CCASE:
JACK PICOULT
DDATE:
19681219
TTEXT:
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[1] UNITED STATES DEPARTMENT OF LABOR
WAGE APPEALS BOARD
In the Matter of
WAB Case
Petition of Jack Picoult for review of No. 68-09
decision of the Solicitor dated
October 9, 1967, concerning certain Dated: December 19, 1968
apprentice wage rates under the follow-
ing contracts for United States Post
Offices:
GS-02B-13,098, Passaic, N.J.
GS-02B-13,983, Bayonne, N.J.
GS-02B-13,087, Hoboken, N.J.
Jack Picoult, Petitioner
Mr. Eugene Drexler, for the Petitioner.
Mr. Thomas X. Dunn, for the Building Trades Con-
struction Department, AFL-CIO,
and the International Brother
hood of Electrical Workers,
AFL-CIO,
Intervenors.
Mr. Edward D. Friedman, Acting Solicitor of Labor.
Before: SMITH, Chairman, and BARKER and ROTHMAN, Members.
DECISION AND ORDER
I.
Subsequent to this Board's decision in WAB Case No. 68-8,
dated August 26, 1968, in which the Board declined to review the
petition for failure to prosecute the appeal in a timely manner,
the petitioner filed on September 23, 1968, a motion for
reconsideration of the petition. The Solicitor did not oppose the
motion, and it was granted on October 18, [1]
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[2] 1968. No oral proceeding was requested under section 7.14 of the
Board's rules (29 CFR 7.14). On November 25,1968, the Board granted a
motion to intervene filed by the Building and Construction Trades
Department, AFL-CIO, and the International Brotherhood of
Electrical Workers, AFL-CIO.
The parties were afforded an opportunity to file briefs in
support of their positions by November 18, 1968, and to file reply
briefs within ten days thereafter. Written statements were filed
by the Solicitor and the Intervenors. The petitioner indicated
that its position was fully stated in the petition and accompanying
materials, including those filed with its motion for
reconsideration. However, the Petitioner did file briefs in reply
to the Solicitor and the Intervenor.
The petition is for review of a Solicitor's decision dated
October 9, 1967. The decision is brief, and is set out in full in
the form of a letter /FN1/ to an officer of the General Services
Administration. [2]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ The letter reads as follows:
Mr. Norman G Harper
Acting Director
Construction Division
Public Buildings Services
General Services Administration
Washington. D.C. 20405
Dear Mr. Harper:
This is in reply to your letter requesting an interpretation
of section 5.5(a)(4) of our Regulations (29 CFR, Subtitle A). The
question is raised because apprentices employed on projects in
[2][FN1 CONTINUED ON PAGE 2][2] Bayonne, Hoboken, and Passaic, New
Jersey are employed pursuant to an apprenticeship training program
established by agreement between United Construction Contractors
Association. Inc., and Industrial Workers of Allied Trades, Local
199, affiliated with National Federation of Independent Unions, New
York City and registered with the New York State Apprenticeship
Council.
Section 5.5(a)(4) reads in part as follows:
The contractor or subcontractor will be required to
furnish to the contracting officer written evidence of
the registration of his program and apprentices as well
as the appropriate ratios and wage rates, for the area of
construction prior to using any apprentices on the
contract work.
The authority to approve an apprentice schedule is found in
5.5(a)(1)(i) which provides that:
The contracting officer shall require that any class of
laborers and mechanics which is not listed ln the wage
determination . . . shall be classified or reclassified
conformably to the wage determination.
The wage rates which we have found prevailing for Bayonne,
Hoboken, and Passaic, New Jersey, are the rates negotiated
between Local Union No. 164, International Brotherhood of
Electrical Workers and the New Jersey Chapter of the National
Electrical Contractors Association. In order to be in conformity
with the wage determinations included in your contracts, the
apprentice wage rates must also be those in the collective
bargaining agreements from which the journeymen's rates were taken.
As of August 15, 1967, the negotiated wage rates for journeymen
electrician ia $6.26 and the apprentice rates are: 1st Year, $3.05;
2nd Year, $3.82; 3rd Year, $4.48; 4th Year, $4.85; and 5th Year,
$5.15. [3][FN1 CONTINUED ON PAGE 4]
[4] In addition your attention is invited to the following which
is quoted in Item 36, page 16, of the New York City Agreement:
IT IS EXPRESSLY AGREED AND UNDERSTOOD that the Employer
shall pay a higher wage scale as prescribed in any
contract executed by the Employer with any governmental
authority . . .
It is hoped that this is sufficient information upon which to
take appropriate action. For your information and guidance there
is enclosed a copy of our Memorandum No. 59 relating to the
applicable apprentice wage rates and ratios.
Yours sincerely,
/s / Charles Donahue
Solicitor of Labor
Enclosure
Memorandum No. 59, dated June 24, 1964, referred to in the letter,
announced a policy of discontinuing the listing of apprentice
wage rates on wage determinations listed under the Davis-Bacon Act,
and stated that future wage determinations would carry the
following notation:
Before using apprentices on the job the contractor shall
present to the Contracting Officer written evidence of
registration of such employees in a program of a State
apprenticeship and training agency approved and
recognized by the U.S. Bureau of Apprenticeship and
Training. In the absence of such a State agency, the
contractor shall submit evidence of approval and
registration by the U.S. Bureau of Apprenticeship and
Training.
The contractor shall submit to the Contracting Officer
written evidence of the established apprentice-journeyman
ratios and wage rates in the project area, which will be
the basis for establishing such ratios and rates for the
project under the applicable contract provisions. [4][END
FN 1]
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[3] II
The principal points urged by the petitioner are the
following:
1. The petitioner submitted written evidence to the
contracting officer of the petitioner's registered program
and the wage rates [3]
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[4] required to be paid thereunder. He points out that the program and
wage rates were duly registered in the State of New York. He asserts
that his wage rates "were agreed to with and/or established by the
Contracting Officer." [4]
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[5] 2. The wage rates were arrived at in accordance with the
contract provisions. Paragraph 3, subparagraph (b) of Standard
Form 19-A states the following:
The Contractor shall furnish written evidence of the
registration of his program and apprentices as well as
the ratios allowed and the wage rates required to be paid
thereunder for the area of construction, prior to using
any apprentices in the contract work. [Underscoring is
that of the petitioner.][No underscoring in original]
The petitioner interprets this provision as requiring the
petitioner to pay his apprentices under this registered
program.
3. The petitioner says that the Solicitor erred when he
considered apprentice's "wages" without considering the entire
program, and by comparing such wages with those found locally
prevailing for other workmen.
4. In response to the Solicitor's statement that: "the wage
rates we have found prevailing for Bayonne, Hoboken, and Passaic
are the rates negotiated between Local Union 164, International
Brotherhood of Electrical Workers, and the New Jersey Chapter of
the National Electrical Contractors Association," the petitioner
asserts that the jurisdiction of local union 164 does not extend to
Passaic.
5. The petitioner urges the Board to consider the equities of
the case. Since no wage rates were stated in the bid documents,
the petitioner's price for the project was based in part on the use
of the apprentices at his registered rates.
6. The Solicitor used an erroneous rate in his ruling. He
cites wage rates that were allegedly prevailing as of August 15,
1967, although the opening dates for each bid were considerably
earlier. [5]
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[6] The Solicitor makes the following major points:
1. He relies upon section 5.5(a)(4) of the Department's
applicable rules (29 CFR 5.5(a)(4)), which is restated in paragraph
3(b) of Standard Form 19-A, quoted above. Section 5.5(a)(4) is
quoted by the Solicitor as follows:
. . . The contractor or subcontractor will be required to
furnish to the contracting officer written evidence of
the registration of his program and apprentices as well
as of the appropriate ratios and wage rates, [*] for the
area of construction [*] prior to using any apprentices
on the contract work. [*[Emphasis is the Solicitor's.]*]
The most vital point made by the Solicitor is that this
section must be read with section 5.5(a)(1)(ii) of the same rules,
which is restated in paragraph 1(d) of Standard Form 19-A and which
as so restated reads as follows:
The Contracting Officer shall require that any class of
laborers or mechanics which is not listed in the wage
determination decision and which is to be employed under
the contract shall be classified or reclassified
conformably to the wage determination decision, and shall
report the action taken to the Secretary of Labor. If
the interested parties cannot agree on the proper
classification or reclassification of a particular class
of laborers or mechanics to be used, the Contracting
Officer shall submit the question, together with his
recommendation, to the Secretary of Labor for final
determination.
In this connection, the Solicitor points out that his
Memorandum No. 59 provides pertinently:
. . . The contractor shall submit to the Contracting
Officer written evidence of the established
apprentice-journeyman ratios and wage rates [*] in the
project area [*], which will be the basis for
establishing such ratios and rates for the project under
the applicable contract provisions. [*[Emphasis is the
Solicitor's.]*] [6]
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[7] 2. The Solicitor points out that the Davis-Bacon Act itself,
under which the wage determinations were made and included in the
contracts, requires that the wage rates to be determined by the
Secretary must be those that he finds prevailing for the
corresponding classes of laborers and mechanics "in the city, town,
village, or other civil subdivision of the State [*] in which the
work is to be performed [*]." [*[Emphasis is the Solicitor's.]*]
It would be an[o]m[a]lous, the Solicitor says, to treat apprentices
different from other laborers and mechanics who are entitled to
locally prevailing wages as the minimum wages payable under the
Act.
3. Determinations by the Secretary of Labor should be
considered "the most authoritative" in wage rate matters of this
sort, citing Nello L. Teer Co. v. U.S., 208 F.Supp. 552, 15 WH
Cases 571, cert. den. 86 S.Ct. 1065, 17 WH Cases 254 (1966).
4. The Solicitor states that his position is consistent with
underlying purpose of the Davis-Bacon Act of maintaining the
stability of local wages by discouraging an influx of
cheap labor to areas of Federal construction.
In his reply to the Solicitor's presentation, the petitioner
asserts that the Solicitor has failed to respond to the position of
the petitioner that the payment of the wage rates under his
registered program was part of the contractual undertaking, which
among other things, provided that: "the contractor shall furnish
written evidence of the registration of his program and
apprentices, as well as the ratio allowed and the wage rates
required to be paid [*] thereunder [*] for the area of construction
prior [7]
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[8] to using any apprentices in the Contract Work."
[*[Emphasis is the petitioner's.]*] Secondly, the petitioner
asserts that the "administrative expediency" represented by the
Solicitor's failure to list apprentice rates should be no excuse
for prejudicing bidders. Thirdly, the petitioner asserts that
the use of registered programs, such as his, provides sufficient
safeguards against an influx of cheap labor to areas of Federal
construction.
The essential points made by the Intervenors are the
following:
1. Permitting the petitioner to pay his apprentices under his
New York agreement would permit him to pay from $1.25 per hour as
a beginning rate up to a fifth year apprenticeship of $2.67 --
regardless of where the apprentices work, whether it be New York,
New Jersey, or any other State of the Union.
2. The upshot of the pertinent contract provisions was simply
to place on the Contractor the burden of showing what the
appropriate locally used apprenticeship wage rates were, and it did
not have the effect of giving the sanction of law to any wage rates
which the contractor submitted even if they had been collectively
bargained.
3. Apprentices cannot be treated differently than other
laborers and mechanics and they are entitled to the benefits of the
Davis-Bacon Act.
4. The position of the petitioner is inconsistent with the
general objectives of the National Apprenticeship Act of 1937. [8]
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[9] 5. The petitioner's position in questioning the right of the
Solicitor to determine apprentices' wage rates is not consistent
with United States v. Binghamton, 347 U.S. 171, 12 WH Cases 20, and
Nello L. Teer Company v. United States, supra.
6. The Davis-Bacon Act and the National Apprenticeship Act are
remedial legislation entitled to the liberal construction given
them by the Solicitor.
III.
At the outset, two basic observations should be made. First
of all, apprentices to the various construction crafts are
"laborers" or "mechanics" within the meaning of the Davis-Bacon
Act. Secondly, apprentices are clearly entitled to minimum wage
protection under the Davis-Bacon Act when the Secretary of Labor,
or his delegee, the Solicitor of Labor, has made local prevailing
wage findings based on the wages paid to corresponding classes of
laborers and mechanics.
The overriding question in this case is to what extent, if
any, is the protection of apprentices by requiring payment
according to the local prevailing wage rates affected by the
policy announced in the Solicitor's Memorandum No. 59, dated June
24, 1964, /FN2/ of discontinuing the listing of apprentice wage
rates in wage determinations made under the Davis-Bacon Act and by
reliance upon related rules and contractual provisions. [9]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ See footnote 1. [9]
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[10] The collective contentions of the petitioner are to the
effect that, as a consequence of the memorandum and related rules
and contractual provisions, apprentices were to be treated
differently from all other laborers and mechanics entitled to the
protection of the Davis-Bacon Act. In this connection, he relies
upon paragraph 3(b) of Standard Form 19-A, the Federal procurement
form containing the labor standards provisions applicable to
construction contracts exceeding $2,000. /FN3/ Paragraph 3 of the
form is entitled "APPRENTICES."
Under paragraph 3(b) the petitioner was required "to furnish
written evidence of the registration of his program and apprentices
as well as the ratios allowed and the wage rates required to be
paid thereunder for the area of construction, prior to using any
apprentices in the contract work." /FN4/ The petitioner argues
that, under this provision, he was only required to submit the
wages to be paid under his New York registered apprentice program,
and that these wages were those to be paid under his contracts in
order to meet the requirements of the Davis-Bacon Act. We do not
agree. The provision clearly requires the submission of apprentice
wage information relating to the area of construction rather than
some other area. Memorandum No. 59 /FN5/ supports this conclusion
since it provides that the contractor is to submit evidence of
"established apprentice . . . wage rates in the project area."
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN3/ See 41 CFR 1-16.401 and 1-16.901-19A.
/FN4/ Paragraph 3 is a restatement of section 5.5(a)(4) of the
Department of Labor's applicable rules (29 CFR 5.5(a)(4)).
/FN5/ See footnote 1. [10]
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[11] Memorandum No. 59 goes on to contemplate the use of the
submitted wage rates in the establishing of the minimum wage rates
for apprentices. The labor standards clauses as a whole suggest
that the establishing of these minimum wage rates is to be
accomplished under paragraph 1(d) of the standard form rather than
paragraph 3(b) which only deals with the submission of the
specified information. Paragraph 1 states the obligations of the
contractor under the Davis-Bacon Act.
Paragraph 1(d) of the standard form reads as follows:
(d) The Contracting Officer shall require that any class
of laborers or mechanics which is not listed in the wage
determination and which is to be employed under the
contract shall be classified or reclassified conformable
to the wage determination decision, and shall report the
action taken to the Secretary of Labor. If the
interested parties cannot agree on the proper
classification or reclassification of a particular class
of laborers or mechanics to be used, the Contracting
Officer shall submit the question, together with his
recommendations, to the Secretary of Labor for final
determination. /FN6/
In applying paragraph 1(d), we find no merit in the contention
of the petitioner that his apprentice wage rates "were agreed to
with and/or established by the Contracting Officer." The
petitioner points to no particular agreement or establishment, and
we find no facts in this record to support his contention. Indeed,
the referral by the Public Building Service to the Solicitor, to
which he responded in his October 9, 1967, letter, suggests the
absence of any such agreement or establishment. [11]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN6/ The subparagraph restates section 5.5(a)(1)(ii) of the
Department's rules, to which the Solicitor refers and upon which he
relies. [11]
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[12] Further, we find no merit in the contention of the
petitioner that the apprentice "wages" not be considered without
attention being given to the entire apprenticeship program. The
operation of such a program does not remove protections afforded by
the Davis-Bacon Act.
We conclude that the minimum wage protection provided to
apprentices by the Davis-Bacon Act is not diminished by the policy
announced in Memorandum No. 59. The journeymen rates were in the
bid documents and these are the critical rates concerning the
determination of lesser apprentice rates, under the clause in
paragraph 1(d) of the standard form. It is clear from the long use
of the clause contained in paragraph 1(d) that historically the
Secretary has not determined in every instance locally prevailing
wages for all classes of laborers and mechanics. We do not say
that he was required to do so here since the wage determination's
inclusion of the journeyman rate provided sufficient guidance to
prospective bidders about minimum wages for electrical work.
Any different conclusion would make no sense at all in the
administration of the Davis-Bacon Act. To say that an employer who
has negotiated an approved apprenticeship program for any area
/FN7/ can take that set of apprenticeship rates with him wherever
he goes throughout the country in performing work subject to the
Act is totally inconsistent with the purposes of the Act.
Apprentices are laborers and mechanics under the Act and are
entitled to the rates prevailing in the construction area for
apprentices in accordance with either direct findings of the
Secretary of Labor under the Act or contractual determinations
conforming to those findings. [12]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN7/ See 29 CFR 1.2(c) for the use of the term "area" in the
administration of the Davis-Bacon Act. [12]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
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[13] Officers of the Government administering the Davis-Bacon
Act may not concede away its protective standards through
inadvertence or mistake. And from the record, this was not done
here. Any arrangement or acquiescence permitting less in the
way of prevailing wage protection than required by law would be
unauthorized. The Government would not be estopped by any such
unauthorized arrangement or acquiescence in the ordinary case. This
is such a case.
Turning now to how the applicable contract provision was
applied in this instance, we do agree with the petitioner that the
conformance of wage rates for apprentices must relate to wages
found prevailing at the time of the making of the wage
determination included in the contract. This does not appear to
have been done here, and the case is remanded to the Solicitor for
necessary corrective action in this regard.
SO ORDERED.
OSCAR S. SMITH, CHAIRMAN,
CLARENCE D. BARKER, MEMBER,
STUART ROTHMAN, MEMBER,
WAGE APPEALS BOARD [13]
