BRITE MAINTENANCE CORP., WAB No. 87-07 (WAB May 12, 1989)
CCASE:
BRITE MAINTENANCE CORPORATION
DDATE:
19890512
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D.C.
In the Matter of
BRITE MAINTENANCE CORPORATION, WAB Case No. 87-07
Subcontractor & Dated: May 12, 1989
Mark Charpentier, President/
Treasurer
BEFORE: Jackson M. Andrews, Chairman, Thomas X. Dunn, Member and
Stuart Rothman, Member
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
the Administrator, Wage and Hour Division, seeking review of the
Administrative Law Judge's (hereinafter ALJ) decision and order
imposing a two year, rather than a three year debarment of the []
respondents in a Davis-Bacon Related Acts case.
Briefly, the respondents in the ALJ's hearing, Brite
Maintenance Corporation, its president, Mark Charpentier, and its
vice-president, Christina Charpentier, were subcontractors to nine
prime contractors working on fourteen housing projects in St.
Louis, Missouri. These projects were financed by the Department of
Housing and Urban Development and the contracts contained the labor
standards provisions of the Davis-Bacon Related Acts and the
Contract Work Hours and Safety Standards Act. The respondents
agreed to pay the Davis-Bacon predetermined wage rates when they
signed their [1]
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[2] subcontracts.
A Wage and Hour Division investigation of respondents'
performance disclosed that on all of the projects, respondents
failed to pay their employees the predetermined rate of pay for the
work performed and failed to pay the correct amount of overtime.
The violations were the same on the projects. Wage and Hour
determined that respondents owed a total of $44,466.45 for the
prevailing wage violations and $519.21 in overtime to 22 of Brite's
employees. The back wages have been paid in full. Wage and Hour
asserted that respondents had submitted certified payrolls which
had been falsified with regard to the wage rates paid and hours
worked, and therefore sought debarment of respondents.
In a debarment hearing in June, 1985, the ALJ dismissed the
debarment action against Christina Charpentier and found that the
remaining respondents had committed aggravated and willful
violations of the applicable Davis-Bacon Related Acts. However, on
the basis that it was respondents' first investigation, that the
back wages were paid in full, that respondents cooperated fully
during the investigation, and that the respondents agreed to future
compliance, the ALJ ordered the two year debarment of respondents,
rather than the maximum three year debarment. It is this ruling
that the Administrator has appealed to the Board. [2]
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[3] In this petition by the Wage and Hour Administrator, the Board
is asked to review the decision of the ALJ who, after finding that
an employer has falsified its certified payrolls to avoid
Davis-Bacon Act requirements imposed a two year debarment, not the
maximum three year debarment penalty. The Department of Labor
contends that this case required the imposition of the full three
year debarment. The Board agrees with the Department of Labor,
reverses the decision of the ALJ and changes the period of
debarment from two years to three years.
The regulation which governs debarment proceedings under the
Davis-Bacon Related Acts, 29 CFR 5.12(a)(1), provide in pertinent
part:
Whenever any contractor or subcontractor is found by the
Secretary of Labor to be in aggravated or willful
violation of the labor standards provisions of any of the
applicable statutes listed in Sec. 5.1 other than the
Davis-Bacon Act, such contractor or subcontractor . . .
shall be ineligible for a period not to exceed 3 years
. . . to receive any contracts or subcontracts subject to
any of the statutes listed in sec. 5.1.
A following section of the same regulation, 29 CFR 5.12(c)
provides the following considerations for determining whether
removal from the ineligible list is warranted. This regulation
provides in pertinent part:
[T]he Administrator will examine the facts and
circumstances surrounding the violative practices which
caused the debarment, and issue a decision as to whether
or not such person or firm has demonstrated a current
responsibility to comply with the labor standards
provisions of the [Davis-Bacon Related Acts], and
therefore [3]
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[4] should be removed from the ineligible
list. Among the facts to be considered in reaching such
a decision are the severity of the violations, the
contractor or subcontractor's attitude towards
compliance, and the past compliance history of the firm.
In no case will such removal be effected unless the
Administrator determines after an investigation that such
person or firm is in compliance with the labor standards
provisions applicable to Federal contracts and Federally
assisted construction work subject to any of the
applicable DBRA statutes . . .
Although the ALJ determined that it was clear that respondents
had committed aggravated and willful violations, he ordered
debarment for only two years. The Board does not agree with this
disposition of the case. The Board has accepted, as a general rule,
the Department's position that in the case of deliberate, willful
falsification of payroll information debarment under the Related
Acts, (as is required by the statute for Davis-Bacon Act
violations) should be for the three year period.
The Board has encountered ALJ decisions in the above described
situation, -- no question of misclassification, -- but simply
falsifying the certified payroll to show that more was paid than
was in fact paid, in which the ALJ has concluded that the
imposition of the three year debarment requirement should not be
imposed. There have been [cases in] which the ALJ has relieved the
employer of debarment altogether on the basis that this was the
first Davis-Bacon job or the first Davis-Bacon investigation.
The debarment provisions of Davis-Bacon and related acts [4]
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[5] are not to be viewed as punitive measures to be imposed after
a violation is discovered, but as a preventive tool to discourage
violation. There will always be more Federal and federally-aided
Davis-Bacon construction projects underway than there will be
available contracting agency and Department of Labor enforcement
people to investigate violations. There have been and undoubtedly
will continue to be instances in which contracting agency people
have not paid attention to Davis-Bacon requirements. The purpose of
the debarment provisions is to enlist the cooperation of the
Davis-Bacon employer in self-enforcing compliance with the Act's
requirements. Therefore, in the case in which no rational
explanation can be given for an intentional falsification of the
certified payroll report, the employer who does this should be
aware of the full three year debarment.
The Board offers this illustration: a Davis-Bacon schedule
requires laborers to be paid $10.00 per hour. There is no claim
that the work performed was not within the laborers' classification
or not done by laborers. The employer in fact pays the employee
$6.00 per hour but puts down on the certified payroll report $10.00
per hour, thus showing knowledge that the required Davis-Bacon rate
is $10.00. That, the Board considers to be a willful and
aggravated violation because imbedded in the violation along with
whatever other purpose or alleged justification such an [5][6]
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[6] employer may have is an intention to frustrate the due
administration of the Act. This is not to say that there will not
be instances in which an employer can show that there may have been
a technical violation or a dispute over proper classification of
employees. But to certify that more was paid than the amount which
the employer knew, without any excuse, was required to be paid
under Davis-Bacon, must be looked at as a willful and aggravated
act. Such a violation which shows a pattern or practice pervasive
of a substantial and significant number of falsified payrolls
requires the Board to call forth the maximum debarment sanction of
three years.
In view of these considerations the decision and order of the
ALJ is reversed and Brite Maintenance Corp., and Mark Charpentier,
president, will be ineligible to receive any contracts or
subcontracts subject to any of the statutes listed in 29 CFR Sec.
5.1 for a period of three years.
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Chairman Andrews, concurring:
While it is my view that the Decision and Order of the
Administrative Law Judge in these matters should be afforded great
deference by the Wage Appeals Board, I concur in the decision to
partially reverse by imposing a three-year debarment rather than
the two-year debarment recommended by the ALJ. Intentional
violations of Davis-Bacon related acts totalling nearly $45,000
cannot be viewed as de minim[i]s, nor [6]
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[7] be mitigated by reason of financial hardship or economic pressure.
Respondent may petition after six months for removal from the debarment
list pursuant to 29 CFR Section 5.12(c).
BY ORDER OF THE BOARD
Craig Bulger, Esquire
Executive Secretary,
Wage Appeals Board [7]