure to pay time and one-half for
hours over 8 in a workday may have been an inadvertent act.
Nevertheless, it seems to the Board that petitioner's failure to
read his contract and thereby inform himself and his bookkeeper of
the requirements with regard to overtime compensation for his
employees cannot be construed as exercising due care. There is [3]
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[4] nothing in the record of the case before the Board to indicate that
petitioner attempted to inform himself of his obligations. Without a
showing on petitioner's behalf of the required due care there is no
basis on which the Wage and Hour could accept GSA's recommendation that
the contractor should be relieved of his liability to pay liquidated
damages.
Although it appears that the 4 years it has taken for this
appeal to reach the Board is an extremely long time, it does not
seem to the Board that petitioner's position has been unduly
prejudiced as a result of this delay. There is disagreement in the
record as to when petitioner became aware that there was a
potential liability for the assessment of liquidated damages under
CWHSSA, but it appears that he must have been so informed early in
1974. This being the case, the fact that petitioner may not have
known the actual amount of the damages, as he claims, does not
require a waiver of these damages. The Board does not see that the
delay experienced by petitioner should estop the Government from
pursuing its claim. No one in a position of authority with the
Wage and Hour Division ever indicated to petitioner's detriment
that a waiver would be granted. Finally, it seems clear that
damages to the contracting agency (GSA) are not necessary for a
contractor to be liable for liquidated damages. [4]
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[5] In view of these considerations, the decision of the
Assistant Administrator of the Wage and Hour Division denying a
waiver of liquidated damages is affirmed and Petition for Review is
hereby dismissed.
BY ORDER OF THE BOARD
Craig Bulger, Executive Secretary,
Wage Appeals Board [5]
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