TELE-SENTRY SECURITY, INC., WAB No. 87-43 (WAB June 7, 1989)
CCASE:
TELE-SENTRY SECURITY, INC.
DDATE:
19890607
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D.C.
In the Matter of
TELE-SENTRY SECURITY, INC. WAB Case No. 87-43
Dated: June 7, 1989
APPEARANCES: Kenneth Takahashi, Esquire, for Tele-Sentry
Security, Inc.
Leif Jorgenson, Esquire, for the Administrator, Wage
and Hour Division, U.S. Department of Labor
BEFORE: Jackson M. Andrews, Chairman, Thomas X. Dunn,
Member, & Stuart Rothman, Member, Dissenting
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
Tele-Sentry Security, Inc., (hereinafter Tele-Sentry or petitioner)
seeking review of the Decision and Order of the Administrative Law
Judge (hereinafter ALJ) dated September 11, 1987 finding
Tele-Sentry in violation of the labor standards provisions of the
Davis-Bacon Act and the Contract Work Hours and Safety Standards
Act (hereinafter CWHSSA). The ALJ's Decision and Order is attached.
This appeal arose from Tele-Sentry's performance on two
contracts. One contract was for the installation of a $125,000
security system at the Federal Building and U.S. Courthouse in
Atlanta, Georgia, and the second contract was for the installation
of a $420,000 fire alarm system at [1]
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[2] Keesler Air Force Base, in Mississippi. The dispute arose
concerning wage payments on the contracts between September, 1981 until
October, 1982 on the Atlanta contract, and until April, 1982 on the
Keesler contract.
Following investigations at both sites the Wage and Hour
Division determined that Tele-Sentry had failed on both contracts
to pay its employees in accordance with the wage determination for
the classification of work which they performed. Specifically,
Tele-Sentry paid employees, which Wage and Hour classified as
electricians, at a lower rate and classified them as "electrician,
laborer" in Atlanta, and as "laborer" at Keesler. Tele-Sentry paid
these employees $8.43 per hour on both contracts. It is agreed
that the electrician's wage rates on both contracts was $15.60 per
hour.
The President of Tele-Sentry testified at the Atlanta hearing,
and took the same position at Keesler, that low voltage fire and
security installations are not part of the electrician's work, and
that installing conduits, pulling wire and mounting boxes required
no electrical skill or knowledge and could be performed by
virtually unskilled laborers.
A representative of the General Services Administration
contradicted these statements at the Atlanta hearing, asserting
that GSA had considered the electrician's wage rate appropriate for
the work performed on the contract. In [2]
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[3] addition, a representative of the electrician's local union and
three electrical contractors testified that electricians normally
performed the work of installing security systems in the Atlanta area.
At the Keesler hearing, the Wage and Hour compliance officer
testified that Tele-Sentry's employees were using screwdrivers,
snips, pliers, hammers and drills, which he considered to be normal
tools for electricians to use. Also, both a representative of the
local union and an electrical contractor testified that in that
part of Mississippi, only electricians or registered apprentices
performed the work called for by the Keesler contract.
With reference to the Keesler contract, there was also a
dispute under the labor standards provis[i]ons of CWHSSA concerning
the time at which the employees started to work and returned their
tools at the end of the day.
The ALJ ruled that on both contracts the work performed was
electrician's work and should have been compensated at the wage
rate determined for electricians. On the Keesler contract, the ALJ
also found that the employees began work prior to their recorded
starting time and should have been paid for this time. The ALJ
adopted the back wage computation of the Wage and Hour Division for
both contracts and concluded that Tele-Sentry was liable for
prevailing wages and overtime violations as calculated by Wage and
Hour in the amount of $87,480.35 to be paid to the employees in [3]
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[4] question.
The petitioner has raised numerous questions challenging the
ALJ's decision as applied to both contracts in the Petition for
Review filed with the Board and the oral hearing held on September
30, 1988.
- - -
The Board considered this appeal on the basis of the Petition
for Review filed by the petitioner, the Statement on Behalf of the
Administrator in Response to the Petition for Review filed by the
Solicitor of Labor and the record of the appeal before the Wage and
Hour Division and the record of the Administrative Law Judge's
hearing. At the hearing before the Wage Appeals Board all parties
were present and participated or were represented by counsel.
The Wage Appeals Board has reviewed the decision and order of
the ALJ in the light of the arguments set forth in the Petition for
Review and the arguments presented by the petitioner at the oral
hearing. It appears to the Board that the ALJ has written a
judicious and soundly reasoned decision which is supported by the
evidence presented at the hearings. The Department of Labor has an
established procedure for adding, after contract award, additional
classifications to wage schedules, and for resolving disagreements
as to proposed classifications and wage rates which are set forth
at 29 CFR 5.5(a)(1)(ii)(A), (B) and (C). The petitioner,
Tele-Sentry, did not make any effort to avail itself of these [4]
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[5] procedures. In choosing to utilize misclassified and thus
underpaid workers, the petitioner proceeded at its own peril.
Furthermore, although the Petitioner offered testimony at the
hearings to support its belief that it was usual for low voltage
projects such as those under consideration here to be installed by
"electrician, laborer" or "laborer" and that the General Services
Administration had agreed with Tele-Sentry's decision to so
classify and pay its employees, there was ample rebuttal testimony
from a Compliance Officer, a GSA electrical engineer and other
parties which directly contradicted this position.
The Board in a recent decision, Homer L. Dunn Decorating,
Inc., WAB Case No. 87-03, (March 10, 1989) cited a Supreme Court
decision relating to credibility which is an issue in this appeal
also. See Universal Camera v. NLRB, 340 U.S. 474 (1950) at p. 494.
Conclusions, interpretations, law and policy should of
course, be open to full review. On the other hand, on
matters which the hearing commissioner, having heard the
evidence and seen the witnesses, is best qualified to
decide, the agency should be reluctant to disturb unless
error is clearly shown.
Also,
. . . material facts in any case depend upon the
determination of credibility of witnesses shown by their
demeanor or conduct at the hearing.
p.496
In this appeal the Board does not find any error in the ALJ's
hearing or decision and order which would warrant reversal and
hereby adopts the decision of ALJ. The [5]
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[6] Petition for Review by petitioner is therefore dismissed.
- - -
Member Rothman, dissenting:
This case is before the Board to review a matter of basic
Davis-Bacon principle. As a pure question of applicable law, the
Board should approach this question de novo, particularly when it
is apparent that a grave and manifest injustice has been done. The
Board should look at such a question from the point of view of
realistic administration of the Act and a just result.
I find it necessary to dissent because the majority has
applied the wrong principle of Davis-Bacon law and administration
as well as the wrong standard of review. This case does not turn
on credibility determinations made by the ALJ.
I am concerned that the testimony upon which the ALJ relied
was restricted to new construction in which low voltage security
and fire alarm systems are installed as part of new construction in
which the "electrical work" on low voltage systems is done on an
integrated basis by an electrical contractor who performed all the
new construction electrical work pursuant to a single contract. In
this case the renovation work was awarded separately long after the
buildings had been completed. There is too much evidence and reason
not to believe that as a matter of prevailing local area practice
a new generation of specialty contractors and [6]
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[7] employees has sprung up which predominate in the updating of
buildings without such systems.
I would remand to the Administrator for further consideration
for the following reasons.
The Davis-Bacon Act must live in the present. The petitioner
has shown by sufficient, if not controlling, evidence that in the
Atlanta locality, the predominant, if not exclusive, practice is
that the installation of low voltage fire alarm or security systems
long after new construction has been completed is done by specialty
contractors who have their own work classifications and their own
wage schedules. There is significant evidence to require further
review and investigation by the Administrator that the general
electrical contractors do not perform this work on a prevailing
local practice basis when it is not an integral part of new
construction. The representation was made in this case at oral
argument that the six bids for the instant contract were all made
solely by specialty contractors at less than general new
construction prevailing wage schedules.
Under these circumstances, a serious error is made when the
contracting agency does not request the Department of Labor to
survey local area practice to determine prevailing wage and fringe
schedules for installation of these low voltage alarm and security
systems. I would remand this case for such a survey of area
practice to be made spanning a time [7]
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[8] period applicable to the instant project.
If as a result of such survey, the claims and representations
of the petitioner are found to be justified, I recommend that the
Administrator take a no enforcement position in this case and
accordingly release the withheld funds.
There is reason to believe that since there was a "laborers'
electrician" rate in the Atlanta schedule the petitioner had a
rational basis for using employees whose classifications used by
these specialty contractors for this kind of work were not
unsimilar to that classification in the schedule.
In general a prospective bidder must question the accuracy or
applicability of a Davis-Bacon wage and fringe schedule in advance
of contract award. By recommending a no enforcement position on the
facts of this particular case and so limiting my recommendation,
the basic principle remains unchanged. This situation is not the
same as the situation in which a bidder protests too late whether
the wage rate in an undisputed classification and undisputed
schedule was correct.
Where work is now exclusively or almost exclusively performed
by specialty contractors whose emergence is due to new technologies
and new construction procedures, the Administrator should not
continue to apply the dead hand of the past but should bring the
administration of the Act into [8]
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[9] the present. In this way the objectives of the Act will be nurtured
and advanced, not frustrated.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board [9]
