COASTAL ENERGY, INC., WAB No. 89-07 (WAB June 26, 1991)
CCASE:
COASTAL ENERGY, INC.,
DDATE:
19910626
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
COASTAL ENERGY, INC.,
Subcontractor WAB Case No. 89-07
DANIEL J. MESSIER,
President
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Patrick J. O'Brien, Member
DATED: June 26, 1991
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
Coastal Energy, Inc., and Daniel J. Messier, president
(collectively "Coastal" or "Petitioners") for review of the
December 6, 1988 decision and order (Attachment) of Administrative
Law Judge ("ALJ") Anthony J. Iacobo, debarring Petitioners for
"aggravated or willful" violations of the U.S. Housing Act of 1937,
as amended (42 U.S.C. [sec] 1437j) ("Housing Act"). For the
reasons stated below, the Board denies the petition for review and
affirms the ALJ's decision and order. [1]
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[2]
I. BACKGROUND
Coastal was a subcontractor on four projects subject to the
Housing Act (a Davis-Bacon Related Act), and performed asbestos
removal on those projects. After the Wage and Hour Division of the
Department of Labor received a complaint that Coastal was not
paying its employees the prevailing wage rates, an investigation
into Coastal's performance on the four projects ensued. The Wage
and Hour Division determined that $13,259.53 in back wages was owed
to Coastal's employees, and Coastal made full payment of that
amount. The Wage and Hour Division also determined that there was
reasonable cause to believe that Petitioners had committed
"aggravated or willful" violations of the Housing Act, and proposed
that Petitioners be debarred. Coastal requested a hearing on the
debarment issue.
After a hearing the ALJ issued a decision and order,
concluding that the inconsistencies in the certified payrolls and
the company payroll journals "are so frequent and pervasive as to
lend support to the testimony of the former employees of Coastal
that they were not paid the prevailing wage." The ALJ further
concluded that the "inaccuracies and inadequacies" in Coastal's
certified payroll records "are the result of intentional
falsifications and/or total disregard of their [prevailing wage
obligations] by Coastal and its president." The ALJ listed several
examples of inconsistencies in the payroll records which he found
were intentional falsifications.
The ALJ examined Messier's testimony, and found "obviously
unacceptable" Messier's suggestion that he was unaware of the
obligations imposed by the contracts he signed. "This conduct,"
the ALJ stated, "signing contracts while clearly aware that federal
rules and regulations govern certain aspects of the contractor's
responsibilities towards his employees, and then keeping records
which clearly fail to fulfill these responsibilities, lend credence
to the testimony of the former employees that they were knowingly
being underpaid by Coastal while working on the federal projects
here at issue and, in at least one instance, were discharged if
they complained." The ALJ concluded that in view of the aggravated
and willful violations committed by Petitioners, a three-year
debarment was warranted.
II. DISCUSSION
Debarment for violation of the Davis-Bacon Related Acts is
governed by 29 C.F.R. 5.12, which provides in Section 5.12(a)(1):
Whenever any contractor or subcontractor is found by the
Secretary of Labor to be in [*] aggravated or willful
violation [*] of the [2]
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[3] labor standards provisions of any
of the applicable statutes . . . other than the Davis-Bacon
Act, such contractor or subcontractor or any firm,
corporation, partnership, or association in which such
contractor or subcontractor has a substantial interest shall
be ineligible for a period not to exceed 3 years (from the
date of publication by the Comptroller General of the name or
names of said contractor or subcontractor on the ineligible
list. . .) to receive any contracts or subcontracts subject to
[the Davis-Bacon Act or Related Acts]. [*] (Emphasis
supplied) [*] .
In this case, the ALJ evaluated the hearing testimony and
other record evidence and concluded that Petitioners knowingly
undertook to evade their prevailing wage obligations, and
intentionally falsified the certified payrolls to conceal these
violations. It is established under Board precedent that
falsification of certified payrolls constitutes "aggravated or
willful" conduct warranting debarment under 29 C.F.R. 5.12(a)(1).
See, e.g, A. Vento Construction, WAB Case No. 87-51 (Oct. 17, 1990)
(29 WH 1685), at p. 15, and cases cited therein at p. 7 n.4; Marc
S. Harris, Inc., WAB Case No. 88-40 (Mar. 28, 1991).
Petitioners argue that any violations they may have committed
were unintentional. However, this argument essentially takes issue
with the ALJ's credibility determinations and findings of fact, and
we find no basis for disturbing the credibility determinations and
the findings made by the ALJ in this case. Furthermore,
Petitioners' suggestion that the violations were committed out of
inadvertence or inexperience is severely weakened by the testimony
of one employee that he was fired after he requested to be paid the
prevailing wage, and the testimony of other employees that they
were admonished by Messier not to reveal their wage rate to anyone.
Petitioners also argue that the full three-year debarment
period should not be imposed in the circumstances of this case.
However, in A. Vento Construction (at p. 14), the Board held that
"aggravated or willful" violations of the labor standards
provisions of the Related Acts warrant an order imposing a
three-year debarment period absent extraordinary circumstances.
(FOOTNOTE 1) See also A. Vento Construction, at p. 18 (Member Rothman,
concurring) (falsification of payrolls warrants a three-year
debarment period). The Board finds no extraordinary circumstances
present here. [3]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
(FOOTNOTE 1) Persons and firms placed on the ineligible list pursuant to
29 C.F.R. 5.12(a)(1) are permitted to request removal from the
ineligible list after completing six months of the debarment
period, pursuant to the procedure set forth at 29 C.F.R.
5.12(c). [3]
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[4] The petition for review is denied. The decision and order
of ALJ Iacobo is affirmed.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Patrick J. O'Brien, Member
____________________________
Gerald F. Krizan, Esq.
Executive Secretary [4]
