MILLER INSULATION COMPANY, INC., WAB No. 94-01 (WAB May 2, 1994)
CCASE:
MILLER INSULATION
DDATE:
19940502
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
MILLER INSULATION WAB Case No. 94-01
COMPANY, INC.,
Subcontractor
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
DATED: May 2, 1994
DECISION OF THE WAGE APPEALS BOARD
This matter is before the Wage Appeals Board on the petition
of the International Association of Heat and Frost Insulators and
Asbestos Workers, AFL-CIO (the ``Union'' or ``petitioner''), for
review of a June 22, 1993 final ruling issued by the Acting
Administrator, Wage and Hour Division. On the Union's request
for reconsideration, that ruling was affirmed by the
Administrator on November 30, 1993. In his ruling, the Acting
Administrator approved conformed classifications and wage rates
for work performed under five contracts subject to the labor
standards provisions of the Davis-Bacon and Related Acts,
pursuant to the Department of Labor regulations at 29 C.F.R. Part
5. For the following reasons, the Wage and Hour Division's final
rulings are affirmed.
I. BACKGROUND
A. Procedural and factual background
Previously, another related case (Miller Insulation Company,
Inc., WAB Case No. 91-38 (Dec. 30, 1992)``(Miller I''), was
before the Board on a petition filed by the Acting Administrator,
who sought review of a decision and order issued by a Department
of Labor Administrative Law Judge (``ALJ''). Full discussion of
the facts underlying that enforcement proceeding -- and the
[1]
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[2] classification conformance dispute at issue herein -- are
contained in the Board's decision in Miller I.
In part, Miller I concerned the ALJ's conclusion that the
contractor, Miller Insulation, Inc. (``Miller Insulation'')
properly classified and paid as carpenters employees performing
mechanical insulation work on five commercial construction
projects. The applicable wage determinations had contained
asbestos worker classifications reflecting wage rates
collectively bargained to be applicable to [*]industrial[*]
construction projects. [*EMPHASIS IN ORIGINAL*] See AR Tab B.
Miller Insulation had classified the mechanical insulators as
carpenters and paid them consistent with the applicable wage
determinations. Wage and Hour sought this Board's review of,
inter alia, the ALJ's decision denying back wage recovery to the
affected employees.
In the Miller I decision, this Board set aside the ALJ's
finding that Miller Insulation committed no wage violations. The
Board noted:
that Miller Insulation may have a legitimate complaint
about the applicable wage determinations -- the absence
of a wage rate for commercial mechanical insulation
work. As noted by the Union, Miller Insulation should
be permitted to request through the conformance
procedure that a wage rate and fringe benefits
corresponding to the rate and benefits for commercial
insulation work in the applicable collective bargaining
agreement be added to the wage determinations (it may
be that the absence of a rate for commercial insulation
work could also be resolved through the procedure set
forth at 29 C.F.R. 1.6(d) for correction of clerical
errors in wage determinations). And while we do not
suggest the outcome of the conformance process, we do
note that there is perhaps a larger issue --
appropriate for resolution through the conformance
procedure -- than the addition of
collectively-bargained rate for commercial mechanical
insulating work to the wage determinations. That is,
while -- as the Acting Administrator notes (Statement
at pp. 20-21) -- the regional wage specialist testified
that ``in each applicable wage determination, the union
rates prevailed for asbestos workers,'' it is not clear
from the record before us that it was determined that
the union rate for asbestos workers performing
commercial mechanical insulation work was the
prevailing rate for that type of work. In the absence
of such a determination, it seems at least arguable
that Miller Insulation should be able to propose a wage
rate other than the collectively bargained rate for
commercial mechanical insulation work. At the very
least, it is appropriate to raise and address such
issues through the conformance procedure. [2]
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[3] Miller I, slip op. at p. 8.
Through the appropriate contracting agency, Miller
Insulation did indeed request Wage and Hour to issue conformed
classifications and wage rates for the contracts. Administrative
Record (``AR'') Tab E. On June 22, 1993, the Acting
Administrator issued Wage and Hour's ruling, permitting --
retroactively -- Miller Insulation's use of the carpenters' wage
rates in lieu of the industrial asbestos workers' rates. As
noted, the conformance ruling was affirmed on the Administrator's
reconsideration at the Union's request.
B. The Acting Administrator's conformance ruling
Wage and Hour considered Miller Insulation's conformance
request, examining the facts available concerning the contract
work and area employment information under commercial mechanical
insulation contracts, and the requirements for approval under
applicable regulation, 29 C.F.R. 5.5(a)(1)(ii)(A). The criteria
for approval, stated the Acting Administrator, are:
(1) that the work to be performed by a classification
requested is not performed by a classification in the
wage determination; (2) that the classification is
utilized in the area by the construction industry; and
(3) that the proposed wage rates, including any bona
fide fringe benefits, bears a reasonable relationship
to the wage rates contained in the wage determination.
AR Tab D, p. 1. The Acting Administrator ruled that the criteria
for issuance of a conformed classification and rate had been met,
for the following reasons.
The Acting Administrator first found that the commercial
mechanical insulation work at issue was not performed by a
classification listed in the applicable wage determinations. See
AR Tab B, exhibits. Wage and Hour found that:
Although there is no question that asbestos workers
install heat and frost insulation on mechanical systems
regardless of the insulation materials used, there was
not a classification [*]at the wage rate listed[*] [in
the Union's collective bargaining agreement] in any of
the wage determinations that covered the type of work
in question. Thus, the first conformance criterion has
been met.
AR Tab D, p. 2; emphasis in original. In other words, the Acting
Administrator based his ruling on a finding that there were
[*]two[*] classifications of asbestos workers at issue: one for
[*]commercial[*] mechanical insulation (which was not listed in
the wage determinations) and another for [*] industrial [*]
mechanical insulation [3]
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[4]
(which was listed). [*EMPHASES IN ORIGINAL*] As noted, these
separate classifications were negotiated through collective
bargaining.
The Acting Administrator made no finding with respect to the
second criterion of the conformance regulation; it was undisputed
that the classification was utilized in the local construction
industry. This would appear beyond dispute, given that the Union
had negotiated two separate rates, one for both industrial and
commercial insulation work. The Union, in fact, did not
challenge the conformance with respect to this second of the
three relevant factors.
The Acting Administrator further found that the carpenters'
rates proposed for payment by Miller Insulation bore a reasonable
relationship to the wage rates contained in the wage
determinations. Wage and Hour stated the basis for this finding
in the following manner:
On each of these contracts, [Miller Insulation] . . .
proposed a wage rate that is not only substantially
higher than the laborers classification, but is
equivalent to that listed in the applicable wage
determination for the carpenter classification, one of
the skilled classifications.
Id. Payment at the carpenters' rates, the Acting Administrator
ruled, was therefore consistent with the ``reasonable
relationship'' criterion.
Subsequent to issuance of the June 22, 1993 ruling, the
Union filed a petition for review with this Board. The Union
also filed a request for reconsideration by the Administrator,
who denied the requested relief in a ruling dated November 30,
1993. Briefing of the issues raised by the petition for review
was ordered and oral argument was conducted before the Board on
March 21, 1994.
II. DISCUSSION
The first question presented by the petition for review is a
challenge to the Acting Administrator's conclusion that the
disputed mechanical insulation work was not performed by a
classification listed in the wage determinations. As noted, the
wage determinations did contain a classification for ``asbestos
workers,'' but the wage rate listed was that for the collectively
bargained industrial work. Petitioner argues that the work to be
performed under the respective ``commercial'' and ``industrial''
categories is the same and argues that the contract wage
determinations -- containing the classification for asbestos
workers at the collectively bargained industrial rate -- should
be seen as precluding approval of a conformed classification for
failure to meet the first criterion of the conformance
regulation. The Union states this contention thus: [4]
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[5] there is no generally recognized distinction in the
industry between `industrial'' and ``commercial''
projects that would justify different wage rates for
each kind of construction. .... [T]he distinction, if
any, between ``commercial'' and ``industrial''
mechanical insulation work is based exclusively on
``prevailing'' local area practice. . . . .
Supplemental Petition for Review, p. 13.
The Board cannot accept this argument. It is not this
Board's function to look behind the separate classifications
negotiated by the Union's Local 133. Rather, we accept the fact
that in this case the Union itself negotiated two [*]separate[*]
classifications and wage rates. The Board concludes that the
Acting Administrator correctly determined the disputed commercial
mechanical insulation work was not performed by a classification
contained in the wage determinations, in spite of the fact that
it is not disputed that the industrial classification and rate
were contained in the applicable wage decisions. There was no
clear evidence before the ALJ that insulators paid at the
industrial rate performed commercial work; nor was there any
showing presented before the Wage and Hour Division in the
conformance process to that effect.
Before passing to the next issue, we must note that in our
first decision permitting Miller Insulation to pursue a
conformance request, it was not our intent -- as suggested
possible by the Union -- to direct Wage and Hour to determine a
conformed rate based on prevailing area practice. It is
long-settled that correct conformance procedure is to determine
whether the disputed work was performed to any degree by a
classification in the wage determination and not whether the work
was performed by 50% or more of workers. The latter process
would essentially be a de novo determination of prevailing
practice and that is not the purpose of the conformance process.
Rather, the inquiry concerning whether the Union's
commercial insulators' rate prevailed was directed to determining
if there had been a clerical error of omission in the failure to
list that separate classification and rate in the wage
determinations. It is now apparent that no clerical error was
committed in the compilation of the original wage determinations.
In his final ruling, the Acting Administrator in fact concluded
that ``the Wage and Hour Division has no data indicating that the
union rate for asbestos workers was prevailing for commercial
mechanical insulation work for the locality and time periods at
issue.'' AR Tab D, p. 2. See also, Joint Record Excerpts, pp.
38-39; 40; 46-47; 59-60.
Moreover, in the conformance and reconsideration procedures
below, the Union made no showing to indicate the Wage and Hour
Division committed clerical error by omitting the Union's
commercial insulator classification and rate. Nor can we accept
the Union's payment evidence before Wage and Hour to be [5]
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[6]
a substantial indication that the Union's commercial insulators
performed any significant amount of this disputed work. Simply,
payment evidence for one employee in an inapplicable county and
conflicting payment data for another employee is not persuasive.
Thus, the Board's holding in Fry Brothers Corp., WAB Case
No. 76-06 (June 14, 1977) has no bearing on the facts presented
in this conformance process, although that holding was central to
the Board's reversal of the ALJ's decision in Miller I, in part,
as an untimely challenge to the wage determination process. Fry
Brothers might have had some bearing here, had the Acting
Administrator found the commercial insulators' classification had
actually prevailed and was inadvertently omitted from the wage
determinations.
The final question presented by the petition for review is
whether the rates conformed by the Acting Administrator and
affirmed by the Administrator bore a ``reasonable relationship''
to the other wage rates contained in the respective wage
determinations. The Board concludes that Wage and Hour exercised
proper discretion in approving a rate for commercial mechanical
insulators at the carpenters' rate as proposed by Miller
Insulation.
Here, the carpenters' rates were substantially higher than
the wage determination rates listed for the various laborers'
classifications, which are either unskilled or semi-skilled
classifications. This, if an otherwise reasonable action, is
appropriate for determining a conformed rate in the ordinary
situation -- such as here -- where the rate requested for
conformance is that of a skilled classification. In some
instances, the commercial mechanical insulator rate (conformed at
the carpenters' rate) is higher than the rate listed for other
skilled classifications such as glaziers, painters, plasterers
and some (though not all) of the power equipment operator rates.
With respect to some of the other skilled classification rates
(such as for bricklayers, cement masons and plumbers), the rate
for carpenters is not significantly lower.
Thus, this case does not present a situation such as was
presented to the Board in the matter of M.Z. Contractors, Co.,
Inc., WAB Case No. 92-06 (Aug. 25, 1992)(``M.Z. Contractors I''),
as argued by the petitioner. In that case, the Board was faced
with another conformance request for the classification of
mechanical insulator, albeit on a residential construction
project in Philadelphia. In that case, the wage determination to
which a reasonable relationship had to be determined was clearly
different from the present circumstances. There, Wage and Hour
had conformed a wage rate for the skilled mechanical insulator
classification at the wage determination's laborer rate of $8.00
for the hourly wage plus $2.00 in fringe benefits. Wage and Hour
issued the conformed rate in reliance on ``long-standing
policy,'' specifying that a conformed skilled classification rate
could be issued if the conformed rate equalled or exceeded the
lowest determined rate for another skilled classification. The
M.Z. Contractors [6]
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[7] I wage determination, however, contained a prevailing
rate for painters (which is a skilled classification) that
was [*]lower[*] than the laborers' rate. [*EMPHASIS IN ORIGINAL*]
The Board reversed the Acting Administrator's conformance
action in that case, and remanded the matter to Wage and Hour for
reconsideration of a conformed rate appropriate in the
circumstances to the classification of mechanical insulator. On
the facts surrounding that case's wage determination, the Board
ruled that ``it was unreasonable to set a wage rate for
mechanical insulators by simply setting the rate for that skilled
classification at the same level as the laborers' rate.'' Id. at
p. 4. On remand, the Acting Administrator conformed a new rate
at the lowest ``mechanical trade'' rate and, after a new petition
for review was filed, the Board affirmed the conformance action
as a reasonable application of the conformance regulation. M.Z.
Contractors, Co., Inc., WAB Case No. 92-23 (Aug. 16, 1993).
Thus, there are clear and material differences between the
present case and the situation in M.Z. Contractors I. Given our
conclusions concerning the relationship between the skilled
classifications listed in Miller Insulation's wage determinations
and the carpenters/conformed mechanical insulator rate, we
conclude that the Acting Administrator's conformance rate was in
reasonable relationship to the listed rates.
For the foregoing reasons, the Acting Administrator's
conformance ruling and the Administrator's denial of the Union's
request for reconsideration are affirmed.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Gerald F. Krizan, Esq.
Executive Secretary [7]
