International Brotherhood of Teamsters, Local No. 551. Lewiston, Idaho, WAB No. 72-04 (WAB June 1, 1973)
CCASE:
DWORSHAK DAM, IDAHO
DDATE:
19730601
TTEXT:
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[1] UNITED STATES OF AMERICA
UNITED STATES DEPARTMENT OF LABOR
WAGE APPEALS BOARD
WASHINGTON, D.C.
In the Matter of
WAB
The Applicability of the Davis-Bacon Act to
Certain Site Warehouse Employees of Equip- Case No. 72-04 /FN1/
ment Dealers under the Corps of Engineers
Contract No. DACW-68-67-C-0005, Dworshak Dated: June 1, 1973
Dam, Idaho, Dworshak Dam Constructors,
a Joint Venture, Prime Contractor
Dworshak Dam Constructors,
Orofino, Idaho,
Petitioner
APPEARANCES:
Seth W. Morrison, Esquire,
Seattle, Washington for
the Petitioner
Winthrop A. Johns, Esquire,
Washington, D. C. for the
Petitioner for the Hearing before
the Wage Appeals Board
George E. Rivers, Esquire,
Counsel for Construction Wage Standards,
U.S. Department of Labor
Before: Oscar S. Smith, Chairman,
Stuart Rothman and
Clarence D. Barker, Members,
Wage Appeals Board [1]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ This case may be cited as Dworshak Dam, Idaho, WAB 72-04.
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[2] [DECISION]
In December, 1966 Local Union No. 551, International
Brotherhood of Teamsters, Lewiston, Idaho, complained to the
Department of Labor in Seattle, Washington that Petitioner was in
violation of the contract labor standards requirements of the
Davis-Bacon Act with respect to four employees of three equipment
dealers who worked out of Petitioner's one warehouse on the
construction site of the Dworshak Dam. The subject contract of
Dworshak Dam Constructors, a Joint Venture, was in the sum of
$131,216,855.00, was started in 1966 and provided for the
construction of the main dam structure. The project will be the
highest straight-axis concrete gravity dam in the United States and
the largest concrete dam ever constructed by the Corps of
Engineers. The project site encompasses many square miles. The
contract is now substantially completed.
The Teamster's complaint was referred to the Corps of
Engineers, the Federal agency here involved, for investigation. On
completion of the investigation, the agency's report was
transmitted to the Solicitor of Labor for opinion whether the four
employees of the three equipment firms were subject to the labor
standards provisions of Petitioner's construction contract.
According to the report, Nez-Perce Tractor and Equipment Company
was the Caterpillar dealer for the area; Intermountain Equipment
Company was the dealer for Euclid and Ingersoll-Rand; and Williams
Equipment Company was the dealer for K-W Dart. Nez-Perce and
Intermountain entered into a lease agreement with the prime
contractor, Dworshak Dam Constructors, to lease [2]
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[3] warehouse space at the project site for equipment repair, maintenance,
and storage. The Williams Equipment Company subleased space from
Intermountain Equipment Company for the same purpose.
In his decision of September 7, 1967 the Solicitor found the
four employees subject to the labor standards provisions of the Act
and the prime construction contract. He referred the matter back
to the Corps for appropriate corrective action. /FN2/ The Corps
thereafter [3]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ The Solicitor's September 7, 1967 opinion included the
following:
The situation involved in this case appears to be similar
to that considered by the Wage Appeals Board in the
matter of the Griffith Company. In the Griffith case the
Board considered the briefs submitted by the interested
parties on the question of whether equipment rental
dealers were "subcontractors" or "materialmen."
The Board did not feel required to decide the legal
status of equipment rental dealers in determining
coverage under the Davis-Bacon Act. In its opinion, the
Board stated: "Fortunately in this case, the Act has one
illuminating guidepost. Whatever the other purpose may
have been for including the provision in the statute,
whether by way of limitation of coverage or to assure the
protections of the Act it is clear that work of laborers
and mechanics performed upon the site of a project is the
kind of work it is the purpose of the statute to
protect."
And the Board further stated: we believe that when a
laborer or mechanic comes upon the site of the work to
perform services directly related to the prosecution of
the work to be performed under contracts with the owner
and necessary for its completion, such employees are
entitled to the protections of the Act. WAB Case No.
64-3, dated July 2, 1965. [3][FN2 CONTINUED ON PAGE 4]
The prime contractor in the instant case employs four
warehousemen in its warehouse, performing duties similar
to the employees in question. The warehousemen employed
by the contractor are receiving the contract wage rates.
To conclude that laborers and mechanics performing
similar duties in connection with and at the site of the
construction contract can be paid different wage rates
simply because they are employed by firms with differing
legal definitions would appear to make a distinction not
contemplated by the Act.
Therefore the Corps of Engineers should be advised that,
in our opinion, the employees of Nez-Perce Tractor and
Equipment Company, the Intermountain Equipment Company
and the Williams Equipment Company working on the site of
the work are entitled to receive the contract rate
applicable to warehousemen for the work performed in
furnishing supplies and equipment to the construction
contract. [END FN2]
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[4] found some $12,000 due the four employees involved and is still
withholding sufficient funds under the contract to provide for
restitution.
On November 8, 1968, Petitioner Dworshak Dam Constructors
sought review of the Solicitor's coverage ruling. However,
Petitioner requested the Board to suspend consideration until a
decision was made by an Arbitrator in a grievance procedure brought
by Teamsters Local No. 551 against the Dravo Corporation a
Co-sponsor of the joint venture, Dworshak Dam Constructors. An [4]
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[5] arbitration hearing in the matter was held at Spokane,
Washington, on June 27, 1969 but it was not until September 13,
1972 that the Arbitrator issued an interim decision to the effect
that the work done by the employees in question was not the work of
warehousemen and was not covered by the provisions of the
collective bargaining agreement.
A hearing was held by the Wage Appeals Board on November 27,
1972. At the conclusion of the hearing, it was apparent that the
Petitioner's justification consisted primarily of only the
arbitrator's award and this simply did not constitute a sufficient
legal or factual base to enable the Board to render a decision. In
addition, Counsel for the Department of Labor then requested
additional time to develop the facts, a request to which no
objection was taken under the circumstances, the Board granted the
parties additional time, later extended to April 13, 1973, to
support their positions with factual material independent of the
Arbitrator's award. Such material was to explain the actual duties
performed by the warehouse employees and to clarify if possible the
contractual relationships between the equipment dealers and the
Petitioner. Such post-hearing briefs and other data have been
received and reviewed. [5]
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[6] The issue in this case is whether the four employees of the
three equipment dealers who worked on the Dworshak Dam site in
warehouse space leased from the prime contractor, were "laborers
and mechanics" protected under the Davis-Bacon Act and applicable
regulations. If these men were covered employees, was the
applicable rate for "warehousemen" the contract minimum of $4.22
per hour plus fringes? Wage Determination No. AE-14,700 included
in the construction contract for Dworshak Dam was issued pursuant
to the Davis-Bacon Act, the wage determination provisions of which
provide for
. . . minimum wages to be paid various classes of
laborers and mechanics which shall be based upon the
wages that will be determined by the Secretary of Labor
to be prevailing for the corresponding classes of
laborers and mechanics employed on projects of a
character similar to the contract work in the city, town,
village or other civil subdivision of the State in which
the work is to be performed . . . /FN3/
The pertinent provisions of the Department's regulations as
they relate to this matter read as follows: [6]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN3/ Sec. 1 of the Davis-Bacon Act, 40 U.S.C. 276(a). [6]
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[7] Sec. 5.2 Definitions. . . .
(g) The terms "construction", "prosecution",
"completion", or "repair" mean all types of work done on
a particular building or work; at the site thereof . . .
including without limitation, altering, remodeling,
painting and decorating, the transporting of materials
and supplies to or from the building or work by the
employees of the construction contractor or construction
subcontractor, and the manufacturing or furnishing of
materials, articles, supplies or equipment on the site of
the building or work, . . .
(i) Every person paid by a contractor or subcontractor in
any manner for his labor in the construction,
prosecution, completion, or repair of a public building
or public work, or building or work financed in while or
in part by loans, grants, or guarantees from the United
States, is "employed" and receiving "wages", regardless
of any contractual relationship alleged to exist. /FN4/
7.1 Purpose and Scope
(b) The Board has jurisdiction to hear and decide in its
discretion appeals concerning questions of law and fact
from final decisions under Parts 1, 3, and 5 of this
subtitle including decisions as to the following: (1)
Wage determinations issued under the Davis-Bacon Act and
its related minimum wage statutes . . . (3) controversies
concerning the payment of prevailing wage rates or proper
classifications which involve significant sums of money,
large groups of employees, or novel or unusual situations
. . . /FN5/ [7]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN4/ 29 CFR, Part 5.
/FN5/ 29 CFR, Part 7. [7]
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[8] Petitioner's primary contention is that the four employees
the Solicitor said were subject to the Act's coverage and hence
misclassified were put on the job to do salesmen's work for each
dealer in competition with the other dealers, and it was as
salesmen that these employees really spent their time and efforts.
* * *
This case comes to the Wage Appeals Board under unique
procedural circumstances unlikely to be duplicated. It presents a
novel question of practice in the administration of the Davis-Bacon
Act under Reorganization Plan 14 /FN6/ and related regulations of
the Department of Labor. It is more than five years since the
decision of the Solicitor of Labor to which the Petitioner excepts.
It is about five years from the time the Petitioner requested
review of that decision. What has happened in the meantime? When
Petitioner requested review in 1968 it asked the Wage Appeals Board
to suspend action while an arbitrational course was pursued under
a collective bargaining agreement with Local 551, International
Brotherhood of Teamsters. The Solicitor of Labor had already made
his determination that the Petitioner was in violation of its
obligation under the Act. The Corps of Engineers had already
assessed some $12,000, in back-pay liability before the
arbitration. [8]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN6/ 5 U.S.C. App. [8]
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[9] From the beginning it was not clear to the Wage Appeals Board
what the Union and the Petitioner, particularly the Union, had in
mind in going to arbitration after the Solicitor and Corps of
Engineers had finished with the case. The Wage Appeals Board,
however, deferred to the Petitioner's request to hold the case
until the labor arbitration was concluded in order to give the
Petitioner the opportunity to develop its position according to
whatever theory it had in mind.
One of the objects of autonomous labor arbitration is to
substitute a speedy direct method of solving disputes between
unions and employers arising out of the interpretation and
application of private collective bargaining agreements. Instead
of a speedy resolution of whatever the union and employer had in
mind as of 1968, there ensued a series of delays extraordinary in
labor arbitration. Nothing happened. Although the arbitration
hearing was held on June 27, 1969 the arbitrator's final decision
and award did not issue until November, 1972 for reasons
unbeknownst to the Wage Appeals Board. There has been no
explanation why either party to the arbitration did not press the
arbitrator for a decision or discharge him for failing to decide
the case. [9]
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[10] It was only after repeated requests by the Wage Appeals
Board to the Petitioner to either get on with the case or face
dismissal, with the Petitioner insisting it could not move forward
without the arbitrator's decision, that the Petitioner finally
secured the final award, and then only after the Wage Appeals Board
was informed that the arbitrator had issued only a tentative award
which was not made final until further warnings from the Board.
The Petitioner, having finally gotten the paper it was looking
for, came to the Wage Appeals Board hearing in November, 1972 armed
with the award. Petitioner presented the argument that the
arbitrator had concluded that the Petitioner had not violated the
terms of the collective bargaining agreement between Local 551 and
Dravo Corporation because the three equipment companies whose
employees came on the job site to do work for which the government
found Davis-Bacon violations were equipment dealers and not
subcontractors.
In the meantime, the job was completed. The union officials,
the employer officers, and the employees affected, have gone their
way. What should have come before the Wage Appeals Board five
years ago on the basis of a fresh evidentiary record is now laid
before the Board on a stale record and an arbitrator's award.
The Petitioner's approach appears to be that the Wage Appeals
Board would not have to get into any factual questions because an [10]
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[11] arbitrator did that job for the Board when he concluded
that the four employees were salesmen and not warehousemen. But
for what purpose would an arbitrator reach such decision after the
Solicitor and Corps of Engineers had found a violation of the Act
in the amount of $12,000 in back-pay and that these employees were
warehousemen under the Act? The arbitrator was not called upon to
interpret and apply the provisions of the Davis-Bacon Act. He
could not have been aware of the experience and administration by
the Department of Labor under Reorganization Plan 14 and related
rules and regulations of the Department of Labor.
Counsel for the Solicitor, now the Employment Standards
Administration, Department of Labor, poses the following question
in his pre-hearing statement to the Board:
The obvious question, which begs for an answer, is what
is the effect, if any, of the arbitrator's September 13,
1972 interim decision that the disputed work is not the
work of warehousemen under the provisions of the
applicable collective bargaining agreement?
Counsel for the Solicitor of Labor adds a footnote:
For the proposition that an arbitration award, whether
adverse or favorable to an employee, is not conclusive of
a determination of wage rates under the Davis-Bacon Act
by this Board see Hutchins v. United States Industry,
Inc., 428 F. 2d 303 (1970).
Counsel for the Solicitor suggests that the arbitrator's
September 13, 1972 interim decision, made final November, 1972, has
no effect. We agree. [11]
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[12] This Board is called upon to interpret and apply the
Davis-Bacon Act, a remedial statute of the United States, and the
some 62 related Acts. The parties who come here seek vindication
of statutory rights and of the public interest behind the statute
The Board sees no warrant in the Davis-Bacon Act to excuse itself
from such responsibility by delegating the responsibility to the
vagaries of a private arbitrator who has not taken an oath to
interpret and apply the provisions of any statute, and who can not
do so.
Under the developing law of Federal labor arbitration an
arbitrator is normally called upon to interpret and apply the
provisions of the collective bargaining agreement and nothing more.
There is no way of telling whether an arbitrator will be equipped
with the necessary knowledge, skill and experience to fit statutory
interpretations into the body of practice, precedent and tradition
out of which the interpretation and further interpretations are
forged. Nor is an arbitrator selected by the parties to a private
arbitration for such purpose. It would be most unusual for an
arbitrator, despite the excellence of many, to have such
background.
When the parties to a labor arbitration are before an
arbitrator they do not understand and the arbitrator does not
understand that the arbitrator is being called upon to adjudicate
statutory rights. The parties do not mutually agree in advance
that the private arbitrator is empowered to do so. It appears to
this Board that neither this Board nor any other adjudicating
tribunal can compel parties to a [12]
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[13] private collective bargaining agreement to agree that an arbitrator
will determine statutory rights. To deprive a litigating party of the
vindication of a statutory right before the appropriate agency established
to hear and resolve such matters is simply to shortchange him of
something that the scheme and purpose of the Act have given to him.
Where the heart of a question involves a statutory application, one
body must consider and resolve questions of applicable law and
facts. Even if a union and an employer thus sought to foreclose an
individual employee of his statutory protection, it would not work
for these are rights for the employee's protection and for the
protection of the public. Whether the arbitrator's decision of
September 13, 1972 finalized in November, 1972 was adverse to or
favorable to the Petitioner, Petitioner's position before this
Board would be the same.
This Board will not abdicate its primary responsibility to an
arbitrator who is not selected for his knowledge in the
interpretation and application of the Act. It further believes
that it cannot do so. We see no warrant in the statutory scheme of
things for a public agency to so divest itself of responsibility.
The arbitrator's award has to do with subcontracting; --
whether the work performed by the employees in question was
Teamsters work. After sitting on the case four to five years he
concluded that the work done by the employees in question was not
work of warehousemen. He denied the union's claim to
"jurisdiction" over these positions and its request for appropriate
wages for these employees. [13]
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[14] The facts are that the employees of the three companies
came on the site of the work at the invitation of the Petitioner.
They used the same warehouse building as the employees concededly
covered under the prime contract and the Act. Insofar as the
factual record before us now indicates these four employees did
substantially the same work as the employees concededly covered.
We accept the Solicitor's and Corps of Engineers' conclusions made
in 1968 and 1969 as supported by substantial evidence. The
emphasis placed in the arbitrator's award upon the sales and
promotional work done by these employees is not satisfactorily
borne out by the "interrogatories" obtained five years later to
reconstruct the record. Post-hearing data, though equivocal or in
some cases supportive of Petitioner's position that these men also
did sales work, also tended to support the Solicitor's position,
particularly in the case of Donald F. Millard, the employee of
Nez-Perce, that they were basically warehouse clerks. As early as
August 19, 1968 the prime contractor reported to the Corps of
Engineers that the four "warehouse clerks" in issue were supervised
by the prime contractor's own warehouse supervisor although they
were carried on the payrolls of their respective firms. This
statement would appear to conflict with the concept of these men
being primarily salesmen to the prime and other firms in the
general area. The data, indicate that these men were more than
clerks and were not executive-type employees. For example, they
accepted deliveries, unloaded and placed parts in bins, kept
inventory records and at times delivered parts to the contractor's
repair shops. [14]
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[15] The Wage Appeals Board cannot conclude on the basis of
this belated submission that the Solicitor of Labor and Corps of
Engineers acted erroneously in concluding that the employees who
were suffered and permitted to come upon the site of the work, were
invited to do so, who were employed there for the advantage of the
Petitioner as well as for the advantage of the equipment dealers
and who worked in the same warehouse with admittedly covered
employees pursuant to a lease arrangement were not engaged in work
of the same nature and extent as other warehousemen who were
properly classified. On the facts of this case, a conclusion can
not be justified that employees invited or permitted to work on a
job site and who do the same work as covered and classified
laborers and mechanics, are not themselves covered by the
Davis-Bacon Act because the prime contractor left the legal
relationship with, the invitees' employer vague or indeterminate or
under a lease arrangement.
The Petitioner's case has been ably presented by Counsel. But
Petitioner gambled on the result of an arbitrator's inexcusably
late award which came to naught.
ORDER
The contracting agency should proceed to enforcement. The
Petition is denied.
Oscar S. Smith, Chairman
Stuart Rothman, Member
Clarence D. Barker, Member [15]
