CCASE:
J&L JANITORIAL SERVICES, INC.
DDATE:
19851106
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
Disputes concerning the payment of
prevailing wage rates and overtime by
J&L JANITORIAL SERVICES, INC., PRIME
Contractor WAB Case No. 85-08
and Dated: Nov. 6, 1985
Proposed debarment for labor standards
violations by Respondents
J&L Janitorial Services, Inc., and
Mr. Lonnie J. Miller, President
With respect to laborers and mechanics
employed by the contractor under the U.S.
Department of the Interior Contract No.
14-16-0005-79-073, Patuxent Wildlife
Research Center, Laurel, MD
APPEARANCES: Lawrence S. Wescott, Esquire, Susan E. Kehoe,
Esquire for J&L Janitorial Services, Inc.
Terry R. Yellig, Esquire, for the Building and
Construction Trades Department, AFL-CIO
Leif Jorgenson, Esquire, Douglas Davidson, Esquire
for the Wage and Hour Division, U.S. Department of
Labor
BEFORE: Alvin Bramow, Chairman, Thomas X. Dunn, Member
Stuart Rothman, Member [1]
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[2] DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
the Administrator of the Wage and Hour Division and on the
cross-petition of J&L Janitorial Services, Inc., (hereinafter J&L).
Both petitions are seeking review of a decision rendered by an
Administrative Law Judge (ALJ) on March 11, 1985 concerning
application of the Davis-Bacon Act and the Contract Work Hours and
Safety Standards Act (CWHSSA) to a construction contract between
J&L and the U.S. Department of the Interior to furnish painting and
repairs on buildings located at the Patuxent Wildlife Research
Center in Laurel, Maryland.
The project at Patuxent was started in November, 1979 and
completed in mid-1980, and was subject to the applicable contract
provisions of the Davis-Bacon Act, CWHSSA and the Department
of Labor regulations, 29 CFR Part 5. Upon the project's
completion, the Department of the Interior conducted a final
inspection on July 8, 1980 and withheld the final payment of $9600
because of allegations that J&L had failed to pay proper wages
and overtime to laborers and mechanics it employed on the project.
An investigation of the project by the Department of Labor
disclosed that 37 painters, 4 carpenters and 4 laborers were
underpaid in the amount of $17,711.60, of which $493.49 of the
assessment was due to CWHSSA violations. The investigation also [2]
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[3] indicated that J&L maintained two sets of records and
falsified certified payroll reports for the period from April 18,
1980 through July 4, 1980 in order to make it appear that J&L's
employees were being paid the prevailing wage rates called for
by the Patuxent contract.
Upon being notified of the results of the investigation,
J&L requested a hearing concerning the Wage and Hour Assistant
Administrator's findings in the investigation. A hearing by an
ALJ was conducted in August, 1984 in Baltimore and on March 11,
1985, the ALJ issued his Decision and Order.
The ALJ held that the statute of limitations in the Portal-
to-Portal Act applied to administrative proceedings under the
Davis-Bacon Act. As a result the wage underpayments claimed by
the Wage and Hour Division were time-barred since the
administrative proceedings did not begin until more than two years
after the cause of action accrued. On the other hand the ALJ
concluded that the statute of limitations in the Portal-to-Portal
Act did not bar the Department of Labor's claim for recovery of
overtime wages due J&L employees under CWHSSA. The ALJ found
that J&L and its President, Lonnie J. Miller, were responsible
for poor recordkeeping and ordered that J&L and its President,
Lonnie J. Miller, individually, be placed on the list of bidders
ineligible for government contracts for a period of 18 months
because of evidence in the record that J&L falsified its certified
weekly payrolls. [3]
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[4] The Wage and Hour Administrator filed a petition with this
Board for review of the ALJ's order that the Davis-Bacon claim
of wage underpayments is time-barred, and the ALJ's decision to
limit the period of debarment to 18 months. J&L's cross-petition
to the Board challenges the debarment order by the ALJ of the
company and its President.
J&L argues in support of the ALJ's decision that the statute
of limitations in the Portal-to-Portal Act bars any action by Wage
and Hour against the employer under the Davis-Bacon Act. It is
also urged that any violations of CWHSSA were the acts of an
employee of J&L and were not authorized by the employer, nor was
the employer aware of his actions. It is their position that
debarment under CWHSSA can only be ordered if it can be shown that
the violations were willful or aggravated acts of the employer and
that the record does not demonstrate this. For these reasons J&L
argues that it should not be debarred from receiving government
contract for [*] any [*] period of time.
It is Wage and Hour position that the ALJ erred in holding
that the statute of limitations in the Portal-to-Portal Act
applies to Davis-Bacon administrative proceedings. This position
is support by decision of this Board and cases before the Federal
District Court, the Third Circuit and the Supreme Court. As a
result Wage and Hour asserts that the case should be remanded to
to the ALJ for a finding of wages owed the employees under the [4]
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[5] the Davis-Bacon Act.
Further, Wage and Hour asserts that the ALJ erred in debarring
J&L for only 18 months for the CWHSSA violations since the statute
provides for debarment for a term not to exceed 3 years and since
the Wage and Hour Division has consistently taken the position
that the basic period of debarment should be the 3 year period
with leave for the employer to be removed from the debarred list
upon a showing of compliance with certain conditions contained in
the Regulations at 29 CFR 5.12(c)(1). Wage and Hour argues that
the fact that J&L maintained two sets of books and falsified
certified payroll records justifies the three year debarment
and that there is no evidence of current compliance or a change
of attitude toward compliance by J&L.
The Building and Construction Trades Department, AFL-CIO,
has filed a Memorandum with the Board in support of the
Wage and Hour Administrator's position with regard to the
statute of limitations provisions of the Portal-to-Portal Act
not applying to administrative proceedings under the Davis-
Bacon Act. The Building and Construction Trades Department
also supports Wage and Hour's position that the debarment of
J&L for 18 months was erroneous, and that J&L should be
debarred for 3 years.
The Wage Appeals Board considered this appeal on the basis
of the Petition for Review filed by the Solicitor of Labor on
behalf of the Wage and Hour Division, the cross-petition for
review filed on behalf of J&L, the record of the appeal before the
Wage and Hour Divis[i]on and the ALJ, the memorandum filed by [5]
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[6] the Building and Construction Trades Department, AFL-CIO and
the information submitted by all interested parties at an oral
presentation before the Board on October 22, 1985.
* * *
The Wage Appeals Board has consistently held that
administrative proceedings before an Administrative Law Judge and
before this Board are not barred by the statute of limitations
contained in the Portal-to-Portal Act, 29 U.S.C. 255. See
Thomas J. Clements, Inc., WAB Case No. 84-12 (January 25, 1985),
J. Slotnik Company, WAB Case No. 80-05 (March 22, 1983) and
Glenn Electric Company, Inc., WAB Case No. 79-21 (March 22, 1983).
It has been the Board's position that this ruling applies to
Davis-Bacon Act cases as well as the related acts which are
not mentioned in the Portal-to-Portal Act. In so holding the
Board has been following the United States Supreme Court's
ruling in Unexcelled Chemical Corporation v. U.S., 345 U.S.
59 (1953) which held that an administrative proceeding is not
an "action" within the meaning of the statute of limitations
under the Portal-to-Portal Act.
It is obvious to the Board that the ALJ was unaware of the
Third Circuit's decision in Glenn Electric Company, Inc. v.
Donovan, 755 F.2d 1028 [(3d Cir. 1985)] when he issued his
Decision and Order of March 11, 1985. That Court stated in
footnote 7 as follows: [6]
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[7] As stated previously, because Judge Ziegler held, as
a matter of statutory interpretation and construction,
that the Portal-to-Portal Act did not apply to the
U.S. Housing Act, he did not reach the Secretary's
alternative argument that the statute of limitations
applies only to actions brought in court and not
before administrative agencies.
Although we view this case as Judge Ziegler did
and ground our holding on statutory construction,
as an alternative basis for affirmance, we rely on
Unexcelled Chemical Corp. v. U.S. 345 U.S. 59
(1953), wherein the United States Supreme Court
ruled 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. That case involved an
administrative proceeding by the Department of
Labor to collect child labor liquidated damages
under the Walsh-Healey Act, one of the three
statutes expressly covered by the Portal-to-
Portal Act statute of limitations.
Inasmuch as the Secretary's enforcement action has
been entirely administrative, i.e., neither complaint
nor counterclaim filed, the limitations provisions
of the Portal-to-Portal Act do not apply even if the
Act is construed as governing the Davis-Bacon Related
Acts. See Ready-Mix Concrete Co. v. United States,
130 F.Supp. 390, 313 (Ct.Cl. 1955) (withholding actions
by the government are not subject to the Portal-to-
Portal Act.) [Emphasis in original.]
From the above language, the Third Circuit clearly found
that the Portal-to-Portal Act statute of limitations applies
[*] only [*] to [*] court [*] actions under the Davis-Bacon Act and
not to administrative actions before an administrative law judge or
this Board.
Therefore, the Board finds that the ALJ erred in ruling
that the claims arising under the Davis-Bacon Act are barred by
the statute of limitations in the Portal-to-Portal Act. [7]
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[8] With respect to debarment of the firm of J&L Janitorial
services and Mr. Lonnie J. Miller, individually, debarment is
imposed under CWHSSA whenever any contractor or subcontractor
is found to be in aggravated or willful violation of the labor
standards provisions of that statute. See 29 CFR [sec] 5.12(a)(1).
The ALJ in his Decision and Order indicated that the
Department of Labor requested that J&L Janitorial Services and
Mr. Lonnie J. Miller be debarred under CWHSSA as well as the
Davis-Bacon Act. A review of the Order of Reference authorizing
a hearing pursuant to 29 CFR [sec] 5.12(b) concerning debarment
does not allege that J&L Janitorial Services and Mr. Miller have
committed violations of the labor standards provisions of
CWHSSA which constitute aggravated or willful violations of the
labor standards of that statute.
Irrespective of this fact, the ALJ based his order for
debarment on the premise that the falsification of payroll
records to simulate prevailing wage compliance is prima facie
evidence of willful violations and a debarrable act. This
finding by the ALJ is misplaced as the payroll records do not
indicate any falsifications with respect to overtime violations.
In fact, counsel for Wage and Hour agreed in response to a question
asked by a member of the Board that there was no falsification as
far as CWHSSA was concerned. The only falsification [8]
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[9] of records is that relating to Davis-Bacon Act violations, and these
alleged violations are not before the Board as they were barred by the
ALJ by the statute of limitations in the Portal-to-Portal Act.
The record also reveals that the CWHSSA violations amounted
to less than $500.00. This, coupled with the fact that there was
no falsification, leads the Board to the conclusion that the
CWHSSA violations were neither willful nor aggravated and,
therefore, debarment is not warranted.
In view of the foregoing the Decision and Order of the ALJ
is reversed in that the Davis-Bacon Act violations are not barred
by the statute of limitations in the Portal-to-Portal Act, and
the case is remanded to the ALJ to consider these alleged
violations and debarment. Further, the Decision and Order of
the ALJ is reversed regarding debarment, and J&L Janitorial
Services, Inc., and Mr. Lonnie J. Miller, individually, are not
subject to the ineligible list for CWHSSA overtime violations.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board [9]
