CCASE:
R.C. FOSS & SON, INC.
DDATE:
19870911
TTEXT:
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[1] [87-46.WAB ATTACHMENT]
U.S. Department of Labor Office of Administrative Law Judges
John W. McCormack Post Office
and Courthouse
Boston, Massachusetts 02109
Date: September 11, 1987
Case No.: 85-DBA-32
In the Matter of:
Disputes concerning the payment of prevailing
wage rates and overtime compensation by:
R.C. FOSS & SON, INC., Prime Contractor
ATLANTIC PAINTING CO., INC., Subcontractor
With respect to laborers and mechanics
under U.S. Department of Housing and
Urban Development Project No. 023-EH-090;
Turtle Creek Housing, Beverly, Massachusetts
AND BY
TLT CONSTRUCTION CORPORATION, Prime Contractor
ATLANTIC PAINTING CO., INC., Subcontractor
With respect to laborers and mechanics
employed by the above subcontractor under
U.S. Department of the Navy Contract No.
N62472-78-C-284; Hangers #1 and 2, Naval Air
Station, S. Weymouth, Massachusetts
AND BY
DUSTIN ENGINEERING, INC., Prime Contractor
ATLANTIC PAINTING CO., INC., Subcontractor
With respect to laborers and mechanics
employed by the above subcontractor under
Veterans Administration Contract No. V523-825;
Veterans Administration Medical Center,
Boston, Massachusetts [1]
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[2] AND BY
FRANCHI BROTHERS CONSTRUCTION, Prime Contractor
ATLANTIC PAINTING CO., INC., Subcontractor
With respect to laborers and mechanics
employed by the above subcontractor under U.S.
Department of Housing and Urban Development
Project No. 023-43096PM; Bear Hill Nursing
Center, Wakefield, Massachusetts
AND BY
KIRKLAND-BARLOW ASSOCIATES, JOINT VENTURE
Prime Contractor
ATLANTIC PAINTING CO., INC., Subcontractor
With respect to laborers and mechanics
employed by the above subcontractor under U.S.
Department of Housing and Urban Development
Project No. 023-35254; Chestnut Gardens
Apartments, Lynn, Massachusetts
AND BY
SHAH CONSTRUCTION CO., INC., Prime Contractor
ATLANTIC PAINTING CO., INC., Subcontractor
With respect to laborers and mechanics
employed by the above subcontractor under
General Services Administration Contract No.
GS-01B-01802; U. S. Appraisers Stores,
Boston, Massachusetts and under U.S.
Army Engineer District Contract No.
DACA-51-81-C-0053; Dispensary/Dental Clinic,
Hanscom Air Force Base, Bedford, Massachusetts [2]
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[3] Proposed debarment for labor standards
violations:
ATLANTIC PAINTING CO., INC., Subcontractor
ALBERT L. COLBURN, President/Treasurer
With respect to laborers and mechanics
employed by the subcontractor on the above
projects
Appearances:
John S. Casler
For Complainant, U.S. Dept. of Labor
Edward E. Shumaker, III, Esq.
For Respondent, R.C. Foss & Son, Inc.
Gerald M. Cohen, Esq., and Geoffrey H. Lewis, Esq.
For Respondents, Atlantic Painting Co., Inc.
and Albert L. Colburn
Before: Anthony J. Iacobo
Administrative Law Judge
DECISION AND ORDER - ORDERING DEBARMENT and
AWARDING BACK WAGES
Procedural History
This proceeding stems from an Order of Reference issued November
23, 1984 whereby the Assistant Administrator of the Wage and Hour
Division of the U.S. Department of Labor (the Department) referred
this matter for a hearing and the issuance of an appropriate
decision and order. The Assistant Administrator found reasonable
cause to believe that Atlantic Painting Company, Inc., and its
president/treasurer, Albert L. Colburn (Atlantic and Colburn,
respectively) have committed willful or aggravated violations of
the National Housing Act, (12 U.S.C. Sec. 1715c) the U.S. Housing
Act of 1937, 42 U.S.C. Sec. 1437j) and the Housing Act of 1959,
(12 U.S.C. Sec. 1701q(c)(3)) and concluded that they should (a) be
debarred from further participation in government sponsored
contracts and (b) made to pay past due wages to various employees
who had [3]
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[4] not been receiving the applicable prevailing wage on
the above-captioned government-sponsored contracts. Atlantic
requested a de novo hearing.
A hearing was held pursuant to the provisions of the Davis-
Bacon Act (40 U.S.C. Sec. 276a et seq.) and the labor standards
provisions of the foregoing statutes in Boston, Mass. on March 30
through April 3, 1987 at which time respondents Atlantic/Colburn
and R.C. Foss and representatives of the Department participated.
Briefs were filed by all three parties.
Respondent Atlantic was the subcontractor in seven projects
falling within the ambit of the Davis-Bacon Related Acts (DBRA)
noted hereinabove. These statutes are listed in 29 C.F.R. Sec.
5.1. Atlantic was the painting subcontractor in each project.
R. C. Foss and Son, Inc. (Foss), which actively participated in
this proceeding, was the prime contractor in the so-called Turtle
Creek Housing project (Turtle Creek) in Beverly, Massachusetts. The
other projects, all in Massachusetts are: Hangars #1 and #2, Naval
Air Station, S. Weymouth (Weymouth); Veterans Administration
Medical Center, Boston (VA Hospital); Bear Hill Nursing Center,
Wakefield (Bear Hill); Chestnut Gardens Apartments, Lynn (Chestnut
Gardens); U.S. Appraisers Stores, Boston (Appraisers Stores); and
Dispensary/Dental Clinic, Hanscom Air Force Base, Bedford
(Hanscom). A complaint was received by the Wage and Hour Division
that Atlantic was not paying its employees the prevailing wages, to
which it had agreed under its contract with the prime contractors
and the respective sponsoring government agencies. This
precipitated an investigation of Atlantic's activities on the seven
projects noted. The instant proceeding stems from the
investigation and the aforesaid conclusions of the Assistant
Administrator.
Applicable Law and Regulations
The Davis-Bacon Act provides that an employer participating in
government sponsored contracts such as those embraced herein:
. . . shall pay all mechanics and laborers employed
directly upon the site of the work, unconditionally and
not less often than once a week, and without subsequent
deduction or rebate on any account, the full amounts
accrued at time of payment, computed at wage rates not
less than those stated in the advertised specifications,
regardless of any contractual relationship which may be
alleged to exist between the contractor or subcontractor
and such laborers and mechanics. 40 U.S.C. [sec] 276a.
The above-cited statutes are implemented by the Secretary of
Labor's regulations found in title 29 of the Code of Federal [4]
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[5] Regulations, 29 CFR Parts 1 et seq., particularly parts 3, 5, 6
and 18. Generally, these regulations require a contractor and its
subcontractors to (a) pay its employees weekly at rates not less
than those specified in the applicable contract, (b) make no
deductions not specifically authorized by law or regulation, and
(c) preserve payroll records for three years from date of
completion of the contract; the records must contain accurately and
completely the name and address of each worker, his correct
classification, rate of pay, daily and weekly number of hours
worked, deductions made and actual wages paid. Underpayments in
violation of these requirements may be recovered by the withholding
of appropriate funds which may be distributed to the underpaid
workers after appropriate proceedings. In the event it is
concluded, after said proceedings, that the violations were
aggravated or willful the errant employer may be debarred from
participation in future government sponsored projects for a period
not to exceed three years.
Summary of the Evidence
Mr. Guilherme Furtado testified that he had worked as a painter
for Atlantic. The witness stated that his rate of pay was always
$6 an hour, recalling but one exception when they painted a small
private dwelling, when it apparently was less. He recalls working
on several government "jobs", specifically the project in
Weymouth, Chestnut Gardens, the V.A. Hospital, and the Appraisers
Stores. At the Naval Air Station in Weymouth he painted with both
a brush and a roller, the job lasting for about a year; he was
there a couple of months. (TR 28) He started work at about 7 and
finished at approximately 3 o'clock taking an approximately 15 or
20 minute break for lunch. (TR 29). Co-workers included
individuals named "Eddie Nascimento, Louie Mendonca, Jorge Mendonca
(father of Louie), Mario and Ritchie". His wages for the whole
week were about $265 net. (TR 31) The weeks that he worked at
Weymouth were generally spent entirely at that locale. On occasion,
part of the week would be spent elsewhere. At the Chestnut Gardens
location in Lynn, the witness stated that he worked there for about
one month working 3 or 4 days a week using a brush and roller.
Among his fellow workers, he recalls working with Mario Correia,
the aforesaid Eddie and another individual called Ritchie. His
working hours were from 7 to 3 with about a half hour for lunch.
(TR 33) He recalls that Mario and another individual called Louie
did the spray painting at that location. At the VA Hospital he
worked for about 2 weeks for the whole of each week starting at 7
o'clock concluding at 3 with about 1/2 hour for lunch. He recalls
an individual named Eddie working with him there. The work involved
using a roller. He was paid by check at the rate of $6 an hour. He
was paid on the basis of a 40 hour week (TR 35) He also emphasized
that he was paid the same amount of money each week, $265. (TR
35). At the Appraisers Stores he would work [5]
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[6] approximately 2 days a week of the approximately 2 weeks he worked
there and the remainder at some other site in Lowell. The rate of pay
was the same as in the other locations, that is, approximately $265 net
for what he considered to be a 40 work week.
Under cross examination, the witness said he did not recall
ever having a raise to $7 an hour, nor did he recall any specific
discussion with the employer regarding the rate of pay at the time
of his hiring, nor any discussion as to working on "non-government
jobs and government jobs". (TR 38-39). The witness however did
not recall whether there were any weeks where he worked less than
five days a week or less than 7 1/2 hours a day. He also denied
remembering signing any document acknowledging that he would be
paid $3.35 an hour "on non-rated jobs" (non-government jobs) Tr.
41) The witness also indicated that he never returned any of his
money to Mr. Colburn. He did acknowledge that on some occasions he
would work part of the day on a public job and the remainder on a
private job. (TR.44) At the present time his hourly rate of pay
is $5.75 working for a different employer. Mr. Furtado
acknowledged recognizing his signature on a two-page document on
Atlantic letterhead and received as RAX 2. The exhibit, in addition
to containing the respondent's letterhead has 6
typewritten statements as follows "I understand that while
working on non-rated jobs, I make $3.35 per hour." This statement
is repeated with space for an acknowledging signature six different
times on each of the two sheets of paper that constitute the
exhibit. The witness's signature appears at the bottom of the last
statement of the first page. It appears that he was not able to
read it in its entirety but admitted signing it. He does not
recall, however, when he signed the undated statement nor having
any discussion with Mr. Colburn about it. In regard to his
signature at the bottom of the statement prepared by Mr. Paul
Tracy, the government investigator, Mr. Furtado indicated that he
signed it after the statement was read to him, and it appeared to
be an accurate restatement of what he had told the investigator.
(Tr. 50). My review of Respondent Atlantic's payroll records for
this witness indicates he earned $5.50 per hour ($220 gross is a
frequently appearing sum.) Later in July his gross weekly wage
was $235, in August it was increased to $240, and, beginning
with the week ending August 27, 1982 the wages were generally
larger, with wages generally in excess of $300 being posted for
the last calendar quarter. On several occasions he earned about
$265, net, during the last months of his employment. CX 22 pp.
27-28.
Mr. Roger D. Haynesworth testified that he is currently
employed with another painting company and has worked for them
approximately 2 years. He worked for the respondent Atlantic
some years ago on several occasions, after answering an ad in a
newspaper. He was interviewed and hired by the owner of the
company, Mr. Al Colburn. During the course of the opening [6]
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[7] interview he was told that he would be paid $6.50 an hour.
(Respondent's payroll record appears to substantiate this. CX
22 p. 34). There was no other discussion regarding the rate of
pay. (Tr. 55) He worked 40 hours a week with no weekends. He
described the workday as normally starting at 7 a.m. and
concluding at 3:30 in the afternoon with 1/2 hour for lunch. Id.
Mr. Haynesworth recalled working at Turtle Creek, Chestnut Gardens,
the VA Hospital and the Appraisers Stores on Atlantic Avenue in
Boston. The witness stated that he worked approximately 4 months
at the Turtle Creek site shifting back and forth to and from other
jobs. While at Turtle Creek he normally would work there the
entire week, although on occasion he would be sent to other places
for a day or two during the week. For example, he would be shunted
to the Chestnut Gardens project in Lynn. (TR 57) The routine was
essentially that he would be paid by check on a Friday morning of
the week on which he worked. He worked as a finish painter for
both interior and exterior surfaces with a brush and roller. There
were two major spray painters at Turtle Creek but he did not recall
their names. Among the individuals he worked with were people
named Kenny, Bob (one of Mr. Colburn's brothers) and some others
who were of Portug[u]ese extraction. Mr. Haynesworth also
testified that regardless of whether he was on a private job or a
government sponsored project his rate was the same - $6.50 per
hour. (Tr. 63) He was not told of the wage scale differences on
government projects until advised by electricians and carpenters on
one of the job sites that so-called "prevailing wages" should be
paid. On the Chestnut Gardens project the claimant usually worked
broken weeks, that is some of the days were spent in other
projects. Some of these included the Appraisers Stores and the VA
Hospital as well as Turtle Creek. The witness estimated that
during the period of his employment by respondent Atlantic, 80% of
his time was spent on government projects. Tr. 64. He would be at
the VA Hospital an average of 4 days of each week during the about
one month period that he worked there. Government rates were never
mentioned except on one occasion back at the headquarters of
Atlantic in North Reading when Mr. Colburn took each of the workers
aside and told them that the reason they were not getting the
government rate was that he wanted to keep them all employed. At
the time only Mr. Colburn's brother was present. (TR. 66-67) When
Haynesworth expressed dissatisfaction with the arrangement Mr.
Colburn gave him a check for $357, some time after the meeting on
August 31, 1982. (TR. 68) Mr. Haynesworth also acknowledged that
during the period he was employed by Atlantic he worked on private
jobs, recalling specifically one in Brookline and another in the
Kenmore Square area. He indicated that in being transferred,
sometimes in the middle of the day from one job to another, the
reasons given were to complete a job.
Atlantic's payroll record appears to substantiate that
Haynesworth's wage was $260 weekly. CX 22 pp. 34-35. [7]
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[8] Mr. Robert Martin of Seabrook, New Hampshire worked for
Atlantic for approximately 2 months, two weeks of which were at
the Appraisers Stores. (Tr. 90) He obtained the work through a
friend and neighbor. At the time of employment Colburn told him
that he would be working a normal 8 hour working day and his salary
would be $5 per hour to start. (TR. 91) The workday he recalls,
was from 7-7:30 A.M. until 3:30-4:00 P.M. every day Monday through
Friday. He corroborated the testimony of other witnesses to the
effect that he would be moved about from site to site, although he
recalled working two full weeks at the Appraisers Stores. (TR. 92)
Among those with whom he worked at that location were the
respondent's brother, "Bobby", another individual named Mike, a
fellow named Joey and another individual called Kenny. He did not
notice any difference in his pay that would reflect his working at
one site or another. The witness recalls confronting Colburn at
the Appraisers Stores site regarding the appropriate "union rate".
He was told by Colburn to tell anyone who inquired that he was
earning $12 an hour. If Martin was dissatisfied he would be
discharged. (Tr. 93-94). As a result of the conversation and
the witness's insistence that he be paid the prevailing wage,
Colburn apparently paid him a salary consistent with the $11.63
prevailing wage for the time spent at the Appraisers Stores but
then gave Mr. Martin $3.35 an hour for the time spent elsewhere
on private projects. At the time he was paid he recalled that
Colburn's two brothers "Bobby" and "Kenny~ were present. (TR
98) Martin reiterated during cross-examination that his weekly
salary was based on a rate of $5 per hour and that it would vary
when he worked less than the prescribed 40 hour week. (TR. 103)
Atlantic's payroll appears to support the witness. CX 22 pp. 41-42.
Mariano Correia, at the time of his testimony, was working for
GAC Painting, but was expecting it to be his last week of
employment. (The company is run by respondent Colburn and owned by
his spouse). Mr. Correia has worked for approximately 6 years for
Colburn. He was referred to Atlantic by a friend, Mr. Manny
Pacheco. At the time he was told that he would be paid $168 per
week. (TR. 109) He recalls working at Turtle Creek, Weymouth,
Chestnut Gardens, Hanscom, the VA Hospital and the Appraisers
Stores in Boston. He was uncertain as to whether he worked at the
Bear Hill Nursing Center in Wakefield. He was a spray painter.
(TR. 110) He indicated that at Turtle Creek he worked some weeks
all week at the same site and at other times his day would be split
with work performed at other jobs. On one occasion, in connection
with the Chestnut Gardens job, he was paid a larger amount than
usual but was told to return $90 in cash to Mr. Colburn the
following week. (TR. 111) At the time he was told that if someone
asked him how much he earned on the job he was to show the
check.[8]
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[9] This happened on a couple of occasions. The witness
acknowledged that as time progressed he was given a raise in pay
from $168 to $178 up to $208 per week. On the occasions when he
had to return money to Mr. Colburn he received between $9 per hour
and $9.50 per hour. (TR. 113 ) While working at Weymouth he
recalls earning approximately $295-298 for a 40 hour week. He
recalled working at Chestnut Gardens were he worked for "a couple
of weeks", one of them was a full week. (TR. 115 ) Among those he
recalls working with him were Eddie Nasciemento, Bob Colburn, and
Louie Mendonca. He identified the spray painters as he, Eddie, and
the Colburn brothers, Bob and Ken. TR 116. At Weymouth he worked
both as a spray and brush painter. At Turtle Creek he did mostly
spray painting. He also worked for a few days at Hanscom where he
did some spray painting. (TR 119) The witness also testified that
he did not see any change in his pay when he went from one job to
another. He also recalled working at the VA Hospital and at the
Appraisers Stores for relatively brief periods. He was shown a
copy of RAX 2 and acknowledged that he was told to sign it at one
time while in the respondent's North Reading office. (TR. 120) He
was unable to remember when this was done, although he does recall
that it was some time after he first spoke with Mr. Tracy. (Tr 121)
The witness acknowledged that although he had worked for Atlantic
over a period of approximately 6 years the employment had been
interrupted on several occasions when he left for several months at
a time. He believes he first began working for respondent in 1980
or 1981. While he recalls working in 1982 he was unsure as to
whether or not he worked the entire year. (Tr. 122-123). Sometime
during August 1982, he began keeping records with the assistance of
his wife (he is virtually illiterate in English) in order to record
the days he worked on a particular project, the number of hours he
spent on any particular day, and those co-workers that he could
identify who were also employees of Atlantic. The
cross-examination of Mr. Correia demonstrated that while he had a
distinct recollection of the various projects which are the subject
of this proceeding as well as some other private jobs, he was
rather uncertain of the number of days that he spent on any
particular project. TR. 136-139. The witness also had some
difficulty in expressing himself. He had approximately 6 years of
school in Portugal and attended school in this country for 2 weeks,
one hour each night. He has been a resident of this country since
November 1977.
Mr. Correia was recalled and testified that while working on the
Turtle Creek project on two separate occasions, when he received
checks in the amount of $475, he was requested by Mr. Colburn to
return $90. TR 197-198. At the time his wages were $9. 50 an hour
and his take-home pay was approximately $300. In this connection
it was brought out that on one occasion when the witness had worked
but one day of the week he asked and received $200 as a loan and it
was repaid through [9]
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[10] Colburn withholding $50 out of the paycheck for four subsequent
weeks. Mr. Correia acknowledged that some of his checks, which I note
to be dated November 1982, bear notations that suggested that in certain
instances he was being paid at the rate of $3.35 on certain projects.
RAX 5 and 6. Mr. Correia could not remember being told that as a result
of his testimony, he might be entitled to additional money. TR 218-219
While the witness was unable to specify the precise dollar
amounts, he again indicated that on two separate occasions, he was
requested after being given unusually large sums p[ur]portedly as
wages, he was required to return a portion of the monies to Mr.
Colburn. Tr. 228-229. Implicit in this is the idea that the large
amounts were to demonstrate that the witness was receiving the
applicable wage for the time spent on the government project.
Mrs. Filomena Maria Correia testified that she is married
to Mariano and has been since approximately 1980. She was asked to
review CX 24. She testified that complainant's exhibit 24
consisted of a form suggested by Mr. Paul Tracy which was designed
to show the places and the amount of hours worked by her husband,
Mariano, and the names of the individuals who worked with him on
the projects. Mrs. Correia testified that the first "couple of
weeks" were composed from recollection but the remainder were
entries made fairly contemporaneous with the event. TR 241. She
would make the entries on the instructions of her husband. Mrs.
Correia was born in the Azores and has been in this country for
approximately 11 years. She has an excellent command of the
language, reflecting her 2 years of college level training. Her
recollection was that Tracy came to them approximately 2 or 3 weeks
after her husband had begun working for Colburn, and that is when
they started making a record. TR 244-246. The fruit of their
collaboration is admiss[i]ble. She served as his scribe and was
cross-examined as to the faithfulness of her service.
Mr. Arthur DaSilva testified that he is currently self-employed.
At one time he worked for Atlantic for approximately 6 or 7 years
beginning in 1975 or thereabouts. TR 142. He testified that his
wage had increased from around $6 an hour to $8 per hour at the
time he severed his employment. TR 143. He, too, had a poor
command of English. In reviewing the seven projects which are the
subject of this proceeding, the witness was unsure as to whether he
worked at Turtle Creek, but was fairly confident that he worked at
Weymouth and the Appraisers Stores, where he did some spraying,
over approximately 3 months. He did not work continuously for that
period on that project, although there were some weeks where he
spent the entire week there. He [10]
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[11] described his working hours as from 7 o'clock in the morning until
3:30 in the afternoon with approximately 1/2 hour for lunch. (TR. 146)
Among his co-workers on the Appraisers Stores project were Ritchie
Hughes, Jorge Mendonca, Louie Mendonca, Jack and Wayne Eaton and Bob
Colburn. He believed his rate of pay was $8 per hour. Mr. Colburn had
advised him that if anyone asked him how much he was earning that he
would respond $13 or whatever was the prevailing rate. He denied that
Colburn had ever told him that his rate of pay would be $3.35 an hour on
private jobs. The witness, although having difficulty with English,
nevertheless made it clear that from the outset whenever he worked on a
government job he was told by Colburn to give whatever the prevailing
wage was as the money he was being paid on that particular project.
However, in point of fact, he was receiving a set pay based on a $6, $7,
or $8 per hour wage rate with the increases coming as he acquired
experience and took on the responsibilities of a working team leader.
(TR 154-158). This was reiterated in his testimony. (TR 160-161).
Mr. Muhamud El-Azzaoui is currently self-employed. He
worked for Atlantic approximately 5 or 6 months in the summer of
1982 after answering a newspaper advertisement. He was hired by
Colburn as a painter and was paid "$4.50 to 5.00 an hour". (TR.
169) He was not told anything else regarding his pay rate at the
time of his hiring. Among the places where he was employed, as
here pertinent, are Turtle Creek, Hanscom and Bear Hill. (Tr.
169-170) He recalled that he worked at the Turtle Creek project in
Beverly for about 6 full weeks. He worked from 7 a.m. until 3:30
p.m. taking approximately 1/2 hour for lunch. On an average day at
Turtle Creek the Atlantic workforce consisted of more than "a
dozen" people. His very first job for Atlantic was at a private
building in Kenmore Square. He was paid $5 an hour. His regular
weekly paycheck was calculated on the basis of $5 an hour except at
the end of his employment Mr. Colburn came to him and said there
had been some mistake and gave him check for what he was told was
owed him. At Hanscom, Mr. El-Azzaoui recalled that he worked a
period of a couple of weeks but that after 3 or 4 days he would
be moved to another job and then returned. He was unsure as to
the total number of days that he worked at Hanscom. He worked but
2 days or so at Bear Hill Nursing Home. Mr. El-Azzaoui recalled a
meeting at Colburn's headquarters where the employees were invited
into his private office one at a time and were told that should
anyone inquire regarding his compensation at government jobs he
should tell them that he was moved about from one place to the
other. Mr. El-Azzaoui signed a statement sometime in 1982 which was
somewhat in conflict with his testimony. Despite the fact that the
witness's testimony was at some variance with the statement made to
the DOL investigator, Mr. El-Azzaoui's testimo[n]y appeared to be
convincing and he had a clear recollection of some of his [11]
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[12] co-workers who were identified as employees of Atlantic by other
means. Some were witnesses in this case. (TR 173-175) He denies
having ever been told that he was working for $3.35 an hour. (TR
174) In all Mr. El-Azzaoui believed that he worked approximately
55% of his time on private jobs and 45% on government jobs. (TR.
184)
Mr. Paul R. Tracy testified that he has been in the employ of
the U.S. Dept. of Labor as a compliance officer with the Wage and
Hour Division since August of 1978. His duties include the
responsibility of investigating companies for compliance with
several labor standard statutes including the Fair Labor Standards
Act, the Davis-Bacon and related acts and the Contract Work Hours
and Safety Standards Act. In conjunction with these
responsibilities he conducted an investigation of respondent
Atlantic. Specifically he was checking for compliance with the
Fair Labor Standards Act, which pertains to the federal minimum
wage and overtime law, and the Davis-Bacon and related acts, which
apply to federally assisted contracts and construction contracts,
and the Contract Work Hours and Safety Standards Act, which is the
law dealing with overtime payment and federal contracts. He first
met with Mr. Colburn at his shop in North Reading, Massachusetts in
August 1982. TR 261-263. As a consequence he investigated in
some detail the heretofore noted projects. The Appraisers Stores,
a General Services Administration project was jointly investigated
with Marguerite Smith, a special agent from the Office of the
Inspector General for the General Services Administration. All
these projects were in Massachusetts. TR 263. He was checking
specifically to see whether or not the prevailing wage rate was
being paid to the laborers on these projects. In addition, he
wanted to see whether the overtime premium would be paid for those
hours worked beyond 8 per day or beyond 40 per week. There is no
evidence of any overtime rules being violated.
As a consequence of the conversation with Colburn he was
provided with weekly certified payroll cards (CX 1-7) and
individual employee payroll cards for the two year period under
audit. TR 265 He reviewed the complainant's exhibits 1 through 7
and confirmed that they looked like the certified payroll records
that had been submitted by respondent Atlantic in conjunction with
the seven projects here under consideration. Essentially, the
certified payroll reflected the appropriate prevailing rate
pursuant to the contractual agreement of respondent with the
sponsoring agency. TR 267. He identified exhibits 8-14 which are
the calculations of Tracy on so-called Wage Transcription and
Computation Sheets for each of the employees in each of the
projects. Attached to each of the exhibits is a summary sheet
listing the employee's period of employment covered by the exhibit,
the statute which is applicable, and the gross amount of back wages
due. The wages are calculated on the basis of a 7 1/2 hour day.
This represents a compromise between the 8 hours alleged by the [12]
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[13] workers and the 7 hours that are generally listed in the
certified payrolls as the number of hours spent by the employees on
the job by the respondent, Colburn. The witness testified that his
investigation revealed that the rates actually paid by Atlantic to
the employees engaged for work on the subject projects were
substantially less than the rates called for in the contracts. TR.
268. In drawing these conclusions Tracy looked at the company's
payroll cards based on Atlantic's "One Write" system where the
payroll check stubs reflect the gross pay, deductions and net
amount paid, and the certified payrolls submitted by Colburn to the
various general contractors and agencies (TR 268-269 ). The
information contained therein was transcribed into Exhibit 22.
This exhibit reflects dollar amounts paid to various employees
during the period in issue which in the witness's opinion are
substantially less than the gross weekly wages reported on the
certified payroll, in many instances. TR 270. Exhibit 22 is a
photocopy of payroll records kept by the respondent and provided to
the Department of Labor during the course of the conferences with
the respondent. It is not a "complete photocopying of all the
company payroll cards". TR 271. Also, it contains annotations
made by Colburn during the course of negotiations. The witness
emphasized that the column which is headed by the written notation
"Days" was added sometime after his, Tracy's, original review of
the records. This was Colburn's attempt to show the number of days
each week an employee worked, taken from some other source. TR
271. The witness gave several examples which demonstrated his
contention that the certified payrolls were not consistent with the
company's payroll cards. The first example he gave was that of
an employee named Louis Mendonca. The certified payroll for
the Weymouth project for the week ending April 23, 1982 (payroll
(PR) 18 CX 2) reflects his being paid $13.22 per hour for gross
wages of $185.08 on that project for that week. The certified
payroll for that same week at the Appraisers Stores (CX 7, PR 28)
shows Mr. Mendonca as working a total of 7 hours at $11.77 per
hour, or a gross pay of $82.39. The two together total $267.47.
Respondent's payroll records for that week show Mr. Louis Mendonca
as earning $200 gross. (CX 22 p. 53) The $200 gross wages
corresponded with the investigator's information obtained from Mr.
Mendonca that he earned an hourly rate of $5.00 per hour based on
a 40 hour work week. TR 277. Tracy also noted that the wage
records kept by Mr. Colburn do not show the number of hours that
the individual worked in any particular week. Those are shown only
on the certified payroll. TR 277-278. The company failed to keep
a record of total hours worked by any individual. The witness gave
other examples involving other employees wherein the same kind of
discrepancy was shown. Another example was an employee named
Jorge Mandonca who, for the week ending May 21, 1982, is shown
in exhibit number 7, the certified payroll for the Appraisers
Stores project, as having worked two days for 7 hours each day
at the rate of $11.77 per hour earning $164.78 on that [13]
~14
[14] project. For the same week he is shown on CX 1, the Turtle Creek
Project, as having worked 7 hours at $16.47 per hour for a total of
$115.29 on that project and again for the same week he has shown on
Exhibit 2 as having worked for 5 hours at Weymouth which, at the
rate of $13.22 per hour, indicates a gross earnings for that
project of $66.10. TR 296-297. The total for the three projects
is $346.17, earned during the course of 26 hours of work for that
week. The company's payroll records for that week show the
employee as earning a gross amount of $210. CX 22, p. 47
Taking as another example the records pertaining to one of the
witnesses, Mr. Mohammed El-Azzaoui, Tracy demonstrated that for the
week ending August 6, 1982 for the Turtle Creek project (CX 1),
certified payroll number 13, shows Mr. El-Azzaoui as having worked
on Monday and Tuesday seven hours each day at the hourly rate of
$16.47 to have earned a gross amount for that project alone of
$230.58 yet the gross earnings for all projects is listed as $195.
Turning to the corresponding office payroll card contained in CX 22
at page 1 Mr. El-Azzaoui is shown as earning $195.00 in gross
wages. TR 304-305. (I note that on Exhibit CX 22 Mr. El-Azzaoui,
for that week, is listed as having worked 5 days.) A number of
examples are given where the certified payroll shows that the
amount paid to the employee on all projects is less than the
amount earned on that particular project for that week. The
lesser amount is often confirmed in complainant's exhibit 22,
the photocopy of the payroll record cards supplied by the
respondent. Tracy gave a number of other examples of disparities
that he discovered when comparing the payroll record cards with the
certified payroll that is, CX 1 through 7 and CX 22 and cited
several other specific instances. TR 300-322. He also testified
that aside from the payroll record cards there were some cash
disbursement journals selected copies of which were shown to him by
Colburn, otherwise there were no other records showing the hours
worked by an individual. TR 314.
The witness noted that the Fair Labor Standards Act required
that an employer keep an accurate record of the total hours worked
by an employee each work day and each work week. This includes all
projects for a construction company. TR 323. Tracy testified that
he also compared the certified payrolls, the company payroll cards
(Exhibit 22) and the employer[']s cash disbursement journal with
records kept by employees. Such records were kept by Mariano
Correia, Gilbert Rosenfield, Mitchell Furney, John Barnaby, Kenneth
Hines and several others. He would also compare the records with
some of the daily records kept by the general contractors,
sometimes called the inspector's reports, or superintendent's
reports. TR 323-324. The superintendent's daily construction
reports of the general contractor, R. C. Foss on the Turtle Creek
project, did not correspond with the number of painters reflected
in the [14]
~15
[15] certified payroll. It was explained that the
general contractors would have an onsite supervisor check the
number of employees of the various subcontractors and submit daily
reports. The numbers reported may be on the basis of an
examination early in the day or later in the day, as the case
may be, and inherently may not be accurate in the event workers
of some subcontractor are on the site working for only a portion of
the day. The number of individuals noted by the superintendent in
his report was transcribed by Mr. Tracy at the bottom of the
certified payrolls so that a ready comparison may be made of the
number of workers reflected in the certified payroll as having
worked on a particular project on a particular day and the number
of workers reported by the superintendent. A review of these
indicates that they often do not agree. In some instances more are
reflected in the certified payroll and in others less. Generally,
Tracy concluded the daily superintendent's report's reflected more
employees on the job than the certified payrolls. TR 326. On the
Turtle Creek project the superintendent's daily reports showed a
painter on the job April 12, 13 and 16, two or three weeks earlier
than the first certified payroll submitted by Atlantic. TR 328.
The witness directed our attention to certified payroll 15 of
CX 1, dealing with the Turtle Creek project. On August 20, 1982,
a Friday, he visited the site and counted nine employees, whom he
named. The certified payroll reported only 7. TR 335. He cited
other examples of the understating of employees on a job by
Atlantic, referring to reports submitted by another government
agency, Housing and Urban Development, as showing a greater number
of painters on the project on the corresponding days. TR 338-340.
I do not accord this aspect of the testimony much weight because
the HUD author(s) of the reports were not available for
cross-examination. This is different from the superintendent's
reports where the prime contractors are parties-respondent in the
proceeding and had a contractual relationship with Atlantic.
Turning to the report prepared by Mrs. Correia, (CX 24), the
witness noted that on Tuesday the 21st the record prepared by Mrs.
Correia listed 12 employees as working with him at the Turtle Creek
project. The certified payroll reveals only 7 employees had worked
that day. The witness cited CX 1, certified pa[yr]roll number 20,
which showed 8 painters, the construction report showed 10 and Mr.
Correia showed 12. TR 348. Other examples of a similar nature are
cited. TR 349. While Mr. Correia's report shows him working on 2
private jobs on Monday September 20 the certified payroll reports
him as working at Turtle Creek, Beverly. TR 350, CX 24, p. 4.
Mr. Tracy first met with Mr. Colburn on August 19, 1982. TR
351. A series of subsequent conference[s] took place from November
16, 1982 through March 17, 1983. TR 351-354. After the [15]
~16
[16] initial contact with Colburn he noted that there were changes
in the way the company's payroll records were kept. TR 355. In
particular the gross amounts earned by the workers were no longer
in round numbers but in dollars and cents with the variations being
greater than had been previous. I note as an example the week
ending September 3, 1982 at Turtle Creek, (CX 1, payroll 17) of 10
employees shown two employees earned gross wages in rounded dollar
amounts. In contrast with the week ending May 21, 1982, (CX 1,
payroll 3) each of the seven employees listed had gross earnings on
all projects in even dollar amounts. Payroll 4 of the same
exhibit shows six employees with gross wages in even dollar
amounts.
Mr. Tracy then turned his attention to the means he employed in
calculating the back wages which he alleges are owed by respondent
Atlantic to its employees for work performed on the seven
government sponsored projects here at issue, for which the
employees failed to receive the prevailing wages. TR 357-358. The
computations are contained in Exhibits 8 through 14. The
calculations were made by Tracy by comparing payroll records
submitted by the company, CX 22, the certified payrolls and the
information given by employees on the basis of records they kept or
their recollection. He gave as an example, the third page of CX 8
which refers to Mr. El-Azzaoui who testified that he was paid $5 an
hour. Inasmuch as his payroll records reflected in CX 22 showed a
gross pay of $200, dividing that by 40 hours would confirm the $5
per hour rate. According to the documents made available to Tracy
by El-Azzaoui, he believed he worked for 25 days at the Turtle
Creek jobsite. The hourly wage paid was then subtracted from the
prevailing wage for that site ($16.47) and the difference
multiplied by an average workday which was "reconstructed" to
be 7 1/2 hours per day, and multiplied by the number of days. Tr.
365. The witness then described the technique he employed to
reconstruct the back pay of another employee, Mr. John Barnaby, who
did not testify and supplied no personal records. Tr. 372-376.
Tracy subtracted the hourly rate deduced from dividing by 40 those
regular earnings listed in the employer's payroll for those weeks
where the employee worked a 5 day week (he would take an average in
the event the rate of pay changed over the period being studied)
from the prevailing wages for the project and multiply the
difference by the number of days shown in the certified payroll as
work days of the individual. Again, seven and one-half hours was
used as the length of the work day. The witness again explained
that in arriving at his calculations, although he used 8 hours per
day as the basis for calculating the hourly rate the individual
workers were paid, in the course of conferences with respondent
Colburn they had reached an agreement that the days were 7 1/2
hours long "on the jobsites", and that was the figure used in the
computation of the amount that would be due on the projects. TR
378-380. In each instance, or in most instances Mr. Tracy would
use the hourly rate given to him by Mr. Colburn or the one that he [16]
~17
[17] derived from the individual worker through personal
interviews. There did not appear to be any significant change in
these figures. There wasn't any real challenge as to the accuracy
of the figures inasmuch as it appears Mr. Colburn's position is
that the hourly rate for the week is the result of a "melding or
blending" of the purported $3.35 an hour minimum wage that the
individuals earned on private jobs and the appropriate prevailing
wage that they allegedly earned on the "government" jobs. It was
generally agreed that with regard to the other projects the basic
methodology employed by Mr. Tracy was similar. In some instances
other devices were employed. For example, at Chestnut Gardens an
employee by the name of James Catazzo, whose name never appeared on
the company certified payroll records or on the regular payroll
records, was determined to be an employee from check registers
shown to Tracy by Colburn. TR 413 (CX 10, A-2)
Mr. Tracy testified that he was assigned to the investigation
by his superior sometime after August 4, 1982. The investigation
proceeded as a result of a complaint by a Mr. Furney a few days
earlier. One of his early steps was to contact Colburn with whom
he met for the first time on August 19, 1982. TR 457. He met with
him at the respondent's North Reading office where he noted that it
was essentially a one-man operation with no office staff. TR
459-460.
During the course of the investigation which lasted until
November 16, 1982, Tracy visited the Turtle Creek, Weymouth, and
Hanscom projects. (TR 466). He acknowledged that when there is a
discrepancy between Atlantic's records and the superintendent's
records in calculating the number of individuals on the particular
project he would accept the superintendent's records. TR 469.
Through respondent counsel's interrogation, Tracy acknowledged
the number of days being credited to workers on the Turtle Creek
project, 614 is considerably larger than the approximately 455
mandays reflected in the construction reports, and 412 days in Mr.
Colburn's certified payrolls. TR 510. It was noted, however,
that the construction superintendent reports may have had apparent
gaps for a number of reasons. For example, there was in fact no
one from Atlantic working because it was a rainy day and no
painting was being done or no one was working on a particular day.
It was brought out that there were insufficient records kept by
Colburn, precluding Tracy from checking to see the actual number of
hours any particular employee worked during any particular week on
both government and private jobs. TR 537. The only records
usually available were the so-called certified payrolls and the
payroll record cards. Tracy, as noted previously, attempted to
take an average hourly wage deduced from the records and
interviews. He would also consider the various rates of pay paid
an individual over a period, with [17]
~18
[18] increases in the hourly rate being paid as an employee gained
experience, apparently. TR 545-550. Tracy acknowledged that in
resolving disputes and differences in the records he would resolve them
in favor of the employees and contrary to Colburn's interests in
computing the amount of back wages.
Robert W. Colburn (hereinafter Robert) is currently employed by
GAC Painting, functioning as a working foreman at various jobs. TR
675. The company is owned by Gilda Colburn, Al's wife. His
working supervisor is Al. TR 697. He has been functioning in this
capacity for approximately 3 years. Previously he was employed by
Atlantic Painting, run by his brother, Al Colburn, where he
functioned in pretty much the same capacity doing both public and
private work. He started working for Atlantic in 1974. Some of
the jobs in which he worked during the period 1980-1982 included
Turtle Creek, in Beverly, the Appraisers Stores in Boston, the Base
in South Weymouth, and the Bear Hill Nursing Center. TR 676-677.
Robert testified that he was told in "1980 to 1982" that he would
be paid $3.35, the minimum wage, for private jobs and a higher rate
on government jobs, depending on the job, approximately $11-16 per
hour. He acknowledges receiving a "combined rate", depending on
the job. TR 677-678. He recalled there were others working with
him on various jobs during this period including Mario Correia,
Richard Hughes, Ken Colburn, Manny Pachico. The number of
individuals with whom he would be working would vary depending on
the job. If he were on a particular project he generally would set
up the work and instruct the others as to what they should do. TR
678. It was his understanding that the others upon being hired
would also be told the nature of the pay arrangement. Al Colburn
explained it and "reaffirmed at different times" what the pay
structure would be. Specific meetings were held for that purpose.
TR 679. He himself explained it to some of the Portug[u]ese
individuals who had difficulty with English. The witness however
was unable to specify dates but he recalled that the meetings
usually took place at a restaurant. TR 680. These were general
meetings where the pay rate or any other aspect that came up with
regard to the job would be discussed. In the course of the year
such meetings would take place 3 or 4 times. TR 681. On
cross-examination Robert was asked if he knew the number of days he
worked at the Turtle Creek Project, the witness indicated that it
may have been around 25 days but he was not sure because he moved
around "too much". TR 681-682. While he recalled working at
Hanscom he was again unsure as to the precise number of days but he
believed he worked there more than a week. In fact he stated "more
than two weeks definitely." TR 683. Again, while he recalled
working at Chestnut Gardens in Lynn he was unsure as to the number
of days he actually worked there. TR 685. With regard to the
Appraisers Stores, he recalled being there rather sporadically.
However, he did not think that he was there a total of 60 days. TR
686. While he remembered working at the [18]
~19
[19] Bear Hill project, he was unsure how many days he in fact worked
there. He was also unsure as to the proportion of private work versus
government work. The witness testified that he never spent a whole week
on a government job. TR 688. The witness recalled spending at least a
whole week on a private job and mentioned the specific project. TR
688-689. In the summer of 1982 the witness test[]ified that the normal
workday began at 7 o'clock and work would normally finish at 3 with 1/2
hour for lunch. TR 692. Normally Al would call the witness or another
foreman the night before and direct him as to which jobsite he would
expect him to be working. The foreman would in turn call the
individuals that would constitute part of the crew. On other occasions
Al would advise the people at the jobsite where to report the following
day. Robert acknowledged that while he would be paid the minimum wage
on private jobs, if he worked a full week on a private job he would be
paid more than the minimum wage. TR 694. He gave the specific example
of the so-called Shah private residence. In 1982 his fairly regular
gross salary was approximately $330 per week. TR 695-6.
Mr. Albert L. Colburn testified that he is the owner of
Atlantic Painting Company which was started 1974. He graduated
from high school and attended a business college for 2 years.
Prior to starting his own painting company he worked for a paint
manufacturer functioning as a credit manager and a store manager.
It was primarily a retail operation. In operating Atlantic, he
hired employees through advertising in a Boston newspaper or
through word of mouth from employees already working for the
company. The job interview would take place either at his office
or on a jobsite, the individual would be told the type of work the
company was involved in, usually commercial work, that is,
industrial, multi-family buildings or business concerns, as
distinct from single family dwellings. The company also engaged
in government sponsored projects. The individual would be told
that he would be paid two wage scales, one for private jobs and the
other for government jobs. The private job would be at $3.35 per
hour, and then, depending on the individual's experience, he would
start at "$200 a week or $240 a week or whatever." TR 702. The
individual would also be told that he would be moved from one kind
of job to another and the agreed figure would be what they could
expect to average as a weekly pay. The individuals would be
satisfied with that arrangement, if not, they would not accept the
job. Mr. Colburn testified that the working times of the
individuals would be "blended" so that "their average would be to
$240 a week". TR 703. The witness asserted that the employees
would be told that their rate of pay would be blended. "By having
them so many days on a government and so many days on a private
project". TR 704. Respondent indicated that depending on the
degree of experience of a particular worker their starting salary
would vary from $200 a week to a higher amount, as they gained
experience. His [19]
~20
[20] attorney used the word "scale" in which the witness agreed. TR
706-707. This was allegedly part of the negotiation at the time they
were hired. Colburn essentially confirmed the testimony of his brother
to the effect that he would call the foreman the night before and tell
them where to report for work. He would also call the individual
workers. TR 708. Employees who would not receive a call would then
know that they should report at the same job the next day. He, himself,
would try to be at every jobsite at least 3 times a week. In explaining
the schedule respondent testified: "What I would do is I'd have a sheet
of paper and I'd mark down the existing jobs that I had going, and
knowing that I had to move people around from government to private jobs
I'd work it out and make my telephone calls, and do that. Its a lot of
from the top of the head, as far as my -- I've written schedules where
people go and stuff like that. There's so many things that has to be
done that night. I can't really form a schedule for the week, and say
that I'm going to live by that schedule. There's sometimes people don't
show up and you have to change it for that reason, and just changing
them from private jobs to public jobs is enough." TR 709. As an
adjunct to the blending of assignments in order to blend the rate the
witness would then prepare his payroll as follows. Question: "How did
you do your payroll?" Answer: "Okay, from the sheet that I would have
throughout the week. It would have the names of people on the different
jobs. Right? And then before what I would do is I would take that one
rate of pay, the average rate for that week, the salary or whatever you
want to call it, the amount that I told the individual that he would be
receiving during that week. I posted that on the sheet, on the card, my
payroll card, right? You know, write my check out to the individual for
the number of days that he appeared on my schedule. If he worked a full
week he got the full amount. If he worked less then he got less." TR
710. The payroll would usually be made out on Thursday evenings and the
checks would be delivered to the employees on Fridays. This would be
for the current week. He received no complaints from the employees.
The respondent testified that he would prepare the certified payroll as
follows: "I would go from the sheet that I had made up during the
course of the week, reflecting all the different jobs whether they be
private jobs or public jobs. Okay? Then I would take off that person's
name, and then transfer that to the certified payrolls. What it was is
a yellow sheet of paper and it had the names of the jobs on there, and
then Monday, Tuesday, Wednesday. And it gives you the individual[']s
name under each job and from that I would transfer it to the certified
payrolls the man days." TR 711-712. The amount earned on a particular
project by the particular individual would be calculated by the number
of "man days or hours times the rate" TR 713. The rate being, the
appropriate government rate on the particular job. The amount listed
under the column "amount paid on all projects" would be transcribed from
the weekly payroll and would accurately reflect the payroll cards [20]
~21
[21] and checks. TR 713-4. The "yellow sheets" were not produced
at the hearing, allegedly being destroyed at the end of each week.
Colburn testified that he was first contacted by an
individual, Ms. Margaret Smith, regarding the Appraisers Stores
contract sponsored by the General Services Administration in August
of 1981. At that time, in answer to a complaint she asked for
certain records which were given to her. He did not hear from her
again. Thereafter, in the summer of 1982 she and Paul Tracy began
interviewing employees. TR 715-716.
In discussing his various employees Mr. Colburn spoke first
about Mr. Martin, who testified earlier, TR 717. He stated that
the employee began working on the recommendation of another
employee, his pay rate was explained to him and there was no
dispute. The individual, Mr. Martin, was assigned to both private
and government projects. One that Colburn recalled specifically
was the Appraisers Stores. The other, private projects, included
Harbor Towers and Fisher Hill Estates. Allegedly, there was a
dispute because Mr. Martin wanted to remain at the Appraisers Store
where he was aware that the Federal job was being performed at the
higher rate of pay. Colburn indicated that none of his employees
were exclusively on either private jobs or government jobs. As a
result of the dispute, Mr. Martin "quit". TR 720.
Roger Ha[yne]sworth was hired as a result of answering a
newspaper ad which asked for experienced painters. As a result of
the applicant's allegation that he had approximately 5 years of
experience, a "blended rate" of $260-280 a week was offered. TR
721-722. Regarding the encounter described by Mr. Ha[yne]sworth at
Kenmore Square, Colburn indicated that the meeting was to adjust
back wages. TR 722.
Mr. Colburn also testified regarding his relationship with
Mariano Correia. The money that Mr. Correia returned to him was
allegedly the payment for an advance given to him earlier. TR 724.
He described this as a practice he would follow with "good
employees". The witness then looked at RAX 5, photocopies of
checks, one for $115 and another for $50, made out to Mariano
Correia. These checks are described as advance payments made to
Correia by Colburn. Those which constitute RAX 6, allegedly show
not only the amount paid to Mr. Correia for work performed but also
the breakdown as to the places where the work was performed and the
amounts received. It is noticed that these checks, RAX 5 and 6,
are all dated sometime after the Tracy-Colburn meetings. The
earlier checks, for example those to Roger Haynesworth, made out in
May 1982, check nos. 10494, 10532 and 10549 do not contain such
notations. RAX 4. With regard to Mr. Arthur DaSilva, Mr. Colburn
testified that he was hired sometime before 1981, and did not
speak or understand English well. However, Mr. DaSilva, too, [21]
~22
[22] was told of the so-called "blended rate" of pay arrangement.
TR 729-730. Similarly with regard to Mr. El-Azzaoui. TR 730.
With regard to the percentage of time spent on private jobs and
government jobs the witness was unable to agree or disagree with
Mr. El-Azzaoui saying only that he recalls that El-Azzaoui "spent
a lot of time on private jobs." TR 731.
In an attempt to show his cooperation with the government
investigation, Mr. Colburn testified that at his initial conference
with Tracy he gave him his copies of certified payroll and weekly
payroll records. He subsequently compared his records with those
of the general contractors' superintendent's reports, found some
deficiencies in his own records, adjusted them so as to make them
conform, and sent in the certified payrolls to the general
contractor for forwarding to the federal government. TR 735-737.
Colburn averred that his records were fairly consistent with some
of the contractors' superintendent's daily reports (sometimes
called clerk of the works reports in the transcript) because he,
himself, drew comparisons with those documents. TR 739-740, RAX 8.
The exhibit shows that as to three projects studied the figures for
the Appraisers Stores and Turtle Creek projects reflect the
greatest disparity between the Department's computations, on the
one hand, and the superintendent's reports and Atlantic's payroll
records, on the other. This is to be compared with CX 27 which is
the Department's comparisons. The witness emphasized that he began
double checking only after his meetings with Tracy. Prior to that
he did not check what the so-called daily superintendent's reports
contained for any particular job.
In attempting to explain away his brother Robert's testimony
regarding Robert's wages not changing despite working a full week
on a private job, thus suggesting he worked at more than the
minimum wage, Albert Colburn testified that on oc[c]as[]ion, when
an individual worked an entire week on a private job or on a
government job, he would still get the so-called blended weekly
rate, and then there would be a point where an adjustment would be
made. He cited Wayne Eaton as an example where adjustments were
made in 1981 and later in 1982. TR 766-767.
Mr. Colburn stated that Atlantic Painting was currently not a
functioning entity. He, however, is self-employed working for a
company called Architectural Estimating Management Company. Most
of his work, however, is done for GAC Painting owned by his wife.
His duties for the company are essentially similar to those he
performed for Atlantic. TR 772-773.
He acknowledged that the rate of pay that he told each of his
employees they would be receiving, was, in fact, reflected in the
payroll records. TR 777-778. The witness's attention was [22]
~23
[23] drawn to CX 22, page 3, where near the top of the page is the
figure $6.50. When asked to explain it, the witness testified that
that would be the hourly "blended" rate that would be employed in
calculating the individuals wages, based on an forty-hour week. TR
779. During the summer of 1982, on the average, Atlantic employed
approximately 20 people. In addition to the seven government
sponsored projects here considered there were an undisclosed number
of private projects functioning at the same time. On an average
day during the period from around July 10 to August 10, 1982
Atlantic Painting would have 4 or 5 crews with 4 or 5 foremen.
Included among the foremen would be his two brothers, Bob and Ken
Colburn, Eduardo Nacimento, and possibly Mariano Correia. In some
instances the job would be rather small and there would not be
anyone designated as foreman. This would often be a situation
where just one or two painters would be out on their own. At
TR 782-784-785 Mr. Colburn explained how he would keep a daily time
sheet that would show the names of the individuals that would be
working on any particular day during that week and the project at
which he was working. This was never produced. As to any
particular individual, he would know that after, on the average,
approximately 2 days on a government job assuming that individual
is earning say $260 per week, he would then be placed on
non-government work. This would be an estimate because he did not,
in fact, perform any specific calculations. In other words there
was not any attempt to apply the specific applicable prevailing
rate to any particular individual who worked in the government
project for the specific number of hours that the individual worked
on that project. TR 786-787. Mr. Colburn indicated that he would
make "adjustments to the wages afterwards if it didn't come out
right." TR 787. He cited various months during which such
adjustments were made. The witness's attention was directed to
CX 7, payroll 33, which is for the week ending May 28, 1982 and
shows 5 individuals working at the Appraisers Stores for that week.
Robert Colburn is shown as having worked 3 days, Lewis Mendonca, 1
day, Jorge Mendonca, 2 days, Kenneth Colburn 3 days and Jorge
Mendoca senior, 1 day. Referring to the respondent's brother,
Kenneth who is shown as earning $320 for all projects, if one adds
$247.17, the amount earned for 3 days work at $11.77 per hour, for
a seven-hour day, and add that to presumably two seven-hour days on
private work, the total gross pay is $294.07, not $320. Similar
discrepancies were noted. The witness did not explain how this
came about, other than to say that somehow he would reconcile these
discrepancies. TR 789. It was also shown that for that same week
Mr. Ken Colburn was reported as working at the Turtle Creek
project, Thursday and Friday, and shown as working Wednesday,
Thursday and Friday at the Appraisers Stores project for that same
week. The respondent, acknowledged that this would be an error. TR
790. Furthermore, Ken Colburn was shown on the Chestnut Gardens
certified payroll for that very same week as working 2 days, where
the prevailing wage was $15.67. CX 3. Also, he is shown [23]
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[24] as earning $219.38 that week on that project and, yet, a gross
amount on all projects of $320. TR 792-793. Respondent
acknowledged there was an error, because he was unable to explain
how Ken Colburn worked 49 hours on that week in 3 different
government projects without working overtime, but nevertheless
received a blended gross wage of $320 for that week. When the
witness explained that perhaps he was confusing Kenneth Hynes with
Kenneth Colburn, the records of Kenneth Hynes were examined. He
worked 14 hours at Chestnut Gardens for that same week on Monday
and Thursday, and he is reported as working at Turtle Creek,
(payroll 4 CX 1) 2 days on Wednesday and Friday. However, instead
of being paid approximately $450, he received $260 for the week.
The witness acknowledged that based on those figures that the
worker was underpaid by approximately $189 that week. TR 794.
Other examples of patent inconsistencies were shown. TR
798-799. As a result of the investigation sometime in August, Mr.
Colburn's recordkeeping was adjusted in an attempt to better show
the workings of the blended rate. TR 796.
The witness indicated that he recognized that in balancing the
projects in order to come up with a wage which the individuals
had been promised and were expecting for their weekly efforts, that
it did not always "come out even." But he would then try and make
some adjustments so that there would be a balance. Furthermore,
Mr. Colburn indicated that the agreements were usually on the basis
of a certain amount per week, and not on an hourly basis, although
he acknowledged that in certain instances he would use the hourly
figure as a point of reference on the payroll card. Adjustments in
wages would be made from time to time. TR 829.
Discussion and Conclusions
Prior to discussing the evidence as a whole, I shall review
several evidentiary matters raised by the parties during the
hearing and reiterated on brief. Respondent Foss argues that
unsworn interview statements the authors of which are not available
for cross-examination "do not constitute legally competent evidence
of hours worked by employees . . . and therefore no award can be
based on such inadmissable hearsay in the face of Atlantic's
denials and other conflicting evidence collected by the Compliance
Officer." Brief p. 3. Two cases are cited: Marshall v. United Egg
Products, 25 W.H. Cases 881 (S.D. Ga. 1981) and Wirtz v. G.A.M.
Electronics, Inc., 255 F. Supp. 349 (D.N.H. 1966). In United Egg,
no witnesses were available, only unsworn statements collected by
the compliance officer. This is not the factual situation here,
where there were many worker-witnesses whose testimony was credible
and lent support and credibility to the other material submitted by
the [24]
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[25] Department. The W[ir]tz case dealt with injunctive
relief. Where none of the three employees whose wages constituted
the alleged violation were any longer employees of the respondent,
the court refused injunctive relief. The case is not in point.
Similar arguments by Atlantic must also fail.
Foss and Atlantic also argue that since the Department has the burden of
showing the amount of back pay due, I may reject guesses at
reconstruction presented by the compliance officer if his conclusions
are illogical or not supported by admiss[i]ble evidence, citing Marshall
v. Hope Garcia Lancarte, 632 F. 2d 1196, (5th Cir. 1980). While the
above proposition is correct, the case also notes that an employer has
the burden of keeping accurate records and cannot complain of an
inaccurate back pay award when, if better records were kept, a more
accurate award could have been made, citing Anderson v. Mt. Clemens
Pottery Co., 328 U.S. 680 (1946), Hope Garcia, at 1198. Lastly,
respondents argue that in view of the inaccuracies exposed in the
witness-employees' testimony that no award of back pay should be made to
any witness not present and testifying at the hearing. Marshall v.
Truman Arnold Distributing Company, Inc., 640 F. 2d 906 (8th Cir. 1981).
They argue that the Department failed to produce sufficient evidence on
behalf of such employees so as to show the dates, times and places of
their work and the amounts allegedly due as a matter of just and
reasonable inference. The case cited is in point but may be
distinguished on the facts. In Truman Arnold, the District Court
reduced the alleged back wages due of the 17 employees who were
witnesses by fifty percent. The Circuit Court concluded the
Department's estimate for the remaining 8 employees who did not testify
was seriously undermined and therefore remanded the case for the
development of further evidence respecting the eight employees. In the
case at bar, as I will develop in greater detail, infra, the records of
Atlantic, insofar as they purport to show the dates, hours and places
its employees worked during the periods at issue, are wholly unreliable.
Thus, where, as here, the Department has sustained its burden of showing
that respondent Atlantic's employees' performed work for which they were
not properly compensated, the burden shifts to the employer to negate
the reasonableness of the inferences drawn from the employees' evidence.
Failing this, I may award damages to the employees although the results
may be only approximate. Anderson v. Mt. Clemens, supra at 686-88.
This principle has been applied uniformly by the Wage Appeals Board.
"Failure to keep such [accurate] records will be at the contractor's or
subcontractor's peril." In the Matter of Structural Services, W.A.B.
Case No. 82-13, June 22, 1983, p. 8.
Review of the Evidence and Conclusions
The evidence of record clearly establishes that the only
fairly accurate record kept by Atlantic is the payroll cards [25]
~26
[26] (CX 22) which accurately reflect the amounts paid by Atlantic
to its respective employees. The certified payrolls, however, are
purely contrivances falsified by Colburn to show compliance with
his obligations under the applicable laws, regulations and
contracts signed by him with respect to each of the seven projects
which are the subject of this proceeding. The falsity starts with
the number of hours ascribed to each employee for a full day's
work-seven hours. All the employees, including respondent's
brother whom he called as a witness, testified they worked at least
seven and one-half hours. This, standing alone, constitutes, in my
judgement an aggravated and willful violation. The falsity of the
records go even further. Colburn, himself, acknowledged he would
at times have to make adjustments because while he tried to make
things "balance", they did not and "adjustments" had to be made.
"You know, they're going to make so much a week [the "payroll
contract commitments" to use counsel's phrase] and go from there."
TR 806. This statement, of course, recognizes what the testimony
and preponderance of the evidence reveal: that the statutory
requirement that each employee be paid what he earned on each
project for each week at the conclusion of such week, was treated,
at best, as a mere casual objective which need not be rig[or]ously
met because a supervening understanding had been reached as to what
pay the worker would receive for a full week's work.
I find it incredible that Colburn would be able to move his
employees around each day, or portion of each day, so as to come
out "even" at the end of the week. That is, for each individual to
work just enough combination of hours on government-sponsored and
private projects so that the gross pay would be $220, or $260, or
some such ~round" figure week after week. I note that after the
initial interview with Tracy Atlantic's certified weekly payrolls
fail to show the same high proportion of gross wages in "round
figures". (e.g., CX 1, payroll 9 vs. payroll 17). I infer that
greater attention was being given to the [*] appearance [*] of
compliance, after the initial contact with the compliance officer.
[*Emphasis in original*] I do not believe, however, based on the
discrepancies in the certified payrolls and the testimony of the
former employees, that any greater compliance was undertaken by
Atlantic in the late summer and fall of 1982. In fact, respondent
Colburn's own testimony reveals he intentionally submitted false
certified payrolls.
The "obvious" discrepancies in the certified payrolls, noted
by Atlantic in its brief (p. 4) are cited as examples of the
inadvert[e]nt nature of the "errors". The argument is that the
figures were so contradictory on their face that they had to be
innocent errors. I choose to view the discrepancies differently.
I conclude that Colburn was engaged in such a giant sham that as a
"one-man" operation he became confused. That is why, in addition
to numerous instances where the certified payrolls showed the
individual being paid less per [26]
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[27] week for "all projects" than he was shown as earning for the
project being reported, there were times where the individual is listed
as working a full day at more than one project on the same day. TR 790.
While Atlantic undoubtedly did shift its employees from one job to
another, from day to day, and sometimes in mid-day, it is quite clear
that there was no record made available showing these job assignments so
that one may ascertain whether the alleged applicable rates, were being
paid. Colburn referred to a yellow sheet being the medium on which he
recorded the daily job assignments, but these sheets were never made
available.
Ultimate Findings and Conclusions
It is quite clear, therefore, that respondent Atlantic has
failed in its duty to keep appropriate records. The records made
available are full of contradictions. The contradictions and false
information contained in the certified records constitute
aggravated and willful violations of the Davis-Bacon and related
acts. The overwhelming weight of the testimonial evidence
demonstrates that the certified payroll records contain false
information both as to the number of hours which constituted a
"full" work day and as to the dates worked and the wage rates paid.
The calculations made by the compliance officer, as reported in CX
8-14, as may be adjusted due to payments voluntarily made by
Atlantic, represent the most reliable calculations of the monies
due Atlantic employees. While these calculations involved, in
part, reliance on records kept by employees and estimates based on
the compliance officer's experience and judgement, the failure of
Atlantic to keep more detailed contemporaneous records of what work
each employee actually performed each day, and where performed,
necessitates the reliance on what may be imprecise information.
Albert L. Colburn, as president of Atlantic, is directly
responsible for the aggravated and willful violations detailed
herein. Lastly, Albert L. Colburn, performing the very same
functions for G.A.C. Painting, owned by his wife, as he had
performed for Atlantic, is found to have a substantial interest in
G.A.C. Painting.
The monies withheld by the Department or by its direction are
to be used to satisfy the order issued herein to the extent
possible.
ORDER
It is therefore Ordered that
(a) Atlantic Painting Co., Inc., and Albert L. Colburn,
and their successor and assigns and any entity in which
Albert L. Colburn has a substantial interest, pay the
back wages in the amount and to the individuals specified
in the Department of Labor's exhibits 8 through 14, less
payments of $6,214.80 [27]
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[28] already made for a total amount now due of $95,575
as shown on Exhibit A [NOT] attached.
(b) Credit for payments already made shall be
apportioned among the various contracts on a percentage
basis, employee by employee;
(c) The individuals and entities specified in paragraph
(a), above, be debarred for a period of three years for
aggravated and willful violations of the Davis-Bacon and
related Acts and the regulations specified herein, and
(d) Any monies found to be due employees of Atlantic
which cannot be satisfied by monies presently withheld by
the Department are, jointly with Atlantic, the
responsibility of the prime contractors, R. C. Foss &
Sons, Inc., TLT Construction Corporation, Dustin
Engineering, Inc., Franchi Brothers Construction,
Kirkland-Barlow Associates, Joint Venture and Shah
Construction Co., Inc., to repay.
ANTHONY J. IACOBO
Administrative Law Judge
Notice to the Parties
This Decision and Order, pursuant to 29 C.F.R. Sec 6.34 may be
appealed by filing an appropriate timely pleading with the Wage
Appeals Board, U.S. Department of Labor, 200 Constitution Avenue,
N.W. Washington, D.C. 20210. [28]
