LABORERS' DISTRICT COUNCIL, WAB No. 92-11 (WAB Apr. 29, 1993)
CCASE:
LABORERS' DISTRICT COUNCIL
DDATE:
19930429
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
LABORERS' DISTRICT COUNCIL WAB Case No. 92-11
of the Metropolitan Area
of Philadelphia and Vicinity
With respect to review of
General Wage Decision No. PA91-25
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Anna Maria Farias, Member
DATED: April 29, 1993
WAGE APPEALS BOARD DECISION ON RECONSIDERATION
This matter is before the Wage Appeals Board on the request --
filed by the Acting Administrator, Wage and Hour Division --
seeking clarification or reconsideration of the Board's October 21,
1992 decision and order in the captioned matter. The Acting
Administrator's motion is opposed by the Laborers' District Council
of the Metropolitan Area of Philadelphia and Vicinity ("LDC") and
the Laborers' International Union of North America, AFL-CIO. For
the following reasons, the Acting Administrator's motion is denied. [1]
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[2] I. BACKGROUND
The original case before the Board was filed by LDC, which
sought review of a May 26, 1992 ruling by the Acting Administrator,
reaffirming the prevailing residential construction wage
determination for the classification of laborers in the
Philadelphia, Pennsylvania area, General Wage Decision ("GWD") No.
PA91-25. The residential construction laborer's rate in GWD No.
PA91-25 had been determined for application in Bucks, Chester,
Delaware, Montgomery and Philadelphia Counties, based on
combination of wage rate data from 196 private residential
construction projects which were ongoing or completed during the
period from August 1, 1986 through July 31, 1987. GWD No. PA91-25,
issued for the five-county area contained a laborers' prevailing
wage rate of $10.00 (including fringe benefits).
In the original decision, the Board concluded it was not
appropriate to affirm the existing residential construction wage
rate for laborers in Philadelphia County. In this matter Wage and
Hour did not first ascertain whether the survey data from
Philadelphia County alone was adequate for wage determination
purposes and then consider data from surrounding counties after
deciding that the data from Philadelphia alone was inadequate;
instead, Wage and Hour apparently decided simply to issue a single
residential construction wage determination for Philadelphia and
four surrounding counties.
Laborers District Council, slip op. at page 5. The decision
contained the Board's additional directive that
[t]he crucial stipulation upon remand, however, is that the
error acknowledged in this matter cannot remain uncorrected nor, as
Petitioner has noted . . . should the error be perpetuated in
future wage determinations.
Id. at p. 7. The Board remanded the case to the Wage and Hour
Division for issuance of a new wage determination. The wage survey
on remand contained sufficient residential wage data for a
Philadelphia-only wage determination and, based on the foregoing
language, the Wage and Hour Division ultimately excluded wage data
reflecting payment of the old laborer's rate of $10.00 per hour.
A new wage determination was issued; the new laborer's rate was
$15.95 (plus $7.23 in fringe benefits) per hour. The Acting
Administrator states that if the old $10.00 hourly payment data had
been included in compiling the new wage determination, an hourly
wage rate of $11.97 (plus $4.43 in fringe benefits) would be issued
for residential laborers. The Acting Administrator seeks
reconsideration or clarification of the Board's language which has
been interpreted to exclude the $10.00 rate from consideration.
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II. DISCUSSION
The Acting Administrator argues that exclusion of the $10.00
rate is contrary to the Department's regulations and Board
precedent, since that interpretation results in a de facto
challenge to a wage determination after the award of a contract or
start of construction, contrary to the Department's regulations and
Board precedent. It is also contended that prohibiting usage of
valid wage data, application of which was permissible and legal
prior to the date of the Board's original decision /FN1/ is
contrary to Board precedent.
LDC's position is that exclusion of the $10.00 rate is proper
given that the rate was "tainted" by the improper wage
determination process. LDC further argues that exclusion of the
$10.00 rate is not inconsistent with precedent.
The Board has carefully reexamined the positions of the
parties in this matter and concludes that exclusion of the $10.00
rate -- on these facts -- is the appropriate remedy. It is
strongly emphasized that the root problem with promulgation of the
initial wage determination was Wage and Hour's failure to calculate
a county-by-county usable response rate and its failure to make and
maintain adequate records of the original wage survey. The Wage
and Hour Division was simply unable to substantiate its position
that there had not been an adequate county-by-county usable
response rate from residential contractors. It was this failure --
conceded by counsel for the Acting Administrator -- that convinced
the Board in its first decision that GWD PA91-25 could not be
allowed to stand and that the "tainted" wage rate should not be
utilized in future wage surveys. The Board completely agrees that
there is much permissible latitude in the determination of
prevailing wages under the Davis-Bacon and related Acts; however,
Wage and Hour must comply with applicable wage determination
regulations which have been duly promulgated. This duty to comply
with wage determination regulations, of course, extends to the one
at issue in this case -- 29 C.F.R. 1.7(a) -- which requires that
the determination "area will normally be the county unless
sufficient current wage data . . . is unavailable to make a wage
determination." (Original emphasis).
The Board is not persuaded that prohibiting use of the $10.00
rate is anything more than "troublesome," as argued by the Acting
Administrator. This case concerns determination of wage rates for
residential construction and the [3]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ The $10.00 rate was in effect between the time of its
publication in the wage determination in 1989 until April 1, 1992
when LDC brought its challenge to the attention of the Acting
Administrator for reconsideration. [3]
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[4] record demonstrates that there is sufficient private
construction to determine wage rates, even in the absence of Davis-
Bacon rate. Whether the remedy fashioned in this case would be
appropriate with respect to a similar procedural failure under a
"heavy" or "highway" wage determination is not before the Board at
this time and such a situation could well demand a different
remedy.
The Board, moreover, does not view the well-established
prohibition against post-award (or start-of-construction)
challenges to wage determinations to be a controlling principle on
the facts presented by this case. That line of Board decisions and
the regulation at 29 C.F.R. 1.6(c)(3) prevent unfair advantage to
successful bidders on particular Davis-Bacon covered projects.
Here, the $10.00 rate was published in GWD PA91-25 and was accepted
as valid for purposes of contract bidding and award in the
Philadelphia area. Exclusion of the $10.00 rate prospectively for
the purpose of a new wage survey is not comparable to the situation
where wage determination rates are challenged retroactively
subsequent to the award of a contract. The facts that the $10.00
rate were valid and unchallenged by any interested person for an
extended period of time does not affect this analysis.
Contrary to the Acting Administrator's contention, the
decision in this case is not inconsistent with Board precedent.
The Acting Administrator argues that this decision is contrary to
Review of Davis-Bacon Wage Decision 77-TX-4189 and related
decisions in Texas, WAB Case No. 77-19 (Dec. 30, 1977) and Highway
Bridges over Mobile Bay, WAB Case No. 77-02 (Oct. 21, 1977). In
particular, the Acting Administrator relies on the following
statement in WAB Case No. 77-19:
The Board has resisted taking a position, as recently as
the Mobile Bay Bridge, WAB Case No. 77-2, October 21,
1977, that wage data from a validly awarded project
should not be utilized in subsequent wage surveys due to
alleged deficiencies in the wage rates determined for the
project. The Board sees no reason to change its position
in this case.
Neither of those cases, however, is on point in this matter. The
Mobile Bay Bridges case did not involve an acknowledged error
committed by the Wage and Hour Division in failing to adhere to its
wage determination procedures; instead, that case involved the
issue whether certain projects were appropriately deemed to be
"highway" rather than "heavy" construction, and whether data from
such projects was appropriately excluded from a wage survey.
Similarly, WAB Case No. 77-19 also involved categorization of types
of construction. In that case, the issue was whether Wage and Hour
properly omitted, from a series of wage determinations for building
construction, separate rates for paving and utilities incidental to
general building construction. We view disputes over the proper
categorization of construction projects as far different from the
instant case, [4]
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[5] wherein there can be no dispute that Wage and Hour failed to follow
the wage determination procedures set forth in the Department's
regulations. Thus, the Board's stated reluctance in WAB Case No. 77-19
to exclude data from a validly awarded project in subsequent wage
surveys "due to alleged deficiencies in the wage rates determined for
the project" (emphasis supplied) does not control the result in the
instant case, where the error in the wage determination process is
beyond dispute.
The Acting Administrator also cites Southeast Idaho BCTD, WAB
Case No. 86-22 (Feb. 4, 1987). The Acting Administrator argues
that the Board in that case found that Wage and Hour had improperly
expanded the geographic scope of a wage survey, but that in
directing the issuance of new wage determinations the Board "did
not preclude Wage Hour from considering data from projects which
had been constructed pursuant to the challenged wage determination
rates in issuing the new wage determinations." As LDC aptly notes,
however, it is not apparent that the issue of whether the
challenged data should be excluded from future wage determinations
was ever raised by any of the parties in that case.
For the foregoing reasons, the Acting Administrator's motion
for clarification or reconsideration is denied and the Board's
October 21, 1992 decision in this matter is reaffirmed in its
entirety.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Anna Maria Farias, Member
Gerald F. Krizan, Esq.
Executive Secretary [5]
