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CCASE:
TEXAS HIGHWAY-HEAVY BRANCH & TEXAS HEAVY, MUNICIPAL
DDATE:
19771230
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
Review of Davis-Bacon Wage Decisions WAB Case No. 77-23
77-TX-4190 through 77-TX-4207 and
related decisions in Texas Dated: December 30, 1977
APPEARANCES: Thompson Powers, Esquire, Ronald S. Cooper, Esquire
Christopher T. Lutz, Esquire for Texas Highway-Heavy
Branch, Texas Heavy, Municipal & Utilities Branch of
the Associated General Contractors of America
Terry Yellig, Esquire for Building and Construction
Trades Department, AFL-CIO
George E. Rivers, Esquire, Gail V. Coleman, Esquire
for the Wage and Hour Division, U.S. Department of
Labor
Decision by: Alfred L. Ganna, Chairman, William T. Evans, Member,
Thomas M. Phelan, Member
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
the Texas Highway-Heavy Branch and Texas Heavy, Municipal Utilities
Branch of the Associated General Contractors seeking [1]
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[2] review of a series of general wage determinations published in the
Federal Register for building construction in areas of Texas. These
wage determinations include a definition of building construction as
follows:
Building Construction includes construction of sheltered
enclosures, with walk-in access for the purpose Of
housing persons, machinery, equipment or supplies;
includes in all construction of such structures, the
installation inside the building of utilities and
equipment both above and below ground level, as well as
excavation and foundation; includes site preparation and
incidental paving and utilities outside the building.
Petitioner contends that the definition of building
construction is in error as applied to water and sewage treatment
plants in Texas in that buildings constructed at water and sewage
treatment plants for the purpose of housing machinery or equipment
have been built with either heavy-highway rates or with water and
sewage treatment plant rates and have not been considered building
construction.
The Wage and Hour Division indicates it has recently adopted
the quoted definition of building construction and published it in
its wage determinations on the basis of several recent decisions of
the Wage Appeals Board, its conclusion that there is no significant
difference in buildings which are inhabited by people and
structures which house machinery and that therefore the same wage
rates should apply to both. The Wage and Hour Division
characterizes this definition as a working description, intended to
serve as a guide to contracting agencies. [2]
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[3] It states ". . . advice may be sought from the Wage and Hour
Division in particular cases where its application is not clear." (Page
8, Statement for the Assistant Administrator)
Petitioner contends that the definition of building
construction now being published in its wage decisions by the
Department is directly contrary to the prevailing and long standing
practice in Texas of using the heavy-highway rates to build
structures which house machinery on water and sewage treatment
plants. Petitioner also indicates that the Wage Appeals Board's
decisions relied on by the Wage and Hour Division are not pertinent
to the issues in the case.
The Building and Construction Trades Department, AFL-CIO,
submitted a Brief to the Board and participated in the hearing. In
general, the Building and Construction Trades Department supported
the position of the Wage and Hour Division.
A hearing on this matter was held on November 18, 1977, and
all interested parties were present.
It seems to the Board that the same reasoning applies to this
case with reference to recent decisions by this Board as was
discussed in the decision on WAB Case No. 77-19, heard on the same
day with substantially the same parties. The Department of Labor
says it is relying on earlier decisions of this Board, namely Van
Ness Street, WAB Case No. 76-17 (January 27, 1977), [3]
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[4] and Lower Potomac Pollution Control Plant, WAB Case No. 77-20
(September 30, 1977) to justify procedures which appear to the Board to
be contrary to the statutory intent of the Davis-Bacon Act
The Act states, in part, that wage determinations issued by the
Department will be based on wages that are ". . . prevailing for
the corresponding classes of laborers and mechanics employed on
projects of a character similar to the contract work in the city,
town, village or other civil subdivision of the State in which the
work is to be performed . . ." As we said in the earlier Texas
case, WAB 77-19, the decisions of this Board should not be
improperly enlarged from the factual situation on which each one is
founded to subvert the meaning of the statute.
It is apparent to the Board that the problem in this case has
arisen because the Wage and Hour Division has for the first time
adopted a definition of building construction and is including this
definition in its published wage decisions. At the hearing Wage
and Hour characterized the definition as a guide to assist
contracting agencies in the application of the various wage
schedules which are frequently included in the wage decisions
published in the Federal Register. Wage and Hour also indicated
that the definition would not be applied in an arbitrary [4]
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[5] manner, that if a contracting agency brought a particular type of
proposed construction to the attention of the Wage and Hour Division, it
was entirely possible Wage and Hour would agree that the project, or a
part of it, could be excluded from the definition. This means that a
structure housing machinery might be considered to be a heavy nature
instead of a building nature. It became abundantly clear at the hearing
that there were kinds of machinery and structures at these treatment
plants that would unquestionably be classified as heavy construction if
it were not for the fact that a shelter is placed over them.
Nevertheless, the definition of building construction promulgated by the
Department would cover this equipment and thereby change its category of
construction without any reference to the factual situation.
The Board does not agree that the definition printed on the
wage determination could be regarded by contracting agencies as
merely advisory. All other information printed on wage
determinations, such as wage rates or classifications, are not so
considered by the contracting agencies or the Department of Labor.
The definition as far as the contracting agencies are concerned is
mandatory.
Although the definition may operate satisfactorily with
reference to most contracting agencies, it is apparent that in [5]
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[6] the area of construction of water and sewage treatment plants
the definition has created more problems that it has solved. It
has apparently resulted in the reclassification of what had been
considered heavy construction into what would now be considered
building construction.
The Wage and Hour Division's reliance on Van Ness Street and
Lower Potomac Pollution Control Plant to support such a
reclassification is, in the Board's view, entirely misplaced. In
Van Ness Street there was no dispute as to the category of
construction which the high-rise residential apartment building
was in and the Board was therefore not concerned with that
question. The issue was whether the high-rise residential
apartment building should be considered separate and apart from
commercial building construction by reason of the different wages
being paid on the two types of building construction. In the Lower
Potomac Pollution Control Plant case, there was similarly no
dispute as to the categories of construction. The contract work
clearly fell into two different categories and the Board was not
willing to disregard that fact and direct the issuance of a wage
determination for only one category solely on the basis that the
contractors working on similar projects used only one wage schedule
rather than dual schedules. [6]
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[7] In Van Ness Street the Board would not permit high-rise
residential apartment buildings to be segregated from commercial
building construction solely on the basis of the wages being paid;
and in Lower Potomac Pollution Control Plant, it would not permit
one type of construction to be converted into a separate type of
construction solely on the basis of wages being paid. In both
cases the category or categories of construction into which the
contract work fell was undisputed.
In the present case, however, there is a legit[i]mate dispute
as [to] the category of construction into which the contract work
properly falls. The Petitioner contends that the work is properly
considered in the heavy-highway construction category because of
the nature of the work and points to the historical practice of
paying heavy-highway wage rates as evidence of the proper category
of construction. This is not a matter of having wage rates convert
work which is clearly in one category of construction into another
category There is an obvious disagreement as to what is the
proper category in the first place. The Wage and Hour Division's
adoption and subsequent application of its definition of building
construction, in light of such a disagreement, and without having
consulted with either the parties affected by the new definition or
with other [7]
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[8] governmental agencies with an obvious interest in such a major
change was not proper and, in the Board's view, the definition cannot
therefore be applied in this type of instance. The definition is in the
nature of a rule, and if a definition is deemed desirable, it should be
adopted in accordance with rule-making procedures.
When there is no general agreement as to the proper category
of construction into which a particular project falls and it is
important for wage determination purposes to categorize such a
project, the Department may consider the wages being paid on
projects of a character similar as one indication of the proper
category of construction. Wages, however, are only one indication.
It is also necessary to look at other characteristics of the
project, including the construction techniques, the material and
equipment being used on the project, the type of skills called for
on the project work and other similar factors which would indicate
the proper category of construction. These things were not done
with respect to the wage decisions under review in this case and
those wage decisions are therefore not proper.
The Wage and Hour Division is directed to discontinue the
application of its definition of building construction until [8]
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[9] such time as it has been properly adopted. If there is any dispute
in the meantime as to the construction category into which a particular
project falls, those disputes should be looked at and worked out on a
case by case basis.
BY ORDER OF THE BOARD
Craig Bulger, Executive Secretary
Wage Appeals Board [9]
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