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<![CDATA[
CCASE:
STOP FIRE
DDATE:
19870618
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D.C.
In the Matter of
STOP FIRE, INC., Contractor WAB Case No. 86-17
JAN REMITZ, President Dated: June 18, 1987
APPEARANCES: Marcus Max Gunkel, Esquire, for Stop Fire, Inc., &
Jan Remitz, President
Gerald F. Krizan, Esquire, for the Administrator,
Wage and Hour Division, U.S. Department of Labor
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
the Administrator of the Wage and Hour Division seeking review of
the Administrative Law Judge's Decision and Order of June 2, 1986.
Briefly stated, the facts of this appeal are as follows: In
November, 1982, Stop Fire, Inc., was awarded an Air Force contract
to install a turbine Generator Fire Detection System at Sunnyvale
Air Station in California. A labor standards investigation of Stop
Fire, Inc.'s performance on the contract revealed that six
employees of Stop Fire were not properly paid since their actual
wages and benefits did not match those on the certified payrolls,
which in turn did not comply with the Davis-Bacon wage
determination. Back wages in the amount of $17,332.15 were
assessed against Stop Fire and were paid in full at the conclusion
of the investigation. Subsequently, the Assistant [1]
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[2] Administrator of the Wage and Hour Division determined that the
wage underpayment and the submission of incomplete, inaccurate and
false certified payrolls constituted a disregard of Stop Fire's and
Jan Remitz's obligations to their employees within the meaning of
section 3(a) of the Davis Bacon Act. The debarment issue was
referred for an administrative hearing pursuant to 29 CFR 5.12(b).
After a half-day hearing the Administrative Law Judge
(hereinafter ALJ) on the basis of the testimony, exhibits and
post-hearing submissions recommended that Stop Fire, Inc. and Jan
Remitz not be debarred. The Administrator of the Wage and Hour
Division has appealed this ruling to the Wage Appeals Board. The
decision and order of the ALJ is attached.
The Board has considered this appeal on the basis of the
entire record before the ALJ and the petition for review submitted
by the Solicitor of Labor, and a hearing before the Board held on
April 22, 1987, at which all interested parties participated and
were represented by counsel.
* * *
For the reasons given below the Board vacates the ALJ decision
and remands this case to the Chief Administrative Law Judge for
further action.
The Department of Labor's key witness, Mr. Steven Barry Arata,
the supervisory working foreman on the project, testified that he
questioned the principal stockholder and owner of the company, Mrs.
Jan Remitz, about compliance with the Davis-Bacon wage rates. He
stated that she told him that as a minority contractor, she was not
required to comply with the Davis-Bacon Act. If this is true, it
is not an explanation that the ALJ can sweep under the rug or one
that this Board can tacitly accept. Mrs. Remitz testified that she
had never spoken to Mr. Arata about his not receiving the
prevailing wage on this job. With such evidence in the record,
showing knowledge of the Act [2]
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[3] and an intent not to apply it, the Board cannot affirm the ALJ. Mr.
Arata further testified that during his employment and the employment of
five other employees subject to the Davis-Bacon Act provisions as
specified in the contract, a union representative told them at the
project site that they were paid below Davis-Bacon Act schedules. There
is no company testimony that there was no union organizing activity at
the project site or that the company owners were otherwise unaware of
what the union representative was telling employees about required
wages.
As a result of this conflicting testimony, the record in this
case is deficient. It is not clear whether that deficiency should
be placed at the door of the Solicitor of Labor's San Francisco
regional office which presented the case to the ALJ, or to the ALJ
for not perfecting an adequate record by determining the role
played in this matter by the company's former president, Terry
Remitz, the present owner's husband. Nevertheless, the record
requires the conclusion, as the ALJ found, that the construction
contract between the Air Force and Stop Fire, Inc., was executed by
Terry Remitz. Thereafter, in order to qualify for this or other
business as a minority company, Mrs. Jan Remitz was made the
principal stockholder and new president. She testified that
although she knew what wages were in fact paid, she knew
practically nothing about what was going on at the project site and
nothing about wage rates required by law.
At the oral argument on April 22, 1987 before this Board, it
was brought out that Terry Remitz was an experienced plumber.
Until he went into his own business he was a member of the local
plumbers' union. The Board will not, sitting as a review body,
conclude without adequate company explanation that such an owner
with such experience would be unaware that a construction contract
with the Department of the Air Force at a military installation was
not subject to the Davis-Bacon Act predetermined wage scales. [3]
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[4] The company had at least several jobs under way at the time
this case arose. The Board was told that the company had or has
some 55 employees. Yet, according to the ALJ's findings, the
company's explanation of payroll falsifications is that the
preparation of Davis-Bacon payroll certifications was not
handled by a job construction bookkeeper or an accountant, but that
it was left to a receptionist/secretary of the company to fill out
the certifications.
It cannot be concluded that if the required Davis-Bacon wage
rate specified in contract documents is $22.77 per hour plus $4.99
in fringe benefits and the company has inserted that wage rate as
the amount paid in its certifications, but in fact the company has
paid substantially less than those amounts, that deliberate,
knowingly false information has not been submitted. A company
knows whether it paid the amount specified as the Davis-Bacon wage
rate or it did not pay it. A contractor is required to tell the
truth in the certified payrolls submitted to the contracting
agency. This does not mean that when there are instances where the
truth is not stated due to error, that this must always result in
the inclusion of the contractor on the ineligible bidders list.
The Board does not accept the reasoning of the ALJ that the
lower echelon officers of the Department of the Air Force did not
know much about the Davis-Bacon Act either. While there may be
such instances of excuse in appropriate cases, this is not one. It
can seldom be an excuse that an administrative officer of a
government agency and the contractor together, were willing to let
wage underpayments or other violations of the Davis-Bacon Act go
through. This is something that each government contracting agency
should see does not happen. The contention that this was a
company's first Davis-Bacon Act job is not sufficient to relieve it
from being placed on the ineligible list, absent other additional
justification.
In this case, the Board concludes that the ALJ was not
justified on the basis of the record in recommending that there be
no debarment. By the same [4]
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[5] token the Board does not see that the Solicitor of Labor's regional
office has diligently pursued that matter with a full evidentiary case.
Debarment under the Davis-Bacon Act carries with it a harsh
remedy, a three-year debarment. The Board does not in this case
determine those factors which when present will establish a prima
facie case for the moving party, the Wage and Hour Administrator,
that the respondent contractor has disregarded its obligations to
employees under the Davis-Bacon Act warranting debarment. The
Board believes that the establishment of such criteria can involve
policies of administration within the Department of Labor as to
when it will or will not seek debarment. This being the case, the
Board leaves it to the Wage and Hour Administrator to first
establish, if that office so desires, such criteria as to when it
will or will not proceed to debarment.
In this case, upon remand, if the Wage and Hour Administrator
has a change of mind as to whether or not she desires to continue
to seek debarment, that is a matter up to the Wage and Hour
Administrator.
For the foregoing reasons the Board vacates the decision of
the ALJ and remands the case to the Chief Administrative Law Judge.
For one thing, the ALJ should make credibility findings concerning
the testimony of Mr. Arata and Mrs. Remitz with respect to whether
the underpayments were brought to her attention. The Wage and Hour
Administrator is also authorized, as well as directed, to consider
whether to request reopening the case for further evidence, whether
testimonial or documentary, to prove its case that debarment is
appropriate here. In the meantime, the company is not debarred
from seeking further Davis-Bacon projects.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary [] [5]
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