ARB CASE NO. 97-064
(ALJ CASE NO. 96-DBA-18)
DATE: October 31, 1997
In the Matter of:
BILL J. COPELAND
Prime Contractor
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
DECISION AND ORDER OF REMAND
This case arises under the provisions of the Davis-Bacon Act (DBA), 40
U.S.C. §§276a-276a-7, 276c, the Contract Work Hours and Safety Standards Act
(CWHSSA), as amended, 40 U.S.C. §§327-332, and the regulations at 29 C.F.R.
Parts 5 and 6 (1997). The Acting Administrator (Administrator), Wage and Hour Division
(WHD), Employment Standards Administration, U.S. Department of Labor timely petitioned for
review of the Decision and Order (D. and O.) of the Administrative Law Judge (ALJ) issued
January 28, 1997. The ALJ dismissed the Administrator's Order of Reference charging Bill J.
Copeland (Copeland) with violations of the DBA and the CWHSSA. The ALJ's decision is
affirmed in part and reversed in part and remanded for proceedings consistent with this decision
for the reasons stated below.
BACKGROUND
The Administrator seeks review of the ALJ's decision dismissing the
Administrator's back wage and debarment action against Copeland. The ALJ's dismissal was
issued without a determination as to the merits of the action, but was based on a determination
that Copeland was prejudiced by "the extreme and inexcusable administrative delay in
bringing this matter to a hearing." D. and O. at 17.
The facts on appeal are not in dispute. Copeland was awarded two
contracts by the United States Forest Service to do various trail and construction work in the San
Bernardino National Forest in 1991. The work on the first contract, to clear a trail, was expected
to take about seven months to complete, and the second contract, to construct a comfort station,
was to take about four months to complete. Government's Response to Prehearing Order
(Response), Exhibits (Ex.) A and B. Copeland does not dispute that the contracts were covered
by the DBA and the CWHHSA. Ex. A at 54; Ex. B at 55; Prehearing Conference Transcript (Tr.)
at 51.
[Page 2]
In March 1992, certain of Copeland's employees alleged that they were not
being paid the prevailing wage rate as required by the DBA. In July 1994, consequent to its
investigation of the allegations, WHD charged Copeland with violations of the DBA and the
CWHSSA. In August 1994, Copeland timely filed a request for a hearing to challenge the
charges. The WHD failed to issue an Order of Reference to the Office of Administrative Law
Judges (OALJ), which is the procedural step necessary to bring the matter to a hearing. Copeland
petitioned our predecessor appellate body, the Wage Appeals Board (WAB) in November 1994,
seeking among other things, an order directing the Administrator to issue an Order of Reference
to the OALJ.
The WAB granted the Administrator's motion to dismiss Copeland's
petition, agreeing that since there had not been a hearing and consequently an appealable ALJ
decision, the case was not properly before the WAB. In dismissing the petition, however, the
WAB recognized Copeland's frustration to get a hearing on the merits and "urges . . . [the
Administrator] to expeditiously issue an Order of Reference in this matter." In the Matter
of Copeland Construction Company (Copeland I), WAB Case No. 94-20, Decision, Jan. 31,
1995, slip op. at 4.
The Administrator did not issue an Order of Reference, but in March
1995, issued an amended charging letter to Copeland, alleging that the violations required
debarment. Copeland again timely requested a hearing to contest the charges in the amended
charging letter, and ten months later, in February 1996, the Administrator sent an Order of
Reference to the OALJ.
A prehearing conference was held in December 1996, at which time
counsel for the Administrator advised the ALJ that the Government would not be able to proceed
to a hearing on the merits until June 1, 1997. On January 28, 1997, the ALJ issued a decision
granting Copeland's motion to dismiss, without a determination on the merits of the case. The
Administrator petitioned this Board for review of the dismissal order.
This Board granted the Administrator's request for review on March 10,
1997. Our review of the case record indicated unwarranted delay on the part of the Administrator
in bringing this matter to resolution and on September 25, 1997, an order was issued requiring
the Administrator to provide to the Board and the parties, a list of witnesses certified to be
available and willing to testify at a hearing on the merits of this case.
The Administrator responded on October 14, 1997, and indicated three
available witnesses for a hearing: the WHD investigator and two complaining former employees,
Mayberry and Patterson. Current, validated addresses of the witnesses were provided which
should obviate the difficulty Copeland alleged he encountered in his previous attempt at
prehearing discovery. See Copeland's statement in Opposition to Administrator's Petition
at 18-19.
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DISCUSSION
The Administrator's various delays in failing to respond to Copeland's
request for hearings after the first and amended charging letters, as well as to the WAB's urging
to act expeditiously is inexplicable. Even in the pleadings before us, neither the Administrator
nor counsel proffer any explanation for the Administrator's failure to act other than to note that
"the Administrator regrets the delay ....." Administrator's Statement in Support of
Petition at 16 n.9. While the ALJ's impatience with the Administrator's evident indifference in
moving this matter to resolution is understandable, his dismissal of the matter with prejudice
without any factual investigation and a consequent determination on the merits of the case, or
even a determination as to how Copeland was prejudiced by the delay, is inappropriate.
Although the pertinent regulations do not specify a time frame within
which the Administrator is to refer the matter to the OALJ, the Administrator's nineteen-month
delay in issuing an Order of Reference in this case exhibits an unseemly indifference to an
orderly and timely disposition of the case. See 29 C.F.R. §§5.11(b)(3);
5.12(d)(4); 6.30(a).
The issue of inordinate delay by WHD in bringing a matter to a timely
hearing was addressed by the WAB in The Matter of J. Slotnick Company et al., WAB
Case No. 80-05, Decision, Mar. 22, 1983, slip op. at 8-9. In Slotnick, the WAB was
concerned that the Administrator's inexcusable delay burdened both the employees who might
have been wronged and could possibly be equally unfair to the contractor if it turned out that the
employees had not been wronged, for in either situation, interested persons were denied access to
withheld funds. Id. Although the WAB stated that extreme delay may create a
presumption of improper treatment with or without the showing of palpable injury to the
contractor, the WAB did not dismiss the complaint in recognition that such dismissal could
ultimately be to the detriment of the employees. The decision reminded administering agencies of
their responsibility to act expeditiously. Id. at 9.
The WAB addressed the matter of extreme delay in processing a
complaint in The Matter of Gemini Construction Co., WAB Case No. 91-23, Decision,
Sep. 12, 1991. In Gemini, the WAB affirmed the ALJ's determination that the contractor
had not been prejudiced by a four-year delay since the contractor was aware of the results of
WHD's investigation, was in control and possession of its own records and could rebut the
allegations of violations. In Gemini, the contractor, as in the case before us, was faced
with the problem of a potential witness dying before the case was heard, but did not indicate how
the witness' testimony could have resulted in a different outcome, vis a vis the alleged wrongful
payment. Id. at 4. In the case before us, Copeland is likewise aware of the allegations of
his former employees and has control of his original records. The purported testimony of the
deceased witness will be subject to the ALJ's determination as to its relevance in Copeland's
defense.
The issue of extraordinary delay by the WHD arose again in The
Matter of Tom Rob, Inc., WAB Case No. 94-03, Decision, Jun. 21, 1994. In Tom
Rob, the ALJ determined that a delay of four years and eleven months denied the contractor
due process and
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dismissed the complaint. The WAB rejected the ALJ's finding of prejudice solely on elapsed time
and relied on the four-factor analytical framework set forth by the Supreme Court in Barker
v. Wingo, 407 U.S. 514 (1927), followed by United States v. $8,850, 561 U.S. 555
(1983). The Barker analysis assists a court in determining if an individual's rights have
been violated in a civil proceeding due to a delay in holding a hearing. The Barker
factors are: (1) the length of the delay; (2) the reason for the delay; (3) the defendants' assertion
of rights to the procedure; and (4) prejudice to the defendants. Id. at 6.
The WAB in Tom Rob found that mere allegations of prejudice are
not sufficient to satisfy the fourth requirement and, citing Gemini, determined that there
must be a showing of actual prejudice. The WAB professed its reluctance to grant a motion to
dismiss on the basis of presumed prejudice in an administrative hearing, and that a more prudent
course would be to require the ALJ to proceed with a hearing on the merits and then sort out the
evidence which he or she deemed pertinent to the case, disregarding testimony or evidence
deemed improper or prejudicial, citing Builders Steel Co. v. Commissioner of Internal
Revenue, 179 F.2d 377 (8th Cir. 1950). Id. at 9-10. In this manner, an ALJ could
determine if the contractor had actually been prejudiced by not being able to produce witnesses
directly attributable to the delay.
In The Matter of Public Developers Corp. (PDC), WAB Case No.
94-02, Decision, July 29, 1994, the WAB reversed an ALJ's dismissal of WHD's complaint
against the contractor pursuant to a laches theory, based on the inordinate delay in processing the
case. In PDC, the delay stretched over a period of eight years, from commencement to
Order of Reference, including a three-year delay from the investigation to the issuance of the
charging letter. Id. at 3-5. The ALJ held a fact finding hearing in PDC, from which he
determined that the contractor had been prejudiced by the extreme delay by the government.
However, the ALJ did not rule on the merits of WHD's claims against PDC, nor did he identify a
specific reason for finding of prejudice. The WAB ruling rejected the dismissal on a laches
theory because the ALJ failed to find specific facts to support his conclusion that PDC was
prejudiced in its ability to present a defense.
The WAB, at the time of the PDC decision had only two sitting
members, and although both members agreed to the remand in an effort to hasten the resolution
of the case, one member wrote a concurring opinion. The concurring member stated that he
would affirm the ALJ because the PDC case record supported the ALJ's finding of
prejudice against the contractor, even though the ALJ failed to indicate a specific basis for such
finding. Id. at 15-16.
In the case before us, the ALJ did not hold a fact finding hearing, but only
a prehearing conference. No evidence was offered other than Copeland's statements at the
prehearing conference that three witnesses that he intended to call would not be available to
appear in person at a hearing. The most extreme instance was the death of a potential witness,
although the other two witnesses who live out of state could presumably be available by
deposition or other methods.
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We note that the case record contains a fairly complete documentary
record. Although the Response was not admitted into evidence, certain issues of fact are apparent
which negate the appropriateness of a dismissal without a hearing on the merits. The
Administrator's Response includes sworn statements by the complaining employees which
contain assertions that directly contradict documents submitted by Copeland to the Forest
Service, as well as his statements at the prehearing conference.
These disparities pertain to hours claimed to have been worked by Mallie,
Glen Copeland, Mayberry, Patterson, Ramirez, Wooley and Brose, Exhibits T, U, V, W, X, Y
and Z, respectively; and the time sheets submitted by Copeland regarding the days and hours
worked, Exhibits F and G. Pursuant to restrictions in this Order, only those statements by
Mayberry and Patterson are directly germane to the hearing on the merits. The statements also
pertain to the method of compensation being linked to work product indices up to a specified
amount rather than an hourly wage as set forth in the Forest Service contract.
Since the ALJ did not conduct a fact finding hearing, our review of the
record merely notes these inconsistencies between Copeland's comments and the employees'
sworn statements. Because a documentary review is not satisfactory as a means of determining
witness credibility, we remand this case so the ALJ can benefit from personal observation of the
witnesses at a hearing.
Our main concern in this decision is to protect the rights of employees who
may have been wrongfully underpaid pursuant to the DBA and the CWHSSA. But we must also
assure Copeland of a fair opportunity to respond to the Administrator's allegations. In trying to
balance the rights of the parties in this case, notably Copeland and the claiming employees who
are available to testify at the hearing, we appreciate the fact that the agency which bears the
responsibility for the inordinate delay in moving this case to resolution is insulated from the
consequences of its inaction. Although such dilatoriness in the private sector which resulted in a
dismissal might provide aggrieved complainants with an opportunity for redress, that is not a
viable alternative in this case.
We find that the Administrator's unwarranted delay, combined with
Copeland's inability to conduct prehearing discovery with former complaining employees who
were not certified to be witnesses at the hearing, is prejudicial to Copeland with regard to their
claims in this case. Therefore, we bar recovery of their potential claims against Copeland, and the
Order of Reference with regard to the claims of these claimants is dismissed. SeeSlotnick at 9.
1 Although the
Administrator's four year delay in issuing an Order of Reference from the commencement of the
action in this case represents a 50% improvement compared to the unwarranted delay in PDC, we
take little comfort in the improvement.