WAYNE J. GRIFFIN ELECTRIC INC., WAB Case No. 93-05 (WAB Oct. 29, 1993)
CCASE:
WAYNE J. GRIFFIN ELECTRIC INC.
DDATE:
19931029
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
WAYNE J. GRIFFIN WAB Case No. 93-05
ELECTRIC, INC.
Subcontractor
MR. WAYNE J. GRIFFIN, President
ALICE GRIFFIN, Secretary
[MRS. JACQUELINE GRIFFIN,
Vice President]
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
DATED: October 29, 1993
DECISION OF THE WAGE APPEALS BOARD
This matter is before the Wage Appeals Board on the petition
for review filed by Wayne J. Griffin Electric, Inc., Mr. Wayne J.
Griffin and Alice Griffin ("Petitioners" or "Griffin"), seeking
review of the February 18, 1993 decision and order issued by
Administrative Law Judge ("ALJ") Anthony J. Iacobo. In his
decision and order ("ALJD"), the ALJ held that Griffin committed
violations of a Davis-Bacon Related Act in "reckless disregard"
of its statutory and contractual obligations and found that these
violations were therefore "aggravated or willful" within the
meaning of the regulation at 29 C.F.R. 5.12(a)(2). ALJD at 5.
ALJ Iacobo further held there were no extraordinary circumstances
present on the facts of this case and therefore ordered
Petitioners' debarment from federal contracting for a period not
to exceed three years. Id. at 6. Finally, in addition [1]
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[2] to the named parties respondent, the ALJ ordered debarment of Mrs.
Jacqueline Griffin, the firm's vice president. Id. For the following
reasons, the ALJ's decision and order is affirmed in part and reversed
in part.
I. BACKGROUND
Griffin is an electrical contractor with part of its
business the performance of construction on federal or
federally-assisted projects. Prior to the violations alleged in
this proceeding, Griffin performed construction work at the
Harborside Hotel in Portsmouth, New Hampshire. ALJD 3. This
project was in part federally-assisted by a grant under the
Housing and Community Development Act of 1974 -- a Davis-Bacon
Related Act ("DBRA") -- and the labor standards provisions
applicable to these statutes therefore governed payment of wages
and fringe benefits for the project. In 1987, Griffin's labor
standards performance at the Harborside Hotel was reviewed by the
Wage and Hour Division's investigator, Patricia Slate. Id.
In her compliance review, Investigator Slate determined --
in pertinent part -- that Griffin had not paid proper fringe
benefits required under the wage determination applicable to the
contract work. Griffin did not pay its employees on the project
any fringe benefits during their first 90 days of work. Id.;
Transcript ("Tr.") pp. 19, 21. After the probationary period
ended, Griffin paid only fringe benefits for health insurance and
holiday, vacation and sick leave and these benefits were less
than the required minimum fringe benefits of $2.60 under the wage
determination. Tr. pp. 21-22. Slightly more than $28,000 in
DBRA fringe benefit violations were assessed by Investigator
Slate. In concluding her investigation, Investigator Slate
reviewed the findings, explained the violations, and discussed
the requirements for future DBRA compliance with Wayne J. Griffin
(the firm's president), Griffin's bookkeeper (Kathleen Bauer),
and the firm's counsel. During the final conference, Wayne J.
Griffin agreed to restitution for the wage violations and,
moreover, agreed to future compliance with DBRA requirements,
including fringe benefits.
Subsequently -- in 1988 -- Griffin was a subcontractor under
Project No. 49400 for construction of the Pentram Operation
Facility (subject to DBRA requirements pursuant to the Urban Mass
Transportation Act) in Hampton, Virginia. Wage and Hour
investigator David D. Havrilla twice investigated Petitioners'
labor standards compliance under this project. The first
investigation [2]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ Nearly $90,000 was assessed by Investigator Slate on this
project for violations of the Fair Labor Standards Act (29 U.S.C.
[sec] 201 et seq.). Griffin's affected employees were working
"off-the-clock," which, when counted as hours worked, resulted in
overtime liability of time and one half employees' regular rates
for hours worked over 40 in a week. ALJD 3; Tr. 21. [2]
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[3] covered the period February 1987 through August 1988.
Griffin's project manager referred Investigator Havrilla to the
main office located in Massachusetts. Kathleen Bauer -- as
previously noted, Griffin's bookkeeper during the first
(Harborside Hotel) Wage and Hour investigation -- was Havrilla's
only contact during the initial Pentram project review.
During his first Pentram investigation, Havrilla reported
that once more Griffin was failing to pay fringe benefits during
its employees' first 90 days of employment. ALJD 3; Tr. 36.
Moreover, after the probationary period, Griffin was still not
paying the full amount of fringe benefits under the applicable
wage determination. Id. (Havrilla also reported a lone
violation regarding underpayment of an apprentice.)
Havrilla related the results of this first Pentram
investigation to Griffin's bookkeeper (Bauer) in a telephone
conference. During that conference, Bauer told Havrilla that
Griffin would pay the amount assessed as back wages for the
reported violations that amounted to over $18,000. As did
Investigator Slate, Havrilla provided DBRA reference materials
which explained compliance responsibilities. Furthermore,
Investigator Havrilla explained the requirements of the law and
the violations in his final telephone conference with the
bookkeeper. ALJD 4.
Some months later, Wage and Hour commenced another
investigation of Griffin's Pentram project, after receiving
complaints of continuing violations. Id. Ms. Bauer was again
contacted, and the bookkeeper provided information in a letter to
investigator Havrilla confirming that Griffin had made no changes
in its fringe benefit payment practices and was continuing to
violate fringe benefit requirements under DBRA. Id.
Havrilla reviewed payroll records and determined that the
same types of fringe benefit violations were still being
committed by Griffin on a continuing basis. That is, Griffin
still had not come into compliance and was not paying for fringe
benefits during the "probationary" period and after the first 90
days of employment did not pay the full amounts of required
fringe benefits. As a result of his second Pentram
investigation, Investigator Havrilla computed nearly $10,500 in
additional violations.
At the conclusion of the second Pentram investigation,
Havrilla first discussed his findings with a new Griffin
bookkeeper, Sandy Crowe, Ms. Bauer having left the firm on
maternity leave. Ms. Crowe, in turn, reported the Wage and Hour
findings to Mrs. Jacqueline Griffin, the firm's vice president.
Mr. Havrilla then discussed the findings with Mrs. Jacqueline
Griffin, who again on Griffin's behalf pledged future compliance
with DBRA requirements and agreed to pay the back wage
assessment. [3]
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[4] II. DISCUSSION
Griffin paid all back wages which were assessed during the
two Pentram investigations conducted by Wage and Hour. ALJD 2.
The only issue remaining for ALJ Iacobo's disposition and now, by
this Board, is the question of debarment. The Department of
Labor's regulation at 29 C.F.R. 5.12(a)(1) requires that:
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].
[*]Emphases added [*]. Thus, the question presented is whether
Petitioners' acts or omissions constitute "aggravated or willful"
violations within the meaning of the applicable regulation and
precedent defining this term. ALJ Iacobo held that the thrice
repeated fringe benefit violations -- following Wage and Hour's
explicit findings communicated to Griffin on two separate
occasions -- were willful or aggravated. The Board agrees.
ALJ Iacobo took the following view of the Petitioners'
fringe benefit violations:
Here, both Mr. Griffin and Ms. Bauer received an
explanation of earlier violations by Ms. Slate of the
very same aspects of their contractual obligations as
were found in violation by Mr. Havrilla -- the
calculation of fringe benefits. [*] The violations
included a clear and unambiguous ruling -- there can be
no 90-day "probationary period" [*] insofar as it
concerns the nonpayment of fringe benefits to
employees. Yet, this is one of the several admitted
failings of Respondents. [*] Mr. Griffin, we are told,
was too busy with other aspects of company business to
concern himself with this particular part of his
business -- compliance with the contractual provisions
of the project which required adherence to the DBRA.
This unsupervised delegation of responsibility to
[4]
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[5] someone else must be viewed as a "reckless disregard"
of his own responsibility to comply with the law. [*]
ALJD 5; [*] emphases added [*]. In concluding the fringe benefit
violations were committed in "reckless disregard" of the DBRA
obligations, the ALJ utilized the Supreme Court's recent
definition of the term "willful." McLaughlin v. Richland Shoe
Company, 486 U.S. 128 (1988). In Richland Shoe, the Court
interpreted the term "willful" as used in the Fair Labor
Standards Act (and other labor standards statutes), holding that:
The word "willful" is widely used in the law, and,
although it has not by any means been given a perfectly
consistent interpretation, it is generally understood
to refer to conduct that is not merely negligent. The
standard of willfulness that was adopted in [Trans
World Airlines v. Thurston, 469 U.S. 111 (1985] -- that
the employer [*] either knew or showed reckless
disregard for the matter of whether its conduct was
prohibited by the statute [*] -- is surely a fair
reading of the plain language of the Act.
Richland Shoe, supra, at 486 U.S. 133; [*] emphasis supplied [*].
On the facts presented in this case, the Board concludes that the
ALJ correctly looked to the Richland Shoe standard to examine the
evidence against the regulation's requirements.
Wayne J. Griffin attended the Harborside Hotel closing
conference -- as did the bookkeeper, Bauer, and counsel for
Griffin -- conducted by Investigator Slate. The undisputed
evidence shows that the investigator explicitly informed Mr.
Griffin that failure to pay wage determination fringe benefits
during the first 90 days of employment was a violation under
DBRA. Wayne J. Griffin may have been "responsible for getting
the work and overseeing field operations" (ALJD 2), but he is
also the president of the firm and Wage and Hour's unambiguous
notice of Griffin's violative practices squarely placed the onus
on him to ensure that the violations cease. This, as the ALJ
correctly noted, was not done and Petitioners cannot now attempt
to shift the blame for the continuing, identical fringe benefit
violations to a former bookkeeper. See, Permis Construction
Corp., WAB Case No. 88-11 (July 31, 1991) where -- at page 4 --
the Board held:
Board precedent does not permit a firm or a responsible
company official to avoid debarment by claiming that
the labor standards violations were committed by agents
or employees of the firm. See, e.g., Map Maintenance
and Construction Corp., WAB Case No. 90-33 (Mar. 11,
1991); P.B.M.C., Inc., WAB Case No. 87-[5]
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[6] 57 (Feb. 8, 1991); Marvin E. Hirchert, WAB Case No.
77-17 (Oct. 16, 1978).
Where an employer has explicit knowledge of violative wage
payment practices, takes no action to correct the wrong, and
violations continue, the Board concludes that the employer has
committed "willful" violations, because "reckless disregard" of
the DBRA responsibilities -- as well as actual knowledge -- are
shown. Moreover, where violations continue after still another
notification, as here, the violations are also "aggravated," by
virtue of their continuance after notification and repeated
failure to take corrective action.
Petitioners additionally challenge the decision and order as
a violation of their rights to due process. In the Board's
reading of this argument, Griffin excepts to the decision and
order because the ALJ failed to cite more than the case of
Richland Shoe, supra, in support of his conclusions concerning
the propriety of debarment. The Board does not agree with this
argument. In the first place, the parties briefed the question
of "willful or aggravated" violations in the context of the
Richland Shoe decision. See ALJD at 5. In this case, the Board
concludes that the ALJ gave full and fair consideration to the
evidence of both the Administrator and Griffin at the hearing.
Indeed, Griffin has not raised any contention in the petition for
review that the ALJ made clearly erroneous findings of fact; the
ALJ adopted Griffin's proposed findings of fact in toto. It is
the Board's view that ALJ Iacobo made clear credibility
determinations in choosing to give greater weight to the
testimony of the Wage and Hour Investigators. The ALJ found that
Wage and Hour's investigators gave repeated notice to
representatives of the firm, including Wayne J. Griffin and his
subordinate, Ms. Bauer. The Board will not reverse credibility
determinations where they are not clearly erroneous. Milnor
Construction Corp., WAB Case No. 91-21 (Sept. 12, 1991).
Furthermore, Petitioners' contention that the ALJ did not
"analyze other case law or regulations," (Petition for Review at
p. 2) is unsupported. The ALJ plainly applied the appropriate
regulation for determination of the debarment issue, 29 C.F.R.
5.12(a)(1). ALJD 1-2, 5. In any event, the legal conclusion
reached by ALJ Iacobo is consistent with the precedent
established by this Board, which has never held that proof of
payroll falsification or scienter is required for debarment under
the labor standards statutes related to the Davis-Bacon Act. For
example, in Property Resources [6]
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[7] Corp., WAB Case No. 90-24 (Apr. 29, 1991), debarment was upheld in
the absence of proof that certified payrolls were falsified. There,
repeat violations were held to be sufficient basis for a finding of
"aggravated or willful" even without false records. The fact that the
principal in that case admitted to underpaying workers for a clearly
improper purpose -- as now argued by Petitioners -- is a distinction
without a difference. The key point is that the evidence in both the
instant matter and in Property Resources demonstrated without doubt that
both firms knew or acted in reckless disregard that certain practices
were violative of the requirements under DBRA, yet violations were
committed.
Petitioners also contend there are extraordinary
circumstances in this case to support a debarment order of less
than three years. See, A. Vento Construction, WAB Case No. 87-51
Oct. 17, 1990). The Board does not agree. The same violations
in this matter continued over an extended period, even after two
notifications that Griffin's practices were contrary to its
statutory and contractual obligations. Back wages for the fringe
benefit violations were substantial, amounting to nearly $30,000
on the Pentram project. Delegating total payroll responsibility
to a "problem" employee, as Griffin has characterized their first
bookkeeper (see Tr. 100-102) demonstrates there were no effective
steps taken to ensure future compliance, despite at least two
promises to do so after Wage and Hour investigations. In short,
there are no extraordinary circumstances on this record to
mitigate debarment.
Moreover, the Board finds no extraordinary circumstance in
the contention raised in Petitioner's supplemental brief that
they will be automatically debarred from Massachusetts State
contract work upon commencement of their federal debarment. But
this does not appear to be especially relevant, given the fact
that Griffin was first found in violation on a project in New
Hampshire (Harborside Hotel) and next in Virginia (Pentram
Project). The Board therefore declines to order a debarment
period of less than three years on facts where there are no
extraordinary circumstances.
Petitioners and the Administrator agree on one point in this
dispute: that the ALJ exceeded his authority in ordering
debarment of Mrs. Jacqueline Griffin. The Order of Reference
initiating the underlying administrative hearing charged "Wayne
J. Griffin Electric, Inc.," "Mr. Wayne J. Griffin, President,"
and "Alice Griffin, Secretary" with potential liability for
debarment. The Administrator did not seek to amend the Order of
Reference to include Mrs. Jacqueline Griffin. In analogous
situations, the Board has held that an ALJ is without
jurisdiction to order the debarment where the Order of Reference
was issued for determination of back wages, only, and did not
charge debarment. See, Williams Fence Co., Inc., WAB Case No.
87-23 (July 9, 1987); E.B. Fitzpatrick, Jr. et al. , WAB Case No.
87-17 (July 9, 1987). In this case, where debarment of Mrs.
Jacqueline Griffin was not sought by the Administrator, the Board
concludes that the ALJ exceeded his authority in issuing such an
order. Accordingly, that portion of the ALJ's order debarring
Mrs. Jacqueline Griffin [7]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ Persons and firms placed on the ineligible list pursuant
to 29 C.F.R. 5.12(a)(1) are permitted to request removal from the
ineligible list after completing six months of the debarment
period, pursuant to the procedure set forth at 29 C.F.R. 5.12(c). [7]
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[8] is reversed. In all other respects ALJ Iacobo's decision and
order is affirmed and the petition for review is dismissed.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Gerald F. Krizan, Esq.
Executive Secretary [8]
