U.S. Department of Labor

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Administrative Review Board

200 Constitution Ave. NW

Washington, DC 20210-0001

IN THE MATTER OF:

ADMINISTRATOR, WAGE AND

HOUR DIVISION, UNITED STATES

DEPARTMENT OF LABOR,

PROSECUTING PARTY,

ARB CASE NO. 2023-0051

ALJ CASE NO. 2019-DBA-00004

ALJ PATRICK M. ROSENOW

DATE: August 25, 2025

FIVE STAR AUTOMATIC FIRE

PROTECTION LLC,

RESPONDENT.

Appearances:

For the Prosecuting Party, Administrator, Wage and Hour Division:

Seema Nanda, Esq., Jennifer S. Brand, Esq., Megan E. Guenther,

Esq., Jonathan T. Rees, Esq., Sarah M. Roberts, Esq.; U.S. Department

of Labor, Office of the Solicitor; Washington, District of Columbia

For the Respondent:

Robert L. Blumenfeld, Esq.; Mendel Blumenfeld & Pulido, PLLC;

El Paso, Texas; Michael T. Milligan, Esq.; Law Office of Mike Milligan;

El Paso, Texas

Before JOHNSON, Chief Administrative Appeals Judge, and KAPLAN, and

BURRELL, Administrative Appeals Judges

DECISION AND ORDER AFFIRMING IN PART AND VACATING AND

REMANDING IN PART

This matter arises under the Davis-Bacon Act (DBA), 1 the Contract Work

Hours and Safety Standards Act (CWHSSA), 2 and their implementing regulations. 3

Respondent Five Star Automatic Fire Protection worked as a subcontractor

installing a fire protection system in the medical clinic at Holloman Air Force Base

in Otero County, New Mexico. 4 An Administrative Law Judge (ALJ) found

Respondent misclassified Complainants’ 5 position and failed to pay them prevailing

wages and benefits in violation of the DBA, and that Respondent owed

Complainants $71,285.49 in back wages. 6 The ALJ also ordered that Respondent be

debarred from receiving federal contracts for three years. 7 Respondent appealed to

the Administrative Review Board (Board). For the following reasons, we affirm in

part and vacate and remand in part.

BACKGROUND

Respondent is a fire sprinkler installation business co-owned by Luis and

Veronica Palacios. 8 Respondent has worked on DBA projects since its inception, and

both Luis and Veronica have relevant experience with the DBA. 9

Respondent has three categories of sprinkler fitting employees based on their

skills and experience. These categories include laborers, who are new hires who are

inexperienced and work under supervision, supervisors or journeyman sprinkler

fitters, and apprentices. Respondent’s system attempted to assign one laborer to

each foreman so that laborers could learn about the work and perform certain tasks

that apprentices also perform. 10 Foremen are responsible for teaching laborers. 11

After approximately one year, laborers may become eligible to participate in

40 U.S.C. § 3141 et seq.

Id. § 3701.

29 C.F.R. Parts 1, 3, 5-7.

Decision and Order (D. & O.) at 2-4.

Complainants are Jesus Torres, Christopher Garcia, and Miguel Garcia.

Id. at 18.

Id.

Id. at 3.

Id.

Id. at 3-4.

Id. at 4.

10F

Respondent’s apprenticeship program. 12 After completing the program, apprentices

become journey sprinkler fitters. 13

11F

12F

On August 19, 2014, the United States Army Corps of Engineers awarded a

prime contract to Gilbane for a replacement medical clinic at Holloman Air Force

Base in Otero County, New Mexico. 14 The contract was valued at $51,958,664.00. 15

On December 22, 2014, Gilbrane contracted with Respondent to furnish, install,

and complete all fire protection systems with a subcontract that was valued at

$462,746. 16 The subcontract left staffing decisions up to Respondent. 17 Both the

contract and subcontract were subject to the provisions of the DBA. 18

13F

14F

15F

16F

17F

The Wage Determination did not contain a sprinkler fitter job

classification. 19 The closest classification was the pipefitter classification. 20 The

Department of Labor’s (DOL) Wage & Hour Division (WHD) determined that the

local union prevailed regarding the pipefitter classification and wage rate, with a

prevailing wage rate of $31.14 per hour and $12.42 per hour in fringe benefits. 21

The prevailing wage rate for common laborers listed in the Wage Determination

was $13.61 per hour in wages and $3.89 per hour in fringe benefits. 22

18F

19F

20F

21F

From June 5, 2016 to August 13, 2017, Respondent assigned four employees

to work on the project, which included Adrian Cabral, a journeyman sprinkler fitter

and foreman who was paid under the pipefitter job classification, and three general

laborers: Jesus Torres, Christopher Garcia, and Miguel Garcia. 23 Respondent

employed Jesus from July 2015 to March 2017, Christopher from February 2016 to

22F

Id.

Id. As discussed later, while the Wage Determination contained a “common laborer”

position, this project was under a Collective Bargaining Agreement, which did not include a

“common laborer” position. Id. at 4, 8-10, 16.

Id. at 5.

May 2017, and Miguel from November 2015 to May 2017. On May 3, 2017,

Respondent enrolled Christopher and Miguel in the apprenticeship program. 24

23F

In October 2017, the WHD began investigating Respondent for the period of

June 5, 2016 to August 13, 2017. 25 On August 1, 2018, the WHD issued a Notice of

Determination finding that Respondent misclassified the work that Torres and the

Garcias performed and ordered Respondent to pay $71,285.49 in back wages and be

debarred. 26

24F

25F

Respondent objected and requested a hearing before an Administrative Law

Judge (ALJ) with the Office of Administrative Law Judges (OALJ). 27 A hearing was

held across the following dates: February 23-25, 2021; April 14-16, 2021; and April

30, 2021. 28 Eleven witnesses testified, and the ALJ admitted Joint Exhibits (JX) 174 and 76-79. 29 At the hearing, Respondent moved to admit a final as-built drawing

that Respondent contended reflected any changes made to the original construction

design. 30 The ALJ designated the document as JX-80 and stated that he was not

going to rule on whether it was admitted or not until WHD reviewed it. 31

26F

27F

28F

29F

30F

On August 4, 2023, the ALJ issued a D. & O. finding that Respondent

misclassified Complainants’ positions and failed to pay them prevailing wages and

benefits in violation of the DBA. 32 The ALJ opined that his findings were based on

the testimony of the eleven witnesses and JX 1-74 and 76-79. 33

31F

32F

The ALJ found that Complainants regularly unloaded pipes and other

materials from trucks and placed them in staging areas, moved pipes and other

materials from the first staging area and repositioned them to a different one, and

moved the pipes and the materials into the needed locations; screwed escutcheons

into the ceiling holes pre-cut by others; used caulking guns to seal spaces where

they existed; held pipes while Cabral installed, hung, or re-cut or re-grooved them;

helped prepare and install hangers by climbing a ladder and securing a metal bar

Id.

Id. at 2.

Id.

Transcript (Tr.) at 1399-1403.

Id. at 1403-04.

D. & O. at 18.

Id. at 2. The ALJ did not address whether JX-80 was admitted.

with a screw, then placing a hanger on a beam and tightening a bolt; installed

brackets and secured sprinkler heads by hand and snapped together flex heads;

walked and looked for water dripping during pressure testing; and spent 15-20

minutes at the end of each day sweeping and cleaning up. 34 The ALJ further found

that, on occasion, Complainants worked for extended periods without Cabral’s

direct oversight and in a different area of the project; hung lines; pressure tested

pipes; and cut, grooved, and threaded pipes. 35

33F

34F

Respondent had contended that some of these tasks were simple and did not

require specialized talent, knowledge, or training, and thus fell under the general

laborer category. 36 However, the ALJ determined that “virtually all of

Complainants’ work fell into the pipefitter category” and that the collective

bargaining agreement (CBA) and Wage Determination provided notice that workers

who performed these tasks must be paid at the pipefitter rate. 37 Thus, the ALJ

concluded that Respondent misclassified Complainants’ positions and ordered

Respondent to pay Complainants $71,285.49 in back wages. 38

35F

36F

37F

The ALJ also ordered that Respondent be debarred for three years. 39 The

ALJ found that Respondent demonstrated “at least gross negligence or willful

blindness” based on the following factors: (1) Respondent’s preexisting familiarity

with the DBA, (2) Complainants’ signing into work with the incorrect classification,

and (3) Cabral’s instruction to Complainants to drop their questions about their pay

rate. 40

38F

39F

Respondent petitioned the Board to review the D. & O.

JURISDICTION AND STANDARD OF REVIEW

This Board has jurisdiction to hear appeals concerning questions of law or

fact from the Administrator’s final determinations under the DBA and CWHSSA. 41

The Board’s review of the ALJ’s decision “is in the nature of an appellate

40F

Id. at 14-15.

Id. at 15.

Id. at 16.

Id.

Id. at 18.

Id.

Secretary’s Order No. 01-2020 (Delegation of Authority and Assignment of

Responsibility to the Administrative Review Board (Secretary’s discretionary review of ARB

decisions)), 85 Fed. Reg. 13,186 (Mar. 6, 2020).

proceeding,” and the Board “will not hear [factual] matters de novo except upon a

showing of extraordinary circumstances.” 42 Under this standard of review, the

Board “will assess the ruling to determine whether it is consistent with the

applicable statute and regulations, and is a reasonable exercise of the discretion

delegated to the Administrator to implement and enforce the DBA.” 43

41F

42F

DISCUSSION

Upon review of the ALJ’s D. & O., the parties’ arguments on appeal, and the

record, the Board concludes that Respondent violated the DBA by misclassifying

Complainants’ positions. However, the Board finds that the ALJ did not fulfill his

duty of explanation in finding that Respondent acted with gross negligence that

would justify a three-year debarment. Accordingly, we affirm the ALJ’s D. & O. in

part and vacate and remand in part for the reasons that follow. 44

43F

1. Respondent Violated the DBA

The Davis-Bacon Act requires the payment of locally prevailing wage rates

and fringe benefits to laborers and mechanics working on Federal contracts in

excess of $2,000 for the construction, alteration, or repair of public buildings and

public works. 45 As the Supreme Court has recognized, the DBA is “a minimum

wage law designed for the benefit of construction workers.” 46

The purpose of the DBA is “to protect local wage standards by preventing

contractors from basing their bids on wages lower than those prevailing in the

area.” 47

44F

45F

46F

29 C.F.R. § 7.1(e); Jamek Eng’g Servs., Inc., ARB No. 2020-0043, ALJ No. 2017-DBA00021, slip op. at 7 (ARB June 23, 2021) (quoting Terrebonne Par. Juv. Just. Ctr. Complex,

ARB No. 2017-0056, slip op. at 3 (ARB Sept. 4, 2020) (quoting 29 C.F.R. § 7.1(e))).

Id. (quoting Interstate Rock Prods., Inc., ARB No. 2015-0025, ALJ No. 2013-DBA00010, slip op. at 9 (ARB Sept. 27, 2016)).

In addition, Respondent contends that the ALJ admitted JX-80 but failed to address

it in the D. & O. Respondent’s (Resp.) Brief (Br.) at 29. Respondent contends that this

exhibit demonstrates that Complainants inflated the number of arm-over devices they

installed. Id. It is unclear from the record whether the ALJ admitted JX-80. On remand,

we instruct the ALJ to determine whether JX-80 was admitted and, if so, correct the record.

However, for the reasons that follow, we find that Respondent’s arguments pertaining to

JX-80 are not controlling.

See 40 U.S.C. § 3142.

United States v. Binghamton Constr. Co., 347 U.S. 171, 178 (1954).

Dist. Council of Iron Workers of the State of Cal. v. Adm’r, Wage & Hour Div., U.S.

Dep’t of Lab., ARB No. 2020-0035, slip op. at 2 (ARB July 26, 2022) (quoting Univs. Rsch.

Ass’n, Inc. v. Coutu, 450 U.S. 754, 773 (1981)).

To effectuate the statutory objectives of the DBA, the WHD determines the

prevailing wage rates for various job classifications and publishes these rates in

documents known as “wage determinations.” 48 To determine the prevailing wage,

the WHD conducts a prevailing wage survey program in the area in which the work

is to be performed, and derives DBA prevailing wage rates from survey information

voluntarily provided by responding contractors, contractors’ associations, labor

organizations, public officials, and other interested parties. 49 The prevailing wage

rates contained in the wage determinations derive from rates prevailing in the

geographic area where the work is to be performed or from rates applicable under

collective bargaining agreements. 50 Those rates are based on wages paid to the

majority of laborers in corresponding classifications on similar projects in the

area. 51

47F

48F

49F

50F

When, as here, an employer is alleged not to have paid employees for the

hours worked, we apply a burden-shifting framework. 52 The WHD bears the initial

burden of proving that employees performed work on the DBA project for which

they were improperly compensated. 53 To satisfy its burden, the WHD must:

(1) show that employees performed work for which they were improperly

compensated and (2) produce “sufficient evidence to show that the amount and

extent of that work as a matter of just and reasonable inference.” 54 Once WHD has

satisfied its burden, the burden shifts to the employer to demonstrate either the

precise number of hours worked or to present evidence sufficient to negate “the

reasonableness of the inference to be drawn from the [WHD]’s evidence.” 55

To satisfy its burden, the employer must submit evidence that “(1) is based on

individualized records[] and (2) fully accounts for the work hours in question,

consistent with the project as a whole.” 56 If the employer fails to carry this burden,

51F

52F

53F

54F

55F

40 U.S.C. § 3142(b); 29 C.F.R. § 1.3.

See 29 C.F.R. §§ 1.1–1.7.

40 U.S.C. § 3142(b); 29 C.F.R. § 1.3.

Id. at § 1.2(a)(1).

Adm’r, Wage & Hour Div., U.S. Dep’t of Lab. v. Coleman Constr. Co., ARB No. 20150002, ALJ No. 2013-DBA-0004, slip op. at 11-13 (ARB June 8, 2016) (citing Anderson v. Mt.

Clemens Pottery Co., 328 U.S. 680, 687 (1946)).

Id. at 11.

Id.

employees may be awarded damages, even if the amount of such damages is

approximate. 57

56F

The ALJ found that Respondent misclassified Complainants’ positions and

that therefore Complainants were not properly compensated for their work. 58

The ALJ determined that there was no real dispute that the Complainants

performed the following tasks:

57F

[U]nloaded pipes and other materials and placed them

based on the numbering system as set forth in the

blueprints; screwed escutcheons into the ceiling holes; used

caulking guns to seal spaces; held pipes while Cabral

installed, hung, or re-cut or re-grooved them; climbed

ladders and secured a metal bar with a screw; placed

hangers on a beam and tightened bolts; and installed

brackets and secured sprinkler heads by hand and snapped

together flex heads.[ 59]

58F

The ALJ found that, while some or all of these tasks may be simple and did

not require specialized knowledge or training, “virtually all of Complainants’ work

fell into the pipefitter category.” 60 The ALJ also found that the record clearly

demonstrated that the CBA and Wage Determination gave Respondent notice that

workers who performed these tasks must be paid at the pipefitter rate. 61 The ALJ

further found that the existence of the “utility worker” category in the CBA, along

with the fact that it was highly limited and seldom used, was consistent with the

intention of the CBA that workers who performed the tasks Complainants did were

to be paid as pipefitters. 62 Thus, the ALJ concluded that Respondent violated the

DBA by misclassifying Complainants. 63 The ALJ found WHD’s calculations of

underpayment to be reasonable and ordered Respondent to pay $71,285.49 in back

wages. 64

59F

60F

61F

62F

63F

Id.

D. & O. at 16.

Id.

Id. Because the Wage Determination did not contain a “sprinkler fitter” job

classification, the ALJ determined that “pipefitter” was the appropriate classification

because it was the closest job classification to a sprinkler fitter. Id. at 4.

Id. at 16.

Id.

Id. at 16, 18.

Respondent contends that the ALJ erred in finding that the work

Complainants performed fell under the pipefitter classification instead of the

general laborer classification. 65 Respondent contends that the ALJ erred in relying

on testimony of business agents, rather than industry experts’ testimony on

established construction industry practices. 66 Respondent also contends that the

ALJ’s findings are contrary to the DOL’s definitions of the tasks performed. 67

Respondent asserts that the tasks Complainants performed fall under the “laborer”

or “helper” classification, not the “pipefitter” classification. 68

64F

65F

66F

67F

We find that Respondent misclassified the Complainants’ positions.

The purpose of the DBA is to ensure that contractors pay locally accepted wages. 69

The project at issue was covered by a CBA. 70 Although the Wage Determination

included a general laborer position, the CBA did not. 71 Rather, the CBA included

“utility worker” and “pipefitter” classifications. 72 Notably, the “utility worker”

position is limited to a period of six months, may not include employees who are

learning a trade, and is limited to only general tasks related to the pipe trade, such

as truck driving, picking up and delivering materials, and removing scrap pipe. 73

Utility workers also could not be used to replace apprentices. 74 In contrast, the

CBA’s “pipefitter” classification covers both journeymen and apprentices who

perform the following tasks: “unloading, carrying, and organizing pipes and

materials; using blueprints or plans; preparing and installing hangers; installing

pipe; using a power machine; cutting, grooving pipe, and threading pipe; installing

brackets for sprinkler heads and sprinkler heads; hydrostatic testing; caulking;

installing escutcheons; and cleaning.” 75 After a thorough review of the record,

we agree with the ALJ that the work the Complainants performed fell into the

“pipefitter” classification. As the ALJ found, the Wage Determination did not

contain a “sprinkler fitter” job classification and we agree that the “pipefitter”

classification is the most similar job classification.

68F

69F

70F

71F

72F

73F

74F

Resp. Br. at 33.

Id.

Id. at 37.

Id. at 36.

See 40 U.S.C. § 3142.

D. & O. at 8.

Id.

Id. at 9.

Id.

Id. at 8.

Thus, we find that the WHD met its burden by establishing that the

Complainants were misclassified and paid the incorrect wage rate. As such, the

burden shifted to Respondent to demonstrate either the precise number of hours

worked or to present evidence sufficient to negate “the reasonableness of the

inference to be drawn from the [WHD]’s evidence.” 76 Respondent has not challenged

the calculation of back wages. 77 We find that WHD’s calculation is reasonable and

affirm the ALJ’s order that Respondent pay Complainants $71,285.49 in back

wages.

75F

76F

2. The ALJ did not fulfill his duty of explanation in finding that

Respondent acted in gross negligence to justify a three-year debarment

Contracting with the government is a privilege, not a legal right. In this

matter the government contract requires the contractor to pay employees according

to the DBA and CWHSSA, their implementing regulations, and the Wage

Determination made by the Secretary of Labor. Whenever a contractor or

subcontractor is found to have “disregarded their obligations” to workers or

subcontractors under the Wage Determination, such contractor, subcontractor, or

responsible officer will be debarred for a period of three years. 78 Once grounds for

debarment have been established, the three-year period is mandatory, “without

consideration of mitigating factors or extraordinary circumstances.” 79

77F

78F

The recognized purpose underlying the device of debarment is to be a

remedial measure rather than a punitive one “so as to encourage compliance and

discourage employers from adopting business practices designed to maximize profits

by underpaying employees in violation of the Act.” 80 While effective, the courts have

recognized that debarment can have drastic results for the contractor including a

“sudden contraction of bank credit, adverse impact on market price or share of

listed stock, if any and critical uneasiness of creditors generally to say nothing of

79F

Coleman Constr. Co., ARB No. 2015-0002, slip op. at 11 (quoting Mt. Clemens

Pottery, 328 U.S. at 688).

See Resp. Br., Resp. Reply Br.

29 C.F.R. § 5.12(a).

Interstate Rock Prod., Inc., ARB No. 2015-0024, ALJ No. 2013-DBA-00010, slip op.

at 4 (ARB Sept. 27, 2016) (quoting In re Thomas & Sons Bldg. Contractors, ARB No. 20000050, ALJ No. 1996-DBA-00037, slip op. at 4 (ARB Aug. 27, 2001)).

Id. at 10 (quotation omitted).

‘loss of face’ in the business community.” 81 Debarment has long been considered the

“death penalty” of procurement law as it can cut off the lifeblood of an employer or

contractor’s business. 82 Given the severe impact of debarment, it is appropriate that

agency impositions of debarments as a penalty be carefully reviewed.

80F

81F

Violations of the DBA by themselves do not constitute disregard of an

employer’s obligations within the meaning of the law. 83 To support debarment, the

evidence must establish a level of culpability beyond negligence. 84 Disregard of

DBA obligations must involve “some element of intent.” 85 The underpayment of

prevailing wages, coupled with the falsification of certified payrolls, have

constituted disregard of a contractor’s obligations to employees and, therefore, are

sufficient to establish “intent” under the DBA debarment provisions. 86 In addition,

an employer’s bad faith and an employer’s gross negligence regarding compliance

have also been found to constitute disregard of DBA obligations. 87 Intentional

failure to look at the law is also sufficient. 88

82F

83F

84F

85F

86F

87F

See Gonzales v. Freeman, 334 F.2d 570 (D.C. Cir. 1964). Chief Judge Warren Burger,

then a judge for the D.C. Circuit, first set the judicial stage for the propriety of debarment

by recognizing that Perkins v. Lukens Steel Co., 310 U.S. 113 (1940), held that “no citizen

has a ‘right,’” in the sense of a legal right, to do business with the government. However,

the court found “that cannot mean that the government can act arbitrarily either

substantively or procedurally, against a person or that such person is not entitled to

challenge the processes and the evidence before he is officially declared ineligible for

government contracts.” Gonzales, 334 F.2d at 574.

See Todd J. Canni, Shoot First, Ask Questions Later: An Examination and Critique

of Suspension and Debarment Practice Under the FAR, Including a Discussion of the

Mandatory Disclosure Rule, the IBM Suspension, and Other Noteworthy Developments, 38

PUB. CONT. L.J. 547 (2009); Daniel E. Schoeni, Personal Debarment for Non-Distributive

Corporate Misconduct: On the Efficacy of Debarring the Individuals from Government

Contracts for Collective Wrongdoing. 46 PUB. CONT. L.J. 51 (2016).

Interstate Rock Prods., Inc., ARB No. 2015-0024, slip op. at 4, 4 n.9 (“DBA violations

do not, by themselves, constitute a disregard of an employer's obligations within the

meaning of the law- to support debarment, the evidence must establish a level of culpability

beyond negligence.”) (citing NCC Elec. Servs., Inc., ARB No. 2013-0097, ALJ No. 2012-DBA00006, slip op. at 8 (ARB Sept. 30, 2015) (“[a]n innocuous mistake may trigger a violation of

the DBA, but such mistakes, especially those that do not result in harm to employees, do

not necessarily evidence an employer’s disregard of its DBA obligations”).

Id.

Id. at 4-5 (citation omitted).

Id. at 5.

Id.

The ALJ acknowledged that Respondent had a clean history and cooperated

in the investigation. 89 However, the ALJ found these were “matters in extenuation

and mitigation rather than relevant to the level of negligence related to the

misclassification.” 90 The ALJ concluded that three factors supported “at least gross

negligence or willful blindness” that justified debarment: (1) Respondent’s

preexisting familiarity with the DBA, (2) Complainants’ signing into work with the

incorrect classification, and (3) Cabral’s instruction to Complainants to drop their

questions about their pay rate. 91

88F

89F

90F

Respondent contends that the ALJ erred in ordering that Respondent should

be debarred for three years. 92 Respondent asserts that debarment is not a strict

liability result of any finding of a DBA violation but rather depends upon an

employer’s intent and must rise to a level of culpability beyond negligence. 93

Respondent contends that the factors the ALJ relied on in finding gross negligence

do not justify a three-year debarment. 94

91F

92F

93F

We agree and find that the ALJ did not fulfill his duty of explanation in

finding that Respondent acted in gross negligence to justify a three-year debarment.

An ALJ has a duty to adequately explain why he credited certain evidence

and discredited other evidence. 95 An ALJ “need not address every aspect of [a

party’s claim] at length and in detail,” but the findings “must provide enough

information to [assure] the Court that he properly considered the relevant evidence

underlying [the party’s] request.” 96 The ALJ must explain the relevant evidence in

a manner that allows the Board to understand “what the ALJ did and why he did

it.” 97

94F

95F

96F

D. & O. at 18.

Id.

Resp. Br. at 37.

Id. at 40.

Id.

5 U.S.C. § 557(c)(3)(A). Specifically, the ALJ must include a statement of “findings

and conclusions, and the reasons or basis therefor, on all the material issues of fact, law, or

discretion presented on the record.” Id.

Mazenko v. Pegasus Aircraft Mgmt., LLC, ARB No. 2021-0032, ALJ No. 2019-AIR00001, slip op. at 10-11 (ARB June 18, 2024) (quoting Mori v. Dep’t of the Navy, 917 F.

Supp. 2d 60, 65 (D.D.C. 2013)).

Id. at 28 (quoting Printz v. STS Aviation Grp., ARB No. 2022-0045, ALJ No. 2021AIR-00013, slip op. at 30 (ARB Dec. 15, 2023)).

The ALJ’s first factor supporting debarment is Respondent’s familiarity with

the DBA. However, the ALJ failed to connect Respondent’s familiarity with the

DBA with gross negligence or willful blindness. As the ALJ found, Respondent has

worked on DBA projects since its inception, and both of its owners, Luis and

Veronica Palacios, have relevant experience with the DBA. 98 An intentional failure

to look at the law could support a finding of gross negligence or willful blindness. 99

However, the ALJ has not specifically found an intentional failure to look at the law

or the CBA. Without a more thorough analysis regarding Respondent’s DBA

history, we find that the ALJ’s analysis is insufficient to support a finding of gross

negligence or willful blindness.

97F

98F

Next, the ALJ noted that WHD stated that Respondent directed

Complainants to sign-in as apprentices and later found that Complainants signing

into work under the wrong classification demonstrated at least gross negligence. 100

However, the ALJ did not indicate whether he found that Respondent directed the

workers to sign-in as apprentices, and the record contains conflicting evidence.

99F

The record shows that Jesus Torres, Christopher Garcia, and Miguel Garcia

signed-in as “apprentice.” 101 However, the record contains conflicting evidence as to

whether Respondent directed them to sign-in as apprentices, or whether they did

that of their own volition. Christopher Garcia testified that Adrian Cabral, a

journeyman, told him to sign-in as an apprentice. 102 Similarly, Miguel Garcia

testified that Cabral and Jorge Cobian, a Five Star superintendent, directed them

to sign-in as apprentices. 103 However, Jesus Torres’s testimony contradicts the

Garcia brothers. Torres testified that, while Cabral and Cobian called him an

“apprentice,” he thought it was because it was a more professional way of referring

to him. 104 He further stated that he switched from signing-in as “sprinkler” to

“apprentice” on his own, and that the Garcias followed after him. 105 In addition,

Cabral testified that he denied instructing any of the three laborers to sign in as

apprentices. 106 When Cabral was questioned whether he signed Miguel Garcia in as

an apprentice one day when Miguel was unable to sign-in, Cabral stated that he did

100F

101F

102F

103F

104F

105F

D. & O. at 3.

Interstate Rock Prods., Inc., ARB No. 2015-0024, slip op. at 5.

100

Id. at 17-18.

101

JX 23 at DOL 341, 2254, 2307, 2575, 2663, 2734, 2834.

102

Tr. at 183.

103

Id. at 440-41.

104

Id. at 566-70.

105

Id.

106

Id. at 300.

not read it as “apprentice,” but rather as “ayudante,” or “helper.” 107 The ALJ has

not resolved this conflicting evidence. Based on this discrepancy and the ALJ’s lack

of analysis, it is unclear what Respondent’s intent was and whether Complainants

signing-in as apprentices rises to the level of gross negligence or willful blindness.

106F

Lastly, the ALJ also noted that WHD argued that Cabral’s testimony that he

warned the Garcias that taking the matter of their pay rates to Cobian could get

them taken off the job supported debarment. 108 The ALJ then found that this

instruction demonstrated gross negligence. 109 However, the ALJ neither discussed

the factual circumstances surrounding this claim, nor indicated what evidence he

considered when reaching this conclusion apart from citing WHD’s assertion.

107F

108F

In WHD’s post-hearing brief before OALJ, WHD contended that Cabral

testified that he told the Garcia brothers not to discuss their pay rate with Cobian

or else they would be pulled from the job. 110 Both Garcia brothers testified that they

approached Cabral about their pay and that he instructed them not to raise the

issue with Cobian or he would pull them from the job. 111 However, WHD’s third

transcript citation does not pertain to this issue. 112 On the contrary, Cabral

testified that neither Torres nor the Garcia brothers raised the issue of their pay

with him. 113 The ALJ also failed to resolve this discrepancy, and thus it is unclear

what Respondent’s intent was and whether this rose to gross negligence or willful

blindness.

109F

110F

111F

112F

Thus, we find that the ALJ did not fulfill his duty of explanation in finding

that Respondent acted in gross negligence or willful blindness.

Accordingly, we AFFIRM the ALJ’s finding that Respondent violated the

DBA by misclassifying Complainants and owes Complainants $71,285.49 in back

wages, VACATE the ALJ’s order that Respondent be debarred for three years, and

REMAND for further consideration consistent with this opinion.

107

Id. at 115-16.

108

D. & O. at 18.

109

Id.

110

Administrator’s Post-Hearing Brief at 37.

111

Tr. at 187-88, 451-53.

112

Id. at 1173.

113

Id. at 298.

SO ORDERED.

ELLIOT M. KAPLAN

Administrative Appeals Judge

RANDEL K. JOHNSON

Chief Administrative Appeals Judge

THOMAS H. BURRELL

Administrative Appeals Judge

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.