P.J. STELLA CONSTRUCTION CORP., WAB No. 80-13 (WAB Mar. 1, 1984)
CCASE:
P.J. STELLA CONSTRUCTION
DDATE:
19840301
TTEXT:
~1
[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
P.J. STELLA CONSTRUCTION WAB Case No. 80-13
CORP. &
MY GLASS COMPANY Dated: March 1, 1984
Woburn, Massachusetts
BEFORE: Stuart Rothman, Member, 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 Mr. Donald Socorelis and My Glass Company, Subcontractor,
(hereinafter My Glass) seeking review of the recommendation of
Donald Elisburg, Assistant Secretary of Labor for Employment
Standards, that the Comptroller General consider imposing
ineligibility sanctions against My Glass Company and its
principal owner, Donald Socorelis.
My Glass was a subcontractor on an Army contract awarded
to P.J. Stella Construction Corp. to perform expansion work
for the US Army Reserve Center at Hanscomb Air Force Base in
Bedford, Massachusetts. P.J. Stella's contract was subject to
the labor standards provisions of the Davis-Bacon Act, the
Contract Work Hours and Safety Standards Act (CWHSSA) and the
Department of Labor's regulations thereto.[1]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ Chairman Alvin Bramow withdrew from consideration of this
appeal and did not participate in the decision. [1]
~2
[2] On an employee's complaint, an investigation by the Wage
and Hour Division revealed violations of the Davis-Bacon Act,
CWHSSA and the Fair Labor Standards Act. Specifically, employees
of My Glass working as laborers and glaziers were not paid the
predetermined wage rate contained in the applicable wage
determination. Back wages of $5010.15 were found due to 6
employees under the Davis-Bacon Act, two employees were due $68.50
under CWHSSA and one employee was due $670.80 under the Fair Labor
Standards Act.
Certified payrolls for a 2 month period in 1977 were
furnished to the contracting agency showing that employees were
paid the glazier's wage rate of $10.94 per hour when the employees
were in fact paid from $3.50 to $7.50 per hour. Subsequent
payrolls showed that the glaziers and glaziers helpers were
paid $5.00 per hour instead of the predetermined wage rate for
glaziers. A wage rate for glaziers helpers was not listed in
the applicable wage determination. There were instances of
falsification to show employees worked fewer hours than the
actual hours worked and an employee who in fact worked on the
project was not reported. Complete restitution was made by
Mr. Socorelis.
At an informal proceeding with the Wage and Hour Division
held pursuant to 29 CFR [sec] 5.6(b)(1) Mr. Socorelis did not
dispute the findings of the investigation concerning the incorrect
wage payments and the falsification of the certified payrolls. The [2]
~3
[3] defense to the Wage and Hour Division's claims consisted of
lack of knowledge of the labor standards provisions requirements
and of the violations. Mr. Socorelis stated that his partner
negotiated the contract with the prime contractor and that he was
not aware of the applicability of the Davis-Bacon Act to it. It
was further stated at the Wage and Hour informal hearing that Mr.
Socorelis' partner handled all the boo[k]keeping including
preparation of certified payrolls and that he met with the Wage and
Hour Division's investigators. Further, Mr. Socorelis was not
aware of the investigation until nearly completed.
The Wage and Hour Division ruled that there were no
mitigating circumstances and concluded that submission of falsified
certified payrolls coupled with the payment of improper wage
rates consisted of willful and aggravated violations of the labor
standards provisions of the Davis-Bacon Act.
Exceptions to the Wage and Hour ruling were filed with
Assistant Secretary Elisburg. The Assistant Secretary upheld
the ruling stating that although Mr. Socorelis may not have
been the primary perpetrator of the Davis-Bacon violations,
as owner he could not escape responsibility for the willful
violations of the Act. The Assistant Secretary found the
violations of the firm constituted a disregard of obligations to
its employees and recommended that inel[i]gibility sanctions be [3]
~4
[4] considered by the Comptroller General against both My Glass and
Mr. Socorelis.
On October 8, 1980 My Glass and Mr. Socorelis filed a
petition with the Wage Appeals Board seeking review of the
Assistant Secretary's recommendation to the Comptroller General.
Petitioners do not deny that the violations occurred, but
contend that since the actions which constituted the violations
were those of Mr. Socorelis' partner in which Mr. Socorelis had
no part, the sanction of inel[i]gibility should not be applied to
petitioners. The Assistant Secretary's position is that
petitioners have disregarded their obligations to their employees
within the meaning of 29 CFR [sec] 5.6(b) of the regulations
applicable to the Davis-Bacon Act.
* * *
The Board has reviewed the decision of the Assistant
Secretary, the petition filed on behalf of the petitioners, the
record on the appeal before the Wage and Hour Division and the
statement submitted by the Solicitor of Labor on behalf of the
Assistant Secretary of Labor for Employment Standards. No request
for oral argument to the Board was made.
The Assistant Secretary observed in his decision that
Mr. Socorelis was the primary owner of My Glass Company. There
is no contention that underpayments and submission of certified
payrolls did not occur. It appears from the record that Mr.
Socorelis concerned himself almost exclusively with the field
operations [4]
~5
[5] of the firm. His partner handled the business
operations, negotiated contracts (including the one in question),
paid employees and prepared the paperwork required to be filed with
the contracting agency.
Mr. Socorelis reasons that he should not be debarred because
he was not responsible for his partner's actions which resulted
in the underpayments and the submission of falsified payrolls to
the contracting agency. He also claims that no actions of his
with regard to the firm's employees were willful. This, he claims,
would be essential if he is to be charged with disregarding his
obligations to his employees. He claims that the actions were
those of his partner and that he had no knowledge that the
employees were not paid in conformity with the applicable wage
determination.
This Board has held /FN2/ that an employer cannot take cover
behind actions of his inexperienced agents or representatives or
the employer's own inexperience in fulfilling the requirements
of government construction contracts. In each of these cases
debarment of the employer was recommended.
The Board concludes that partners are required to be at
least as responsible for all their acts within the partnership [5]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ In re Hirchert, WAB Case No. 77-17 (Oct. 16, 1978), In re
C. M. Bone, WAB Case No. 78-04 (June 7, 1978) and T.A.M. Inc.,
WAB Case No. 79-05 (Aug. 16, 1979). [5]
~6
[6] as an employer must be for the actions of his employees.
Additionally, in a firm the size of My Glass, with six employees
involved on the project, it is not conceivable that the primary
partner in charge of "field operations" would be unaware that one
of his six employees was discharged for complaining that he had
not been paid the predetermined wage rate. The Board concludes
this partner did have knowledge of what transpired with regard
to the operations of his firm and the Wage and Hour Division's
investigation of the firm's violations of the Act. But even if
he did not have such knowledge, he was so grossly negligent of
his statutory obligations to his employees as to constitute
complete disregard of the employer's obligations to his employees.
This is all that is required for the Assistant Secretary to
recommend debarment of the contractor to the Comptroller
General.
In view of these considerations, the Board affirms the
recommendation of the Assistant Secretary and dismisses the
petition.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board
