CCASE_NAME:
US DOH UD VS. S.T.C. Construction Company
CCASE_NO:
77-OFCCP-5
DDATE:
19770628
TTITLE:
DECISION & FINAL ADMINISTRATIVE ORDER OF THE SOL
TTEXT:
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U.S. Department of Labor
In the matter of
U.S. Department of Housing
and Urban Development
Complainant
and Docket No. 77-OFCCP-5
S.T.C. Construction Company
Respondent
DECISION AND FINAL ADMINISTRATIVE ORDER
OF THE SECRETARY OF LABOR
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Preliminary Statement
This matter arises under Executive Order 11246, as amended
(hereinafter referred to as the Order), which prohibits employment
discrimination based on race, color, religion, sex, or national
origin by Government contractors and subcontractors and
Federally-assisted construction contractors and subcontractors.
The Order also imposes affirmative action obligations on such
contractors to ensure that applicants are employed, and that
employees are treated during employment, without regard to their race,
color, religion, sex, or national origin. The Secretary of Labor and
the Director of the Office of Federal Contract Compliance Programs
(hereinafter referred to as OFCCP) are responsible for issuance and
enforcement of regulations under the Order, found at 41 CFR Chapter
60.
On June 28, 1977 the Department of Housing and Urban Development
(HUD) initiated an enforcement proceeding under the Order against
S.T.C Construction Company (hereinafter referred to as Respondent)
alleging violation of the "Camden Plan" and Executive Order 11246
through, inter alia, its failure to furnish requisite records in
connection with a HUD investigation to ascertain compliance with its
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contract with the Housing Authority of the Borough of Collingswood,
New Jersey (Low Income Housing Project NJ 79-1).
On May 22, 1979 Administrative Law Judge (ALJ) Rhea M. Burrow,
after a hearing, issued a Recommended Decision and Order in this case.
The conclusion of the Administrative Law Judge was that Respondent was
subject to Executive Order 11246, as amended, and the Camden Plan Bid
Conditions and that it violated its contractual obligations and the
Order by failing and refusing to provide timely access to pertinent
records, by failing to submit monthly Manpower Utilization Reports and
by failing to submit required certifications from its subcontractors.
The Administrative Law Judge ordered that Respondent cease and desist
from refusing to furnish all required information relating to its
Federal and Federally-assisted contractors and subcontracts now and in
the future. Further, his Recommended Order concluded that sanctions
for past transgressions or violations not now be imposed, so long as
in any new contract or contracts upon which the company may bid that
it satisfy the Director of the Government Agency and the Director or
OFCCP that it is and has been in compliance.
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On October 5, 1978, President Carter issued Executive Order 12086
which consolidated the Executive Order functions of eleven (II)
Federal agencies into the Department of Labor as of October 8, 1978.
The Department of Housing and Urban Development was one of these
agencies. Prior to the consolidation, the regulations provided, in
pertinant part, that when a hearing was conducted by an agency, the
hearing officer was to make a recommendation to the head of the agency
as to what sanctions should be imposed on a contractor or
subcontractor. The head of the agency was to make a final decision
which had to be approved by the Director of OFCCP.
The Regulations promulgated after consolidation provide that the
Administrative Law Judge is to recommend, findings, conclusions, and a
decision to the Secretary of Labor, who is to make the Final
Administrative Order (41 CFR Parts 60-30.27 and 60-30.30). The
regulations, however, did not provide for those instances when a
proceeding had been instituted by a compliance agency before
consolidation, but which was not concluded until after consolidation
had been effectuated.
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In the instant case, the Administrative Law Judge issued his
Recommended Decision and Order on May 22, 1978. However, no action
was taken by the Department of Housing and Urban Development before
October 8, 1978. Thereafter, on October 23, 1978 the Acting Assistant
Secretary for Fair Housing and Equal Opportunity transmitted the
record in this case to the Director of OFCCP.
At the time of this transmittal, the regulations in effect
provided, and continue to provide, no role for the Director of OFCCP
in the issuance of a Final Administrative Order. Rather, this
function, as noted above, belongs to the Secretary of Labor, am
issuing this Decision and Final Administrative Order.
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Findings
I have reviewed the entire recorded. Based on what review,
I accept and adopt the Findings of the Administrative Law Judge,
except for Findings 10 and 12.
Rulings On Exceptions
Complainant's Exception 1
Complainant excepts to the admission of testimony by the ALJ at
the May 9, 1978 hearing in contravention of the ALJ's earlier ruling
that no testimony would be allowed, and in spite of the fact that
Respondent failed in its response to the Motion for Summary Judgment
to specify the matters it proposed to raise and the hearing.
The exception is denied.
The ALJ stated that he would hear testimony at the May 9,
1978 hearing in order for him to decide what sanctions he should
recommend. (Transcript, at page 57.) He would not hear testimony as
to whether a violation had occurred or whether Respondent was at that
time in compliance. (Transcript, at page 55.) There is nothing in
the Order or the Regulations which render this action by the ALJ
erroneous.
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Rather, the Regulations are very flexible and provide the ALJ with a
great deal of latitude in accepting testimony. For example, the first
sentence of 41 CFR 60-30.18 reads, "Formal rules of evidence shall not
apply, but rules or principles designed to assure production of the
most probative evidence shall be applied." The ALJ had the authority
to hear the testimony, despite his previous ruling.
Complainant's Exception 2
Complainant excepts to the admission of testimony at the May 8,
1978 hearing which was irrelevant and outside the scope of the
Complaint and Motion for Summary Judgement.
The exception is denied.
As noted in the above discussion of Complainant's Exception 1,
the ALJ is given great latitude in the admission of evidence, and
formal rules of evidence are not applicable. In addition, the last
sentence of 41 CFR 60-30.18 reads, "The Administrative Law Judge may
exclude evidence which is immaterial, irrelevant, and unduly
repetitious." (Emphasis added) Since the ALJ may exclude such
evidence, it is implied that the ALJ also may allow such evidence to
be introduced.
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Complainant's Exception 3
Complainant excepts to the rejection by the ALJ of evidence on
the subject of Respondent's cooperation and compliance.
The exception is denied.
In its exception Complainant states that in Findings 10 and 12
the ALJ concluded that Respondent was " currently in compliance with
all requirements and there was no discrimination involved in the
contract at issue." I do not read the ALJ's decision to say that.
Rather in item 10(b) he states, "There has been no discriminatory
violations alleged or demonstrated as to any his Government
contracts." In item 10(c) he states, "Discrimination is not alleged
or involved as to the current contract in issue in this proceeding."
I do not think that these two statements constitute a conclusion that
there was no discrimination--only that it was not in issue.
The fact that it was not an issue was freely admitted by the
Government. Transcript, at pages 43, 55.
Further in the exception, Complainant discusses two memoranda and
accompanying analysis concerning the hiring of minorities by
Respondent. However, I see no indication
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that the Government had ever attempted to formally introduce them
into evidence. Finally, in this exception Complainant refers to the
ALJ's refusal of testimony concerning the Government's difficulty in
obtaining evidence from Respondent. The record indicates that the
Government alluded to difficulty the Government had in obtaining
information during settlement negotiations. However, it was stated
that it was not relevant to whether or not Respondent had complied
with the Executive Order and whether or not it ought to be debarred.
Transcipt, at page 74. It appears contradictory for the Government
to state during the hearing that evidence is irrelevant and then
except to the fact that the ALJ did not admit it.
Complainant's Exception 4
Complainant excepts to the failure of the ALJ to give appropriate
weight to undisputed evidence in the record which contradicts
Respondent's assertions of good faith, cooperation, and compliance.
The exception is granted.
The ALJ stated ". . . there is good reason to believe a bona fied
(sic) effort will be made by him (Mr. Whalen, S.T.C. President) to
assure personal compliance as well as compliance by STC with the Order
and regulations now and in the future." (Recommended Decision at 7)
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Complainant, in its exception, outlines various facts which cast
doubt on the ALJ's conclusion.
I do not believe that the facts, as presented in the record to
me, warrant the prediction that Respondent will cooperate in the
future and comply with the Order and regulations. Respondent ignored
its reporting obligations under the Executive Order and regulations
promulgated pursuant thereto. Neither Mr. Whalen, the President, nor
Mr. Parkinson, who represented himself as the company's "EEO
Representative" was present at a compliance review at the construction
site--a meeting which had been arranged in writing and confirmed by
telephone. A show cause notice addressed to Mr. Whalen was also
ignored.
I therefore conclude that the ALJ erred when he opined that there
was a good reason to believe S.T.C. would comply in the future.
Complainant's Exception 5
Complainant excepts to the failure of the ALJ to recommend any
sanctions against Respondent, after violations of the Order and the
implementing regulations were admitted as charged.
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The exception is granted
The ALJ concluded in his Findings 10 and 12 that there were
circumstances that lend credence to the Respondent's argument that the
imposition of the sanctions would be a harsh and inequitable penalty.
In his Recommended Order, the Judge concludes that no sanction for
past transgressions or violations should be imposed.
I find that the Administrative Law Judge erred in his finding
that the imposition of sanctions would be a harsh and inequitable
penalty and that he erred in his Recommended Order that no sanctions
be imposed.
Achievement of the purposes of Executive Order 11246 depends on
the Government's ability to monitor compliance with the Order and its
implementing regulations. The Respondent contractor agreed as part of
its contract that it would provide required reports and would provide
access to its books and records for purposes of investigation to
ascertain compliance.
The ALJ found, and indeed the Respondent admitted, that it did
not provide required reports, failed to have requested documents
available for the compliance review, failed to respond to the Show
Cause Notice and the followup letter of intent to recommend sanctions
issued by HUD.
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It is appropriate to impose sanctions where a clear
violation of the Executive Order has occurred and impairment of the
Government's monitoring and enforcement of the Order has resulted.
Complainant's Exception 6
Complainant excepts to the limitation in the Recommended Order of
the reporting requirements to Federal and Federally-assisted contracts
and subcontracts.
The exception is granted.
Pursuant to the "Camden Plan" and the reporting requirements
agreed to by contractors, information on the composition of each
contractor and subcontractor workforce must be submitted by the
Respondent on nonfederal construction work within the Camden Plan
area as well as its Federal and Federally-assisted construction work.
Conclusion and Administrative Order
I hereby order, in accordance with sections 209(a)(5) and (6) of
the Order and 41 CFR 60-1.26 and 60-30.30, that:
Respondent's present Government contracts and subcontracts and
Federally-assisted construction contracts and subcontracts be
cancelled, terminated or suspended and that
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Respondent be declared ineligible for further contracts and
subcontracts, and from extensions or modifications of any existing
contracts and subcontracts, until such time that it can satisfy the
Director of OFCCP that it is in compliance with Executive Order 11246
and the Secretary of Labor's regulations issued pursuant thereto.
The sanctions invoked herein shall be applicable to Respondent,
its officers, subsidiaries, and divisions and all purchasers,
successors, assignees and transferees.
Signed at Washington, D.C., this 24th day of June, 1980.
__________________
Secretary of Labor
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CERTIFICATE OF SERVICE
I hereby certify that on June 24, 1980, a copy of the foregoing
Decision and Administrative Order of the Secretary of Labor, was
mailed, postage prepaid, to the following:
Mr. James D. Henry Ms. Carin Ann Clauss
Associate Solicitor for Solicitor of Labor
Civil Rights U.S. Department of Labor
U.S. Department of Labor 200 Constitution Avenue,N.W.
Room N2414 Washington, D.C. 20210
200 Constitution Avenue, N.W.
Washington, D.C. 20210
Mr. Louis G. Ferrand, Jr.
Counsel for Civil Rights
Office of the Solicitor
U.S. Department of Labor
Room N2414
200 Constitution Avenue, N.W.
Washington, D.C. 20210
Ms. Barbara Sullivan
Division of Civil Rights
Office of the Solicitor
U.S. Department of Labor
Room N2414
200 Constitution Avenue, N.W.
Washington, D.C. 20210
Mr. Thomas F. McGuire
Counselor at Law
300 Kings Highway East
Haddonfield, New Jersey 08033
Mr. Christopher H. Hartenau
Attorney
U.S. Department of Housing
and Urban Development
Room 10500
410 Seventh Street, S.W.
Washington, D.C. 20410
_______________
Bruce A. Cohen
