CCASE:
ACandS, Inc.
DDATE:
19940331
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
ACandS, Inc. WAB Case No. 93-16
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
DATED: March 31, 1994
DECISION OF THE WAGE APPEALS BOARD
This matter is before the Wage Appeals Board on the petition
of ACandS, Inc. ("ACandS" or "Petitioner"), seeking review of
the July 29, 1993 ruling by the Deputy Assistant Administrator of
the Wage and Hour Division concerning Petitioner's labor
standards performance as a subcontractor on the Fort Drum (New
York) Expansion Project. The Deputy Assistant Administrator
determined that ACandS: 1) classified and paid as apprentice
asbestos workers certain employees who were not individually
registered in an approved apprenticeship program; 2) employed
apprentice asbestos workers in excess of the ratio allowable to
journeymen, as stipulated in the local apprenticeship program;
and 3) employed and paid certain employees as helpers in the
absence of a helper classification listed in the applicable wage
determination. For the following reasons, the Board affirms the
Deputy Assistant Administrator's final ruling.
I. BACKGROUND
The United States Army Corps of Engineers awarded Contract
No. DACA51-87-C-0125 to prime contractor Black River Constructors
for the Fort Drum Expansion Project. There is no dispute that
the prime contract was subject to and contained the prevailing
wage labor standards provisions applicable to the Davis-Bacon Act
(40 U.S.C. [sec] 276a et seq.) and the overtime wage provisions
of the Contract Work Hours and Safety Standards Act (40 U.S.C.
[sec] 327 et seq.). [1]
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[2] Black River Constructors awarded a subcontract -- similarly subject
to prevailing wage and overtime requirements -- to Petitioner for the
installation of thermal insulation of the mechanical work in buildings
at Fort Drum.
During performance of the subcontract, the Wage and Hour
Division conducted an investigation to determine compliance with
the labor standards provisions by ACandS. The Wage and Hour
Division determined that there were no significant -- or material
-- factual disputes disclosed during the investigation and, on
July 29, 1993, issued the final ruling summarizing the
investigation findings and assessing $325,340.11 for prevailing
wage and $1,947.93 for overtime violations, respectively.
In his ruling letter, the Deputy Assistant Administrator
charged that ACandS:
employed employees who were not registered pursuant to
section 5.5(a)(1) of Regulations Part 5. In this
regard, your firm classified and paid employees as
apprentices, but the employees were not [*]individually
registered[*] as apprentices in the apprenticeship
program approved the New York State Department of
Labor.
In addition, your firm employed apprentice asbestos
workers in excess of the allowable ratio of apprentices
to journeypersons as stipulated in your apprenticeship
program. In this regard, the apprenticeship program
required your firm to maintain a ratio of one
apprentice to four journeypersons asbestos workers.
However, the investigation disclosed that your firm
allowed the ratio on the job site to exceed that
specified in the apprenticeship program. The
investigation also revealed that your firm classified
and paid employees as helpers even though there was no
helpers' rate in the applicable wage decision. For
those employees who were not properly registered as
apprentices and those apprentices employed in excess of
the allowable ratio, you were required by Regulations,
Part 5, section 5.5(a)(4)(i) to pay the prevailing wage
rate for the asbestos worker's classification.
Moreover, employees improperly classified as helpers
were also entitled to compensation at the asbestos
worker's classification [sic].
Administrative Record ("AR") Tab A, p. 2; [*]emphasis in
original[*].
ACandS petitioned this Board for review of the final ruling.
The Parties filed statements in support of their respective
positions and oral argument of the issues raised was conducted
before the Board on January 13, 1994. [2]
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[3] II. DISCUSSION
The Board first considers that portion of Wage and Hour's
ruling which found that ACandS had "classified and paid
employees as helpers even though there was no helpers' rate in
the applicable wage decision." Id. The record in this matter
does not indicate the number of employees (among the 61 workers
alleged to be due back wages) so classified as helpers. Neither
have the parties in their statements or oral argument before the
Board addressed the scope of this issue. Regardless of the
numbers of employees classified as helpers, it is clear from
ACandS' petition for review and its supplemental statement that
Petitioner has failed to address this aspect of Wage and Hour's
findings and has not presented any argument defending the
practice of employing helpers. To the extent that ACandS did
classify and pay employees as helpers -- in the absence of such
provision in the applicable wage determination -- we must
conclude that Petitioner has waived defense against this
investigation finding and the Board therefore affirms Wage and
Hour's conclusion that the employment of helpers was a violation
and that such employees were due compensation at the
journeyperson's rate. See Ocean Habitability, Inc., WAB Case No.
87-22 (Mar. 28, 1991), slip op. at pp. 4-5.
In defending its apprentice employment practices on the Fort
Drum subcontract, ACandS states that it:
accepted persons referred to it as apprentices by its
duly recognized union pursuant to the prevailing local
practice of the union under the collective bargaining
agreement.
ACandS Supplemental Statement, pp. 4-5. Petitioner cites
decisions of this Board as support for the apprentice employment
practices alleged by Wage and Hour to be violations: Colonial
Realty, Inc., WAB Case No. 87-37 (Feb. 22, 1989), request for
reconsideration denied (Sept. 20, 1989). In Colonial Realty, the
employer had hired duly registered apprentices in excess of the
permissible journeyperson to apprentice ratio. Colonial Realty
defended this practice, in part, on the basis that it "had been
mislead by the apprenticeship program and the local carpenter's
union into believing that it was customary in the area to hire
apprentices in excess of the allowable ratio." Colonial I, slip
op. at p. 3.
In its Colonial I decision, the Board expressed the opinion
that the employer had not "attempted to avoid its Davis-Bacon
obligations by utilizing apprentices as journeymen in order to
reduce labor costs" and the employer's "representations" that
the union local business agent saw no violation of the collective
bargaining by excess employment of apprentices, since "the
deviation `is done all the time' . . . ." Id. The Board also
noted its longstanding commitment to strict construction of the
regulation's apprenticeship employment provisions and stated that
its decision -- to remand the case to Wage and Hour for [3]
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[4] a survey of whether there was in fact a "practice" not to adhere to
the apprenticeship agreement ratio -- was not an abandonment of the
general rule of strict liability for violations of apprenticeship
agreement terms and conditions.
The Wage and Hour Division and the Building and Construction
Trades Department, AFL-CIO requested reconsideration of the
Board's decision in Colonial I. The Board denied the request for
reconsideration and affirmed the result reached in the first
decision -- holding the employer harmless for the overemployment
of duly registered apprentices -- but the Board modified the
Colonial I decision to preclude the order remanding the case to
Wage and Hour for a survey.
ACandS now argues that it -- like Colonial Realty -- did not
seek to pay wages lower than those prevailing in the Fort Drum
area but was merely complying with the established area practice
and expectations of the asbestos workers' local union. However,
this Board has repeatedly held that the employer subject to the
Davis-Bacon Act has an obligation to ensure that its employment
of apprentices is consistent with the requirements of the
regulation and applicable agreement's terms. In the most recent
case concerning this question, the Board stated:
Board precedent makes clear that the
responsibility for individual registration of
apprentices lies with the employer. See Tollefson
Plumbing and Heating Co., WAB Case No. 78-17 (Sept. 24,
1979) (the employer, not the contracting agency, has
the responsibility for registering employees in a bona
fide apprenticeship program).
North Star Industries, Inc., WAB Case No. 92-02 (Sept. 30, 1992),
slip op. at p. 6.; aff'd North Star Industries, Inc. v. Robert B.
Reich, No. 92-1613 JU (D.C. Ore. Sept. 30, 1993), appeal
docketed, No. 93-35989 (9th Cir. Oct. 15, 1993). See also Van
Den Heuvel Electric Co., WAB Case No. 91-03 (Feb. 13, 1991).
The Board holds that enforcement of the written terms of
local apprenticeship standards - - as required by Department of
Labor regulations -- must be the rule on Davis-Bacon or Related
Act construction projects. This Board as an appellate body will
not cibsuder the granting of an exemption from the written terms
of local apprenticeship standards where the Administrator has not
first considered a request for variance or exemption pursuant to
29 C.F.R. 5.14. We do not interpret Petitioner's December 3,
1992 submission to Wage and Hour to be a request filed pursuant
to 29 C.F.R. 5.14. Nor did the Deputy Assistant Administrator
consider and address the merits of such an equitable claim for
relief from the apprenticeship standards. [4]
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[5] Where the Administrator has not first ruled, we would
ordinarily decline to exercise the Board's authority to review
the dispute. Petitioner strongly argues that the Board has the
authority to grant variation, tolerances, or exemptions from
Davis-Bacon and related Act regulatory requirements -- including
those pertaining to apprenticeship registration and ratios --
under 29 C.F.R. Part 5. Counsel for the Administrator, in
discussing the Board's apparent authority /FN1/ in this regard at
oral argument noted the Administrator has never -- to counsel's
knowledge -- granted variation or exemption from apprenticeship
standards.
This Board is similarly disinclined to ever grant variance
or exemption from the apprenticeship standards. Thus, to the
extent that the July 29, 1993 ruling could be considered an
implicit denial of exemption from apprenticeship standards, the
facts in this matter would compel affirming the Administrator's
denial. In the first place, no public interest is served by such
exemption. Here, the public interest clearly lies with
enforcement of apprenticeship regulations and the registration
and training requirements contained in the local collective
bargaining agreement to which ACandS was a party. We have often
noted the additional public interest underpinning the Davis-Bacon
Act: the principle that all prospective federal construction
contractors be on a "level playing field" in the bidding
process. Fairness in the bidding process is patently suspect
where even-handed administration of the apprenticeship
regulations is not strictly enforced. The public interest in
preserving local prevailing apprenticeship practices -- as
memorialized by the unambiguous terms of the collective
bargaining agreement -- likewise mitigates against relief from
enforcement of the apprenticeship requirements in this case.
Secondly, Petitioner has not demonstrated that exemption is
"necessary and proper . . . to prevent injustice and undue
hardship." 29 C.F.R. 5.14. ACandS concedes that it "bid for
the project using journeymen rates because it expected that the
union would be able to provide an adequate number of [5]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ A reasonable interpretation of the regulations at 29 C.F.R.
5.14 and the Board's regulations does arguably allow this Board
to grant exemptions, variations, and tolerances to or from the
regulations in 29 C.F.R. Part 5. Exemption authority is
specifically reserved to the Secretary by the terms of the
regulation, [*] "whenever the Secretary finds that such action is
necessary and proper in the public interest or to prevent
injustice and undue hardship."[*] [EMPHASIS SUPPLIED] The
Administrator has long been delegated the Secretary's
responsibilities.
However, Section 5.14 and the Board's rules of practice are
substantially similar. The regulation at 29 C.F.R. 7.1(c)
states:
In exercising its discretion [*] to hear and decide
appeals,[*] the Board shall consider, among other
things, timeliness, the nature of the relief sought,
[*]matters of undue hardship or injustice, or the
public interest.[*]
Furthermore, the Board is explicitly empowered -- "within the
scope of its jurisdiction" -- to "act as fully and finally as
might the Secretary of Labor concerning such matters." 29 C.F.R.
7.1(d). [5]
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[6] journeymen.'' ACandS Supplement Statement, p. 7, n.4.
Retroactive exemption from the apprenticeship requirements would
now appear to be a windfall to Petitioner, having entered the
contract fully expecting to pay journeyperson rates. Petitioner
has made no showing on the record that there was any significant
lack of productivity in using the unregistered and over-ratio
apprentices at Fort Drum.
For the foregoing reasons, the Deputy Assistant
Administrator's final ruling of July 29, 1993 is affirmed.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Gerald F. Krizan, Esq.
Executive Secretary [6]
