GUST K. NEWBERG CONSTRUCTION CO., WAB No. 91-35 (WAB Mar. 31, 1992)
CCASE:
GUST K. NEWBERG CONST.
DDATE:
19920331
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
GUST K. NEWBERG CONSTRUCTION CO.
General Contractor
WAB Case No. 91-35
LANDSIDE/CENTRAL SERVICES
and AIRSIDE BUILDINGS
Greater Pittsburgh International Airport Expansion Project
With Respect to Application of Wage Determination Nos. PA89-1 and
PA89-4 to Construction of Connecting Tunnels
APPEARANCES: Paul E. Greenberg, Esq. for Petitioner Laborers'
International Union of North America; Dorothy P. Come for the
International Association of Bridge, Structural and Ornamental Iron
Workers; Stanford A. Segal, Esq. for Iron Workers Local No. 3;
Charles R. Volk, Esq. for the Constructors Association of Western
Pennsylvania; Edward M. White, Esq. for Gust K. Newberg
Construction Company and Matsuda Bridge, Inc.; Wendy B. Bader,
Esq. for the Acting Administrator, Wage and Hour Division, U. S.
Department of Labor
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
DATED: March 31, 1992
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
the Laborers' International Union of North America, AFL-CIO
("LIUNA" or "Petitioner") for review of an October 11, 1991 ruling
by the Acting Administrator of the Wage and Hour Division regarding
the appropriateness of paying building rates for construction of
tunnels at the Greater Pittsburgh International Airport. The Board
held oral argument in this case on March 19, [1]
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1992. For the reasons stated below, the Board remands this matter
to the Acting Administrator for further proceedings consistent with
this decision.
I. BACKGROUND
Allegheny County solicited bids on July 21, 1989 for the
Midfield Terminal Project Tunnel Construction at the Greater
Pittsburgh International Airport. The bid package contained two
wage determinations applicable to various Pennsylvania counties,
including Allegheny County. General Wage Decision No. PA89-1
listed wage rates to be paid on building and foundation
construction projects; General Wage Decision No. PA89-4 listed the
wage rates to be paid on heavy and highway construction projects.
Both wage determinations reflected union negotiated wage rates.
The bid package contained no instructions regarding the application
of the wage schedules. The general contract for construction of
the system of tunnels was awarded to Gust K. Newberg Construction
Co. ("Newberg") on September 25, 1989. Newberg subcontracted the
concrete and form work on the project to Matsuda Bridge, Inc.
("Matsuda"). The disputed work was performed by Matsuda employees.
Jurisdictional disputes occurred before the award of the
general contract to Newberg. Beginning in 1988, union heavy
construction carpenters, union building construction carpenters and
the Constructors Association of Western Pennsylvania ("Constructors
Association") attempted to resolve which carpenters would perform
the work on the tunnel project. The United Brotherhood of
Carpenters and Joiners of America resolved the dispute between the
local carpenters unions by ruling that the work on the project was
building construction. Also the subject of a jurisdictional
dispute was the work of tieing the reinforcing iron. The local
heavy construction laborers union viewed the work as heavy
construction which, according to area practice, traditionally was
performed by heavy/highway laborers; the local iron workers union
viewed the work as building construction, traditionally performed
by iron workers.
Work on the tunnel project began in October 1989.
Subsequently, in April 1990, LIUNA and the Laborers' District
Council of Western Pennsylvania contacted the Wage and Hour
Division and requested that an audit be conducted to determine the
appropriate wage rates for laborers on the project. LIUNA stated
that laborers were being paid building wage rates instead of heavy
and highway rates; LIUNA also stated that subcontractor Matsuda was
using iron workers to tie reinforcing iron, in violation of the
area practice of paying the heavy laborers' rate for that work.
The Acting Administrator issued a final determination on
March 14, 1991, concluding that the work on the tunnels should be
treated as heavy construction. [2]
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The Acting Administrator noted that All Agency Memorandum No. 130
("AAM 130") sets forth the policies of Wage and Hour regarding the
determination of "projects of a character similar to the contract work,"
and added that AAM 130 lists tunnels as heavy construction. The Acting
Administrator also considered local area practice, stating that "the most
recent determination by the Department of Labor regarding the proper
categorization as to type of construction for tunnels in the
Pittsburgh . . . area was for tunnels involved in construction of
the Pittsburgh subway. At that time we determined that the area
practice was for tunnel construction to be treated as heavy
construction." The Acting Administrator concluded that "[i]n the
absence of data providing a clear basis for a different ruling at
this time, the tunnels involved in the Pittsburgh Airport expansion
project should be similarly treated as heavy construction.
Evidence presented on this issue does not warrant a conclusion
different from that reached previously."
The Iron Workers filed a petition for review with the Wage
Appeals Board on May 14, 1991. The Acting Administrator requested
that the Board remand the matter in order for Wage and Hour to
evaluate tunnel construction data submitted by the Iron Workers in
support of the petition for review and, if necessary to solicit
additional information from other interested parties.
After remand of the matter, the Acting Administrator issued
a final determination on October 11, 1991, withdrawing his March
14, 1991 ruling. The Acting Administrator described the contract
involved in this matter as a contract for "construction of a system
of tunnels using open cut construction techniques." The tunnel
system was described as including (1) a triple corridor tunnel,
with two spans to carry people mover light rail trains, and the
middle span to be used for passengers to walk through if the
rail-mounted people mover fails; (2) two baggage tunnels; and (3)
a double corridor tunnel to carry utilities and a baggage conveyor
belt system.
The Acting Administrator stated that further information
submitted by interested parties upon remand had been studied, and
followup inquiries had been made to clarify and supplement data
submitted regarding tunnel projects underway within the five-year
period prior to award of the airport tunnel construction contract.
Available data,"the Acting Administrator stated, does not include
any tunnels of the same multiple uses as the tunnel system at issue
in this case. The tunnel system at issue in this case combines
elements of the various tunnels under construction in the
Pittsburgh area during the five-year period prior to award of
the contract at issue."
The Acting Administrator added that available data shows that
collective bargaining agreements with both the Master Builders
Association of Western Pennsylvania, Inc. (building construction)
and the Construction Contractors of [3]
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Western Pennsylvania (heavy construction) have been applied to open tunnel
constructionin Allegheny County. Accordingly, the Acting Administrator
stated that "[t]here is not a clearly predominant practice in the area of
treating such tunnels as either building or heavy construction."
The March 14, 1991 ruling was withdrawn by the Acting
Administrator, who concluded that "it is appropriate to allow the
contractor's payment of building construction wage rates for open
cut tunnel construction to stand." The Acting Administrator added
that this conclusion was based on "the lack of a predominant area
practice, the inclusion of both the heavy and building construction
wage determination in the contract bid documents without specific
agency designation as to which schedule should be applied to the
contract at issue here, and the absence of a request for a ruling
on this matter prior to the opening of bids on the contract."
On November 4, 1991 LIUNA requested an extension of time for
filing a petition for review. On November 18, 1991, in response to
LIUNA's request for a summary of the data which the Acting
Administrator had utilized in his October 11, 1991 determination,
the Wage and Hour Division provided (by a letter from the Director,
Division of Wage Determinations), data summary sheets on projects
for which parties had submitted data, and identified five projects
on which tunnel construction was under way during the year prior to
award of the airport tunnel construction at issue in this matter.
LIUNA filed a petition for review on January 6, 1992.
II. DISCUSSION
On review, the Board concludes that this matter should be
remanded to the Acting Administrator for reconsideration of whether
heavy or building wage rates are applicable to the airport tunnel
construction project. The chief infirmity identified by LIUNA in
the Acting Administrator's October 11, 1991 decision is the
methodology utilized by the Acting Administrator in analyzing
project data submitted by the interested parties. As counsel for
the Acting Administrator noted (Statement, at p. 18), Wage and
Hour's traditional approach in making area practice determinations
is to examine peak employment data by classification on each
relevant project. In this case, since LIUNA did not submit peak
employment data as had been requested, the Acting Administrator
departed from Wage and Hour's traditional methodology and instead
simply counted the number of tunnel projects on which heavy rates
had been paid and the number of tunnel projects on which building
rates had been paid.
In the Board's view, the approach used by Wage and Hour in
this case is unreasonable as a method of determining area practice
because this approach does [4]
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not provide a sufficient measure of the amount of work performed
or the number of workers employed. Furthermore, as LIUNA noted at
oral argument, the use of this approach in this case is inconsistent
with the position taken by Wage and Hour when the Davis-Bacon helper
regulations were under consideration. See Iron Workers II, WAB Case No.
90-26 (March 20, 1992), at p. 9. Thus, in response to suggested
alternatives (counting projects on which helpers are used, or counting
contractors employing helpers) for determining area practice
regarding employment of helpers, Wage and Hour stated that these
alternatives "are not acceptable approaches . . . because they fail
to give necessary weight to the size of a project or a contractor's
workforce." 54 Fed. Reg. 4239 (Jan. 27, 1989). Likewise, the
project counting approach used in this case is not an acceptable
method of determining area practice. On remand Wage and Hour
either must utilize its traditional approach of analyzing peak
employment data or, if such information is not available, must
utilize an alternative approach which gives appropriate weight to
the amount of work performed and the number of employees performing
that work.
An additional infirmity in Wage and Hour's decision in this
matter is the lack of explanation for limiting the survey period to
five years prior to award of the airport tunnel contract at issue
in this case. Absent explanation the choice of a five-year period
seems arbitrary, particularly since the choice of this time period
apparently forecloses consideration of a sizeable tunnel project
(the Pittsburgh subway) and the Department of Labor's analysis of
area practice issues in connection with that project. On remand
Wage and Hour must either provide an adequate explanation for the
choice of a five-year period or utilize a different time period.
In addition Wage and Hour should consider LIUNA's assertion,
made at oral argument, that appropriate application of Wage and
Hour's definition of the term "project"/FN1/ requires the
conclusion that the Pittsburgh subway project does, in any event,
come within the five-year period prior to award of the tunnel
contract at issue in this case.
Wholly apart from the methodology utilized by Wage and Hour
in analyzing area practice data in this matter, other aspects of
the October 11, 1991 determination also lack adequate explanation.
It is not explained, for example, why the guidance of AAM 130 that
tunnel work is heavy construction would not control the outcome of
the area practice question here if, as the Acting Administrator
determined in his October 11 decision, there is no predominant area
practice regarding tunnel work in Allegheny County. Also
unexplained is the relevance of the fact that no ruling on
applicable wage rates was requested prior to the opening of bids.
It may be that the October 11 ruling was not [5]
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intended as a ruling on the merits of any aspect of the area practice
issue or on the substantive correctness of payment of heavy or building
rates for tunnel construction, but instead was a decision to decline
enforcement in this matter so as to avoid intrusion into a
jurisdictional dispute. If, however, the ruling in this matter
constitutes a declination of enforcement, that must be made clear
in the decision on remand so that the ruling can be examined by the
parties and the Board on those terms, and so that confusion on
important substantive issues can be avoided.
III. ORDER
This matter is remanded to the Acting Administrator for
further proceedings consistent with this decision. The Acting
Administrator shall issue a determination on remand within 60 days
from the date of this Order, and a status report (including a copy
of the final determination to be issued by the Acting
Administrator) shall be made to the Board on or before that date.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Gerald F. Krizan, Esq., Executive Secretary [6]
[ENDNOTE]
/FN1/ As explained in the Department's Davis-Bacon Construction
Wage Determinations Manual of Operations (1986), at p. 23, a
project "consists of all construction necessary to complete a
facility. . . ."
