Montrose House Building Committee of the Greater Washington Jewish Community Foundation, WAB No. 1975-10 (WAB Nov. 11, 1975)
CCASE:
MONTROSE HOUSE
DDATE:
19751111
TTEXT:
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[1] UNITED STATES OF AMERICA
DEPARTMENT OF LABOR
DECISIONS AND ORDERS OF THE WAGE APPEALS BOARD
In the Matter of
The prevailing wage rates
applicable to the construction WAGE APPEALS BOARD
of Montrose House, Wage Decision CASE NO. 75-10
Md-75-3062; and FHA Project No. DECISION AND ORDER
000-44224-NVSVP, Rockville, DATED: NOVEMBER 11, 1975
Montgomery County, Maryland
Montrose House Building Committee
of the Greater Washington Jewish
Community Foundation
Petitioner
Appearances:
Thomas J. Walsh, Esq.
Danzansky, Dickey, Tydings,
Quint and Gordon
For Petitioner
George E. Rivers, Esq.
William A. Berger, Esq.
For Employment Standards Administration
U.S. Department of Labor
Robert L. Barton, Jr., Esq.
Sherman, Dunn, Cohen and L[ei]fer
For Building and Construction
Trades Department, AFL-CIO [1]
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[2] BEFORE: Oscar S. Smith, Chairman, Wage Appeals Board,
Clarence D. Barker and Stuart Rothman, Member
DECISION AND ORDER
This proceeding is be?ore the Board pursuant to Order 24-70
as amended, of the Secretary of Labor on a petition for review
dated August 4, 1975 filed by the Montrose House Building Committee
of the Greater Washington Jewish Community Foundation pursuant to
Wage Appeals Board rules of procedure (29 CFR 7). Oral hearing was
held on August 29, 1975 /FN1/ before the full Board with a
supplemental hearing before Member Rothman on September 23, 1975.
Interested persons were provided opportunity to present their
positions. On September 10, the Board submitted three specific
requests for factual data to the persons who appeared at the August
29 hearing and requested a response by September 10. Opportunity
was afforded to file post-hearing statements following both
hearings.
Petitioner requests review of Wage Decision MD-75-3062 (40
FR 26,203 ) issued by the Employment Standards Administration,
herein ESA, on June 20, 1975 insofar as this decision [2]
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/FN1/ This case may be cited as Montrose House, Montgomery County,
Maryland. [2]
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[3] is applicable to the construction of Montrose House, a
non-profit high-rise apartment building for the elderly to be
located in Rockville, Montgomery County, Maryland.
Montrose House is proposed to be erected under Section 236 of
the Department of Housing and Urban Development Regulations /FN2/
for use by elderly people with limited income. The project will be
Federally subsidized and operated on a non-profit basis. The
building will consist of one bedroom apartments designed to serve
the particular needs of the elderly. Its ten (10) floors will have
two hundred and fifty (250) apartments.
Wage decision MD 75-3062 is a general building construction
wage determination which covers the suburban Maryland and Virginia
counties that surround the District of Columbia. By letter of July
16, 1975, ESA confirmed to petitioner that it regarded the general
building construction schedule (herein the Commercial Rates) as
applicable to Montrose House.
The issue before the Wage Appeals Board is whether these
Commercial Rates or a lower schedule of residential [3]
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/FN2/ 24 CFR Section 236.1 et seq. [3]
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[4] rates for high-rise residential work are prevailing for wage
determination purposes in Montgomery County.
Petitioner contends that ESA has "ignored the realities of
the construction industry practices in Montgomery County. . ." and
". . . that substantially all high-rise construction of a character
similar" to Montrose House has been done at rates lower than those
set forth on MD-75-3062.
The ESA position is that it has followed a long established
practice which it claims has been endorsed by the Wage Appeals
Board in a number of earlier cases in the District of Columbia and
the suburban counties around it /FN3/ of measuring from a bench
mark that high-rise apartment construction is similar to commercial
construction unless the building and construction industry locally
"has accepted the exclusion of high-rise residential construction"
from the commercial category for wage rate purposes." ESA
reviewing the available wage data supplied to it by petitioner
concluded that the industry locally had not accepted a "carve out
exception" for high-rise residential construction [4]
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/FN3/ Edgewood Terrace, WAB Case No. 73-02; Abbott House, WAB Case
No. 72-05; Stevenson Apartments, WAB Case No. 70-07 and Mattapony
Towers Apartments, WAB Case No. 64-02. [4]
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[5] and held the Commercial Rates to be those applicable to
Montrose House for wage determination purposes.
The Building and Construction Trades Department, AFL-CIO
(herein BTD) supports the ESA position and submitted information
and wage data to "refute petitioner's contention that high-rise
residential construction in Montgomery County is done at open shop
rates below the published rates." /FN4/ There was no development
of comprehensive data by ESA or the parties depicting a total
picture of wage rates and practices. Petitioner's information
reflect substantial high-rise residential work in which the wage
rates paid are below the commercial schedule for a number of
crafts. BTD information also reflects a substantial amount of
high-rise residential work, particularly for work that was subject
to the Davis-Bacon Act, in which the commercial rates were paid for
all crafts.
At the Board's request ESA retabulated the data submitted for
the first hearing, August 29, 1975. ESA concluded "there is an
obvious mixture of union and open shop [5]
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/FN4/ The more scientific assembly of wage data and its analysis
in this case was done by the Building and Construction Trades
Department, AFL-CIO and the local Building Trades Council. [5]
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[6] rates paid on high-rise residential construction in Montgomery
County, Maryland. ESA concluded that of 27 crafts and
subclassifications represented in the data reviewed, 16 were at or
very near the published or negotiated rates while 11 were below
union rates. /FN5/
Since petitioner's data included some information (not used
in the retabulation) concerning the payment of rates below the
Commercial Rates on commercial work in Montgomery County, the Board
asked ESA when a spreadsheet that included high-rise residential
and other building projects for Montgomery County was last prepared
based on a survey. ESA responded that it
does not have information as to when the general building
construction wage rates for Montgomery County, Maryland
was originally determined or how they were compiled. The
present determination currently found in decision MD-75-
3062 (40 F.R. 26203, June 20, 1975), is based on the
Assistant Administrator's long standing policy that the
[6]
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/FN5/ But a wage calculation that establishes a predominant rate
less the published negotiated rate, [*] although near [*] the
published rate, raises some questions where the lower rate comes
from. [*Emphasis in original*] [6]
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[7] published rates are correct unless evidence to the
contrary is presented. The published rates in the
instant case continue to reflect the union negotiated
rates, as has been the situation since the first rates
were determined. . . .
The Board also inquired whether any crafts had negotiated
different rates for high rise than the Commercial Rates and
received the following responses from BTD and ESA:
ESA response -- As best as we can determine no craft has
negotiated an agreement applicable to Montgomery County,
Maryland, which differentiates in wage rates between
high-rise residential and other commercial building.
BTD response -- To our knowledge the only crafts that have
negotiated agreements for Montgomery County that
differentiate in wage rates between high-rise residential
and other commercial building rates are the bricklayers
and the laborers. The bricklayers have a current high
residential rate of $8.00 an hour (including fringe) and
the laborers have a rate of $4.30 an hour (including
fringe). Even as to those two trades, however, certain
union contractors in employing these two trades on high-
rise residential projects have paid the bricklayers and
laborers at their commercial, rather than the high-rise
rate.
Information was not requested nor was the Board advised as to
whether the high-rise residential projects that paid rates above
the negotiated high-rise rates to [7]
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[8] these two crafts did so because of such Davis-Bacon schedules in the
contracts for the work. It seems clear regardless of the reason that if
ESA relies upon negotiated rates, as distinguished from wage rate surveys,
it must use the rates negotiated for the category of work. In
Montgomery County this would mean a lower rate on high-rise
residential construction for bricklayers and laborers than the
schedule published for the Commercial rates.
* * *
The relation of high-rise residential to commercial work in
the District of Columbia and the suburban counties near it has been
considered by the Board in a number of cases. /FN6/ The Board
will not recount them in detail in this decision. The Petitioner
and ESA did a careful job in analyzing past Board case law "in the
air." But their factual data fell apart badly. On the basis of
its factual presentation, Petitioner can not prevail here.
Somewhere along the line, it lost a key 90 carpenters; all on one
project, out of a total of 147, with the only explanation that
someone did not like the ESA inquirer when he called upon the Board
suggestion to recheck a [8]
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/FN6/ See footnote 3, supra. [8]
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[9] questionable submittal. /FN7/
With such a failure of proof in a particular important
instance as part of a wage data base assembled for ESA but not by
the ESA, the Board cannot discern a main path to a determination in
Davis-Bacon administration that high rise residential construction
in Rockville, or Montgomery County shall be removed from the
standard Commercial Rate structure and placed in a new category.
If the Commercial Rates were no longer to be applicable to high
rise residential construction in Rockville or Montgomery County,
then the Board could not co[u]ntenance a new schedule of rates
based solely on the fragmentary data collected or data as fragile
and destructible as the disappearing carpenter's case.
There is a presumption upon review of the validity of
administrative action and the burden is on the Petitioner to
overcome that presumption. It has not done so [9]
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/FN7/ Petitioner had represented that this was an important
project to its case and that the sponsors of that project wished to
be present but regretted their absence from the hearing of August
29, 1975. ESA reported, and the Board credits ESA that upon
recheck ESA was advised that the wage data for this project had
been submitted under a misunderstanding and that the data was not
intended to be used. [9]
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[10] sufficient to warrant a decision in its favor. But the ESA
through its representatives before the Board cannot take refuge
behind such a presumption while at the same time disclosing an
abysmal nonknowledge of the case and there is a fair showing the
presumption may be faulty under the circumstances. In terms of a
major change in the structure of the construction industry in
highly populated Montgomery County, far more hangs in the balance
than just this home for the aged.
The ESA was not sure from the beginning whether its branch in
Philadelphia or the Petitioner had in fact collected and made the
wage data survey upon which ESA predicated its findings. The Board
credits the Petitioner that it was the one that collected and
submitted the data.
ESA's initial premise was that because the elevator installers
on high rise residential construction are totally union, this was
an indication that an entire project must remain within the
negotiated wage structure for commercial work. This premise is not
supported by the structure of the industry.
ESA was without knowledge when that knowledge is important to
the determination of appropriate wage schedules [10]
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[11] that two crafts had negotiated lower than commercial rates for
high rise residential construction.
ESA was unable to supply information as to when if ever it had
undertaken a wage survey in Montgomery County for any purposes with
its own forces and under its own direction and control.
* * *
The Board regrets the long time that it has taken to get to
the conclusions reached here. There are a number of reasons for
the delay, among them is the fact that neither ESA or the
Petitioner has given the Board the kind of solid data required to
resolve a major dispute. The Board will not indulge in unjustified
presumptions. It may be inconvenient or inefficient to undertake
a scientific study and survey in the case of a serious challenge to
administration of the Act. The Board would have liked to dispose
of this case in favor of one side or the other, but after a careful
study of the wage data submitted, it concludes that it has
insufficient evidence to do so. Under such circumstances reliance
by ESA upon the presumption of its own infallibility will not do. [11]
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[12] The ESA knows how to make a field survey. When the stakes
are high, the Board is confident that ESA knows how to make a
thorough one under its own close direction and responsibility. The
Petitioner may in the end be unable to sustain its position, but in
the interest of fairness to the Petitioner and in order to place
all the laborers and mechanics in the locality in their rightful
minimum wage rate schedules who would be engaged in high rise
residential work with federal financial involvement under the
Davis-Bacon Act, a more adequate, comprehensive and re[]liable
survey is required. In this way the ESA decision will be more
rationally founded and on a more concrete set of facts. Petitioner
had indicated that its project could not go forward at the
Commercial Rates in any event.
Delay i[s] destructive in the construction industry. ESA
should allay the trepidations of the additional [12]
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[13] delay by proceeding expeditiously with a well planned and
executed survey.
REMANDED FOR A SURVEY IN ACCORDANCE WITH THIS DECISION.
(s) Oscar S. Smith, Chairman
(s) Stuart Rothman, Member
(s) Clarence D. Barker, Member [13]
