CCASE:
N.B.A. ENTERPRISES & R.D. PAINTING
DDATE:
19910222
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
N.B.A. ENTERPRISES, LTD.
Prime Contractor
and WAB Case No. 88-16
R.D. PAINTING, Subcontractor
RISTO P. DINEFF, Owner
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Patrick J. O'Brien, Member
DATED: February 22, 1991
DECISION OF THE WAGE APPEALS BOARD
This matter is before the Wage Appeals Board on the petition
of the Administrator of the Wage and Hour Division seeking review
of the Decision and Order ("D & O") of Administrative Law Judge
("ALJ") Alexander Karst dated February 19, 1988. The sole issue on
appeal is whether the ALJ committed reversible error in denying
back wages to one employee (Charles Wethern) because of
insufficient proof of an employment relationship with the violating
subcontractor ("Dineff"). Other back wage claims, payroll
falsifications, and the resultant debarment of both the general
contractor and Dineff were not appealed. For the reasons set forth
below, we reverse ALJ Karst on the issue of back wage liability to
Mr. Wethern, and otherwise affirm the Decision and Order as
modified herein. [1]
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[2] I. BACKGROUND
Dineff had a subcontract through N.B.A. Enterprises for the
interior painting of military housing at Davis Monthan Air Force
Base in Tucson, Arizona. Dineff underpaid both regular and
overtime wages and falsified payroll records, both in violation of
the Davis-Bacon Act. The sole issue raised by the Administrator is
whether back wages should have also been awarded to Charles
Wethern, an issue which turns on whether Wethern was an "employee"
within the meaning of the Davis-Bacon Act.
Mr. Wethern arrived at the job site and performed painter's
duties at the behest of David Seckendorf, an acknowledged employee
of Dineff (D & O, p. 3, 5; Tr. 87-98). Dineff testified that he
saw Wethern working on at least two occasions (Tr. 105), while
Wethern claimed that Dineff saw him working on numerous occasions
(Tr. 88, 93). In short, both the witnesses admit that Wethern
performed work on the job site.
Despite the undisputed fact that Wethern performed services
under the contract, Dineff claimed he never hired the claimant (Tr.
116) although he allegedly gave Wethern lists of the houses to be
painted and the order in which the work would progress (Tr. 93-98).
Nevertheless, and in the face of the Regional Solicitor's citation
of Section 1 of the Davis-Bacon Act, ALJ Karst found an absence of
a contractual employment relationship between Wethern and the
absence of "some real or constructive agency of Seckendorf to hire
him for Dineff." (D & O, p. 5) Accordingly, ALJ Karst denied an
award of back wages to Wethern, and debarred Dineff for three years
"pursuant to 29 C.F.R. [sec] 5.12(a)(1) for a period not to exceed
three years." Id. at p. 6. ALJ Karst erred in his understanding
of the Davis-Bacon Act, his interpretation of common law agency
principles, and in the terms of his order.
II. DISCUSSION
Section 1(a) of the Davis-Bacon Act, 40 U.S.C. 276a(a),
requires the contractor or subcontractor to "pay all mechanics and
laborers employed directly on the site of the work . . . regardless
of any contractual relationship which may be alleged to exist
between the contractor or subcontractor and such laborers or
mechanics." The Act and the regulations thereunder, 29 C.F.R.
5.2(o) and 5.5(a)(1)(i), employ a functional rather than a
technical test for coverage: if a person works on a job site
covered by a Davis-Bacon contract, that person is an "employee"
within the meaning of the Act regardless of the common law
relationship between the worker and the contractor. Congress
clearly intended covering such workers regardless of the attempts
of the contractor to distance itself from Davis-Bacon obligations.
This point was raised by the Regional [2]
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[3]
Solicitor in its post trial brief. The Board cannot understand
why ALJ Karst ruled otherwise.
Even if the Act were not abundantly clear on its face, the
decision would be incorrect under common law agency principles.
Seckendorf, acting as an apparent agent for Dineff, brought Wethern
onto the job site where Wethern painted houses. Dineff saw Wethern
functioning as a painter on at least two occasions and did nothing
to discourage the activity, thereby ratifying Seckendorf's agency.
It was only when Wethern asked to be paid for work already
performed that Dineff questioned his status. In short, by
operation of agency principles, a common law employment
relationship was created.
Finally, this case arose under the Davis-Bacon Act. ALJ Karst
ordered debarment pursuant to 29 C.F.R. 5.12(a)(1), which
explicitly refers to statutes other than the Davis-Bacon Act. The
order is hereby modified to provide for debarment pursuant to
Section 3(a) of the Davis-Bacon Act for a period of three years.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Patrick J. O'Brien, Member
Gerald F. Krizan, Esq., Executive Secretary [3]
