MILNOR CONSTRUCTION CORP., WAB No. 91-21 (WAB Sept. 12, 1991)
CCASE:
MILNOR CONSTRUCTION
DDATE:
19910912
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
MILNOR CONSTRUCTION
CORPORATION, Prime Contractor
and WAB Case No. 91-21
DIAL ELECTRIC CONTRACTING
CO., INC., Subcontractor
and
HERMAN ROSENBLATT
President of Subcontractor
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Patrick J. O'Brien, Member
DATED: September 12, 1991
DECISION OF THE WAGE APPEALS BOARD
This matter is before the Wage Appeals Board on the petition
of Milnor Construction Corporation ("Milnor" or "Petitioner") for
review of the decision and order (Attachment) of Administrative Law
Judge ("ALJ") Aaron Silverman dated April 30, 1991, insofar as the
decision and order pertains to liability for unpaid wages. For
the reasons stated below, the Board denies the petition for review.
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[2] I. BACKGROUND
On May 1, 1984, the New York Housing Authority ("Housing
Authority") entered into a contract with Rocky Hill Building
Corporation ("Rocky Hill") for renovation of three apartment
buildings in Brooklyn, New York. Rocky Hill agreed to do the
renovations and then to sell the project (the Lenox Road-Rockaway
Parkway Rehabilitation Project, or "the Lenox Road Project") to the
Housing Authority. The project was funded by the U.S. Department
of Housing and Urban Development, and was subject to the labor
standards provisions of the U.S. Housing Act of 1937, as amended
(42 U.S.C. [sec] 1437j)(a Davis-Bacon Related Act). The contract
between the Housing Authority and Rocky Hill contained the
applicable prevailing wage rates.
Milton Novie is the sole owner and officer of Rocky Hill.
Novie is also president of Milnor, which is co-owned by Novie and
his wife. On May 15, 1984, Rocky Hill contracted with Milnor to be
prime contractor on the Lenox Road Project. The contract specified
that contractors and subcontractors who performed work on the
project were required to pay the applicable prevailing wage rates.
Milnor entered into a contract with Dial Electric Contracting Co.,
Inc. ("Dial") to perform electrical work on the Lenox Road Project.
The subcontract incorporated, by reference, the contract between
Milnor and Rocky Hill.
In October 1985, following complaints about wage
underpayments, the Wage and Hour Division investigated Dial and
Milnor's performance on the Lenox Road Project. The Wage and Hour
compliance officer determined, among other things, that Dial's
certified payrolls listed the names of only two electricians on the
Lenox Road Project, but Dial's in-house payrolls showed that nine
electricians had worked on that project. The compliance officer
also determined that the certified payrolls showed a seven-hour
work day for the electricians; the in-house payrolls, however,
showed that Dial's employees were working an eight-hour day on the
Lenox Road Project. The compliance officer had a conference with
Dial in May 1986 to inform Dial of the investigation results and to
request payment of back wages. In addition, the compliance officer
met with Novie to inform him that the investigation had disclosed
underpayment of wages and recordkeeping violations. Milnor refused
to pay the back wages as assessed by Wage and Hour, on the ground
that the daily records of Milnor's superintendent showed that
employees had worked fewer hours than computed by the government.
Milnor did not provide copies of the daily reports to the
compliance officer.
The matter proceeded to a hearing before ALJ Silverman, who
concluded that Dial and its president had committed aggravated and
willful violations of a Davis-Bacon Related Act and ordered them
debarred for three years. The ALJ [2]
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also ordered that Dial and Milnor were jointly and severally liable
for back wages in the amount of $110,004.88. (ALJD at 19).
The ALJ determined that the electrician classification was the
appropriate classification for the employees in question. Under
the Davis-Bacon Act, he noted, "worker classification is determined
on one basis only, that of actual work done, irrespective of worker
qualification or degree of skill or experience." In this case,
he added, the record evidence offered no contradiction of the
testimony of eight employees and the written statement of another
employee that they "used the tools customarily used by electricians
and performed work customarily performed by electricians. Having
done that, they must be paid as electricians, under the Act."
(ALJD at 9).
The ALJ also rejected Milnor's contentions on the applicable
wage rate (ALJD at 8-10). The ALJ found, among other things, that
a lower $8.75 Davis-Bacon basic hourly rate was not applicable.
The provision setting that rate, he said, "states clearly what work
it applies to, and that is not the work being performed here."
Contrary to Milnor's contention, he added, the provision is
"entirely unambiguous" as applying a $50,000 contract price cap for
use of the lower $8.75 basic rate to both alteration work and new
work. (Id. at 10).
The ALJ next weighed the record evidence on the number of
hours the underpaid employees worked on the Lenox Road Project, and
found that they worked five eight-hour days for a 40-hour week
(ALJD at 11-12). The ALJ noted that Dial's in-house records showed
a 40-hour work week, whereas Dial's falsified certified payrolls
showed a 35-hour week. The ALJ noted that Novie and Milnor foreman
Joe Carbonara testified that the Lenox Road Project was a
seven-hour day project, that the premises were secured at the end
of seven hours, and no trade was allowed to work longer without
obtaining Milnor's permission. However, the ALJ determined that
the weight to be attached to Milnor's evidence was diminished by
the fact that Milnor declined the Department of Labor's request for
production of Milnor's daily reports. The ALJ also stated that the
testimony of Novie and Carbonara suggested that neither of them
actually inspected the site during non-working hours. (Id. at
11). The conformity of Dial's falsified certified payrolls with
the testimony of the Milnor witnesses, the ALJ added, "suggests
that what they say is correct as to how things should have been,
but the more reliable character of Dial's `in-house' books and the
weight I accord the unanimous weight of the workmen makes me find
as a fact that the men did work on the Lenox project a forty-hour
week made up of five eight-hour days" (Id. at 12).
The ALJ also evaluated the evidence on the time periods which
the nine employee claimants were employed on the Lenox Road Project
(ALJD at 12-13). He observed that the testimony and statements of
the claimants were generally [3]
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consistent. He further observed that Dial was performing work on a
second project near the Lenox Road Project, and transferred employees
from one project to another, but none of the pay or other records
indicated at which of the projects the employees were working at any
time. Accordingly, the ALJ stated, the employees' testimony and
statements provided the only basis for determining which individuals
were working on the Lenox Road Project at any given time. The ALJ
accepted, however, Dial's in-house records as being generally credible
regarding the total work hours and rates of pay for each employee.
(Id. at 12). The ALJ also considered the daily records of Milnor
foreman Carbonara and of Colville Holt, the Housing Authority's
project superintendent. The limitations of these records, he
stated, included the fact that they did not list names of
employees. (Id. at 12-13). Furthermore, he noted, "[t]hese two
records unfortunately do not agree, either with each other or with
the claimants' evidence, in that both generally show fewer
electricians than are claimed to be present and Milnor's record
generally shows fewer than Holt's. In addition, of course, half
the Holt records could not be found." (Id. at 13). Upon
evaluation of the Holt and Carbonara records, the ALJ determined
that it was appropriate to accord the most weight to the testimony
and statements of the employees (Id.).
The ALJ went on to apply the principles enunciated in Anderson
v. Mt. Clemens Pottery Co. ("Mt. Clemens Pottery"), 328 U.S. 680
(1946), for assessing back wages where the employer's records are
inaccurate or incomplete (ALJD at 13-18), and determined that
unpaid wages were owed in the amount of $110,004.88 (Id. at 19).
II. DISCUSSION
On review of the record in this matter, the Board concludes
that the decision and order of the ALJ should be affirmed.
Petitioner raises a number of arguments; the conclusion is
inescapable, however, that the essence of Petitioner's arguments is
dissatisfaction with the ALJ's factual findings and credibility
resolutions and the weight he accorded to the record evidence. The
Board has explained that it is reluctant to set aside an ALJ's
credibility resolutions and factual findings absent clear error.
E.g., Permis Construction Corp., WAB Case No. 88-11 (July 31,
1991). Certainly, the thoughtful evaluation of the evidence by the
ALJ in this case provides no cause to depart from that established
principle. Furthermore, the ALJ's assessment of the amounts due
the employee claimants is consistent with the approach set forth in
Mt. Clemens Pottery and applied in Board cases. See Apollo
Mechanical, Inc., WAB Case No. 90-42 (Mar. 13, 1991). Finally, we
note that the back wage liability of prime contractor Milnor is
clear, for the principle that a prime contractor is responsible for
unpaid wages owed to the employees of a subcontractor is also well
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[5] established. E.g., R. C. Foss & Son, Inc., WAB Case No.
87-46 (Dec. 31, 1990). /FN1/
The petition for review is denied. The ALJ's decision and
order is affirmed.
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]
/FN1/ The Board agrees with counsel for the Acting Administrator
(Statement, at p. 20 n.17), that the ALJ properly rejected Milnor's
argument that the basic rate for the Lenox Road Project should be
$8.75. As we read the wage determination (see ALJD at 8), the rate
was $19.50 plus fringe benefits for electricians on construction
contracts (like the Lenox Road Project) in excess of $50,000.
Furthermore, if Milnor had a quarrel with the wage determination,
the appropriate time to raise such an issue was before entering
into the contract. [5]
