CCASE:
DECISION OF THE WAGE APPEALS BOARD
DDATE:
19910222
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
UNITED COOLING
& CONTRACTING CO.
a/k/a R. SAFI CONTRACTING
ASSOCIATED, a/k/a MID-EAST
CONSTRUCTION CO., WAB Case No. 91-04
Lower-Tier Subcontractor
RAYMOND SAFI, President
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 case is before the Wage Appeals Board on the petition of
United Cooling & Contracting Company and Raymond Safi, president
(collectively, "United Cooling" or "Petitioner") seeking review of
the September 12, 1990 decision and order (Attachment) of the
Administrative Law Judge ("ALJ"), regarding issues of prevailing
wage and overtime compensation violations and debarment. For the
reasons set forth below, the Board denies the petition for review.
[1]
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[2] I. BACKGROUND
Placeway Construction Corporation ("Placeway") was awarded a
contract (No. DTCG 26-83-C-00003) by the Department of
Transportation for construction of a project known as Brick
Village, Phase I, for the Coast Guard on Governor's Island in New
York, New York. The contract was subject to the Davis-Bacon Act
(40 U.S.C. [sec] 276a et seq.), and the Contract Work Hours and
Safety Standards Act (40 U.S.C. [sec] 327 et seq.; "CWHSSA").
Placeway engaged Maropakis Contracting, Inc. ("Maropakis") as a
subcontractor on the project. Maropakis in turn engaged as a
subcontractor the joint venture of Tedco Construction Corporation
("Tedco") and United Cooling.
After issuance of charging letters regarding alleged
violations of labor standards requirements, an attorney requested
a hearing on behalf of Tedco and United Cooling, and the Wage and
Hour Division issued an Order of Reference for a hearing before an
ALJ. The hearing date was initially set for January 26, 1989;
after this scheduled hearing was canceled at the Department of
Labor's request, the ALJ set a new trial date of December 11, 1989.
The hearing was postponed to January 29, 1990, after the
Department requested a continuance on November 27, 1989. The
request stated that Tedco and Tedco's owner had agreed to be
debarred and to release of money withheld by the U.S. Navy on one
of the contracts in question, /FN1/ that settlement negotiations
were underway with Placeway, and that the hearing would be confined
to the issue of debarment of the president of Tedco, United
Cooling, and Safi, none of whom could then be located. Notice of
the hearing date was served on all parties, including United
Cooling and Safi. The notice to United Cooling and Safi was
addressed to the same address as was used for earlier and
subsequent documents in the case -- including the ALJ's decision
and order.
At the January 29 hearing in New York City, the Department was
represented by counsel from the Office of the Regional Solicitor,
New York. The ALJ noted that none of the respondents or counsel
were present. Subject to a Show Cause Order, the ALJ ordered that
the hearing proceed as scheduled. The Department called witnesses
and presented documentary evidence, including consent findings
negotiated with Tedco and Placeway. On August 13, 1990 the ALJ
issued an Order to Show Cause by August 27 for the failure of
respondents [2]
/FOOTNOTE1/ In addition to the Brick Village project described above,
in which United Cooling was involved as joint venturer with Tedco,
the case also involved a contract awarded to Tedco by the Navy for
installation of a steam and condensation system at the Naval
Education and Training Center in Newport, Rhode Island. [2]
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[3] to appear or to be represented at the January 29 hearing, and
why judgment by default ought not to be entered against them,
pursuant to 29 C.F.R. 6.7(b). Only Placeway responded, noting
essentially that Placeway did not appear at the hearing because it
had reached agreement with the Department.
In his September 12, 1990 decision and order, the ALJ found
that under Placeway's prime contract with the Department of
Transportation for the Brick Village project, Tedco owed $62,860.13
and United Cooling owed $18,997.48 in unpaid wages and overtime
compensation. The ALJ ordered the contracting agencies on both
contracts to turn over withheld funds to the Comptroller General
for distribution to the affected employees.
The ALJ also determined that United Cooling and Tedco
misclassified employees that performed plumbers' work as unskilled
laborers. In addition, the ALJ determined that United Cooling and
Safi submitted falsified certified payrolls to conceal their
failure to comply with Davis-Bacon Act and CWHSSA requirements, and
failed to maintain true and accurate certified payroll records.
The ALJ concluded debarment was warranted for United Cooling, Safi,
and Tedco's president because of their disregard of obligations to
employees under the Davis-Bacon Act in performance on the Brick
Village contract, and that debarment of Tedco and Tedco's owner
was warranted under the other contract (see note 1, supra).
II. DISCUSSION
On review of the record, the Board concludes that the ALJ
properly exercised his discretion by defaulting petitioner for
failure to appear at the hearing. Authority to enter a default
judgment is provided in the regulations (29 C.F.R., Part 6)
governing administrative proceedings under the Davis-Bacon Act.
These regulations provide at 29 C.F.R. 6.7(b) that if a party fails
to show good cause for failing to appear at a hearing, the ALJ is
authorized to dismiss the case or to find the facts as alleged in
the complaint and to enter a default judgment "containing such
findings, conclusions and order as are appropriate." The
Department of Labor's rules of practice governing proceedings
before ALJs also provide for entry of a default decision if a party
fails to appear without good cause. 29 C.F.R. 18.5(b), 18.39(b).
In addition, 29 C.F.R. 6.7(b) provides that "[o]nly where a
petition for review of such default judgment cites alleged
procedural irregularities in the proceeding below and not the
merits of the case shall a non-appearing party be permitted to file
such a petition for review."
In this case, the only reason given by United Cooling/Safi in
the petition for review for the failure to appear at the hearing is
that "I did not receive the notice of hearing date as I had moved
from my address." Given that petitioner has failed to provide any
information to substantiate this claim -- such as [3] information
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[4] on when the move occurred, and on whether and how mail was
forwarded to the new address, the Board concludes that this bare
allegation by the petitioner does not provide a sufficient basis
for overturning the default judgment. The Board notes in
particular that the decision and order from which United
Cooling/Safi petitions was sent to the same address as the notice
of the January 29, 1990 hearing and all other documents in
the case. Petitioner has failed to explain how it received or
learned of the decision and order, yet allegedly did not receive or
have knowledge of the notice of hearing.
Finally, Board does not resolve the factual question of
whether petitioner had actual notice of the time and place of the
hearing, nor do we see a need to remand the case to the ALJ for
resolution of that question. However, we do take note of an
affidavit (Attachment) supplied by the Solicitor and executed by a
staff attorney in the Regional Solicitor's Office. In the
affidavit, the staff attorney states that he telephoned Safi at
least three days before the hearing in order to determine whether
a settlement could be reached prior to hearing, and that he advised
Safi of the time, place and date of the hearing.
In addition to objecting to entry of default judgment,
petitioner has also excepted to a number of the ALJ's findings and
conclusions on the merits of the case. However, even if the merits
were properly before the Board for review (see 29 C.F.R. 6.7(b)),
we would conclude that petitioner's cursory allegations,
unaccompanied by any supporting information or explanation, would
not suffice as a basis for overturning the ALJ's determinations.
The Board does find it necessary to modify the ALJ's decision
and order in two respects. First, although the ALJ's findings
([pars] 17-21) regarding the second contract involved in this case
correctly refer to Tedco's performance on that contract, the ALJ's
finding in [par] 22 erroneously refers to unpaid wages owed by
United Cooling (instead of Tedco) in regard to that contract.
Accordingly, the Board modifies the finding in [par] 22 to replace
the reference to United Cooling with a reference to Tedco.
Second, although this case involved both Davis-Bacon Act and
CWHSSA (a Davis-Bacon Related Act) violations, the ALJ's decision
and order debars United Cooling and Safi only for disregard of
their obligations under the Davis-Bacon Act. This is not error,
since the order of reference appears to request debarment only for
disregard of Davis-Bacon Act obligations. However, it is necessary
to modify [par] 1 of the ALJ's order, which refers to the Related
Acts debarment regulation (29 C.F.R. 5.12(a)(1)), rather than
Section 3(a) of the Davis-Bacon Act, as the authority for debarment
in this case. Accordingly, the Board modifies [par] 1 of the order
to replace the reference to 29 C.F.R. 5.12(a)(1) with a reference
to Section 3(a) of the Davis-Bacon Act. [4]
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[5]
The petition for review is denied. The ALJ's decision and
order is affirmed to the extent described herein.
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 [5]
