Fort Hood Barbers Assoc. v. Herman,
No. 97-50570 (5th Cir. 1998) (case below ARB No. 96-181)
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
____________________
No. 97-50570
Summary Calendar
____________________
FORT HOOD BARBERS ASSOCIATION;
HENRY TORREZ, JR.; and GILBERT
BARRATACHEA,
Plaintiffs-Appellants,
versus
ALEXIS M. HERMAN, Secretary,
United States Department of Labor
and Any Successor; and NILA STOVALL,
Chief of the Branch of Service
Contract Wage Determination of
the United States Department of
Labor, and Any Successor,
Defendants-Appellees,
GINO MORENA ENTERPRISES,
Intervenor.
_______________________________________________
Appeal from the United States District Court
for the Western District of Texas
________________________________________________
March 30, 1998
Before WIENER, BARKSDALE, and EMILIO M. GARZA, Circuit
Judges.
4The facts of this case aptly
illustrate how a collective bargaining process may be undercut: Plaintiffs had a collective
bargaining agreement (CBA) with the prior contractor to Gino Morena Enterprises (Morena).
After Morena won the contract, the CBA lasted through the first year of Morena's contract before
expiring, and, as section 4(c) of the SCA mandates, the CBA's provisions applied to the first year
of the Morena contract. Plaintiffs and Morena were unsuccessful in reaching a new CBA, so that
at the time of the 1993 wage determination of which the plaintiffs complain, no CBA was in
effect. Because the expired CBA was more advantageous to the plaintiffs than the 1993 wage
determination, they now want the CBA terms to apply to the entire, five-year duration of the
Morena contract. If section 4(c) were to create such a result for the entire duration of the
successor contractor, the successor contractor (here, Morena) and the union would have little
incentive to negotiate a new CBA; the party relatively advantaged by the existing or lapsed CBA
(here, the plaintiffs) could obstruct collective bargaining and insist that the expired CBA
continue for the duration of the contractor's contract, thereby receiving a better bargain than it
could negotiate for itself. By contrast, section 4(d) of the SCA and the Secretary's regulation in
question, 29 C.F.R. § 4.145(b), partially ameliorate the disincentives to collective
bargaining by providing for biannual wage determinations and for each two-year period to be
treated as a "wholly new contract[]," at least where no CBA exists, thereby forcing
the parties to bargain or to pay and receive the prevailing wage rate. Further, as the district court
opinion correctly notes, § 4.145(b) actually benefits workers in situations in which they
receive less than the prevailing wage rate by creating "new" service contracts and
hence, upward adjustments in their wages every two years.
5That is not to say, however, that
the persistence of the parties in tangling with a difficult issue is not appreciated.
6It appears that the same barbers
that had worked under Weaver continued to work at Fort Hood under Morena.
741 U.S.C. § 351(a)
provides that every contract subject to the SCA shall contain provisions specifying the
"minimum monetary wages" and the fringe benefits to be paid to employees
performing services under the contract as determined by the Secretary in accordance with the
wages and benefits "prevailing" in the locality "or, where a
collective-bargaining agreement covers any such service employees," in accordance with
the wages and fringe benefits provided for in such agreement. These determinations made by the
Secretary are known as "wage determinations." In no instance may a wage
determination set wages lower than the minimum wage set in the Fair Labor Standards Act.
Id.
8Plaintiffs articulated this
contention for the first time in this federal court lawsuit filed May 17, 1996 and submitted the
question in their amended petition for review to the Administrative Review Board prior to the
ruling by the Administrator.
9See supra note 3
(describing § 351 and the issuance of wage determinations).
10This regulation emphasizes
that "[t]he operative words of section 4(c) refer to "contract' not "contractor'
" and concludes that "the statute is applicable by its terms to a successor contract
without regard to whether the successor contractor was also the predecessor contractor." 29
C.F.R. § 163(e) (1996) (emphasis omitted). Therefore, "[a] contractor may become
its own successor...." Id.
11This problem is minimized,
of course, by the fact that most collective bargaining agreements are no longer than three years.
See Hearings at 103.
12Plaintiffs offer no reason why
the fact that the second page of the 1993 wage determination was blank is relevant to their failure
to make the argument.
13The section reads in relevant
part: "An employee engaged in an occupation in which he or she customarily and regularly
receives more than $30 a month in tips may have the amount of tips credited by the employer
against the minimum wage required by [the SCA] in accordance with section 3(m) of the Fair
Labor Standards Act...."