CCASE:
MIDWAY EXCAVATORS & KING TOWN
DDATE:
19831213
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
MIDWAY EXCAVATORS, INC., & WAB Case No. 81-17
KING TOWN TRANSPORTATION, INC.
South Hampton, N.H. Dated: December 13, 1983
APPEARANCES: Edward E. Shumaker, III, Esquire for Midway
Excavators, Inc., & King Town Transportation, Inc.
Terry R. Yellig, Esquire for Building and
Construction Trades Department, AFL-CIO
Patricia M. Durye[e], Esquire for the Wage and Hour
Division, U.S. Department of Labor
BEFORE: Alvin Bramow, Chairman, Thomas X. Dunn, Member
Gresham C. Smith, Alternate Member /FN1/
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition
of Midway Excavators, Inc., and King Town Transportation, Inc.,
of South Hampton, New Hampshire, for review of a ruling of the
Assistant Administrator, Wage and Hour Division, pursuant to 29 CFR
[sec] 5.12 dated September 22, 1981. The ruling in question
pertains to the applicability of the Davis-Bacon Act and related
prevailing wage statutes and the Contract Work Hours and Safety
Standards Act to truck drivers hauling materials and delivering [1]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ Alternate Member Gresham C. Smith sat in place of Member
Stuart Rothman. [1]
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[2] equipment to various job sites.
The uncontroverted facts of this appeal are that Midway
Excavators, Inc., (hereinafter Midway) was the prime contractor
on eleven federally funded construction projects subject to the
Davis-Bacon Act or the related acts and the Contract Work Hours and
Safety Standards Act. These contracts involved paving,
resurfacing, sewer and road work in Massachusetts, New Hampshire,
Vermont and Maine. Following up on a complaint the Wage and Hour
Division investigated Midway's operations and found that King Town
Transportation, Inc., (hereinafter King Town) was hauling materials
or delivering equipment to Midway's Davis-Bacon covered
construction projects and that King Town shared certain of their
officers and facilities with Midway. The Wage and Hour Division
determined that King Town's truck driving employees hauling and
delivering material and supplies to the federal sites were subject
to the Davis-Bacon labor standards requirements. Midway and King
Town contended that King Town was an independent trucking firm and
not required to pay its employees in accordance with the Davis-
Bacon prevailing wage standards. The questions were submitted to
the Department of Labor for a [sec] 5.12 ruling in conformity with
the regulations.
On September 22, 1981, the Assistant Administrator ruled that
the two firms were not independent, considering such factors as
separation of facilities, equipment, management, [2]
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[3] employees, business records and financial arrangements. With
reference to Midway/King Town's contention that the labor standards
provisions were not applicable to truck drivers delivering supplies or
material to the job sites, the Assistant Administrator relied on 29
CFR [sec] 5.2(g) which provides that:
the transportation of materials and supplies to or from
the building or work by employees of the construction
contractor or construction subcontractor [] is within the
meaning of the terms "construction", "prosecution", and
"completion" as utilized in the Davis-Bacon Act.
For this reason the Assistant Administrator ruled that King Town's
truck drivers were subject to the Act and must be paid the
predetermined wage rate.
On November 20, 1981 Midway and King Town petitioned the Wage
Appeals Board to review the [sec] 5.12 ruling of the Assistant
Administrator, contending that the employees in question worked
off-site and spent less than 10% of their time at the site of
work. Petitioners argue that the Assistant Administrator's
interpretation of 29 CFR [sec] 5.2(g) extends Davis-Bacon coverage
beyond the limits intended by the Davis-Bacon Act.
The Wage Appeals Board considered this appeal on the basis
of the petition and post hearing briefs, affidavits and exhibits
filed on behalf of the petitioners, the memorandum and post
hearing brief filed by the intervenor, Building and Construction
Trades Department, AFL-CIO, in support of the Assistant
Administrator, and the statement on behalf of the Assistant
Administrator, a post hearing brief, and the record of the case
before the [3]
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[4] Wage and Hour Division filed by the Solicitor of
Labor A hearing was conducted on September 29, 1983 at which all
interested persons were present and participated.
* * *
Prior to the consideration of this appeal, the Board received
a motion from petitioner to disqualify Member Thomas X. Dunn. The
Board denied this motion. /FN2/
The Assistant Administrator determined that Midway and King
Town constituted a single employer for the purposes of the
Davis-Bacon Act based upon the parts of the Investigation Report
by the Wage and Hour Compliance Officer which are set forth below:
James F. Watkins Jr. is President, Treasurer, Director
and owns 100% of the corporate stock of Midway. He is a
Director and owns 48 or 49% of King Town (his own estimate
of ownership made to writer). He is directly and actively
involved in the day to day operation of both firms.
Dorothy Howland is a Director of Midway and is a former
bookkeeper for Midway. (Midway's 1980 records show her
date of hire for Midway as 4/18/72). She is also President,
Treasurer and Director of King Town and owns 25 1/2 or 26%
of King Town's outstanding stock. [4]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ Petitioner's motion to disqualify Member Dunn alleged the
same reasons for disqualification as made in Jordan & Nobles,
WAB Case No. 81-18, August 19, 1983, which the Board denied.
Petitioner also relied on an additional reason to the effect that
Member Dunn's name remained on the letterhead of his former
law firm. Member Dunn refused to disqualify himself in this
appeal and his former firm filed an affidavit showing that the
continuance of his name on the firm letterhead as "retired"
was approved by the D.C. Bar Association before his appointment to
the Wage Appeals Board by the Secretary of Labor. [4]
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[5] Judith Creteau is a Director of King Town and owns the
remainder of its stock (25 1/2 or 26%). While writer has
no information that Judith Creteau was ever employed by
Midway, a Richard W. Creteau of the same address as
Judith is listed on Midway's 1980 records as employed by
Midway - his date of hire is 4/16/73.
Howland and Creteau apparently defer all decision making
to Watkins who runs King Town on a day to day basis. He
also runs Midway.
The trucks owned by King Town are serviced along side the
Midway trucks at the Midway garage by employees of Midway.
King Town owns 6 trucks, 5 of which are generally operating,
and has 4 regular drivers on its payroll. The fifth driver
is generally a Midway employee temporarily assigned to drive
a King Town truck. There is a regular interchange of King
Town and Midway employees, and a single employee may end up
driving for both corporations in the same work week.
King Town trucks are stored at the Midway garage, and
lot on Rt. 150. King Town has no separate offices or
establishments.
The King Town payroll records are kept at the Midway
office - the only difference being that the King Town
records are not entered into Midway's computer. Time
cards are segregated for cost accounting purposes, but
the firm combines the Midway and King Town hours to
determine how much overtime was worked and they pay time
and one/half on the combined hours. A single bookkeeper,
Audrey Owens, who is on the Midway payroll, does the payroll
records for both corporations.
The King Town employees are supervised by the Midway job
superintendent on each project they work on.
As indicated previously, the King Town corporation owns
6 trucks. Midway is a much larger corporation and also
owns heavy equipment such as backhoes and flat beds, in
addition to owning numerous trucks. However, both the
trucks of King Town and Midway are engaged in hauling
hot top and gravel to job sites, and removing rubble
and fill from same.
Watkins is around the King Town/Midway office on a regular
basis and is intimately involved in the day to day operations [5]
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[6] of same. He hires and fires and sets pay rates.
The cases cited by the petitioner in support of its position
are not apposite to the finding of the Administrator that the two
companies are a single employer for the purposes of the Act. More
pertinent are such cases as Operating Engineers v. NLRB, 518 F.2d
1040 (D.C. Cir. 1975) affirmed on the single employer issue per
curiam decision, 425 U.S. 800, and Sakrete of N. California v.
NLRB, 332 F.2d 902 (9th Cir.) cert. denied 379 U.S. 961. Indeed,
the "arms length" rule adopted by the [Circuit] Court as enunciated
in Operating Engineers v. NLRB is decidedly more obvious and
pronounced in a negative sense as to Midway and King Town, than in
Operating Engineers and Sakrete, supra.
The facts in Midway/King Town clearly indicate that the two
firms are closely interlocked in their day to day operations with
officers and employees acting on behalf and working for each firm
interchangeably. The Board reaches the conclusion that Midway and
King Town functioned as a single employer for the same reasons as
were enunciated in Operating Engineers and Sakrete, supra.
It should be noted that in this case the Board has permitted
a large number of pre- and post hearing briefs because the Board
believed that none of the parties had addressed issues that were
foremost in the minds of the members of the Board. Petitioners in
a post hearing brief have filed an [6]
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[7] affidavit with supporting exhibits which the board considers
pertinent to a primary issue in this appeal. The Board originally
had considered remanding this case to the Assistant Administrator so
that the issue of what percentage of King Towns business was derived
from its relation with Midway could be fully explored and explained.
As a general rule, the Board will not accept factual matters, not
previously before the Board at the time of the hearing. The Board
feels that cases should be decided by the facts on the record when
the appeal comes before it. However, the evidence that was lacking
at the time of hearing is clearly available to the Board by virtue of
the exhibits attached to the aforesaid affidavit and accordingly, there
is no reason to remand. The Board will not require parties before
it to perform a vain act.
Although it is not necessary that the Board reach the "site of
work" issue, nevertheless, the Board is not impressed by the
position that petitioner takes on this matter. The last case which
petitioner has cited (Joint Council of Teamsters v. NLRB, 702 F.2d
168) is not support for petitioner's position on the site question.
Indeed, it clearly supports the position that the Board has
previously taken on the "on site" question. Section 8(e) of the
NLRA (29 USCA 1586) uses in its proviso the term "work to be done
at the site of the construction". The union in that case[]
referred to the Davis-Bacon Act as comparable to its construction
of the 8(e) Section in the NLRA. The Court [7]
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[8] said:
. . . we reject the unions' comparison of the two Acts
Neither the legislative history nor the text of the
statute suggests that Congress intended 8(e) to parallel
the Davis-Bacon Act.
The Court clearly indicated its full awareness that the
purpose of Section 8(e) of the NLRA and the "on-site" provisions
are quite different. Section 8(e) was a restraint on unions and
their employee members. The Davis-Bacon Act is an Act for the
benefit of employees and not contractors. U.S. v. Binghampton
Construction Co., 347 U.S. 141 (1954).
Now, before the Board can decide whether the truck drivers
are covered by the Davis Bacon and related Acts, the work being
performed by these employees must be a "construction" activity.
The Assistant Administrator relies on 29 CFR [sec] 5.2(g) which
provides in part that "the transporting of materials and supplies
to and from the building or work by the employees of the
construction contractor or construction subcontractor" is within
the meaning of the terms "construction", "prosecution", and
"completion", as utilized in those Acts. The petitioner argues
that this language was not intended to cover the factual situation
presented by this case.
The Board agrees that the factual situation in the case in
question is distinguishable from those in Cox Enterprises, Inc.,
WAB Case No. 72-10 (January 29, 1973) which involved truck drivers
hauling supplies and equipment from the firm's headquarters to [8]
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[9] highway job sites and United Construction Company, Inc., WAB
No. 82-10 (January 14, 1983) which involved truck drivers hauling
asphalt from the construction contractor's own batch plant to
various construction sites.
It is undisputed and supported by exhibits to affidavits
submitted by petitioner that the truck drivers were not just
hauling materials or delivering equipment to various covered
construction projects of the construction contractor, but to
other non-covered construction projects and also these drivers
were leased with the trucks to other firms. When they were
hauling materials to the covered job sites, it was strictly
from commercial suppliers and it is obvious to the Board that the
suppliers were not dedicated solely to the Davis-Bacon and related
Acts projects. Therefore, the suppliers must be considered to be
bona fide materialmen.
The Board is of the opinion that the language contained in 29
CFR [sec] 5.2(g) was [*] not [*] intended to cover the situation
presented by this case. [*Emphasis in original*] The firm while
performing this type of operation was acting in the place of a
commercial supplier[,] and, therefore, the truck drivers are not
covered by the labor standards provisions of the Davis-Bacon and
related Acts.
Of course, any truck drivers hauling materials or equipment
back and forth from the construction contractor's or
subcontractor's own plant or equipment yard would be covered. [9]
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[10] In view of the above, the decision of the Assistant
Administrator is hereby reversed and it is ordered that any funds
being withheld be returned to the petitioner.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board
