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CCASE:
CASCADE CONSTRUCTION
DDATE:
19910221
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
CASCADE CONSTRUCTION WAB Case No. 86-05
COMPANY, INC.
Oregon
BEFORE: Charles E. Shearer, Jr., Chairman
Stuart Rothman, Senior Member
Ruth E. Peters, Member
DATED: February 21, 1991
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
Cascade Construction Company, Inc. ("Cascade" or "Petitioner"),
seeking review of a final ruling of the Deputy Administrator of the
Wage and Hour Division pertaining to the applicability of the
Davis-Bacon labor standards provisions to truck drivers engaged in
hauling recycled asphalt pavement ("RAP") materials. For the
reasons stated below, the Board denies the petition for review.
I. BACKGROUND
Cascade was the prime contractor for two federally assisted
street paving projects in Portland, Oregon, Contracts No. 9653 and
No. 9701, Arterial Street Overlay Project No. 4, Units 1 and 2,
amounting to more than a million dollars.
The contracts called for removal and disposal of old pavement
materials. Section 204.91 of the contracts provided for payment
for removing and disposing of cold plane pavement. Sheet No. 2 of
the contracts set the rate of pay for [1]
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[2] removal and disposal of cold plane pavement at $1.35 per square yard
for an estimated 170,324 square yards or $229,937. Section 204.34
stated that materials which were not recycled and used on the project
were the property of the contractor and should be removed and disposed
in one or another of three specific ways: by disposing off the project
limits, stockpiling in a controlled disposal area or recycling.
The Highway Division of the Oregon Department of
Transportation advised the Wage and Hour Division that in this
instance Cascade chose to haul the excess materials back to its
commercial source operation for future recycling. The old pavement
materials were stockpiled adjacent to the project or about eight
blocks away.
The Assistant Regional Administrator, Wage and Hour Division
(Seattle), issued an advisory opinion to Cascade on November 8,
1983, regarding the application of prevailing wage coverage of
Davis-Bacon and related Acts to employees of a federal contractor
such as Cascade, who removed paving debris resulting from road
resurfacing construction. He stated that as the transporting of
materials away from the job site fell under 29 C.F.R. 5.2(j), the
employees of such a contractor would be subject to prevailing rate
requirements. He added that State of Oregon road transportation
contracts for that resurfacing work included specifications for
removal of debris and, as the subject activity was part of the
construction contract, this fact supported his conclusion that
these employees were covered by the Davis-Bacon and related Acts.
Cascade subsequently wrote the Director of the Division of
Contract Standards Operations, Wage and Hour Division, to ascertain
whether truck drivers employed to haul RAP from Davis-Bacon
projects were exempt from coverage.
In a February 19, 1985 opinion letter, the Administrator noted
that under 29 C.F.R. 5.2(j), the terms "construction" and "repair"
include the transportation of materials and supplies to or from the
building or work by the employees of the contractor or
subcontractor. Accordingly, the Administrator stated, "in those
situations where your firm is the prime contractor or a
subcontractor on a Davis-Bacon covered construction project, your
employees who are hauling RAP away from the project would be
subject to the Davis-Bacon labor standards provisions."
The Administrator added that as to situations "where your firm
has purchased RAP from a Davis-Bacon covered contractor and is
employing its own drivers or employees of an independent trucking
firm to haul the RAP from the Davis-Bacon covered site to your
commercial plant, the employees hauling this RAP would be covered
by the Davis-Bacon provisions." The Administrator reasoned
that a firm [2]
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[3] undertaking to perform for a covered contractor "a specific portion
of the requirements of the prime construction contract, such as, in this
case, the removal of excavated materials (RAP) from the project site,
such a firm is viewed to be a subcontractor within the meaning of the
Davis-Bacon Act and its employees would be subject to the labor
standards provisions of the Act for the time so spent."
Cascade then requested a final ruling in letters dated August
6, 1985 and November 18, 1985. The Deputy Administrator, on
January 7, 1986, issued a final ruling pursuant to 29 C.F.R. 5.13.
The ruling by the Deputy Administrator repeated the conclusions of
the Administrator in his February 19, 1985 letter.
II. DISCUSSION
Our analysis of this matter begins with an examination of the
pertinent provisions of the statute and regulations. The
Davis-Bacon Act (40 U.S.C. [sec] 276a) covers all mechanics and
laborers employed by the contractor or subcontractor on the site of
the work of a federal contract in excess of $2,000 for
"construction, alteration and/or repair . . . of public buildings
or public works."
In addition, the regulations (29 C.F.R. 5.2(j)) of the
Secretary of Labor implementing the Davis-Bacon Act defines
"construction," "prosecution," "completion," and "repair"
as encompassing "all types of work done on a particular building
or work at the site thereof . . ., including without limitation
. . . the transporting of materials and supplies to or from the
building or work by the employees of the construction contractor or
construction subcontractor . . . . (Emphasis supplied). Thus
under the plain terms of these regulations implementing the
Davis-Bacon and related Acts, the transporting of materials to or
from the covered site by employees of the contractor or
subcontractor is covered activity.
In this case, Cascade was the prime contractor on two
federally assisted street paving projects. The contracts called
for removal and disposal of old pavement materials from the
construction site, and further stated that materials which were not
recycled and used on the project were the property of the
contractor and should be disposed by one or another of three
specific ways: disposing off project limits, stockpiling in a
controlled disposal area or recycling. According to Oregon highway
officials, Cascade chose in this instance to haul the excess
materials back to its commercial source operation for future
recycling. In these [3]
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[4] circumstances /FN1/, the Board concludes that the truck drivers
employed by Cascade performed work covered by Davis-Bacon requirements
when they hauled RAP from the Portland street project site, since this
activity clearly involves "the transporting of materials . . . from the
building or work by the employees of the construction contractor" within
the meaning of the Secretary's regulations.
The Board's decision in this case is consonant with its
decision in Cox Enterprises, Inc., WAB Case No. 72-10 (Jan. 29,
1973). In Cox, this Board first decided that a construction
contractor and a material supplier were a single entity for
Davis-Bacon coverage purposes. Cox, a contractor on three highway
projects which were covered by Davis-Bacon requirements, owned and
operated a concrete plant, coal yard and gasoline pumps at its
headquarters. The Board held that, as Cox was a federal
contractor, its truck drivers were covered when hauling fuel oil,
road oil and construction equipment from its headquarters to the
job site.
In its petition, Cascade relies principally on the Board's
decision in Midway Excavators, Inc., WAB Case No. 81-17 (Dec. 13,
1983). However, that decision was reversed by the U.S. District
Court for the District of Columbia in Building and Construction
Trades Dep't, AFL-CIO v. U.S. Dep't of Labor, C.A. No. 84-0705
(Mar. 6, 1986). On appeal, the D.C. Circuit agreed with the
district court that Section 5.2(j) applied to material delivery
truck drivers employed by a contractor working on a covered
project, but remanded the case to the district court for a
determination whether the regulation was consistent with the
intended coverage of the Davis-Bacon Act, which applies to workers
"employed directly upon the site of the work" (40 U.S.C. [sec]
276a(a)). Building and Construction Trades Dep't, AFL-CIO v. U.S.
Dep't of Labor, 829 F.2d 1186 (1987). The district court
subsequently determined that the Secretary's regulation "is
entirely consistent with the statutory objective of the Davis-Bacon
and related Acts." Building and Construction Trades Dep't,
AFL-CIO v. McLaughlin, 747 F. Supp. 26, 29 (1990). The Board
accepts the determinations of the district court and the court of
appeals, and the Board's decision in Midway Excavators will no
longer be followed.
Accordingly, the petition for review is denied, and
the January 7, 1986 final ruling of the Deputy Administrator is
affirmed to the extent described herein. [4]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ The ruling of the Deputy Administrator extends beyond the
discrete circumstances presented in the record here. However, the
Board's review and affirmance of the ruling is limited to the
particular facts of this case, since the Board ordinarily does not
render advisory opinions. [4]
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[5] Senior Member Rothman, concurring in result but writing
separately
It is well settled that when a construction contractor or
subcontractor removes material from a project site as part of the
execution of the work, the removal is covered by Davis-Bacon. See
29 C.F.R. 5.2(j). Tearing out and removing asphaltic or other
materials from local street, road, or highway construction in
preparation for a new surface is no different from any other
preparatory work requiring removal of materials from the place of
the new work.
This is also the case where the contractor or subcontractor
for local paving or street improvements work removes asphaltic or
other materials for recycling in its own batching plant and it
makes no difference whether the material has a value in determining
the price of the construction work, the transaction is treated as
a sale of the materials, or handled some other way.
Under unique circumstances to be examined on a case-by-case
basis, questions may arise as to when and where the removal of
materials from highway, road or local street projects begins and
when and where it ends. The two instant examples of local street
paving and improvements with a local paving contractor using its
own batching plant are not unique or unusual.
However, disposition of this petition for review requires
further consideration. Cascade Construction Company was an
employer engaged in local paving, street improvement and related
work using its own established bituminous batching plant to secure
and execute the work. /FN1/
Although hauling new paving materials from the construction
contractor's batching plant to the place of use and the backhauling
of old asphaltic material to the batching plant for recycling is
Davis-Bacon covered work, the construction industry in the
particular locality may recognize such work to be in a category of
its own with its own wages, fringes and work classifications. This
would include hauling from a contractor's own batching plant to the
paving job and backhauling materials for recycling.
Construction contractors engaged in local paving and street
improvement work with or without their own batching plants who seek
affirmance from Wage and Hour of locally prevailing wage rates for
their category of work should do so before the award of such
work. [5]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ Cascade also represented that it was an established
commercial batching plant operator selling to all comers, the
public and other local paving contractors. The Administrator did
not inquire into the extent of the claimed commercial
operations. [5]
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[6] The Wage Appeals Board is called upon to review
interpretations of the Wage-Hour Administrator which can
be in the nature of advisory opinions. The Board also is
called upon to issue declaratory judgments. I do not
subscribe to the statement of my colleagues that the
Board does not or should not, in appropriate cases, get
into advisory opinions. I believe the Board decision
here is in the nature of an advisory opinion.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Stuart Rothman, Senior Member
Ruth E. Peters, Member
__________________________________
Gerald F. Krizan, Esq.
Executive Secretary [6]
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