JOS. J. BRUNETTI CONSTRUCTION CO., WAB No. 80-09 (WAB Nov. 18, 1982)
CCASE:
BRUNETTI, DORSON & SUPPLY
DDATE:
19821118
TTEXT:
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WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
JOS. J. BRUNETTI CONSTRUCTION CO. & WAB Case No. 80-09
DORSON ELECTRIC & SUPPLY CO., INC.
FHA Project - Brookchester Apts. Dated: November 18, 1982
New Milford, NJ
APPEARANCES: Mark C. Rushfield, Esquire for Jos. J. Brunetti
Construction Co. & Dorson Electric & Supply Co.,
Inc.
Terry R. Yellig, Esquire for Building and
Construction Trades Department, AFL-CIO
Douglas J. Davidson, Esquire, Gail Coleman, Esquire
(On Brief) for the Wage and Hour Division, U.S.
Department of Labor
BEFORE: Stuart Rothman, Acting Chairman, Thomas X. Dunn,
Member, Gresham C. Smith, Alternate Member /FN1/
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition
of Joseph J. Brunetti Construction Company (hereinafter Brunetti)
and subcon[]tractor Dorson Electric and Supply Company, Inc.,
(hereinafter Dorson) which seeks review of a decision of the
Assistant Secretary for Employment Standards, dated April 22,
1980, reversing an earlier decision by an Administrative Law
Judge (ALJ). As a result of this ruling Dorson was found to [1]
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/FN1/ Board Chairman Alvin Bramow withdrew from consideration of
this appeal prior to the hearing and did not participate in
the decision of the case. [1]
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[2] have violated the labor standards provisions of Section 212(a)
of the National Housing Act (12 U.S.C. 1715c) during renovations of
a Federal Housing Administration (FHA) project, the Brookchester
Apartments, in New Milford, New Jersey, and was found to owe back
wages in the amount of $58,386.49 to 12 of its employees for a
period from mid-October, 1976 to July 1, 1977. A hearing on this
matter was held after reconstitution of the Wage Appeals Board,
on September 21, 1982 pursuant to the Board's Notice of Hearing.
All interested parties were represented at the hearing.
The FHA project which is the subject of this appeal consisted
of renovation of 754 garden apartment units in 47 two-story
buildings. In August, 1976 petitioner Brunetti submitted an
application for project mortgage insurance to the FHA. Brunetti
became the prime contractor on each of four contracts into which
the project was divided.
After the project closing in November, 1976, Brunetti
entered into a subcontract with Dorson Electric & Supply Co.
for the electrical work required by the contract. The applicable
wage determination for garden type apartments contained two
electrician's wage rates. One rate in the range of $7.00
per hour was for "Electricians: applicable to the construction
of all units built primarily for family residence, not to
exceed 4 unit apartments". The other rate of about $13.00 per
hour applied to electricians working on "other residential
construction". Both wage predeterminations were derived by the [2]
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[3] application of Davis-Bacon Act regulations and principles
from negotiated rates contained in collective bargaining agreements
for the New Milford, New Jersey, area.
In May, 1977 the Department of Labor investigated the work
performed at Brookchester Apartments and found violations and
back wages due 12 employees of Dorson. Dorson had applied the
wage rate applicable to "family residence construction, not to
exceed 4 unit apartments" as described in the applicable wage
determination The Department of Labor determined that this
project did not so qualify. It determined that the higher rate of
about $13.00 per hour for electricians on "other residential
construction" applied and was payable to these employees.
The Department of Labor found further violations when Dorson
classified employees on the certified payrolls as apprentices
and paid them from $4 to $6.25 per hour. These rates are lower
than either of the electrician's wage rates contained in the
wage determination. Dorson did not have an approved
apprenticeship or training program registered with either the
Bureau of Apprenticeship and Training, or a recognized State
Apprenticeship agency.
Petitioners requested that a hearing be conducted before an
ALJ on the Department of Labor's determinations. This was held
in early 1979 pursuant to 29 CFR [sec] 5.11(b) of the Regulations.
In October, 1979 the ALJ issued a decision finding no labor
standards violations. Among other rulings the ALJ held that the [3]
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[4] electrician's rate should be the lower rate issued for
"family residence construction not to exceed 4 unit apartments" and
that Dorson had properly classified a number of its employees as
"helpers" or "trainees".
The ALJ's decision and order was appealed. In April,
1980 the Assistant Secretary for Employment Standards reversed
the ALJ's decision on all issues. This has raised a further
issue by petitioners in this appeal. The Regulations state
that after a hearing before an ALJ, the ALJ's decision will be
final unless a petition for review is filed within 20 days of
receipt of the decision. In this case the Government submitted
a "Notice of Filing Petition for Review and Request for Extension
of Time" within the 20 day appeal period. It is being urged by
petitioners that this procedure was not in conformity with
Regulations, 29 CFR [sec] 5.11(b).
On July 25, 1980 petitioners appealed the Assistant
Secretary's decision to the Wage Appeals Board.
Dorson contends in its petition, oral argument and post
hearing brief that it relied on the advice and directions of
the FHA, the contracting agency,in choosing the wage rate to
pay its electricians. Dorson contends that FHA has defined
"buildings" in its publication, Minimum Property Standards, as "A
structure . . . which is cut off from adjoining structures by fire
walls . . . ." Because every two or four units at Brookchester [4]
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[5] Apartments were divided by fire walls petitioner argues that this
divided the structures into buildings of 4 units or less, thereby
qualifying Dorson to pay the lower electrician's wage rate. Dorson
cites a Comptroller General's Opinion, No. B-158511, WAB CCH para.
30,997.23 (June 7, 1976) to support the proposition that where there are
two schedules of wage rates in a general wage determination and the
contracting agency fails to indicate in contract specifications what
particular wage schedule is applicable (or, as here, indicates the
applicability of a wage schedule later challenged by the Department of
Labor); especially as the Comptroller General's opinion said, where the
contractor's interpretation is not entirely unjustified, the Comptroller
General held that the contractor is relieved of any liability for paying
his employees at a higher rate later deemed to be proper by the
Secretary of Labor.
Dorson also argues that the Assistant Secretary erred in
setting aside the ALJ's finding that preliminary work performed by
Dorson was not subject to a prevailing wage determination. It is
asserted that the ALJ's finding that it was proper for petitioner's
employees who were engaged as helpers or trainees and paid as such
was correct and that the Assistant Secretary should not set this
finding aside. Petitioner argues that the collective bargaining
agreement applicable to the project contained a classification
of "wireman trainee" which was its basis for classifying these
employees as apprentices. [5]
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[6] Finally petitioners argue that the Assistant Secretary
erred when he did not rule that the Assistant Administrator
was untimely when the petition for review of the ALJ's decision
was not filed within 20 days of receipt of the ALJ's decision
as required by Regulations 29 CFR [sec] 5.11(b).
The Wage and Hour Division argues that although no petition
for review was filed within the allotted 20 day period, a
"Notice of Filing Petition for Review and Request for Extension
of Time" was submitted to the Chief ALJ within the 20 day period.
With reference to the question of whether petitioner could
employ "helpers" or "trainees", Wage and Hour points out that
electrician apprentices were listed on the certified payrolls
even though petitioner had no approved apprenticeship or
training programs registered with the Bureau of Apprenticeship
and Training or an approved State apprenticeship agency, as
required by Department of Labor regulations. These are a part
of petitioner's contractual obligations. Neither of the wage
determinations under consideration contained a classification
of electrician helper. Petitioners did not request that the
classification of electrician helper be added until after
investigations and the violations were assessed. Wage and Hour
argues that this is in effect an effort to change the wage rate
after the contract has been awarded. [6]
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[7] Wage and Hour relies on statements of the business agent of
the electricians's union that the 754 unit Brookchester Apartments
do not constitute "family residence construction not to exceed 4
unit apartments" within the meaning of the collective bargaining
agreement containing this definition.
Wage and Hour cites a number of cases decided by this
Board that the final authority for classifying laborers and
mechanics on matters arising under the Davis-Bacon Act is
not the contracting agency or the parties to the contract,
but instead rests within the jurisdiction of the Secretary of
Labor.
Finally Wage and Hour asserts that work performed by
Dorson prior to FHA's initial closing was subject to the labor
standards provisions of the National Housing Act and petitioner's
employees should be compensated in accordance with the
applicable wage determination.
The Building and Construction Trades Department, AFL-CIO
(hereinafter BTD) also presented oral argument at the Board's
hearing and filed a post hearing statement for the Board's
consideration. The BTD brief in effect supports the position
of the Wage and Hour Division.
It is apparent to the Board after hearing the arguments
made at the hearing and after looking at photographs of the
buildings upon which the rehabilitation work was performed that [7]
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[8] this was the familiar type of garden apartment construction of
four stories or less in height. /FN2/ The pivotal question then
becomes whether the work in question could be subsumed under
the wage determination definition: "family residence
construction not to exceed 4 unit apartments" or whether it falls
under the general category of other residential construction.
The Board finds itself compelled to reject the basic
evidentiary factor upon which petitioners relied before the ALJ and
upon which they rely in this appeal, i.e.: Dorson's reliance
upon advice and directions from an official of FHA that this
project consisted of family residences of 4 units or less for the
sole reason that the walls between every two units were also said
to be fire walls. It appears that every unit has masonry or
cement block exterior walls. The Board cannot accept the
contention that an assertion of an FHA employee in a
preconstruction conference, or later during an enforcement
proceeding, that the [8]
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/FN2/ An inquiry into the nature and characteristics of a
construction project normally starts with a look at the drawings
and/or specifications of the project. Those who process cases to
the Board will know what the Board is looking for when the issue is
whether the contract work and other construction projects are of a
similar character. Since this was a rehabilitation project, it may
not have been possible to obtain the drawings or original
specifications. However at the request of the Board some snapshots
of a portion of the 754 unit project were brought to the hearing. [8]
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[9] number of dwelling units between fire walls determines the
definition of what is a building when such a declaration is
unsupported by concrete, on-site construction data. An FHA
definition of a "building" does not establish local area practice
or contract interpretation with respect to the meaning of a "family
residence construction not to exceed 4 unit apartments". The Board
does not accept as suitable evidence, capable to produce persuasion
in minds looking for architectural, engineering and structural
elements of a particular project to define "family residence
construction not to exceed 4 unit apartments", a definition
culled from an FHA document which defines a building in the
following terms:
Building" A structure which stands alone or which
is cut off from adjoining structures by fire walls
with all openings therein protected by approved
fire doors.
This FHA definition of a building in terms of fire walls for
fire protection has very little to do with the interpretation
and application of a labor contract and of local area practice
as to whether a garden type apartment project consists of
family residences of less than five unit apartments.
The Board concludes that the nature and characteristics
of the construction does not fit the definition of "family
residence construction not to exceed 4 unit apartments". A
look at the photographs show that there were many structures
in which many more than four family residences are located [9]
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[10] under one roof and in what appears to be one building in garden
type construction. In this regard the Board accepts the
contention of Wage and Hour that the definition quoted above does
not fit a structure that has 15 to 17 dwelling units under one
roof.
The Wage Appeals Board, operating as it does within the
context of the building and construction industry, does not
see enough in the facts to justify a conclusion that this is
"family residence construction not to exceed 4 unit apartments".
This Board, seeking to achieve a fair and balanced administration
of the Davis-Bacon Act, based on experience and knowledge with
respect to the purposes and objectives of the Act, and the
nature, structure and practices of the construction industry
nationally and locally, will give to a decision of an ALJ the
full worth that it deserves in the light of the skill, knowledge
and the help to the ALJ that went into the hearing upon which
the decision is based. The Board will find of interest what
it is that an ALJ did in a case that went to an ALJ hearing.
It will find of interest the quality of the presentation to the
ALJ, and the factors that were taken into account in the ALJ
decision. But by the time a matter comes before the Wage
Appeals Board, the Board is also in the position of reviewing
a decision of the Wage and Hour Administrator or the Assistant
Secretary of Labor. [10]
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[11] The Board avoids use of a "clearly erroneous test", normally
found in judicial appeals, when the factual data presented at
an evidentiary hearing does not measure up to standards expected
of a presentation in a dispute in the construction industry.
On the other hand, the Board does not accept the contention
of the Wage and Hour Division here that in its efforts to solve
this problem by referring to an authoritative local source, all
that Wage and Hour had to do was to ask the local union business
agent how this definition was applied, and to accept an answer
without concrete project data. The Wage and Hour Divis[i]on,
however, did produce the appropriate local union official for
the hearing before the ALJ where he would have been subject to
cross examination with respect to the application of his
interpretation.
The Board has considered petitioner's failure to pay the
appropriate wage rates with respect to the so-called preliminary or
"experimental" work, and with respect to alleged violations of the
Act concerning the underpayment of electricians whom Dorson
identified as apprentices on the certified payrolls, later calling
them helpers.
The evidence in the record does not support petitioner's
failure to pay the correct rate to its employees in either of
these situations. Petitioner's reliance on the Fry Brothers,
WAB Case No. 76-06, (June 14, 1977) and the Portal-to-Portal Act is
misplaced since there were no trainee or helper classifications [11]
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[12] issued in the applicable wage decision for Brookchester
Apartments. It cannot be claimed that the enforcement action that
is the basis of this appeal represents a reversal or change of
position under the Portal-to-Portal Act.
The Board does not agree with the General Accounting Office's
position demonstrated in Comp. Gen. Decision B-158511, supra,
cited by petitioner to the effect that the Wage and Hour Division
is estopped from enforcing a higher wage rate when the
contractor has relied upon advice from the contracting agency
that payment of the lower electrician's wage rate was permissible.
The Secretary of Labor was given the power to regulate the
interpretation and enforcement of the Davis-Bacon Act and related
acts by Reorganization Plan No. 14 of 1950. This authority
has been reinforced by two opinions of the Attorney General of
the United States. The Wage Appeals Board has rejected estoppel
arguments in two previous appeals: Metropolitan Rehabilitation
Corp., WAB 78-25 (August 2, 1979), and Tollefson Plumbing and
Heating Co., WAB 78-17 (September 24, 1979). This Board finds
that the Department of Labor cannot be estopped by a local agency
employee taking Davis-Bacon interpretation matters into his own
hands.
Finally, the Board does not agree that the filing of a
Notice of Intent to Appeal and Request for an Extension of Time,
timely granted by the Chief ALJ, did not satisfy Regulation,
29 CFR [sec] 5.11(b). It was not a complete petition under the [12]
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[13] Regulations, but it was sufficient in this case to put the
parties on notice that an appeal had been taken and would be
perfected. The Board, without condoning the Labor Department's
practice or excusing it, finds it sufficient in this case to
overcome the Regulation's requirement that an ALJ decision not
appealed from becomes final. Therefore, the filing of the Notice
of Intent to Appeal in this case will be considered to satisfy the
Regulation's requirement that an appeal be filed within 20 days or
the ALJ decision becomes final. This interpretation of the
Regulation should not be confused with the situation where no
notice of appeal at all is filed during the 20 day period in
question.
There is no causal link between the FHA manual definition
and its interpretation by an FHA local employee and the local
practice in the area implementing the definition in the wage
predetermination schedule. We are not even told the purpose
of the FHA manual itself or to what this definition in that
manual's appendix applies.
Moreover, the award of this electrical contract work was
by its own definition not limited to family residence construction
of not more than 4 unit apartments but was an electrical
renovation contract extending to 754 apartments in 47 buildings.
In view of these conclusions, the decision of the Assistant
Secretary for Employment Standards is affirmed and the petition
herein is hereby dismissed. [13]
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[14] Member Dunn, Concurring:
I agree with the majority that 29 CFR [sec] 5.11(b) does not
automatically preclude the Administrator from considering
petitions for review filed more than 20 days after receipt of
the administrative law judge's decision. I concur with the
majority for the same reasons that I offered in Peerless
Products Inc., WAB Case No. 80-04 (November 18, 1982). In
each case where timeliness of a petition for review under
5.11(b) is at issue, I would simply determine whether there
is a showing of substantial prejudice to the complaining party
resulting from the untimeliness.
Here, Dorson failed to present any evidence to support
its claim that the Solicitor's untimely filing of a petition
for review was prejudicial or caused it harm.
I also agree with the conclusion of the majority that the
appropriate wage rate for electricians employed by Dorson on
the Brookchester Apartments is the rate applicable to residential
construction with more than four apartment units. I am
disturbed, however, that the majority indicates the Wage and [14]
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[15] Hour Division's case was deficient because it failed to submit
project data in support of the testimony by the IBEW's
local union business agent concerning interpretation of the
collective bargaining upon which the electricians' rate is
based.
It is my understanding that when, as in this case, the
Wage and Hour Division determines that the prevailing wage for
a particular craft derives from experience under a collective
bargaining agreement, the prevailing wage determination also
incorporates by reference all of the work practices and
interpretations adopted in that agreement. Fry Brothers Corp.,
WAB Case No. 76-06 (June 14, 1977). Thus, testimony by the
IBEW's local union business agent before the administrative
law judge that the electricians' rate for "other residential
construction" is applied to projects of a character similar
to the Brookchester Apartments is all that was necessary to
establish it as the rate which should be paid to electricians
employed on that job.
There is no need to present "project data" to support the
local union's representation of the "prevailing practice" in
such cases. In fact, testimony from local building trades
representatives concerning the proper application of wage rates [15]
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[16] negotiated in their collective bargaining agreement should
be irrebut[t]able.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board