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CCASE:
HAWK VIEW APARTMENTS
DDATE:
19860424
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
HAWK VIEW APARTMENTS WAB Case No 85-20
Clark & Sullivan Constructors, Inc. Dated: April 24, 1986
Proj. No. NV 39-P001-007
Reno, Washoe, County, Nevada
APPEARANCES: B.J. Sullivan for Clark & Sullivan Constructors,
Inc.; Jan Leggett for Town & Country Landscape
Terry R. Yellig, Esquire, for Building and
Construction Trades Department, AFL-CIO
Claire White, Esquire, and Douglas Davidson,
Esquire, for the Wage and Hour Division, U.S.
Department of Labor
BEFORE: Alvin Bramow, Chairman, Stuart Rothman, Member, and
Thomas X. Dunn, Member, concurring
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition
for review of a decision of the Assistant Administrator, Wage
and Hour Division, dated June 28, 1985, filed by Clark & Sullivan
Constructors, Inc. (hereinafter Clark & Sullivan) of Reno, Nevada.
The Assistant Administrator's decision denied the addition of
plumber's helpers, irrigation plumber's helpers and the utility
worker classifications to wage decision No. NV 82-5115 which was [1]
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incorporated into the contract for the construction of Hawkview
Apartments, Department of Housing and Urban Development's (DHUD)
Project No. NV 39-P001-007, in Reno, Washoe County, Nevada.
Clark & Sullivan contends that its subcontractors should be
able to utilize the classifications which were requested because
they were contained in the wage determination issued by the
State of Nevada and because the State's determination was
included in the specifications provided by the Reno Housing
Authority to Clark & Sullivan, along with the Department of
Labor's wage determination NV 82-5115.
The factual situation surrounding this appeal is as follows.
In September, 1983, petitioner was awarded a contract to construct
a low-rent housing project in Reno using DHUD's funds provided to
petitioner through the Reno Housing Authority. The contract was
subject to the Davis-Bacon Act labor standards provisions and the
applicable Department of Labor regulations. The specifications for
the project contained both the Davis-Bacon labor standards
provisions and wage determination and the wage scale for Northern
Nevada issued by the State. The latter wage scale included
classifications and wage rates for plumber's helpers and
irrigation[] plumber's helpers bargained by the plumber's union,
and utility and cleanup man bargained by the Sheet Metal Worker's
union. These classifications and wage rates were not included in
the Davis-Bacon wage determination issued by the Wage and Hour
Division. [2]
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[3] At a preconstruction conference one week after contract
award the petitioner and its subcontractors were advised that the
contractors must pay the higher of the Federal and State wage rates
for each job classification, and that if a job classification
didn't appear on the Davis-Bacon wage determination, the contractor
must submit a form to DHUD for approval of the additional
classification and wage rate.
When petitioner requested the Reno Housing Authority to obtain
approval of the additional classifications and rates for plumber's
helpers and utility man, the request was denied and the Reno
Housing Authority began to withhold funds.
In February, 1984 petitioner was notified of Davis-Bacon wage
violations by two of its subcontractors. It was also advised that
a plumber's helper classification was not a classification
recognized by the Department of Labor.
Subsequently, in October, 1984, an additional classification
of irrigation plumber's helpers was requested for the petitioner's
landscape subcontractor. In February, 1985, the Department of
Labor officially denied the addition of the two helper
classifications and the utility man classification, despite the
fact that the Plumber's and Sheet Metal Worker's agreements both
contained the requested classifications. Petitioner in April
requested reconsideration of the Department of Labor's ruling
and in June, 1985, the Assistant Administrator issued a final
determination denying the contested classifications. [3]
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[4] In August, 1985, petitioner appealed the Assistant
Administrator's ruling to the Wage Appeals Board on the basis
that the contested classifications were included in the Northern
Nevada wage rate schedule which was a part of the wage
determinations bound into the specifications.
Although it is not the Wage and Hour Division's primary
position, Wage and Hour finds support for its final ruling in a
District Court injunction in an unrelated case. /FN1/ As a result
of this injunction Wage and Hour is prohibited from issuing
helper classifications except where the duties of the helpers
are clearly defined and distinct from the journeyman and laborer
classifications, and where the term "helper" is not synonymous
with a "trainee" in an informal training program. The Assistant
Administrator held that the union agreements submitted to the
Wage and Hour Division by petitioner did not show that the
proposed helper classifications differed significantly from
those of an apprentice or journeyman. The Wage and Hour Division
cites authorities that hold that it cannot be estopped from
denying the approval of additional classifications despite the
fact that the State of Nevada issued the classifications which
are being sought, and despite the fact that the contracting
agency bound the State's rates in the specifications furnished
to the petitioner. [4]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ Building and Construction Trades Department, AFL-CIO v.
Donovan, 553 F. Supp. 352 (D.D.C. 1982) amended January 17,
1983. [4]
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[5] The Building and Construction Trades Department supported
the position of the Wage and Hour Division. It argued that the
application of the disputed job classifications would frustrate
the statutory purpose of the Davis-Bacon and related acts and
should be pre-empted.
The Wage Appeals Board considered this appeal on the basis
of the Petition for Review filed by petitioner, and the Statement
on behalf of the Assistant Administrator and the record of the case
before the Wage and Hour Division filed by the Solicitor of Labor.
On March 4, 1986, the Wage Appeals Board held an oral hearing at
which all interested persons were present and participated.
* * *
The unusual but simple circumstances of this case taken
together persuades the majority of the Board that it would not
effectuate the purposes of the Act to assess a remedy as though
the basic principles of the Davis-Bacon Act had been violated.
The majority does not find a violation of basic principles to
have occurred. In the circumstances of this case the majority
will not go on to consider whether there may have been fine
technical violations of the Department of Labor's regulations,
-- regulations which may be out of touch with the applicable
Nevada local practice. [5]
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[6] The facts influencing this conclusion include the following:
1. The Reno Housing Authority's project was subject to
both the Davis-Bacon Act labor standards and the Nevada Prevailing
Wage Law. The bid documents included the federal wage
determination and the Nevada wage determination. The Nevada
determination contained classifications and wage rates for the
plumber's helpers, irrigation plumber's helpers, and utility and
cleanup man, not included in the federal wage determination.
2. The majority is convinced from an examination of the
record and matters presented at oral argument that all bidders bid
this job according to acknowledged and accepted local practice,
namely, that the classifications established under the Nevada
Prevailing Wage Law could be followed with respect to this
federally financed project. This is the area practice that applied
to local private construction. Such accepted procedures by the
local housing authority was a part of the way in which it had
done its business in the past, and the bid was accepted according
to this past practice. The two contractors who are participating
in this case had done so on another Reno Housing Authority project.
3. In this setting the Nevada Labor Commission, the state
agency which establishes Nevada predetermined wage rates and
supporting classifications, based its wage determinations and
classifications solely upon local practice as established by
organized crafts through negotiated agreements with local
construction contractors. The petitioners discharged their labor
obligations [6]
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[7] in accord with the standards as established by the Nevada Prevailing
Wage Law and in the same way that an employer subject to the negotiated
agreement would have discharged such obligations. The local prevailing
practice recognized by the organized segment of the local construction
industry had significantly loosened up on helpers and apprentice ratios
for private construction. The Nevada determination mirrored such local
practice. No local construction contractors engaged in low-rent housing
projects of the Reno Housing Authority have been pursued by that
authority in the past for violating federal standards when they were in
compliance with the known and accepted local practice under the Nevada
Prevailing Wage Law.
4. This is not a case in which a construction employer
engaged upon Davis-Bacon work has manipulated helper or
apprentice ratios to circumvent the Davis-Bacon Act to gain an
advantage over other bidders who would have conformed to other
ratios and other classifications or subclassifications. The
majority is satisfied that all bidders would have followed the
local area practice because there was no other one. There were
no other standards reasonably delineated in the bid documents
that would put bidders on notice that the practices which the
Reno Housing Authority had accepted in the past would no longer
be acceptable.
In this case, the majority concludes that any local area
contractor conforming to local practice as well as local negotiated [7]
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[8] agreements who bid the instant job would not have done it
any differently than the way that it was performed here.
One of the classical statements oft repeated with respect
to the Davis-Bacon Act is that the Act holds a mirror up to
local prevailing wage conditions and reflects them. The majority
concludes that it would not effectuate the purposes of the Act
to establish a double standard; one which pertains to local area
practice established by the State of Nevada under its Prevailing
Wage Law derived wholly from negotiations between crafts and
employers in the construction industry for private construction
without Davis-Bacon Act funds, and another set of standards that
applies only to federally financed or federally aided programs
subject to the Davis-Bacon Act.
The majority realizes that as a result of litigation (Building
and Construction Trades Department, AFL-CIO, et al. v. Raymond
J. Donovan, et al., 543 F. Supp. 1282), the court on December 23,
1982, 553 F. Supp. 352, amended on January 17, 1983, enjoined the
issuance of wage determinations containing rates for semi-skilled
classifications of helpers when such classifications are
"identifiable" in the area and/or when the helper's duties overlap
those of the journeyman. On appeal the U.S. Court of Appeals
for the District of Columbia, 712 F.2d 611 (1983), cert. denied
No. 83-697 (January 17, 1984), struck down the provision requiring [8]
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[9] that a helper classification need only be "identifiable" in
an area because it found that that provision undermines the
fundamental purpose of the Act, i.e., that wages on federal
construction projects mirror those locally prevailing.
The U.S. District Court in its Order of December 21, 1984
found that the "identifiable classifications" goes to the heart
of the helper issue and, therefore, refused to rescind its
injunction even though the Court of Appeals indicated in its
decision that an overlap in duties would be permissible. The
Court further stated that the Department of Labor may submit
reissued regulations governing the use of helpers, and if these
regulations conform to the decision of the Court of Appeals,
they will be approved./FN2/
The situation involved in this case is distinguishable and
does meet the criteria set forth by the Court of Appeals.
Moreover, the injunction does not appear to apply to the
Department's enforcement policies or to specific factual
determinations whether a violation has occurred under local
conditions which this Board is called upon to evaluate. The
majority notes the court decision in passing. Under these
circumstances, the petitioner should not be penalized for the use
of these classifications and it is so ordered.
* * * [9]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ It is the majority's understanding that as of this date no
new regulations have been submitted to the court. [9]
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Thomas X. Dunn, Member, concurring
The majority reasons, and I do not disagree, that employment
of plumber's helpers, irrigation plumber's helpers, and utility and
cleanup men is the prevailing practice in the Reno, Nevada, area.
Accordingly, under the circumstances of this case I do not find the
petitioner in violation of its Davis-Bacon obligations and,
therefore, I concur in the majority decision. I would like to
explain my reasoning, which may differ from that of the majority.
The Assistant Administrator denied the petitioner's request
for approval of the three additional classifications pursuant
to the conformance procedure in 29 CFR 5.5(a)(1)(ii). The
Assistant Administrator reasoned in his June 28, 1985
decision that, pending dissolution of an injunction issued in
Building and Construction Trades Department AFL-CIO, et al. v.
Donovan C.A. No. 82-1631 (Dec. 21, 1984) the Wage and Hour
Division is bound to consider requests such as this in accordance
with long standing Department policy that helper classifications
can be added to wage determinations only "where the duties of the
helpers are clearly defined and distinct from those of the
journeyman classification, clearly defined and distinct from the
laborer, and where the term "helper" is not synonymous with
'trainee' in an informal training program." [10]
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[11] The Assistant Administrator, applying this long standing
policy to the facts in this case, refused to approve use of the
proposed classifications on the Hawk View Apartments project
because "the duties ... as set forth in the Plumbing and Pipe
Fitting Industries Utility agreement, the Sheet Metal Workers'
International Association Local Union No. 26 agreement, and
other furnished materials are not deemed distinct from those of
the journeyman or apprentice classifications."
The U.S. Court of Appeals for the D.C. Circuit in Building
and Construction Trades Department, AFL-CIO v. Donovan, 712 F.2d
611, 626-630 (1983), cert. denied. 464 U.S. 1069 (1984) approved a
regulation to be codified at 29 CFR [sec] 5.2(n)(4), (47 Fed. Reg.
at 23,667), (May 28, 1982), which would allow some overlap between
the duties of helpers and other subjourneyman classifications, on
the one hand, and those of journeyman craft workers, on the other.
(The provisions of [sec] 5.2(n)(4) were deferred by the Secretary
(48 Fed. Reg. at 19,368) (April 29, 1983).
The Court of Appeals refused, however, to approve other
regulatory changes which could have permitted recognition of
helpers and other subjourneyman classifications whenever they
are "identifiable in an area". The Court held that: [11]
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[12] (T)he Secretary's identifiable-classification
regulation would virtually ensure underclassification
in union-dominated areas. At least where the
Secretary has not found the use of helpers as
provided for in the new rules to be a nearly
universal practice . . . he is barred from
allowing work that is "prevailing" categorized
in one job classification to be placed in a lower
paid classification merely because such a practice
can be "identified" in the area.
There is nothing to prevent this Board from amending the
standard for recognition of helpers and other subjourneyman
classifications provided that it is not inconsistent with the
holding in Building and Construction Trades Department v. Donovan,
supra.
In this case there is no dispute that the helper and other
subjourneyman classifications requested by the petitioner reflect
locally prevailing practice in the Reno, Nevada, area. The
impediment to their approval by the Assistant Administrator was
that the scope of duties of each of the proposed classifications
was not clearly defined and distinct from the journeyman's duties.
All that is held in this case is that where the Wage and Hour
Division determines that the prevailing rate for a classification
of laborer and mechanic is equivalent to the wage rate negotiated
in a collective bargaining agreement applicable to the same
classification of laborer and mechanic in the locality, the work
practices adopted in that agreement, including recognition of
helper and other subjourneyman classifications, shall also be
recognized as prevailing. [12]
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[13] I offer no opinion on how to determine whether a helper
or other subjourneyman classification is prevailing under
circumstances other than when it is bargained collectively.
I suggest instead that the Wage and Hour Division propose
regulations which define "prevailing" for purposes of recognizing
helper and other subjourneyman classifications.
Finally, my concurrence is not influenced by the fact that
the contested classifications were recognized by the State of
Nevada under its prevailing wage law. The Wage and Hour Division
should not be obliged to adopt a helper or subjourneyman
classification merely because a wage determination issued by
a state agency recognizes it. I am swayed solely by the fact
in this case that the helper and subjourneyman classifications
were negotiated by local building trade unions whose journeyman
wage rates were recognized as prevailing in the area.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary [] [13]
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