PIZZAGALLI CONSTRUCTION CO., WAB No. 83-15 (WAB Dec. 18, 1985)
CCASE:
PIZZAGALLI CONSTRUCTION COMPANY
DDATE:
19851218
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
PIZZAGALLI CONSTRUCTION COMPANY WAB Case No. 83-15
Prime Contractor
R.L. Brooks, Inc., Subcontractor
Sanford Wastewater Treatment Facility Dated: December 18, 1985
Sanford, ME Proj. No.: C2301-32-02
BEFORE: Alvin Bramow, Chairman, Thomas X. Dunn, Member
Stuart Rothman, Member
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
R.L. Brooks, Inc., (hereinafter Brooks or petitioner) seeking
review of the August 8, 1983 ruling of the Administrator, Wage and
Hour Division. The ruling held that the Administrator did not
concur with the recommendation of the Environmental Protection
Agency, (hereinafter EPA) that Brooks be relieved from the
assessment of liquidated damages arising from Brooks' violations of
the Contract Work Hours and Safety Standards Act (CWHSSA). The
Administrator ruled that the statutory criteria for waiver of
liquidated damages, i.e., the violations were inadvertent,
notwithstanding the exercise of due care by the contractor, were
not met.
The facts of the case, which are not in dispute, may be [1]
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[2] simply stated. Brooks was awarded a subcontract from Pizzagalli
Construction Company which was the prime contractor for the
construction of the Sanford Wastewater Treatment Facility in Maine.
Under the contract, Brooks was required to perform the painting
on the facility. The contract was subject to the labor standards
provisions of the Federal Water Pollution Control Act and CWHSSA
and the regulations promulgated thereunder.
An investigation by the Department of Labor of the Sanford
facility disclosed that Brooks had incurred overtime violations for
five of its employees. The back wages calculated to be due from
these violations amounted to $2,323.68 and Brooks made restitution
of the sums owed to each affected employee.
Pursuant to [sec] 102(b)(2) of CWHSSA, EPA assessed liquidated
damages against the contractor for $2,310. However, on April 6,
1983, EPA filed a recommendation with the Wage and Hour Division
that Brooks be relieved of its liability for the liquidated
damages since it appeared to EPA that the subcontractor had
unintentionally violated the CWHSSA provisions.
On August 8, 1983 the Administrator ruled that he did not
concur with EPA's recommendation concerning the liquidated damage
assessment. As a result the petitioner was informed on August 29,
1983 by EPA that it would have to pay the liquidated damages as
assessed. On October 17, 1983 petitioner filed a Notice of Intent
to Appeal the Administrator's ruling with the Wage Appeals Board.
The overtime violations which occurred on the project [2]
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[3] resulted from Brooks' failure to compensate its employees for hours
worked in excess of 8 hours per day. Although the employees worked
only 40 hours per week, this work was accomplished in four days.
Generally the employees worked three 12 hour days, Monday through
Wednesday, and enough hours on Thursday to make up the 40 hour
week.
The petitioner claims that it allowed its employees to work
the overtime hours at the request of the employees who were living
near the job site and away from their homes in or near Brunswick,
Maine. This arrangement allowed the employees to have more time at
home on weekends. Petitioner's owner indicates that he feared that
the employees would walk off the job if he did not accede to their
demands. To demonstrate the firm's good faith intention to conform
to the labor standards provisions of [its] contract petitioner
stated in its Petition for Review that it was acting under the
impression that overtime wages were not required to be paid by
CWHSSA until after the employees had worked the first 40 hours each
week. Affidavits of three of Brooks' employees were submitted to
substantiate its statements.
The Wage and Hour Division argues that if the violations were
not inadvertent, notwithstanding the exercise of due care, the
CWHSSA regulations will not permit a waiver of the liquidated
damages. Wage and Hour relies on the fact that at the start of the
project petitioner's certified payrolls showed the employees
working 8 hour work days. Later, after the petitioner's
arrangement [3]
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[4] with the employees, the certified payrolls merely listed "salary"
with 40 hours, without any daily record of hours worked. It is
contended that this demonstrates that petitioner's violations were
neither inadvertent or unintentional. Wage and Hour cites several
decisions of this Board to support its contention that the strict
requirements of [sec] 330(c) of CWHSSA which permits waiver of
liquidated damages by a contacting agency had not been met in this case.
Furthermore, it is urged that even a cursory reading of the CWHSSA by
petitioner would have revealed an employer's obligation to pay overtime
on daily overtime, that is over 8 hours, as well as overtime over 40
hours per week.
The Wage Appeals Board considered this appeal on the basis of
a Petition for Review filed by counsel for petitioner, a Brief for
the Administrator and the record of the case before the Wage and
Hour Division filed by the Solicitor of Labor. Although petitioner
indicated it desired to have an oral hearing in either Maine or
Boston, Massachusetts, the Board did not agree with petitioner's
request that the hearing be conducted in either of the locations
requested. The Board allowed the petitioner 27 days in which to
request a hearing in Washington, D.C. Since no request for an oral
hearing in Washington was received, the Board considered this
appeal on the basis of the record before it.
* * * [4]
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[5] The issue before this Board is whether a waiver or
adjustment should be granted of the liquidated damages which were
assessed as the result of violations by the petitioner of the
provisions of the Contract Work Hours and Safety Standards Act,
40 U.S.C. 327 et seq. This act under which the liquidated
damages were assessed provides in pertinent part:
. . ., if it is found . . . that the contractor or
subcontractor violated the provisions of this Act
[*] inadvertently notwithstanding the exercise of due
care on his part and that of his agents [*],
recommendations may be made to the Secretary that
an [*] appropriate adjustment in liquidated damages
be made [*], or that the contractor or subcontractor
[*] be relieved of liability for such liquidated
damages [*]. The Secretary shall review all pertinent
facts in the matter and may conduct such investigations
as he deems necessary, so as to affirm or reject the
recommendation. 40 U.S.C. at [sec] 330(c). [*] (Emphasis
added.) [*]
There is no question that the petitioner violated the overtime
provisions of the aforementioned statute. The record shows that
petitioner failed to pay its employees employed in the performance
of the contract the required overtime for hours worked in excess of
eight hours per day. This concealment in itself shows that the
violations were not "inadvertent" and that due care was not
exercised. The Board has stated that where there is a submission
of falsified payrolls the assessment of liquidated damages should
not be waived. See Major Associates, Inc., WAB Case No. 84-14 (May
20, 1985); Harry Johnson Plumbing Co., Inc., WAB Case No. 84-19
(June 6, 1985); Pucket[t], Taul & Underwood, Inc., WAB Case No.
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85-07 (July 23, 1985); and Bright Construction Company, WAB Case
No. 85-03 (October 1, 1985).
In Major Associates, Harry Johnson Plumbing, Puckett, Taul
& Underwood, and Bright Construction the Board held that liquidated
damages can be reduced where the factual situation shows the
violations in a case do not warrant the full assessment regardless
of instances where the payrolls were falsified. To determine
whether the full assessment of liquidated damages is mandated, it
is necessary to examine the facts on a case by case basis. In such
cases the Board is exercising equitable relief which it considers
to be a fair adjustment commensurate with the violations.
Here, the record shows it was the employees who demanded that
they work 40 hours in 4 days rather than 5 days, creating the
situation where they would work more than 8 hours per day.
Petitioner agreed in order to allow the employees to return home
for long weekends, as the project site was too far from the
employees['] homes to commute each day. The record also indicates
that the employees might disrupt the project by walking off the
job if their demands were not met. These facts, coupled with
the fact that the overtime violations were for a short period of
time and amounted to only $2,323.68, leads the Board to believe
that the violations in this case do not warrant the full assessment
of liquidated damages. [6]
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[7] In view of the foregoing, it is the decision and order of
this Board that the liquidated damages be adjusted to $1000.00.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board [7]
