CCASE:
STILLEY PAINTING
DDATE:
19910329
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
STILLEY PAINTING
CONTRACTORS, INC.
and WAB Case No. 89-24
DANNY STILLEY,
President
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Patrick J. O'Brien, Member
DATED: March 29, 1991
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition for
review of Administrative Law Judge ("ALJ") Steven E. Halpern's
August 8, 1989 decision and order by the Administrator of the Wage
and Hour Division regarding the imposition of a two-year, rather
than a three-year debarment in this Davis-Bacon Related Acts case.
For the reasons stated below, the Board grants the petition for
review. [1]
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[2]
I. BACKGROUND
Stilley Painting Contractors, Inc. and its president, Danny
Stilley ("Respondents" or "Stilley") served as a painting
sub-contractor on two Orange, Texas housing projects financed by
the United States Department of Housing and Urban Development. The
contracts were subject to and contained the prevailing wage and
overtime labor standards provisions of the U.S. Housing Act of
1937, as amended (42 U.S.C. [sec] 1437) and the Contract Work Hours
and Safety Standards Act (40 U.S.C. [sec] 327 et seq.),
respectively.
An investigation was conducted by a Department of Labor
compliance officer. The compliance officer compared the certified
payroll records filed by respondent with his in-house payroll
records, and conducted employee interviews, as a result of which
violations of the Davis-Bacon Related Acts were found in that the
wage rates contained in the contract (and proper overtime) were not
paid. As a result a total of $18,840.04 was owed which was paid in
full at the conclusion of the investigation. Of this amount
$233.28 was due for overtime violations.
The certified payrolls did not reflect all of the employees
who worked on the job. Five laborers who were paid less than the
required prevailing rate were not listed. It was also certified
that fringe benefits were paid when in fact they were not. Over
$7,700 of the wage violations in this case were committed with
respect to these employees. Stilley admitted that the laborers who
had been omitted from the certified payrolls were members of a
minority race who had been hired at the request of the Housing
Authority in an effort "to reduce racial unrest which had been
interfering with work on the project."
According to the testimony of Stilley, he intentionally
omitted from the certified payrolls four of the individuals who
worked as laborers because he was paying them $5.00 per hour rather
than the $12.16 hourly rate required by the wage determination. He
intentionally omitted the fifth individual because he was paid
$9.00 per hour rather than the higher laborer's rate due him under
the wage determination because of his perception that to do so
would have caused problems since he was only paid $9.00 per hour
for similar work on other projects at other locations. Stilley
testified that he did not need laborers on the project and that he
did not profit from their underpaid work.
The ALJ concluded, that "while there is no question that
debarment is mandated, I shall not impose the maximum penalty, in
the belief that such is not necessary in this case to effectuate
the purpose for which debarment is intended." The ALJ ordered that
respondents be debarred for a period not to exceed two years.
[2]
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[3] II. DISCUSSION
The ALJ, in this case, indicated that Stilley was cooperative
in the investigation. He further stated that restitution was
promptly made and that "it does not appear that he has committed
any violations prior to or since those here involved. And, having
had opportunity to observe him, it is my impression that he is not
likely to repeat his improper conduct in the future." The ALJ went
on to say that "there is no question that debarment is mandated .
. . ." The ALJ erred, however, in the belief that debarment is not
necessary in this case to effectuate the purpose for which
debarment is intended.
Debarment for violation of the Davis-Bacon Related Acts is
governed by 29 C.F.R. 5.12, which provides in Section 5.12(a)(1):
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 . . . other than the Davis-Bacon Act, such
contractor or subcontractor or any firm, corporation,
partnership, or association in which such contractor or
subcontractor has a substantial interest shall be ineligible
for a period not to exceed 3 years (from the date of
publication by the Comptroller General of the name or names of
said contractor or subcontractor on the ineligible list ...)
to receive any contracts or subcontracts subject to [the
Davis-Bacon Act or Related Acts]. [*](Emphasis supplied)[*].
The ALJ made specific determinations regarding Stilley's
commission of "aggravated or willful" violations in this matter;
under Board precedent, the violations admitted by Stilley including
deliberate underpayment, falsification of certified payrolls and
omissions from the certified payrolls are aggravated and willful
conduct. See, e.g., A. Vento Construction, WAB Case No. 87-51
(Oct. 17, 1990) (29 WH 1685), at p. 15, and cases cited therein at
p. 7 n.4. (FOOTNOTE 1)
Furthermore, the Board held in A. Vento Construction that
where a violation is "aggravated or willful," debarment for a
period of three years is warranted in the absence of extraordinary
circumstances. Here the respondents repeatedly admitted falsifying
payroll records and admitted he knew at the time [3]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
(FOOTNOTE 1) See also Gaines Electric Service Company, Inc., WAB Case No.
87-48 (Feb. 12, 1991), at p. 4 ("Falsification of certified
payrolls is itself deliberate conduct that violates law and
regulation; furthermore, submission of falsified payrolls raises a
prima facie case that any accompanying underpayment of wages or
overtime compensation was deliberately undertaken."). [3]
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[4] that what he was doing "wasn't right". The Board finds no
extraordinary circumstances which would warrant less than a three
year debarment.
Accordingly, the petition for review is granted and the ALJ'S
order regarding debarment is reversed. The Board concludes that a
three-year debarment period is called for in the circumstances
presented here.
III. ORDER
It is ordered that Stilley Painting Contractors, Inc. and
Danny Stilley, President, having committed "aggravated or willful"
violations of Davis-Bacon Related Acts, shall be ineligible
pursuant to 29 C.F.R. 5.12(a)(1) to receive any contracts or
subcontracts subject to any of the statutes listed in 29 C.F.R. 5.1
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
_____________________________
Charles E. Shearer, Jr.
Chairman [4]
