ARB CASE NO. 99-039
ALJ CASE NO. 96-DBA-34
DATE: May 31, 2000
In the Matter of:
Disputes concerning fringe benefit kickbacks,
the misclassification of employees and the
payment of prevailing wage rates by:
KP & L ELECTRICAL CONTRACTORS, INC.,
Subcontractor,
and
CENTRAL ROCK MINERAL COMPANY, INC.,
Prime Contractor,
(With respect to laborers and mechanics employed
by KP & L Electrical Contractors under Project
Nos. KY 4-1 and KY 4-3 for the Bluegrass-
Aspendale project funded by the Department of
Housing and Urban Development)
and
JUDY CONSTRUCTION COMPANY,
Prime Contractor,
(With respect to laborers and mechanics employed
by KP & L Electrical Contractors under Grant
No. C210469-02 and Contract No. L34705 for the
Manchester Waste Water System Plant project and
the Bowling Green Municipal Utilities project both
funded by the Environmental Protection Agency)
and
GROT ELECTRIC, INC.,
Prime Contractor,
(With respect to laborers and mechanics employed by
KP & L Electrical Contractors under Contract No.
DLA 302-91-C-0121 for the Sharondale Defense
Logistics Agency Depot project funded by the
Department of Defense)
[Page 2]
and
BUILDING CRAFTS, INC.,
Prime Contractor,
(With respect to laborers and mechanics employed
by KP & L Electrical Contractors under Contract
No 04-01-033681 for the Danville Water Treatment
Plant project funded by the Department of Commerce,
Economic Development Agency)
and
Proposed debarment for labor standards
violations by:
KP & L ELECTRICAL CONTRACTORS, INC.,
Subcontractor,
and
EDWARD COURTNEY AND KAREN COURTNEY,
Individually
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
Appearances:
For the Petitioner:
Robert J. Schumacher, Esq., Schumacher & Booker, P.S.C., Louisville, Kentucky
For the Respondent: Leif G. Jorgenson, Esq., Paul L. Frieden, Esq., Steven J.
Mandel, U.S. Department of Labor, Washington, DC
FINAL DECISION AND ORDER
In 1992 the Wage and Hour Division of the Department of Labor initiated
an investigation of KP&L Electrical Contractors and several other contractors concerning their
1 The Housing Act and Public Works
Act are both Davis-Bacon Related Acts.
2 We emphasize that in the
course of fact-finding the ALJ made demeanor-based credibility determinations regarding several
key witnesses, including the employee witnesses and company president Edward Courtney. The
ALJ repeatedly found the employees' testimony "credible and consistent," and
discredited the testimony of Edward Courtney, among other reasons, because Courtney admitted
having requested his employees to sign false affidavits to thwart a state overtime investigation.
Specifically with respect to the kickback allegation, the ALJ found that several employees cashed
their back pay checks and either gave the money to Edward Courtney or placed the money on
Edward Courtney's desk. Edward Courtney denied requesting or receiving any money from
employees who were given back pay checks but did not explain why he kept the cash placed on
his desk. The ALJ did not credit Edward Courtney's denials and found the employees' testimony
"credible and consistent . . . with each other." D. and O. at 8. In addition, Karen
Courtney did not testify, and KP&L did not rebut the testimony that she participated in the
kickbacks.
An ALJ's demeanor-based credibility determinations are entitled to great
weight, and "the Board will not reverse credibility determinations where they are not
clearly erroneous." Wayne J. Griffin Electric, Inc., WAB Case No. 93-05 (Oct. 29,
1993) slip op. at 6, citingMilnor Construction Corp., WAB Case No. 91-21
(Sept. 12, 1991); NLRB v. Cutting, Inc., 701 F.2d 659, 667 (7th Cir. 1983) (contrasting
exceptional weight accorded to ALJ credibility findings that rest on demeanor with lesser weight
accorded to credibility findings based on other aspects of testimony, such as internal
discrepancies or witness self-interest).
3L.P. Cavett Co. v. United
States Dept of Labor, 101 F.3d 1111 (6th Cir. 1996), cited by KP&L, is not to the contrary.
In that case, the court held that "situs of work" rules applicable under the Davis-
Bacon Act apply to cases arising under the Federal-Aid Highway Act, a Davis-Bacon Related
Act, 101 F.3d at 1116, but did not address applicability of the Portal-to-Portal Act statute of
limitations to administrative enforcement proceedings.
4 In Bill J. Copeland
the ALJ dismissed the case without a hearing because he determined that Copeland was
prejudiced by "the extreme and inexcusable administrative delay in bringing this matter to
a hearing." ALJ Decision and Order, Jan. 28, 1997, slip op. at 17. On review the Board
found that the Administrator's unwarranted delay, combined with the undisputed fact that
Copeland was unable to conduct prehearing discovery with former complaining employees who
were not certified to be witnesses at the hearing, was prejudicial to Copeland with regard to their
claims. Therefore, the Board barred recovery for their potential claims against Copeland, and the
Order of Reference with regard to the claims of those claimants was dismissed. The Board
remanded the remainder of the case to the ALJ for a hearing on the merits and, if violations were
found, for a determination whether Copeland was prejudiced in his defense and whether that
prejudice was directly attributable to the administrative delay.
5 In fact, KP&L could have
used such claimed inconsistencies between the prior written statements of the employee
witnesses and their testimony at the hearing to impeach them. KP&L failed in this endeavor
because, whatever the claimed weaknesses of the employee testimony, the ALJ did not find the
contrary testimony of Edward Courtney to be believable. See, e.g., D. and O. at 8, as to
kickbacks; D. and O. at 14 and 16, as to paying employees off the payroll in cash; D. and O. at
22, as to loading, unloading and travel time; D. and O. at 30, as to the lack of credibility of
Edward Courtney's statement that he believed the Sharonville project was not covered by the
Davis-Bacon Act.