M.A. BONGIOVANNI, INC., 1989-DBA-101 (ALJ Nov. 2, 1990)
CCASE:
M. A . BONGIOVANNI, INC.
DDATE:
19901102
TTEXT:
~1
[1] [91-08.WAB ATTACHMENT]
U.S. Department of Labor Office of Administrative Law Judges
1111 20th Street, N.W.
Washington, D. C. 20036
In the Matter of
Disputes concerning the payment of
prevailing wage rates by:
M. A . BONGIOVANNI, INC., 89-DBA-101
Prime Contractor,
Date Issued: NOV 2, 1990
and
Rainbow Painting & Wallcovering, Inc.
Subcontractor and
Rainbow Enterprises, Inc.
Subcontractor
With respect to laborers employed by
Subcontractor, Rainbow Painting and
Wallcovering, Inc., on Enviro[n]mental
Protection Agency Contract No.
C-2403050-04, Havre de Grace, Maryland
Thomas J. Grooms, Esq.
For Respondent Prime Contractor
Linda M. Henry, Esq.
For the Department of Labor
Before: Victor J. Chao
Administrative Law Judge
Decision and Order
This proceeding is before me on an Order of Reference from the
U. S. Department of Labor, Employment Standards Administration
(DOL) for a hearing pursuant to 20 C.F.R. [sec] 5.11(b) and [sec]
5.12(b). I held such hearing on June 26, 1990, at which the
following witnesses testified: John Rowland; Sond[r]a Rowland;
Barry Dillon (DOL compliance officer). The record of this case
consists of the hearing transcript (T); ALJ exhibits (ALJ 1, 2, 3);
Joint exhibits (J1-J7); Government exhibits (G1-G5). In rendering
the following recommended decision, I have considered the
post-hearing briefs of DOL and the prime contractor, M. A.
Bongiovanni, Inc. (MAB) which raise the following issues for
resolution: First, whether the DOL's claim against MAB is barred
by the two-year statute of limitations under the Portal to Portal
Act; Second, whether under the facts MAB should be relieved of
liability; Finally, whether DOL made proper computation of John and
Sond[r]a Rowland's overtime pay. [1]
~2
[2] DOL filed a complaint against MAB, the prime contractor,
and Rainbow Painting and Wallcovering, Inc. (Rainbow), the
subcontractor, alleging violations of the labor standards
provisions of the Federal Water Pollution Control Act, a
Davis-Bacon related Act. Specifically, DOL alleges that the
subcontractor failed to pay John Rowland and Sondra Rowland the
prescribed wage rates for work performed as painters and blasters
on the Havre de Grace Water Pollution Control Contract. By the
administrative law judge;s Order dated March 23, 1990, the
following facts were established: Rainbow was covered by the
Federal Water Pollution Control Act (33 U.S.C. [sec] 1372) and the
Contract Work Hours [and[ Safety Standards Act (40 U.S.C. [sec]
327, et seq.); John Rowland and Sondra Rowland worked for Rainbow;
Rainbow violated the above Acts by paying less than the wage rates
mandated by the above Acts to John and Sonda Rowland; John and
Sonda Rowland were underpaid by a total of $19,743.89.
At the June 26, 1990 hearing I held that Rainbow Enterprises
was successor operator to Rainbow. (T 5).
Mr. Richard H. Wall, the comptroller of MAB, stated the
following in his affidavit dated April 6, 1990: MAB subcontracted
the painting work on the Havre de Grace project to Rainbow shortly
after it was awarded the prime contract in 1985. As part of its
subcontract, Rainbow agreed to pay the prevailing wages and
fringe benefits applicable to its covered employees. MAB provided
to Rainbow copies of certified weekly payroll forms and instructed
Rainbow to use those forms to report the wages and fringe benefits
that were paid to its employees working on the project. During the
performance of Rainbow's work on the project, MAB regularly
reviewed the certified weekly payrolls submitted by Rainbow and it
appeared from those reviews that Rainbow was paying the appropriate
rates to its employees. (J 1). After the completion of its work on
the project, and as a condition of receiving the final payment
under the subcontract, Rainbow provided to MAB an affidavit
certifying that it had fully paid for all labor which it had
employed on the project. (J 1, attachment A).
DOL's investigation into the Havre de Grace project commenced
in April of 1987. As a result of the investigation, DOL's letter
dated October 5, 1988 to MAB stated that there had been an
investigation of Rainbow, and that MAB, as prime contractor, could
be "responsible for the payment of back wages when a subcontractor
fails to do so." The letter also stated that Rainbow had not
agreed to pay the back wages computed by DOL. [2]
~3
[3] Mr. Barry Dillon, the DOL's compliance officer who conducted
the investigation, first interviewed John and Sonda Rowland in
April of 1987. He conducted subsequent interviews in 1988. During
the interviews Mr. Dillon took written statements from the Rowlands
regarding the nature of their work at the Havre de Grace project,
their hours of work each month, and their hourly wage rate. Since
the Rowlands' names did not appear on Rainbow's certified payrolls
to MAB, Mr. Dillon interviewed Mr. Ronald Saunders of Rainbow. In
response to Mr. Dillon's request, Saunders was unable to produce
any records which reflect hours worked on any projects. Mr.
Saunders also admitted that he was unfa[]miliar with the payrolls
records since such records were kept by his late father, Charles
Saunders. Based on the fact that the Rowlands did produce written
statements and the fact that Ronald Saunders did not produce hourly
records to substantiate the certified payroll, Mr. Dillon concluded
the certified payroll was "virtually worthless." Accordingly, Mr.
Dillon relied on the Rowlands' written statements to make backpay
and overtime pay computations. (G-2a; G-3a).
At the hearing, John Rowland gave the following relevant
testimony: he was hired to work by Ronald Saunders of Rainbow at
$6.50 per hour. (T 15). While employed by Rainbow, he was not
paid any fringe benefits. (T 25). He was always paid in cash.
(T 19). While in Rainbow's employ, he worked at the Havre de Grace
project for about 8 months; he also worked at other locations.
(T 18, 26). John Rowland testified that he gave written statements
to Mr. Dillon, regarding the number of hours he worked each month
at the Havre de Grace project and his duties during these hours.
(G 5). He also testified that his statements were accurate to the
best of his knowledge. (T 45, 103 - 104). At the hearing, John
Rowland impressed me as truthful; I note, his testimony was
basically consistent with his written stat[e]ments. (G 5). John
Rowland stated in his February 23, 1988 statement that he "worked
40 hours or more per week" at the Havre de Grace project. (G 5).
At the hearing, Sonda Rowland gave the following relevant
testimony: She was also hired to work by Ronald Saunders of Rainbow
at $5.00 per hour. (T 50). Only until the last two weeks of her
employment in October 1986 she was paid $5.50 per hour. (T 55).
She was always paid in cash. (T 50). One Friday evening, she
brought her pay envelope to Mr. George Rice, a MAB supervisor at
the project; Mr. Rice said she was underpaid by Rainbow. (T 50-
52). Afterwards, she complained to Ronald Saunders of Rainbow,
who never corrected the problem. (T 52). Sonda Rowland testified
that she and her husband, John, worked the same hours on different
projects of Rainbow, but on the Havre de Grace project her husband
worked overtime and she did not work overtime. (T 56). She also
testified that she kept a contemporaneous "yellow piece of paper"
regarding the hours she and her husband worked, and she used this
paper to furnish information to Mr. Dillon. (T 108, 53). [3]
~4
[4]
Finally she testified that her written statements to Dillon
accurately reflected her and her husband's work hours. (T 108-
110). At the hearing, Sonda Rowland impressed me as truthful; I
note, her testimony was basically consistent with her statements.
(G 4). In her February 23, 1988 statement, she stated she "worked
approximately 40 hours per week" at the Havre de Grace project.
(G 4).
At the hearing, Mr. Dillon gave the following relevant
testimony: He relied on the Rowlands' statements to compute the
backwage and overtime pay. (T 63-65; 69; G-2a; G-3a). He only
included the hours the Rowlands worked at the Havre de Grace
project. (T 6) He obtained the wage rates they should have been
paid from the wage determination sheet to the contract. (T 66, 69).
He determined their backwage due by multiplying the hours they
worked by prevailing wage rate and subtracting the money John and
Sonda Rowland had estimated as paid. (T 63 - 64). Additionally,
he made overtime pay calculations. In this connection, the
Rowlands, each, noted a number of instances in their statements
where the hours were overtime hours. (G 4; G 5). Mr. Dillon
testified that during his investigation, he spoke to Mr. George
Rice, a MAB supervisor, who verified that John and Sonda Rowland
had worked at the Havre de Grace project, and the number of hours
they worked. (T 101). Based on his computations, Mr. Dillon
concluded that John Rowland was underpaid $10,756.45 (G-2a), and
Sond[r]a was underpaid $8,997.44 (G-3a), a total of $19,743.89.
Discussion and Conclusion
MAB's first argument is that since the claim for backwage is
for the period between February to October, 1986 and DOL's claim
was dated October 5, 1988, such claim is barred by the two-year
statute of limitations under the Portal to Portal Act, 29 U.S.C.
[sec] 255. In making the argument, MAB asserts that it is unclear
which federal prevailing wage law is involved since DOL made
reference to both the Davis[-]Bacon act and the labor standards
provision of the Federal Water Pollution Control Act.
I reject this argument for two reasons. First, this case
clearly is covered under the Federal Water Pollution Control Act,
33 U.S.C. [sec] 1372, a Davis-Bacon related Act, which is not
subject to the two-year statute of limitation under [the]
Portal-to-Portal Act. Glenn Electric Co. Inc. v. Donovan, 755 F.2d
1028 (3rd Cir. 1985). Cf. Tom Shaw v. Marshall, [] F.Supp. [], 26
WH Cases 575 (1982). Second, assuming arguendo that this case were
covered under [the] Davis-Bacon Act, case law holds that the
Portal-to-Portal Act statute of limitations is tolled only when a
court action is filed, not by the commencement of an administrative
proceeding. Glen Electric Co. supra; Unexcelled Chemical Corp. v.
U.S., 345 U.S. 59 (1953). The present case clearly is an
administrative proceeding, not a court action. [4]
~5
[5] MAB next argues that it should be relieved of liability
because of the following circumstances: First, it had regularly
reviewed Rainbow's certified pay[]rolls without finding any
irregularity; Second, Rainbow committed criminal fraud in the
certified payrolls which significantly contributed to lack of
knowledge on MAB['s] part; finally, [the] DOL investigator found
irregularity as early as April of 1987 but did nothing with the
information.
Based on case law, I reject this argument. In re Northern
Colorado Constructors, Wage Appeals Board 86-31 (1987), it was
held that "the Davis-Bacon Act itself creates a contractual
obligation on the part of t[h]e prime contractor to pay the sums
which
its subcontractor owes to the subcontractor's employees." In re
TAP Electrical Contracting, 81-DB-5, 81-DB-6 (ALJ, 1983), it was
held that a prime contractor is liable even if he is not fully
aware of violations until after violations occur. See also In re
J.B.L. Construction Co., 23 WH Cases 1064 (ALJ, 1978). It is true
that that case indicated there may be "extenuating circumstances"
in which a prime contractor may be relieved of its liability.
However, in this case there is no such extenuating cir[c]umstances
since a MAB supervisor was alerted by Sonda Rowland and DOL
compliance officer of pay irregularities.
MAB's final argument is that in instances where overtime hours
were not specified by the Rowlands, Mr. Dillon's computation of
overtime is unreasonable and must be rejected.
In considering this argument, the Supreme Court in Anderson
v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946) set forth the
following standard for the burden of proof which the government
must meet: "An employee has carried out his burden if he proves
that he has in fact performed work for which he was improperly
compensated and if he produces sufficient evidence to show the
amount and extent of that work as a matter of just and reasonable
inference. The burden then shifts to the employer to come forward
with evidence of the precise amount of work performed or with
evidence to negat[]e the reasonableness of the inference to be
drawn from the employee's evidence. [*] If the employer fails to
produce such evidence, the court may then award damages to the
employee, even though the result be only approximate." [*](emphasis
added)[*] In this case since John Rowland stated he worked "40
hours or more per week" and Sonda Rowland stated she worked
"approximately 40 hours per week", it is reasonable to compute
their overtime pay based on their workweek of at least 40 hours.
Consequently, DOL's overtime pay computation in the following
instances was reasonable, absent the evidence required from
employer under Anderson.
In John Rowland's case: 89 hours for 2/86 - 9 hours overtime;
180 hours for 5/86 - 20 hours overtime; 84 hours for 7/86 - 4 hours
overtime; 200 hours for 9/86 - 40 hours overtime; 235 hours for
10/86 - 75 hours overtime. In Sonda Rowland's case: 194 hours for
9/86 - 34 hours overtime. [5]
~6
[6] In my view, the only instance where DOL's computation is
unsupported by evidence is John Rowland's work in 4/86 where he
worked 150 hours, of which 70 hours were counted as overtime.
Based on John Rowland's statement of working 40 hours or more per
week, only 30 hours can be counted as overtime. Accordingly, the
overtime for 4/86 should be $210.60 ($7.02 x 30), not the $491.40
in DOL's computation, a difference of $280.80.
Recommendation
It is accordingly recommended that:
MAB, the prime contractor, pay the following amounts to the
following workers: John Rowland the sum of $10,475.65 (10,756.45
- 280.80); Sonda Rowland the sum of $8997.44.
Victor J. Chao
Administrative Law Judge [6]
