CCASE:
ROSS BROTHERS CONSTRUCTION, INC.
DDATE:
19881121
TTEXT:
~1
[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D.C.
In the Matter of
ROSS BROTHERS CONSTRUCTION, INC. WAB Case No. 87-36
Oregon Department of Transportation
Contract No. 9633 Dated: November 21, 1988
BEFORE: Jackson M. Andrews, Chairman, Thomas X. Dunn, Member, and
Stuart Rothman, Member
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
Ross Brothers Construction, Inc., (hereinafter Ross Bros.) seeking
review of the April, 1987 decision of the Administrator, Wage and
Hour Division, that work performed by Ross Bros.' subcontractor,
Umpqua Sand and Gravel, (hereinafter Umpqua) was covered by the
labor standards provisions of the Davis-Bacon Act.
The facts concerning this appeal are as follows. Ross Bros.
was awarded a contract in 1983 by the Oregon Department of
Transpor[]tation for the grading and paving of a highway project in
Oregon. Ross Bros. obtained aggregate material for the contract
from Umpqua, a company located in Roseburg, Oregon. Umpqua
obtained a temporary permit from the Oregon Division of State Lands
to mine, crush and remove aggregate from a sand and gravel bar in
the Umpqua River. This bar was about 24 miles from Ross Bros.'
highway project and by the terms of the permit, Umpqua could use
this bar only to obtain aggregate for State highway projects. It
set up a [1]
~2
[2] portable crushing plant at the bar and trucked the stone to a
storage yard about 1/2 mile from Ross Bros.' project.
Before entering into the agreement to provide aggregate to
Ross Bros., Umpqua inquired of the Oregon Department of
Transportation whether Davis-Bacon wage rates would apply to
its employees. According to the Petition for Review, Umpqua
was allegedly told that the Davis-Bacon labor standards provisions
would not apply. However, in January, 1984, after Umpqua had begun
performing the project, Ross Bros. requested a ruling from the Wage
and Hour Administrator as to whether the work performed by Umpqua
for Ross Bros. was subject to Davis-Bacon provisions. The
Administrator issued a ruling in April, 1987 that Umpqua's
employees were covered by the Davis-Bacon labor standards
provisions. The Administrator reasoned that Umpqua was covered
because it was producing material from a facility opened in the
vicinity of the contract site and dedicated exclusively or nearly
exclusively to the production of material for the Ross Bros.'
project and other federally assisted State highway contracts. The
Administrator ruled that Umpqua's production of materials was "on
the site of the work" as defined at 29 CFR Sec. 5.l(1). The
regulations states in pertinent part:
(1) The "site of the work" is limited to the physical
place or places where the construction called for in the
contract will remain when work on it has been completed
and, as discussed in paragraph (l) (2) of this section,
other adjacent or nearby property used by the contractor
or subcontractor which can reasonably be [2]
~3
[3] said to be included in the "site".
(2) Except as provided in paragraph (l)(3) of this
section, fabrication plants, mobile factories, [*batch
plants, borrow pits, job headquarters, tool yards, etc.,
are part of the "site of the work" provided they are
dedicated exclusively, or nearly so, to performance of
the contract or project, and are so located in proximity
to the actual construction location*] that it would be
reasonable to include them.
(3) Not included in the "site of the work" are permanent
home offices, branch plant establishments, fabrication
plants, and tool yards of a contractor or subcontractor
whose locations and continuance in operation are
determined wholly without regard to a particular Federal
or federally assisted contract or project. In addition,
fabrication plants, batch plants, borrow pits, job
headquarters, tool yards, etc., of a commercial supplier
or materialman which are established by a supplier of
materials for the project before opening of bids and not
on the project site, are not included in the "site of the
work". Such [*permanent, previously established
facilities*] are not part of the "site of the work", even
where the operations for a period of time may be
dedicated exclusively, or nearly so, to the performance
of a contract.
Following this ruling, Ross Bros. appealed the Administrator's
decision to the Wage Appeals Board on August 18, 1987. The Board
considered the appeal on the basis of the Petition for Review with
attachments and a Reply Memorandum filed on behalf of Ross Bros.,
a Statement of the Administrator and the record of the case before
the Wage and Hour Division filed by the Solicitor of Labor.
Neither party to the appeal requested an oral hearing. [3]
~4
[4] It is Ross Bros.' position that Umpqua acted as a supplier or
materialman and not a subcontractor when it provided aggregate to
Ross Bros.' project and that it had performed two earlier State
projects on which it did not pay Davis-Bacon wages to its
employees. Also, Ross Bros. argues that Umpqua had requested a
ruling from the Oregon Department of Transportation prior to
starting the project and had relied on the Oregon Department of
Transportation ruling that the Davis-Bacon wage rates were not
applicable to their operation.
The Board has considered the arguments set forth in the
Petition for Review and the Reply Memorandum, but considering
the definition of "site of the work" contained in the
Regulations at 29 CFR Sec. 5.l(1) and earlier decisions of
this Board, affirms the decision of the Administrator.
In T.L. James, WAB Case No. 69-02 (August 13, 1969) one of the
earlier decision of the Wage Appeals Board, the Board stated at pp.
5 & 6, in a case that also dealt with a borrow pit for a highway
contractor:
. . . based upon experience in the construction industry
where but for the contemplated construction of a highway
project in the locality, borrow pits or waste areas would
not be opened, the opening of such pits or areas
primarily in and substantially devoted to the prosecution
of the highway work will establish a "prima facie" case
that the work performed in connection with the borrow
pits or waste areas is a part of the construction
activity of the project, [4]
~5
[5] and the employees who do the work are entitled to the
same protection accorded the construction workers elsewhere
on the project. . .
The fact that Umpqua originally utilized this pit for two
other Oregon Department of Transportation highway projects on which
they were not required to pay Davis-Bacon wage rates does not
persuade the Board that Umpqua should not pay those wages on this
project. The fact that Umpqua's permit to mine, crush and truck
the aggregate is specifically limited to use on State projects,
thus inhibiting sale of aggregate to the public, is determinative
to the Board.
Furthermore, Umpqua's installation of a portable crushing
plant at the Umpqua River bar site, 24 miles from the Ross Bros.'
project, does not change Umpqua's activities from being considered
on the "site of the work" as defined in 29 CFR 5.l(1).
In Big Six, Inc., WAB Case No. 75-03 (July 21, 1975) the
Board stated with regard to a batch plant operation, at p. 11:
It is for this reason, the Board believes, that in the
case of an established commercial batching plant, it is
not expected when work is awarded that the prime
contractor will do the work to provide the material that
normally come from such sources. It is for this reason,
too, the established commercial quarry or batching plant
is said to be a "materialman". In such cases the
established commercial operator continues to do its own
thing in its own same way at the same place. But where
the prime contractor must do the work with his own forces
because no commercial operator is [5]
~6
[6] established and ready to perform, another contractor
who takes on a part of the contractor's obligation to do
this becomes subject to the Davis-Bacon Act in the same way.
With reference to petitioner's argument that Umpqua and
petitioner should be able to rely on advice allegedly given by a
representative of the Oregon Department of Transportation that
Umpqua would not have to pay the Davis-Bacon predetermined wage
rates, the Board has held in a line of cases that only the
Secretary of Labor (or the Secretary's designee, the Administrator)
has the power to make rulings on Davis-Bacon issues, which includes
coverage. See Joseph J. Brunetti Construction Co. & Dorson Electric
and Supply Co. WAB Case No 80-09 (November 18, 1982); Metropolitan
Rehabilitation Corporation, WAB Case No. 78-25 (August 2, 1979);
Fry Brothers Corp., WAB Case No. 76-06 (June 16, 1977).
In Wer[z]alit of America Inc., WAB Case No. 85-19 (April 7, 1986),
the Board held that the erroneous advice of a lower-echelon Wage
and Hour official would not estop the subsequent imposition of
coverage. In this instance the Board notes that the Oregon
Department of Transportation representative flatly denied having
tendered an opinion of non-Davis-Bacon coverage.
The Board also agrees with the Administrator's position that
inadvertent failure to assert coverage on the two earlier federally
assisted State highway projects cannot affect the Administrator's
decis[i]on as to whether the Ross [6]
~7
[7] Bros.' project is covered.
In view of these considerations, the Board hereby affirms the
decision of the Wage and Hour Administrator and dismisses the
Petition for Review filed herein.
BY ORDER OF THE BOARD
Craig Bulger, Esquire
Executive Secretary,
Wage Appeals Board [7]
