CCASE:
SEAWARD CONSTRUCTION COMPANY
DDATE:
19830203
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
SEAWARD CONSTRUCTION COMPANY, INC. WAB Case No. 82-05
Omak, Washington Dated: February 3, 1983
BEFORE: Alvin Bramow, Chairman, Stuart Rothman, Member
Thomas X. Dunn, Member
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition
of Seaward Construction Company, Inc., (hereinafter Seaward)
which seeks review of a decision of the Assistant Administrator,
Wage and Hour Division, dated January 28, 1982, on the applicable
zone wage rate for line construction workers. The decision was
issued as a result of a request for a ruling by the U.S. Department
of Energy, Bonneville Power Administration, with respect to their
contract with Seaward for the construction of Chief Joseph - East
Omak No. 1 and No. 2 230 KV transmission lines in Douglas and
Okanogan Counties, Washington.
There is no dispute concerning the facts of this appeal and
they may be simply stated. Department of Labor wage determination [1]
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[2] No. WA 81-5107 applied to Bonneville's aforementioned
contract. The wage decision reflected the negotiated wage rates
for line construction which were contained in the agreement between
the Northwest Line Constructors Chapter of the National Electrical
Contractors Association and various local unions of the
International Brotherhood of Electrical Workers. The agreement
provided for different hourly wage rates depending upon distance
from certain base cities to the location where the work was
performed. Thirty-six urban centers in Washington, Idaho, Oregon
and California were designated base cities. The agreement
described the radius of each zone from these base cities to
determine the applicable wage rates under the agreement. The
agreement also provides that the Base Hourly Rate was to be paid to
all men working out of the employer's permanent shop. This latter
provision is crucial in this appeal.
When Bonneville examined Seaward's first certified payrolls,
it noted that Seaward was paying line construction workers at the
wage rate for the Base Zone instead of Zone 4. In August, 1981
Bonneville notified Seaward that it was not in compliance and
Seaward responded that its Omak, Washington, office was a
"permanent site" for the purpose of procuring and managing work in
the Pacific Northwest and that therefore the Base Zone wage rates
applied and not the Zone 4 wage rates. The difference in wage
rates was approximately $4 per hour per employee.
In January, 1982 the Assistant Administrator agreed with
Bonneville that Seaward's Omak office was not the "employer's
permanent shop" within the meaning of the wage determination and [2]
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[3] the collective bargaining agreement. The Assistant
Administrator ruled that the Zone 4 wage rates were required to be
paid to Seaward's line construction workers.
On April 2, 1982, Seaward forwarded a petition to the Wage
Appeals Board seeking review of the Assistant Administrator's
decision. In its petition Seaward requests the Board to determine
the meaning of the collective bargaining agreement with regard
to the definition of "permanent shop" and payment of the Base
zone rates, or if additional evidence is required, to remand the
case for a hearing to determine the meaning of the agreement.
It is the position of Seaward that the company established
a permanent shop when it opened a facility near Omak, Washington.
Seaward interprets the language of the collective bargaining
agreement that the Base Hourly Rate will be paid to all men working
out of employer's permanent shop to mean any number of permanent
shops which the employer may establish, even those that are not
included in the list of 36 cities contained in the agreement. If
this is not permitted, argues Seaward, the intent of the
Davis-Bacon Act would be thwarted if a local contractor were to
compete with a contractor from outside the area of the agreement
since the local contractor could pay the Base Zone Rate and the
contractor coming from outside the area would be required to pay
more, in this case the Zone 4 rate.
The Wage and Hour Division's position is that the collective
bargaining agreement distinguishes between three types of
headquarters, [3]
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[4] i.e., permanent, job and reporting. Specific towns are used as base
points for calculating distances from job or reporting headquarters to
determine the correct zone rate. Wage and Hour argues that the Base
Zone Rate is paid only when the employees work out of the employer's
permanent shop, or when the job headquarters are located in a base town.
Wage and Hour asserts that the Omak office is not a permanent shop. The
headquarters did not exist prior to the contract. Omak served only the
one Federal contract for Bonneville and Seaward has shown no other sales
in the area. Wage and Hour argues that to permit a contractor for line
construction to move into an area where it has won a contract, set up an
office and take advantage of the lowest wage rates and then move on
after the project is concluded would undercut the entire collective
bargaining agreement.
The Wage Appeals Board considered this appeal on the basis of
the Petition for Review and Reply brief filed by petitioner, the
Statement on behalf of the Assistant Administrator and the record
of the appeal in the Wage and Hour Division filed by the Solicitor
of Labor. No request for oral argument was made.
* * *
The Wage Appeals Board must resolve disputes with a view
toward the structure of the industry out of which the dispute
arises. Petitioner is a company structured to operate nationally [4]
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[5] building electrical transmission lines. Its corporate
headquarters is located in Kittery, Maine and it maintains a
western office in Aurora, Colorado. Upon receiving the Bonneville
contract petitioner leased a warehouse in Omak, Washington, to
serve as the headquarters for the employees working on the
Bonneville contract. This is a customary and understandable
arrangement for contractors who operate outside of a limited area.
The Board does not find it reasonable to conclude that an office
such as petitioner's office at Omak can be called a "permanent
shop" so as to bring it under the provisions of the collective
bargaining agreement which allows payment of the Base Hourly Rate
to employees working out of the employer's permanent shop. The
evidence of permanence is a six months' lease on a warehouse in
Omak. Although the petition indicates that a long term lease
on the warehouse was subsequently signed there is no indication
of any further business being conducted out of the Omak facility
after the conclusion of the Bonneville contract.
For the Board to view the Omak facility as a permanent shop
on the basis of the evidence in the record would render the
collective bargaining agreement meaningless. An out-of-the-area
contractor, such as Seaward, would open an office at the site of a
project, maintain it for the life of the contract, pay its
employees at the base rate and could abandon it after the contract
is completed. The Board cannot accept the idea that this was the
intention of the parties when the collective bargaining agreement
was negotiated. [5]
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[6] The Board recognizes that there is a problem created by the
Wage and Hour Division when it publishes the wage rates for line
construction workers in the wage determination in the manner
that it did in this case. Under this negotiated agreement the wage
rates for line workers at the site of the job would vary depending
upon whether the contractor was from out-of-the-area, or was a line
construction contractor who had a permanent shop within three miles
of the work site. In this instance a local contractor could
properly bid his labor costs at about $4 per hour less than the
out-of-the-area contractor. /FN1/
In addition to petitioner's request that the Board approve
Seaward's designation of the Omak facility as a permanent shop the
Board has been asked, in the alternative, to remand the appeal to
Wage and Hour for a hearing. The Board has reviewed petitioner's
brief and the reply statement and has found no evidence presented
to it which would indicate that a hearing or remand would yield
any new or determinative evidence which would change the Board's
decision. The Board believes that if petitioner had any evidence
bearing on this appeal that it would have been presented to the
Board in these proceedings. [6]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ The wage determination is supposed to set a single,
determinable wage rate for each classification of laborer or
mechanic. The Board does not consider this to be a proper
determination of a wage rate[;] however, it does not appear that it
would be appropriate to raise this issue at this time after the
contract has been awarded. [6]
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[7] In view of these considerations, the decision of the
Assistant Administrator is affirmed that Seaward should pay its
line construction employees at Zone 4 wage rates and the petition
is hereby dismissed.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary,
Wage Appeals Board [7]
