CCASE:
ELMER DAVIS
DDATE:
19840504
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
ELMER DAVIS WAB Case No. 80-08
Ft. Rucker, AL Dated: May 4, 1984
BEFORE: Stuart Rothman, Member, Gresham C. Smith, Alternate
Member, Thomas X. Dunn, Member, Dissenting /FN1/
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition
of Elmer Davis, an employee of J.L. Malone and Associates,
(hereinafter Malone) to review a determination of the Assistant
Administrator, Wage and Hour Division. The petition raises the
question whether Elmer Davis was properly paid while employed
by Malone on an Army contract for construction of an electrical
distribution system at Fort Rucker, Dale County, Alabama. The
Assistant Administrator determined that petitioner performed
the duties of an electrician on the project and was properly
paid as an electrician. The petitioner contends that his duties
constituted those of a lineman and that he should have been
paid the basic hourly wage rate plus fringe benefits in the
applicable wage determination for linemen. The predetermined [1]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ Chairman Alvin Bramow withdrew from consideration of this
appeal and did not participate in the decision of the case. [1]
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[2] rate for linemen was almost $2.00 per hour more than petitioner
was paid on the project. Over the life of the contract this
would amount to approximately $5,600 in wage underpayment.
In 1976 the Corps of Engineers awarded a contract for
$3,586,000 to J.L. Malone and Associates to construct an electrical
distribution system consisting of overhead transmission and
distribution, underground distribution, four substations and inside
wiring at Fort Rucker, Alabama. The wage determination applicable
to the project was issued for heavy construction in Dale County
where Fort Rucker is located. It contained over 50 job
classifications and rates including those for a lineman and
groundman. Shortly after contract award Malone requested that an
additional classification and rate for electrician be added to the
determination. The Assistant Administrator denied this request.
She cited the fact that the wage determination "already contains
the classification of electrical line construction which would be
the classification required to do the work . . ."
Following the submission of additional information by
the Corps of Engineers, a second Request for Authorization of
Additional Classification and Rate was submitted to the Wage
and Hour Division. This time Wage and Hour did not take exception
to the Contracting Officer's determination of a classification of
electrician at $5.80 per hour. As a result petitioner [2]
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[3] was paid for his work on the substations as an electrician
and not at the higher linemen's rate.
In 1978 petitioner filed an action in the Federal District
Court in Orlando, Florida, claiming the back wages due petitioner
for the alleged underpayment. Since the Department of Labor had
not completed its investigation of employment practices in
southern Alabama with reference to this claim, a stipulation
was filed in the District Court action in which the Department
agreed to complete its investigation and to issue a report of
its conclusions. In the event this report was not satisfactory to
petitioner, it was agreed that a further appeal could then be taken
to the Wage Appeals Board.
An investigation by the Wage and Hour Division was then
conducted to determine if certain employees on Malone's project
were paid less than the applicable predetermined wage rate. Wage
and Hour concluded that the petitioner was properly classified as
an electrician. Petitioner's duties performed at the substations
consisted of placing ground wires, installing overhead wires in the
substation towers, bending conduit, pulling wires and mounting
boxes and lighting fixtures, and pulling cable through conduit. In
its report Wage and Hour determined that electricians performed
this work in Dale County, Alabama. This determination was adopted
by the Office of the Assistant Administrator. On June 24, 1980,
petitioner filed a Petition for Review with the Wage Appeals
Board. [3]
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[4] Petitioner's argument to the Board is that although he was
hired as an electrician, the duties he performed on the project
were those of a lineman and that he should have been paid as a
lineman. The duties performed by petitioner at the substation
construction were those described above. It is petitioner's
position that this work was lineman's work on substation
construction and that he should have been paid lineman's wages
of $8.38 per hour plus fringe benefits instead of the $6.50 he
was paid as an electrician. It is claimed that approximately
$5,600 is due to the petitioner.
The Building and Construction Trades Department, AFL-CIO,
(hereinafter BTD) filed a brief in support of petitioner's
appeal. It is the BTD's argument that the addition of the
electrician's classification and rate after contract award was
actually a challenge under Regulations 5.5(a)(ii) /FN2/ to the
wage rates originally issued for the project in the guise of
a request for an additional classification and rate. The BTD
relies on the Fry Brothers Corp. case, WAB 76-06 (June 14, 1977)
in support of its position. The BTD argues that in that case
the Board declared that where union wage rates are determined
to be prevailing so too should union work practices, even [4]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ "The contracting officer shall require that any class of
laborers and mechanics, including apprentices and trainees,
which is not listed in the wage determination and which is to
be employed under the contract, shall be classified or reclassified
conformably to the [w]age determination . . ." [4]
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[5] though there may be substantial evidence that the prevailing
practice is different. The BTD says that Fry Brothers created an
irrebuttable presumption that prevailing practice will be consistent
with local union jurisdiction when the wage rates negotiated by such
unions are determined to prevail in the area. The BTD believes that
the addition of the electrician's rate after contract award was
contrary to a line of decisions by the Board /FN2/ and that
petitioner should have been paid the wage rate for linemen as
originally issued in the wage determination.
The Assistant Administrator's position as presented by
the Solicitor of Labor is that petitioner has performed the
duties of an electrician and not a lineman and that petitioner
was properly paid.
The Assistant Administrator points out that every
classification issued in the wage determination for this project
in Dale County was an open shop, non-negotiated wage rate with
the exception of the lineman and groundman classifications.
Negotiated rates were determined to prevail on a statewide
basis for these classifications. [5]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN3/ See Southeastern Capitol Corp., WAB 78-12 (January 16,
1979), Espana Gardens, WAB 76-15 (May 4, 1977), Gananda Development
Corp., WAB 73-13/74-01 (May 14, 1974), Huntsville-Madison County
Airport, WAB 64-01 (August 31, 1964), Great Lakes Construction
Corp., WAB 78-08 (January 16, 1980). [5]
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[6] The Assistant Administrator also relies on the Fry Brothers
Corp decision, supra, to support its contention that where the
craft in question reflects both negotiated and open shop rates,
both sectors of the industry must be consulted to determine the
prevailing practice for the craft. In this instance the Assistant
Administrator relied upon information she received from local
contractors familiar with substation construction in this area of
southern Alabama. This information indicated that electricians
were used for all aspects of such construction, including erection
of the towers, installation of all electrical hardware on the
towers, and ground electrical work. Wage and Hour asserts that it
was unable to locate any construction of substations in the area
surrounding Dale County that utilized linemen or was performed by
contractors signatory to the applicable collective bargaining
agreement. It is admitted, however, that linemen claim to perform
the same duties listed above as are claimed for the electricians.
In its report of the investigation, Wage and Hour approved
Malone's practice of employing and paying linemen for the
construction of transmission lines and the distribution system,
but did not object to the employment of electricians for work
in the substations at Fort Rucker.
* * *
The Wage Appeals Board considered this appeal on the basis
of the petition and exhibits submitted on behalf of the petitioner, [6]
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[7] the memorandum by the BTD in support of the petition,
and the statement for the Assistant Administrator and the record
filed by the Solicitor of Labor. No request for an oral argument
was received.
Although this case is before the Wage Appeals Board on
the petition of Elmer Davis who claims that the Assistant
Administrator erred in concluding that petitioner's wages
for specified work should have been paid for at the electrician's
wage rate and not at the linemen's predetermined wage rate,
the true issue, however, is whether the Wage and Hour Assistant
Administrator erred when, subsequent to the bidding and award of
the contract, she added an elect[r]ician's classification and wage
rate to the predetermined wage rate schedule. Until the addition
of the electrician's wage rate, the only other wage rate here
pertinent would have been the linemen's rate.
Elmer Davis and the intervenor, the Building and Construction
Trades Department, AFL-CIO, have urged the Board to reverse the
Assistant Administrator and uphold the petitioner's claim that he
should have been paid at the linemen's rate because when the job
was bid there was no other pertinent and applicable rate. All
bi[d]ders, says the BTD, would have bid the job on the basis that
the work in question would have [7]
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[8] been performed and paid for as linemen's work at the linemen's rate
because there was no electrician's rate or classification specified in the
schedule.
Additionally, the BTD says that this was a composite wage
schedule consisting of both negotiated and non-negotiated wage
rates. The linemen's wage rate was taken from a negotiated
agreement and accordingly, the Assistant Administrator should
have considered whether under negotiated agreements there was
an area practice for the specified work to be performed by
lineman at the linemen's rate.
The Board has carefully considered the factors which the
Assistant Administrator took into account in adding an
electrician's wage rate to the schedule and in subsequently
concluding that the specified work was performed in accordance with
local area practice by electricians. /FN4/
The Board concludes in this matter that the Assistant
Administrator properly and duly followed applicable procedures
in adding the electrician's wage rate. The Assistant Administrator
did, in fact, take into account practices under negotiated
agreements as well as non-negotiated practice in determining the
over-all practice.
A laborer or mechanic under the Davis-Bacon Act is entitled
to be paid the prevailing wage for the work performed according [8]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN4/ Placing ground wires, installing overhead wires in the
substation towers, bending conduit, pulling wires and mounting
boxes and lighting fixtures, and pulling cable through conduits.[8]
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[9] to local area practice. He is not entitled to be paid at a
higher rate than that prevailing because, by reason of
"inadvertence" the true wage rate for the work performed was
omitted from the wage rate schedule when, as is the case here,
appropriate steps have been duly taken to correct the inadvertence.
According to the Corps of Engineer's description of the
project this was a $3-1/2 million electrical job to install an
electrical distribution system including overhead transmission and
distribution, underground distribution, substations and inside
wiring. The predetermined wage schedule included approximately
fifty classifications. The Board sees no error whatsoever in
the Assistant Administrator taking steps to correct the
inadvertence. It is further clear to the Board that the Assistant
Administrator meticulously applied the basic Fry Brothers
principle.
Finding no error in the actions taken and in the decisions
reached by the Assistant Administrator, the petition of
Elmer Davis herein must be dismissed.
* * *
Thomas X. Dunn, Dissenting
I have carefully considered the factors which the Assistant
Administrator took into account in adding an electrician's
wage rate to the schedule and in subsequently concluding that [9]
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[10] the specified work was performed in accordance with local area
practice.
The Assistant Administrator ruled in her April 4, 1980
letter to Elmer Davis' counsel that Malone did not violate
the Davis-Bacon Act when it paid Mr. Davis according to the
electrician's wage rate. The Assistant Administrator stated,
in relevant part, as follows:
The appropriate classification for the work
performed by Elmer Davis, whether Lineman or
Electrician, depends by law on area practice.
The area practice in the Ft. Rucker area is to
employ Electricians rather than Linemen to perform
all duties and tasks done by Elmer Davis on the Fort
Rucker project, including erection of the towers
and installation of all electrical hardware on
the towers at the substation. Because Mr. Davis
received full Electrician's wages while employed
on the project, he is not due back wages.
The Assistant Administrator's Statement to the Board
makes it clear that her ruling is based upon the Board's
decision in Fry Brothers Corp., supra, which held that in
order to determine whether employees protected by the Davis-
Bacon Act have been paid the appropriate wage rate in a
prevailing wage determination, it is necessary to determine the
prevailing practice in the area with regard to the classification
of employees who perform the work in question (Assistant
Administrator's Statement pp. 4-5). However, the Assistant
Administrator misapplied Fry Brothers in the present case. [10]
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[11] The Assistant Administrator's April 4, 1980 ruling, as
well as her Statement to the Board, indicates that she regards
the dispute concerning the classification of Elmer Davis as
an electrician as substantially the same kind of problem
presented in several recent cases before the Board, including
Fry Brothers. But the present case is distinguishable.
Each of the cases upon which the Assistant Administrator relies
concerned a dispute about which of two classifications and
rates in a wage determination was applicable to certain duties
performed by laborers and mechanics employed to work on a
federal construction project covered by the Davis-Bacon Act.
This case, on the other hand, presents a different issue.
Specifically, the issue is whether a classification and wage
rate should be added to a wage determination, after contract
award and commencement of construction even though the duties
ascribed to the additional classification are performed by a
classification of workers already listed in the wage determination.
The Assistant Administrator's explanation of her determination
that Elmer Davis is not entitled to back wage payments for the
difference between the electrician rate and the linemen rate which
appeared in Wage Decision 76-AL-121 begs the question of whether
the electrician classification and rate should have been added to
Wage Decision 76-AL-121 in the first place. [11]
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[12] In Fry Brothers it was determined that the contractor owed
$72,214.54 in underpayments to its employees who had been
classified and paid as laborers instead of carpenters. The
contractor disputed the alleged underpayments on the basis that he
classified and paid his employees according to the prevailing
practice in the area which was to classify workers as laborers who
performed the same kind of duties as his employees. In fact, an
Administrative Law Judge agreed that the prevailing practice in the
area was to classify workers who perform such work in residential
construction as laborers.
The Assistant Administrator reversed the ALJ and, upon appeal,
the Board held that where negotiated wage rates are determined to
be prevailing for certain classifications of workers, the
prevailing practice concerning the content of the work performed by
workers in those classifications must be based on the jurisdiction
of the unions whose wage rates are found to be prevailing. As a
result, the Board determined in Fry Brothers that, because the wage
rates for the carpenter and laborer classifications in the
applicable wage determination were the same as the wage rates
negotiated by the two unions, the prevailing practice in the area
should also reflect the respective jurisdiction of those unions.
Consequently, the Board held that the prevailing practice in the
area was to classify workers who performed the same duties as those [12]
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[13] performed by Fry Brothers' employees, as carpenters
inasmuch as the local Carpenters Union claimed jurisdiction over
all such work and the local Laborers Union did not.
The Board explained the rationale for its disposition
of the dispute in Fry Brothers as follows:
When the Department of Labor determines that the
prevailing wage for a particular craft derives
from experience under negotiated arrangements, the
Labor Department has to see to it that the wage
determinations carry along with them as fairly and
fully as may be practicable, the classifications
of work according to job content upon which the
wage rates are based. If a construction contractor
who is not bound by the classifications of work at
which the majority of employees in the area are
working is free to classify or reclassify, grade
or subgrade traditional craft work as he wishes,
such a contractor can, with respect to wage rates,
take almost any job away from the group of
contractors and the employees who work for them who
have established the locality wage standard. There
will be little left to the Davis-Bacon Act. Under the
circumstances that the Assistant Secretary determined
that the wage determinations that had been issued
reflected the prevailing wage in the organized
sector it does not make any difference at all what
the practice may have been for those contractors
who do and pay what they wish. Such a contractor
could change his own practice according to what he
believed each employee was worth for the work he
was doing.
Fry Brothers formally established the principle that
where union wage rates are determined by the Secretary of
Labor to prevail in a locality, so too should union work
practices be regarded as prevailing even though there may
be substantial evidence that the prevailing practice is different [13]
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[14] In fact, Fry Brothers created an irrebuttable presumption
that prevailing practice will be consistent with local union
jurisdiction when the wage rates negotiated by such unions are
determined to prevail in the area. Consequently, the only way to
object to a prevailing practice based on prevailing union wage
rates is to challenge the accuracy of the wage determination
itself.
The Board cautioned, however, that such challenges must
be timely and, appeals concerning wage determinations already
incorporated in contracts which are underway will not be
considered. The Board stated:
The Board finds no error in the determination of
the Assistant Secretary that the wage predeterminations
issued for these three projects reflected the wages
paid under negotiated arrangements in the
organized sector of the construction industry in
the Albuquerque locality. [*] When an interested
person in the construction industry desires to
challenge a Practice of the Labor Department to
accept the negotiated wage rates as Prevailing
without a wage data survey, it is necessary that
the attack come before the Labor Department decision
becomes the basis upon which bids are taken. It
should not be raised at the enforcement stage. We
again find no exonerating circumstances permitting
it to be raised here at the enforcement stage. [*]
[*] (emphasis added) [*]
Fry Brothers at pp. 16-17.
More recently, the Board dismissed as untimely a petition
for review of a decision by the Assistant Administrator that
$2,864.56 in underpayments was owed by a contractor who argued
that the wage rate for plumbers in the applicable wage
determination [14]
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[15] was erroneously high. In Southeastern Capit[a]l Corp., WAB No.
78-12 (January 16, 1979), the contractor argued that the plumber's rate
was wrong because a second wage determination issued by the Wage and Hour
Division [*] after [*] initial endorsement by HUD of a mortgage for
construction by the petitioner of a public housing project included a
lower wage rate. The Board refused, however, to consider the petition
because construction of the project had already started. In
so ruling, the Board held:
The Wage Appeals Board cannot accept the Petitioner's
position that the wage data used as the basis for
Modification No. 1 was not appropriate for a schedule
of wage rates for residential construction in Jefferson
County. There is nothing in the record to prove this
allegation. Petitioner was furnished with a copy
of Wage Decision No. AL 75-1047 and Modification
No. 1 by HUD in early July, 1976. There was ample
time for Petitioner to question the wage rate for
plumbers contained in Modification No. 1 prior to
the start of construction. Also, there was a
preconstruction conference at which this issue should
have been raised if there was any question about it.
If the Petitioner disagreed with Wage and Hour's
determination of the rate as provided to it by HUD,
Petitioner should have requested the Wage and Hour
Division to resolve the matter. Further appeal
could have been made to the Wage Appeals Board
at that time.
Southeastern Capital Corp. at pp. 4-5.
The holding in Southeastern Capital Corp. is consistent
with several earlier Board decisions which held that challenge
to wage rates by any party must be made prior to contract
award and commencement of construction. See, Espana Gardens, [15]
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[16] WAB 76-15, (May 4, 1977); Gananda Development Corp., WAB 73-
13/74-01, (May 14, 1974); Huntsville-Madison County Airport,
WAB 64-01, (August 31, 1964); Great Lakes Construction Corp.,
WAB 78-08, (January 16, 1980).
Nonetheless, the Assistant Administrator, by approving
the addition of the electrician classification and rate to
Wage Decision 76-AL-121, effectively permitted the Corps of
Engineers to reduce the prevailing wage rate for workers who
performed electrical work on the Ft. Rucker substations by
adding a new classification, thereby avoiding the timeliness
problem discussed above. The Assistant Administrator simply
ignored the Fry Brothers principle and approved addition of
the electrician classification and rate to the wage determination
without regard for its effect on the workers involved. Once the
electrician classification and rate was added to Wage Decision
76-AL-121, the Assistant Administrator invoked the Board's decision
in Fry Brothers as justification for her decision that Elmer Davis
was not underpaid by Malone because he was paid in accordance with
the "prevailing wage rate" for electricians.
The conformance procedure used by the Corps of Engineers
has been in effect since at least 1951, /FN5/ and provides that
when information available to the Wage and Hour Division
indicates that the prevailing rate for a classification of
laborers and mechanics is the same as the local union rate [16]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN5/ 16 F.R. 4431-4432 (1951). [16]
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[17] for that classification, the contracting agency and the Wage
and Hour Division will "conform" to the union negotiated practice
insofar as determining the duties performed by workers in the
listed classification. Thus, the duties ascribed to the
classification listed in the wage determination must be the same as
those contemplated in the collective bargaining agreement. In such
instances, there is no need to conduct a prevailing practice
survey. Any other interpretation of 29 CFR [sec] 5(a)(1)(ii)
permits contracting agencies and contractors to avoid the
prevailing wage requirements of the Act simply by submitting
requests for additional classifications with lower wage rates after
contract award regardless of the Department of Labor's earlier
determination of prevailing wages and practices.
There is no dispute in the present case that the wage rate
determined to prevail for the linemen classification is the same as
the local union rate. Furthermore, under the applicable collective
bargaining agreement, linemen "generally construct the entire
substation from the ground up, including all of the necessary
wiring" (Assistant Administrator's Statement, p. 6).
Pursuant to the holding and rationale of Fry Brothers, the
Assistant Administrator should have denied the Corps of Engineers'
request for the additional electrician classification and rate once
she determined that the prevailing wage rate [17]
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[18] for linemen in the area was the same as the local union rate. At
that point, she was obligated by 29 CFR [sec] 5.5(a)(1)(ii) to conform the
duties ascribed in the Corps' request to those in the applicable
collective bargaining agreement. The Assistant Administrator,
based on this information, should have refused to approve addition
of the electrician classification and rate to Wage Decision
76-AL-121 on the basis of Fry Brothers.
Accordingly, since the Assistant Administrator's decision
to approve the addition of an electrician classification and
wage rate to Wage Decision 76-AL-121 came after contract award
and commencement of construction, I would reverse and remand
with directions to the Assistant Administrator to advise the
Comptroller General to pay directly to Elmer Davis and all
other workers employed to construct four electrical substations at
Ft. Rucker, Alabama, pursuant to Contract No. DACA[]-76-C0087 from
any accrued payments withheld under the terms of the contract any
wages due in accordance with the linemen's rate prescribed therein.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board
