CCASE:
COLONIAL REALTY, INC.
DDATE:
19890920
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D.C.
COLONIAL REALTY, INC. WAB Case No. 87-37
Chestnut Street Development Proj.
Contract No. NJ 39-P01-3010 Dated: September 20, 1989
Passaic, New Jersey
APPEARANCES: Doug Romaine, Executive Vice President for Colonial
Realty, Inc.
Doug Davidson, Esquire, for the Administrator, Wage
and Hour Division, U.S. Department of Labor
BEFORE: Jackson M. Andrews, Chairman, Stuart Rothman,
Member, and Thomas X. Dunn, Member
SUPPLEMENTAL DECISION OF THE WAGE APPEALS BOARD
ON REQUEST FOR RECONSIDERATION
The Wage Appeals Board issued a decision in this appeal on
February 22, 1989 with Member Dunn in dissent. The Wage and Hour
Administrator filed a Motion for Reconsideration dated April 24,
1989. The Board considered this motion together with a supporting
memorandum from the Building and Construction Trades Department,
AFL-CIO. It concluded that reconsideration of its decision was
desir[]able. A second hearing to consider additional oral argument
was held on June 20, 1989.
Upon reconsideration of the petition, the briefs and the oral
arguments of September 1, 1988, and June 20, 1989, the Board
concludes that a survey of area local usage shall not be required.
The Board finds under the facts and circumstances presented that
further enforcement in this [1]
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[2] matter is not warranted. It affirms its decision of February 22,
1989 as modified to eliminate the remand to conduct a local survey.
Additional views of Member Rothman:
At the supplemental argument on June 20, the Administrator's
spokesman observed that many things that go on on private work
cannot be done on a Davis-Bacon Act job. He did not elaborate.
The issue raised in this case would not have been presented to the
Board -- there would have been no case with which the Board would
have had to deal -- if it were not for the local factor that the
apprenticeship ratios were admittedly adjusted by the local
administering authority to suit the needs of the moment on private
construction.
The petitioner, at the September 1, 1988 hearing, stated that
at a meeting he attended with the local Carpenters' Business
Manager, the Business Manager unequivocally told a New Jersey State
investigator that what was done on the Colonial job was done all
the time on private construction. The reported statement was, "we
do it all the time and I see nothing wrong with it." The
petitioner's credibility was not challenged at the September 1,
hearing by the Administrator's representative. Whether
nonobservance of the contractually specified apprenticeship ratios
on private construction was the case in this locality was a factual
question which the Board concluded in its February 22, 1989
decision should be inquired into further by the Administrator. [2]
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THE AUTHORITY OF THE BOARD TO
DIRECT THE ADMINISTRATOR TO TAKE
A NO-ENFORCE[]MENT POSITION IN THIS CASE
In an attack upon the authority and jurisdiction of the Wage
Appeals Board, the Administrator identifies the regulations of the
Department of Labor, 29 CFR (Revised as of July 1, 198[3]) Part 5,
Section 5.5(a)(4)(i), Apprentices and Trainees, as the only
regulatory provision the Board may call into play even if the case
raises substantial questions of undue hardship, injustice or
unfairness. The Administrator contends that the Board, and the
Secretary as well, must take a bare bones approach to this one
provision of Part 5 not fleshed out by local circumstances.
The attack on the Board's authority invites a review. With
the passage of time, changes in administrations, changes in
personnel, even changes in generations, the reason this Board was
created may be lost sight of. A primary reason the Board was
created 25 years ago was to meet objections to the administration
of the Davis-Bacon Act because in the private sector local area
practice was advantageously applied to reduce construction costs,
while on public construction the Davis-Bacon Act was
disadvantageously applied to increase labor costs contrary to local
area practice. The Board was created to meet that kind of
criticism emanating from the Congress. It remains a primary
purpose of the Board to deal with local factual problems that give
rise to such [3]
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[4] criticisms.
29 CFR (Revised as of July 1, 198[3]), Part 7, Practice Before
the Wage Appeals Board, Section 7.1(b) provides: "The Board has
jurisdiction to hear and decide in its discretion appeals
concerning questions of law and fact from final decisions under
Part[] . . . 5 of this subtitle including decisions as to the
following . . . (3) controversies concerning the payment of
prevailing wage rates or proper classi[]fications which involve
significant sums of money, large groups of employees, or novel or
unusual situations. . . . "
29 CFR Part 5 which deals with apprentices also provides: "The
Secretary of Labor may make variations, tolerances, and exemptions
from the regulatory requirements of this Part [Part 5] . . . of
this subtitle [*whenever*] the Secretary finds that such action is
necessary and proper in the public interest or to prevent injustice
and, undue hardship," Section 5.14, [*Emphasis supplied.*] Section
5.14's amelioratory provision is also reflected in 29 CFR Part 7,
Section 7.1(c). "In exercising its discretion to hear and decide
appeals, the Board shall consider, among other things, timeliness,
the nature of the relief sought, matters of undue hardship or
injustice or the public interest." /FN1/ Section 7.1(d) further
provides: "In [4]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ The instant situation involves a novel question, undue
hardship, injustice, and public interest.
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[5] considering the matters within the scope of its jurisdiction,
the Board shall act as the authorized representative of the
Secretary of Labor. The Board shall act as fully and finally as
might the Secretary of Labor concerning such matters."
Further, the Board's enabling order, as amended, Secretary of
Labor Order 24-70, affirms the Board's authority to be as
prescribed in 29 CFR Part 7. Thus, the provisions of Part 5,
Section 5.4 to which the Administrator and the Building and
Construction Trades Department want the Board to limit review, has
built into it the accompanying provisions of Section 5.14 and
Section 7.1.
The Board has directed no-enforcement positions from early in
its 25 year history on the ground that enforcement under the facts
of a particular case will not effectuate the purposes of the Act.
When as in this case, the Board directs the Administrator to take
a no-enforcement position, the direction to so act is an exemption,
or the equivalent of an exemption as the regulations authorize,
made at the enforcement stage of a proceeding. An exemption,
whenever and however made, must, of course, be made in a novel or
unusual case, to relieve hardship or prevent an injustice and must
be based upon a principled decision.
THE IMPORTANCE OF APPRENTICESHIP
PROGRAMS IN THE CONSTRUCTION INDUSTRY
The Board is keenly aware of the importance of fairly
administered apprenticeship training programs in national [5]
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[6] labor policy. A spokesman for the jointly administered IBEW/NECA
apprenticeship program addressed the Board on the importance of
apprenticeship in construction. We agree. But the integrity of
the legitimately administered local apprentic[e]ship program is not
involved in this case. It will not be at risk by the Board's
decision of February 22, 1989, as here modified. To the contrary,
the best result that could come from the Board's decision today is
that local administrators of apprenticeship programs will think
seriously about local apprenticeship deals contrary to the
provisions of negotiated, registered programs.
Here, petitioner Colonial Realty was bound by a negotiated
agreement. The petitioner had requested journeymen but was sent
persons whom the Business Manager identified as apprentices. The
Business Manager saw no difference between the private job and the
federally financed project. Petitioner made no deal to employ more
than the negotiated apprenticeship ratios. I conclude on the basis
of the briefs and oral arguments of September 1, 1988 and June 20,
1989, that the local Carpenter Business Manager would not have sent
apprentices to this Davis-Bacon Act job (assuming these individuals
were even apprentices) in lieu of requested journeymen and with the
understanding that they be paid at the lowest apprenticeship rates
unless he was of the belief that he was acting consistently with
what was done on privately financed jobs. Although many
International Union [6]
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[7] representatives were at the June 20 hearing, the local Carpenter
Business Manager was not.
By concluding that the Administrator could take a
no-enforcement position in this case, the Board made no change in
the general principles which the Administrator uses to enforce the
Davis-Bacon Act in apprenticeship ratio situations. As between
enforcing the regulation, Part 5, Section 5.5(a)(4)(i) without
taking into account local area factors, and enforcing the
Davis-Bacon Act taking into account local area factors, the Board
should apply 29 CFR Part 7, Section 7.1(b). In doing so, it will
follow the Act. /FN2/ There is no clear and unmistakable
expression of Congressional intent in the Davis-Bacon Act that
apprenticeship and apprentic[e]ship ratios should be treated
differently in the locality on public and private jobs. The
apprenticeship regulation, Part 5, Section 5.5(a)(4)(i), is itself
predicated on an assumption that registered apprenticeship programs
will be administered in the private sector pursuant to the terms of
the locally negotiated agreements and the BAT registration. The
regulation does not contemplate and hence does not anticipate the
situation in which a registered program is applied in a local area
contrary to the terms of its registration. When this turns [7]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ This is not a case in which an employer who is not a party to
a negotiated local agreement took it upon himself to hire
employees, whether qualified journeymen or not, and called them
apprentices in violation of the area local practice ratios. [7]
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[8] out to be the case, the Board is required to look into the
matter in accordance with Part 7, Section 7.1(b) and Part 5,
Section 5.14.
The Board shares the deep concern of the national building and
construction trades unions and construction employees. But, few
principles are more firmly established than that the administration
of the Davis-Bacon Act must mirror private sector conditions on a
locality-by-locality basis. The Board applied the statute as
written and is not modifying it.
THE ADMINISTRATOR'S REQUEST FOR CLARIFICATION
OF THE BOARD'S FEBRUARY 22. 1989 DECISION
The remand of February 22, 1989, directed the Administrator to
undertake a local area, and only a local area survey, as of the
time of the petitioner's alleged violation of the Act to see
whether the Business Manager's referral of over-the-ratio
apprentices was inconsistent with the way in which the local
apprenticeship program was applied on non-Davis-Bacon Act jobs.
Rather than call it a "survey", it would have been more apt simply
to have directed the Wage and Hour Division to undertake a fuller
factual investigation. Its purpose was to give the Wage and Hour
Division the opportunity to satisfy itself that what was done in
this case was not consistent with what was going on or had been
done in the same time frame on private construction work. There
was no requirement of a specified number of [8]
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[9] instances or a percentage of instances.
The Board further held in its February 22, 1989 decision that
if as a result of the investigation the Administrator was satisfied
that the employment of apprentices on the Colonial job was
consistent with local relaxation of the ratios on private
construction under the locally negotiated agreement she was
directed to take a no-enforcement position, a Board directed
exemption. Because the Administrator had taken the position that
no investigation was required as to local area factors, it appears
that the Administrator had assessed a back-pay liability on the
basis of an inadequate investigation. I conclude on the basis of
the supplemental hearing that the petitioner did not initiate a
request for relaxation of the ratios but was compelled to take
these particular individuals at the insistence of the local
business manager. The Board decides this case on narrow grounds
and does not direct a local survey of any kind.
THE RELATIONSHIP OF THIS BOARD DECISION
TO ITS DECISION OF FEBRUARY 22, 1989
This decision affirms the decision and order of February 22,
1989, as herein modified. [9]
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THE REASONS A SECOND
ORAL ARGUMENT WAS GRANTED IN THIS CASE
The Administrator filed a motion for reconsideration of the
February 22, 1989 decision. The Building and Construction Trades
Department, AFL-CIO, filed a parallel and supporting memorandum.
In its motion for reconsideration, the Administrator stated that
contrary to the petitioner's statements at the initial oral
argument on September 1, 1988, instead of a maximum of six
carpenters on the project as the petitioner asserted, the
petitioner employed as many as 30 at one time. This brought into
question the veracity of the petitioner as to this and other
statements and a sec[]ond hearing was held. But the
Administrator's spokesman acknowledged that the claim that there
were up to 30 carpenters employed at the same time on the job was
without foundation. The petitioner affirmed at the second hearing
that it never had more than six carpenters on the job.
The Building and Construction Trades Department had made no
appearance in this case and was not present at the September 1,
1988 hearing. It indicated an intention to pursue further judicial
review of the Board's decision if it could come in as a party at
the second hearing.
- - -
Additional views of Chairman Andrews:
In reaching its decision of February 22, 1989, the Board drew
a very careful and narrow exception to the general rule. [10]
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[11] We stated: "The Board views this case as one involving special
features at the enforcement stage and it should not be viewed as an
abandonment of the general rule." The Board carefully weighed all
of the unique facts in the case, including the fact that the
petitioner repeatedly requested journeymen and was repeatedly sent
apprentices, and was advised, despite its objection, that such use
of apprentices was proper. The Board also noted: "This is not a
situation in which the employer attempted to avoid its Davis-Bacon
obligations by utilizing apprentices as journeymen in order to
reduce labor costs." Thus, while technical violation of the ratios
may have occurred, the unique facts herein mitigate against holding
Colonial responsible.
In reaching my decision, I place little if any significance
upon any statement made by the local business agent. Thus, upon
reconsideration and to clarify our decision I would have deleted in
its entirety from the February 22, 1989 decision the sentence: "If
the statement of the local business agent reflects local custom and
practice in a substantial and significant way, area practice has
been superimposed on contractual language and the Administrator
should take a no enforcement position under the singular facts of
this case."
The arguments advanced at the June 20, 1989 hearing on the
Motion for Reconsideration that this Board has no discretion to
grant any relief to Colonial would render the [11]
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[12] entire appeals process before the Board a nullity or a sham. Such
arguments are without merit. I would note that petitioner Colonial
Realty requested a hearing before an ALJ in this matter but that
Colonial's request was denied by the Administrator. The argument that
the Administrator, having received a result from this Board with which
she does not agree, is entitled now to a remand of this matter for an
evidentiary hearing before an ALJ is likewise without merit. Such a
procedure would also constitute a fundamental denial of due process.
See Califano v. Sanders, 430 U.S. 99, 109, 97 S.Ct. 980 (1977)
(Constitutional deficiencies in Agency procedures are reviewable and
revers[i]ble.) and Com. of Va. ex rel. Commissioner, etc. v. Marshall,
599 F.2nd 588 (4th Cir. 1979) (procedures of the Department of Labor
including the Wage Appeals Board must afford due process).
- - -
Member Dunn, dissenting:
I would grant the motion of the Administrator for
reconsideration of the decision of the majority of the Board in the
above entitled case and would affirm the ruling of the
Administrator to the extent that Colonial exceeded the allowable
ratio of apprentices and journeymen carpenters as to the entire
work force permitted under the program in which the apprentices
were registered.
I stand by my dissent in the Board's decision of February 22,
1989 and adopt the position of the Building and [12]
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[13] Construction Trades Department, AFL-CIO, and the other
organizations which appeared at the oral argument on June 20, 1989
to enter their protests to the decision.
BY ORDER OF THE BOARD
Craig Bulger, Esquire
Executive Secretary,
Wage Appeals Board [13]
