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USDOL/OALJ Reporter
CCASE:
J. W. BATESON CO.
DDATE:
19891205
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D.C.
In the Matter of
J. W. BATESON CO., et al. WAB Case No. 87-38
& Jamco, Inc., Lower-tier
Subcontractor Dated: December 5, 1989
APPEARANCES: Carol Arnold, Esquire, for the Administrator, Wage
and Hour Division, U.S. Department of Labor
BEFORE: Jackson M. Andrews, Chairman, Stuart Rothman,
Member, and Thomas X. Dunn, Member, concurring and
dissenting
DECISION OF THE WAGE APPEALS BOARD
This case arises under the Davis-Bacon Act, as amended, 40 USC
276a et seq., and the Contract Work Hours and Safety Standards Act,
as amended, 40 USC 327 et seq., (CWHSSA).
Jamco, Inc. (Jamco) was a lower tier electrical subcontractor
for duct bank installation work at a Veterans Administration (VA)
hospital under construction in Alb[u]querque, New Mexico.
Apparently, at the beginning of the project in July, 1983, a
representative of the VA approached Jamco about hiring Vietnam
veterans. On January 25, 1984, the VA approved Jamco's application
for a training program under the Emergency Veterans Job Training
Act of 1984 (EVJTA). The VA thereupon approved participation in
Jamco's EVJTA training program for four of Jamco's employees as [1]
~2
[2] electrician trainees.
In March, 1984, the VA began investigating the electrician
trainee classification established by Jamco, and then referred the
matter to the Department of Labor's Wage and Hour Division. An
investigation by the Wage and Hour Division in June, 1984, revealed
that Jamco had improperly classified and paid nine employees,
including the four electrician trainees.
Jamco laid off the four electrician trainees at that time but
re-employed them after the training program was subsequently
certified by the New Mexico State Apprenticeship Council.
Jamco requested a hearing pursuant to Section 5.11(b) of the
Secretary of Labor's regulations implementing the Davis-Bacon and
Related Acts, 29 CFR Sec. 5.11(b), to determine[] whether Jamco had
committed violations of the Davis-Bacon Act, CWHSSA, and applicable
regulations issued pursuant thereto, 29 CFR Part 5.
A hearing was held before Department of Labor Administrative
Law Judge Alfred Lindeman on March 24 and 25, 1987. Judge Lindeman
issued a Decision and Order on August 10, 1987, in which he found
that Jamco had misclassified part of the work performed by five of
its employees, and that they were entitled to $5722.07 in back
wages. Judge Lindeman also found that the other four employees
classified as electrician trainees had been hired under EVJTA and [2]
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[3] concluded, as such, that they were not subject to sec.
5.5(a) of the Secretary of Labor's regulations implementing the
Davis-Bacon and Related Acts, 29 CFR Sec. 5.5(a)(4), which requires
that apprentices be registered with either a State apprenticeship
agency or the Department of Labor's Bureau of Apprenticeship and
Training (BAT). Without such prior approval, a contractor is
required to pay the prevailing wage rate to such employees.
The Wage and Hour Administrator (Administrator) has filed a
petition for review with the Board challenging Judge Lindeman's
holding. Specifically, the Administrator disputes the ALJ's
conclusion of law that apprentices registered in programs approved
by the VA pursuant to the EVJTA are not subject to the Davis-Bacon
Act's requirements, including the provisions of Sec. 5.5(a)(4) of
the Secretary's regulations, and asks the Board to overrule the
ALJ's Decision and Order insofar as it found that Jamco's four
electricians were not underpaid.
The ALJ found that Jamco's four electrician trainees had been
properly paid because he concluded that the Davis-Bacon Act's
prevailing wage requirement does not apply to a bona fide trainee
in a training program approved by the VA pursuant to the provisions
of EVJTA. The ALJ reasoned that the EVJTA takes precedence over
the Davis-Bacon Act because Sec. 276a-3 of the Davis-Bacon Act, 40
USC 276a-3 provides:
Sec. 276a to 276a-5 of this title [the Davis-Bacon Act]
shall not be construed [3]
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[4] to super[s]ede or impair any authority otherwise
granted by Federal Law to provide for specific wage
rates.
He further reasoned that, although the EVJTA does not expressly
refer to the Davis-Bacon Act, the Job Training Partnership Act
(JTPA) states that although the Davis-Bacon Act is applicable, it
has no applicability "to a bona fide trainee in a training program
under this chapter." See 29 USC Sec. 1553(d). The ALJ concluded
that Jamco's training program fell within this exception to
Davis-Bacon coverage because the EVJTA is part of the JTPA.
The Board considered this appeal on the basis of the Petition
for Review filed on behalf of the Administrator by the Solicitor of
Labor, the record of the case before the ALJ, and the response of
Jamco, filed by its counsel. A[n] oral argument was held on April
19, 1989, notice of which was provided to all interested persons,
but at which only the Administrator was represented by counsel.
- - -
The first impression of the Board in examining Title 29 U.S.
Code Ch. 19, Joint Training Partnership, Subchapter I, Section
1553(d) and Section 1721 is that the ALJ was right in concluding
that Section 1553(d) of the Joint Training Partner[ship] Act (JTPA)
also applied to the Emergency Veterans Job Training Act (EVJTA).
And since this was so, as the ALJ reasoned, Section 1553(d)
excludes not only the JTPA but also the EVJTA from Davis-Bacon Act
wage rate coverage. [4]
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[5] However, upon further study of the statutory provisions
including review of the explanation in the Building and
Construction Trades Department's memorandum, the Board agrees with
the Solicitor of Labor in its Petition for Review and with the
Building Trades in its memorandum that EVJTA is not part of JTPA,
and thus Sec. 1553(d) does not apply to the EVJTA.
But that does not end the question whether the result reached
by the ALJ is right or wrong.
Having concluded that the Congress intended to subsume the
EVJTA under the J[TP]A and Section 1553(d) thereof, the ALJ did not
elaborate upon other provis[i]ons of the Davis-Bacon Act and of the
EVJTA. The result reached by the ALJ was the right result reached
by the erroneous conclusion that Section 1553(d) also excluded the
EVJTA from Davis-Bacon wage rate determination.
The Davis-Bacon Act provides:
Sections 276a to 276a-5 of this title [the Davis-Bacon
Act] shall not be construed to supersede or impair any
authority otherwise granted by Federal law to provide for
the establishment of specific wage rates.
The ALJ alluded to this provision[] of the Davis-Bacon Act as
a part of his decision but did not emphasize it. He stated, "As I
construe the quoted sections, the Davis-Bacon Act provisions
regarding wage rates do not supplant the Emergency Veterans Job
Training Act provisions."
The question to be resolved narrows down to whether the [5]
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[6] Congress endowed the EVJTA with its own criteria and machinery for
determining a specific wage rate or rates for trainees
participating in an EVJTA training program. The conclusion is
inescapable that the Congress did. Section 7(d)(2) of EVJTA
provides:
(d) An application under subsection (c) shall include a
certification by the employer of the following:
* * *
(2) That the wages and benefits to paid to a veteran
participating in the employer's program of job training
will be not less than the wages and benefits normally
paid to other employees participating in a comparable
program of job training.
The minimum wage provisions of the Davis-Bacon Act do not
apply to the instant case, not because of Section 1553(d) of the
J[TP]A, but because of the proviso to Section 276a to 276a-5 in the
Davis-Bacon Act read in combination with Section 7(d)(2) of the
EVJTA.
The contractor in this case paid the veteran trainees at the
same apprenticeship rates that the State of New Mexico subsequently
approved as appropriate apprenticeship wage rates.
Since the ALJ reached the correct result, his decision herein
is affirmed but his reasoning is modified as herein discussed.
The reasoning of the Administrator in this petition to set
aside the ALJ's decision on the ground that Section 1553(d) of the
JTPA is not applicable to the EVJTA, a view [6]
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[7] with which the Board agrees, also has a flip side. The EVJTA is not
a Davis-Bacon Related Act at all. It has been noted in the briefs that
nothing in that Act provides that the wage rates to be paid to veteran
trainees shall be subject to the Davis-Bacon Act. The question arises
whether the Davis-Bacon Act and Reorganization Plan No. 14 of 1951 and
the jurisdiction of the Department of Labor and this Board have anything
at all to do with wage determinations under the EVJTA. The Board shall
let that matter rest for the present in view of the fact that the
project itself, excluding the Emergency Veterans Program, was subject to
the Davis-Bacon Act. The question presented here was whether the
Davis-Bacon Act, because it applied to the overall project, also applied
to the Emergency Veterans Program. The Board concludes in this case
that it does not.
The petition of the Administrator to set aside the ALJ's
decision in this matter is dismissed.
- - -
Chairman Andrews, Additional views:
Additionally, I note that Section 7(h) of the EVJTA (the
authority for which has now expired) prohibits the Veterans
Administration from refusing to approve any apprenticeship program
registered with the Department of Labor or with a State approving
agency. However, EVJTA does [*not*] restrict Veterans
Administration approval solely to Department of Labor or State
approved apprenticeship and training programs. [*Emphasis in
original*] [7]
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[8] Thus, the EVJTA gives the Veterans Administration broad authority to
approve other such training programs. Pursuant to this authority, the
Veterans Administration at first approved, then rescinded its approval
of the Jamco program for four veteran trainees.
While EVJTA does not prohibit Veterans Administration approval
of EVJTA training programs on Davis-Bacon construction, neither
does it prohibit the Veterans Administration from requiring that
Davis-Bacon apprenticeship requirements be met. In fact, the
Veterans Administration, in this case, first approved the Jamco
program, then rescinded its approval, and subsequently began
requiring that Davis-Bacon apprenticeship standards be met for
EVJTA programs to gain approval. (See Veterans Administration DVB
Circular, Appendix E, Revised Change 24, May 23, 1986.) This does
not lessen the validity of the Veterans Administration's original
approval of the Jamco program, nor subject Jamco to liability for
Davis-Bacon apprenticeship standards not required by the Veterans
Administration as part of the program's original approval.
It is not disputed that Jamco paid the four trainees exactly
the same amount paid to apprentices under the comparable BAT
approved New Mexico Apprenticeship Council program, as required by
Section 7(d)(2) of the EVJTA. The argument that the EVJTA training
program neither lasted as long nor was as detailed as the BAT
program and is thus not [8]
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[9] "comparable" is without merit. The EVJTA itself provides for a
minimum training program of three months and a maximum training period
of nine months - clearly not intended by Congress to exactly duplicate
BAT apprenticeship programs.
- - -
Member Dunn concurring and dissenting:
I concur with the majority's holding that the ALJ erroneously
concluded that the exemption from the Davis-Bacon requirements
contained in Section 1553(d) of the Job Training Partnership Act is
applicable to trainees registered in training programs approved by
the Veterans Administration pursuant to the Emergency Veterans' Job
Training Act.
The majority fails, however, to accord any weight to the
opinion expressed to the Board by the Veterans Administration, the
agency charged with assuring quality job training and fair wages to
war veterans, that Congress intended EVJTA trainees to be covered
by the Davis-Bacon Act. Moreover, the Veterans Administration's
opinion is not entirely inconsistent with the ALJ's decision.
It should be understood that the ALJ found that the
Davis-Bacon Act applies to laborers and mechanics employed on
projects also subject to the EVJTA. He further determined,
however, that Section 1553(d) of the JTPA exempts trainees under
the EVJTA from Davis-Bacon prevailing wage requirements.
Accordingly, the ALJ did not really have an opportunity to make a
determination of coverage for the EVJTA [9]
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[10] trainees. Moreover, if the ALJ had such an opportunity to
determine coverage, there is no reason why he would have found the
Davis-Bacon Act inapplicable inasmuch as he had already determined that
Jamco's journeymen electricians were covered by the Davis-Bacon Act and
that Jamco had violated the Act by failing to pay prevailing wages to
these journeymen electricians.
Nevertheless, the majority has determined that Jamco did not
violate the Davis-Bacon Act by paying its four employees, who are
veterans, less than the prevailing wages even though they were not
enrolled in apprentice program approved by BAT. According to the
majority, the prevailing wage requirements do not apply to
participants in EVJTA job training programs, not because of Section
1553(d) of the JTPA, as ALJ Lindeman held, but rather because
Section 276a-3 of the Davis-Bacon Act which provides the Act "shall
not be construed to super[s]ede or impair any authority otherwise
granted by Federal law [*to provide for establishment of specific
wage rates*]. . . . [*emphasis supplied*]. 40 U.S.C. Sec. 276a-3.
In essence, the majority concludes that Section 7(d)(2) of the
EVJTA confers on the VA Administrator authority to establish
specific wage rates applicable to veterans who participate in a job
training program under the Act. However, Section 7(d)(2) of the
EVJTA does not confer such authority on the VA Administrator. [10]
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[11] The majority like the ALJ, also misconstrued Section 4
of the Davis-Bacon Act, 40 U.S.C. 276a-3, which states:
This Act shall not be construed to supersede or impair
any authority granted by Federal law to provide for the
establishment of specific wage rates.
The ALJ's conclusion that "the Davis-Bacon provisions regarding
wage rates do not supplant the Emergency Veterans' Job Training Act
provisions" because "[t]he DBA explicitly states that it shall not
'supersede or impair' any federal authority" is clearly in error.
Section 4 was added by the A[]mendments of 1935 so that the
Davis-Bacon provisions would not conflict with two specific
Depression era statutes which contained their own wage provisions.
The legislative history of the Davis-Bacon Act explains the meaning
and intent of Section 4:
This was inserted in order that the substantive
portion[]s of the act should not conflict with the wage
provis[i]ons on work relief projects under the Emergency
Relief Appropriation Act of 1935. It also makes clear
that the procedural features of this act shall not apply
to projects conducted under the Federal Emergency
Administration of Public Works, although the prevailing
rate of wage principle is also embodied in regulations of
that agency. (See Public Works Administration Bulletin
51.) /FN1/
Section 2 of the EVJTA states that the purpose "is to address
the problem of severe and continuing unemployment among veterans by
providing, in the form of payments to [11]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ H.R. Rep. No. 1756, 74th Cong.; 1st Sess. (1935). [11]
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[12] defray the costs of training, incentives to employers to hire
and train certain wartime veterans who have been unemployed for
long periods of time for stable permanent positions that involve
significant training." Section 4 of the EVJTA authorizes the VA
Administrator to "carry out a program . . . through payment to
employers who employ eligible veterans in [stable and permanent]
jobs in order to assist such employers in defraying the costs of
necessary training."
Therefore, an employer must obtain approval of a program of
job train[in]g for eligible veterans before receiving payments from
the VA under the EVJTA. Section 7(c) of the EVJTA provides that in
order to obtain such approval, the employer must submit a written
application to the VA Administrator. Section 7(d) requires that
each application must include a certification by the employer
concerning a variety of matters. One of the things which an
employer must certify is that "the wages and benefits to be paid to
a veteran participating in the employer's program of job training
will not be less than the wages and benefits normally paid to
other employees participating in a comparable program of job
training: See Section 7(d)(2). Thus an employer seeking to obtain
payments from the VA Administrator under the EVJTA is obligated to
provide assurance that the veteran he hires and trains will be paid
reasonable wages and benefits. This provision is not, however, a
prevailing or minimum wage requirement contemplated in Section
276a-3 which supersedes [12]
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[13] the employer's obligations pursuant to the Davis-Bacon Act to pay
its laborers and mechanics employed on federal construction projects in
accordance with the wage and benefits determined by the Secretary of
Labor to be prevailing in the same locality.
Accordingly, I believe that the August 10, 1987, Decision and
Order issued by ALJ Lindeman should be is vacated insofar as it
held that Jamco's four employees classified as electrician trainees
are not entitled to be paid wages in accordance with the prevailing
wage determination issued by the Secretary of Labor pursuant to
the Davis-Bacon Act and incorporated in the subcontract to perform
construction services at the VA hospital in Albuquerque, New
Mexico; and should be remanded to the Administrator so that she can
disburse the back wages to which the four electrician trainees are
entitled.
BY ORDER OF THE BOARD
Craig Bulger, Esquire
Executive Secretary,
Wage Appeals Board [13]