NORTHSTAR STEEL, INC., WAB No. 89-22 (WAB Aug. 21, 1991)
CCASE:
NORTHSTAR STEEL
DDATE:
19910821
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
NORTHSTAR STEEL, INC.
WAB Case No. 89-22
With respect to wage rates
for installation of metal
panels for B-1 bomber hangars,
Contract No. DACA-45-85-C-0099,
Ellsworth Air Force Base,
South Dakota
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Patrick J. O'Brien, Member
DATED: August 21, 1991
DECISION OF THE WAGE APPEALS BOARD
This matter is before the Wage Appeals Board on the petition
of Northstar Steel, Inc. ("Northstar" or "Petitioner") from June 1,
1988 and April 26, 1989 rulings of the Administrator of the Wage
and Hour Division, wherein employees of Northstar working on the
above-captioned contract were classified as ironworkers over
Northstar's contention that they should have been classified as
carpenters.
For the reasons contained herein, the rulings of the Wage and
Hour Division are reversed. [1]
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[2] I. BACKGROUND
Northstar was a subcontractor on a project to build bomber
hangars at Ellsworth Air Force Base in South Dakota under a
contract that was awarded in March of 1985. Northstar's specific
function was to install insulated metal panels on the outside
frames of B-l bomber hangars, a task that sometimes required the
use of construction cranes for the placement of the panels prior to
and during their attachment.
By letter of October 10, 1985, the Army Corps of Engineers
informed the contractor that Northstar employees should be paid as
ironworkers rather than carpenters, a position that Northstar
contested on the basis of local area practice. Nevertheless, the
Corps informed the contractor (in February of 1986) that it would
not request an area wage survey from the Department of Labor and
would begin withholding contract payments if the contractor and
Northstar did not comply with its prior decision. Once again, the
contractor requested an area wage survey.
At the request of the Department of Labor, the Corps conducted
an area wage survey that was completed in May of 1987. That survey
encompassed 21 different projects involving the installation of
insulated metal panels and standing seam roofs between 1982 and
1986. On 10 of the projects carpenters were used, while
ironworkers were used on the other 11.
The Department of Labor conducted a follow-up survey, which
was completed in 1988. The geographic scope of the survey was
Meade and Pennington Counties, South Dakota, and was limited to the
installation of panels greater than 20 feet in length. The only
project which fit that description was the Rapid City Civic Center,
which was built in 1976. The panels were installed by ironworkers.
After review of this second "survey," Wage and Hour ruled that
the Northstar employees should have been classified as ironworkers.
When Northstar submitted data to the contrary, Wage and Hour
reaffirmed its prior ruling on April 26, 1989. Northstar
petitioned the Board for review of this decision.
On appeal Northstar questions the validity of the survey,
claiming that installation techniques for metal panels do not vary
with the size of the panel itself. Furthermore, under the
applicable regulations, the survey should have been expanded in
geographic scope prior to the consideration of projects older than
one year. Wage and Hour, through the Solicitor's Office, contends
that the survey was proper; and, if not, that "Northstar failed to
demonstrate with clear and convincing evidence that the
Administrator's determination in this case is incorrect" (Statement
on Behalf of the Administrator, at 11). [2]
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[3] An oral argument was held before the Board on July 25, 1991.
II. DISCUSSION
The record in this matter is devoid of any reason to
distinguish the installation of panels greater than twenty feet in
length from the installation of panels of a lesser length.
Northstar has repeatedly asserted that "the methodology employed in
affixing the panels to the structure is the same regardless of the
size of the panel. The only difference in installation lies in the
equipment used to raise the panels and [to] position them for
installation." (Statement on Behalf of Northstar Steel, at 4).
This assertion, which appears to be self-evident, is not addressed
by the Wage and Hour Division (and was not rebutted by the
Solicitor's Office at oral argument).
Except for the second "survey" conducted by the Department of
Labor, the only evidence in the record leads one to the conclusion
that there was no prevailing area practice with regard to the
installation of insulated metal panels, as the work was more or
less evenly divided between carpenters and ironworkers.
Accordingly, the rulings of the Wage and Hour Division are
reversed.
Had the Board not reversed the Wage and Hour rulings, it would
have remanded this matter with instructions designed to require
compliance with Department regulations. As noted, the second
"survey" encompassed only two counties within South Dakota and
looked back to 1979 to find but one "comparable" project.
Northstar questions whether a project so dated could be considered
comparable; given the evolution of the construction industry in the
meantime, this consideration would ordinarily provoke a great deal
of thought. However, the Board need not reach this issue.
The regulation governing area wage surveys contains a clearly
defined procedure, a mechanism which was not observed. 29 C.F.R.
1.7 states in pertinent part:
(a) In making a wage determination, the "area" will normally
be the county unless sufficient current wage data (data on
. . . projects under construction no more than one year prior
to the beginning of the survey or the request for a wage
determination, as appropriate) is unavailable to make a wage
determination.
(b) If there has not been sufficient similar construction
within the area in the past year to make a wage determination,
wages paid . . . in surrounding counties may be considered
.... [3]
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[4] (c) If there has not been sufficient similar construction in
surrounding counties or in the State in the past year, wages
paid on projects completed more than one year prior to the
beginning of the survey or the request . . . may be
considered.
This regulation requires an expansion of the geographic sample
prior to an historical search. It embodies a preference for the
most current information possible. In conducting its "survey," the
Department ignored the geographic bulk of the State of South
Dakota, including counties possibly containing contemporaneous and
possibly comparable projects. Given this deviation from normal and
acceptable practices clearly enunciated in the regulations, the
Board would have otherwise remanded this matter.
The rulings of the Wage and Hour Division are reversed.
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]
