Updated January 15, 2021

DBA Benchbook

Updated January 15, 2021

Davis-Bacon Act

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Enacted in 1949, amended in 1974, codified at 40 U.S.C. § 3141 et seq.

(the Davis-Bacon Act was formerly codified at 41 U.S.C. § 276a et seq.)

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29 C.F.R. Parts 5, 6

The Contract Work Hours and Safety Standards Act

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Enacted 1962, codified at 40 U.S.C. § 3701 et seq.

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29 C.F.R. Parts 5, 6

Table of Contents

I.

II.

III.

Generally

A. Contractor liable regardless of existence of contractual relationship

1. Traditional employer/employee relationship not required

2. Prime contractor liable for lower tier contractor

B. The American Recovery and Reinvestment Act of 2009, impact of

Jurisdiction

A. Administrative delay; laches

1. Actual prejudice required for dismissal of complaint

2. Laches not applicable

a. Delay from date of hearing request and referral

b. Delay from commencement of investigation and notice of alleged

violations

c. Delay in scheduling hearing

B. Motion for reconsideration

C. Untimely petition for review; appeal period not jurisdictional

D. Portal-to-Portal Act is inapplicable

E. Enforcement action not barred by statute of limitations

F. Interplay with the Contract Disputes Act

G. ARB lacks authority to intervene in Administrator's discretionary duties

H. ARB authority to review oral opinion of Assistant Director that is not a final opinion

I. Chief Judge’s authority to reassign case on remand

J. Applicability of DBA to military privatization contracts that include a call for construction

Standard of review

A. By the ALJ

B. Adoption of a party’s brief

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IV.

V.

VI.

C. By the ARB

D. By the circuit court

E. Statutory construction, generally

Evidence

A. Burdens of proof

1. Generally

2. Establishing back wages owed

B. Use of payroll records to demonstrate disregard for classification; business records

exception to hearsay

C. Employer’s obligation to learn applicable wage rates

D. Terms of contract to pay prevailing wage controlling

E. Testimony demonstrates lack of compliance with classification requirements

F. Foreman’s copies of handwritten time records

G. Contemporaneous calendar maintained by employee; business records exception to

hearsay

H. Stipulations

I. Challenge to wage determination after contract issued held improper

J. Persuasive value of Wage and Hour Division’s FOH

Discovery

A. Failure to comply with discovery orders

1. Summary decision proper

2. Ruling against interests

B. Privileges

1. Informants’ privilege

a. Upheld

b. Denied

C. Validity of prevailing wage determination; discovery not permitted

D. Protective order

Classification of employees

A. Disregard for classification established by payroll records

B. Determined solely by Secretary; cannot be determined by employer

C. Classification by work actually performed

D. False Claims Act

1. Held applicable

2. Held inapplicable

E. Sporadic nature of work irrelevant to classification determination

F. Unforeseen circumstances; wage determination cannot be rescinded

G. Retroactive imposition of wage determination

H. Collateral estoppel

1. Held inapplicable

a. Work performed at a “dedicated” plant

b. DOL debarment proceeding distinct from HUD criminal proceeding

I. Contractual relationship between contractor and employees irrelevant

J. Classification based on area of practice by unions and signatory contractors

K. “Side bar” agreements unenforceable

L. No estoppel based on actions of contracting agency

M. Exempt employees

N. Contractor presumed to know the Frye Brothers rule

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VII.

VIII.

IX.

"Site of work" determinations

A. Controlling law

B. Scope of definition limited

C. Sites which are not covered

1. Batch plants-truck drivers hauling asphalt from batch plant to site

2. Transportation to and from dedicated borrow pit

3. Tow truck operators assisting motorists on public highways

D. Sites that are covered

1. Batch plant employee-site was integral and adjacent to work for long, continuous

project (“dedicated” plant)

2. Off-duty police officers directing traffic

3. Warehouse workers

4. Lease for construction of federal facility

Compensation

A. Constitutes part of prevailing wage rate; properly deemed a fringe benefit

B. Contributions to employee pension plans

1. Does not constitute part of prevailing wage rate

2. Bonuses

3. Employer's administrative costs

4. Vacation and holiday benefits, unfunded plans

5. Apprenticeship training program; no “reasonable relationship” established

6. Profit-sharing plans

7. Health insurance

8. Meals and lodging

C. Overtime wages cannot be reduced by fringe benefits

D. Integral and indispensable part of the principle activity, compensation required

Relief

A. Debarment

1. Generally

a. Different debarment standards under DBA and DBA-related acts

b. Debarment is remedial, not punitive

c. Intent to violate required

d. Authority to lessen three year period of debarment

i. ALJ without authority

ii. Administrator has authority

e. Debarment of individuals, as well as company, authorized

f. CWHSSA and SCA violations-different debarment standards

2. Debarment not proper

a. Unsuccessful attempts to pay required wages established

b. No evidence of fraud; consistent payment practices

3. Debarment proper

a. Falsification of payroll records

b. Actual or constructive knowledge of misclassification

c. Failure to pay prevailing wages

d. Destruction of time cards

e. Receipt of kickback of back owed wages

f. Overtime violations; liquidated damages

g. Ignorance

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X.

XI.

h. Experienced federal government contractor; presumption of knowledge

i. Failure to read contract requirements

4. Early removal from debarment list under 29 C.F.R. § 5.12(c)

a. Administrator entitled to presumption that factors properly considered in

denying early removal

b. Administrator's decision reviewed by the ARB

c. Abuse of authority

B. Pre-judgment interest against government disallowed

C. Withheld funds

1. Department's claim superior to surety

2. Due process rights of Respondent

D. Sanctions and attorney's fees; Equal Access to Justice Act inapplicable

E. Liquidated damages

Types of dispositions

A. Stipulations and withdrawal therefrom

B. Consent findings

C. Settlements

D. Dismissal

1. Untimely challenge to wage determination

2. For lack of prosecution

FOIA requirements regarding issued decisions

I. Generally

A. Purpose

These enactments operate to ensure the payment of proper wages, fringe benefits, and

overtime. The Davis Bacon Act is designed to give local laborers and contractors a fair opportunity to

participate in federal building programs, to protect the employees of government contractors from

substandard wages, and to promote the hiring of local labor rather than cheap labor from distant

sources. United States v. Binghamton Construction Co., 347 U.S. 171, reh'g denied, 347 U.S. 940 (1954).

The dual purposes of the Davis-Bacon Act are to: (1) give local laborers and contractors a fair

opportunity to participate in building programs when federal money is involved; and (2) protect local

wage standards by preventing contractors from basing their bids on wages lower than those prevailing

in the locality. L.P. Cavett Co. v. U.S. Dep't of Labor, 101 F.3d 1111 (6th Cir. 1996).

B.

Contractor liable regardless of existence of contractual relationship

In Arliss D. Merrell, Inc., 1994-DBA-41 (ALJ Oct. 26, 1995), the ALJ observed that it was wellsettled that a prime contractor is responsible for the back wages due employees of its subcontractor

under the Davis-Bacon Act, and is responsible for ensuring that all persons engaged in performing the

duties of a laborer or mechanic on the construction site receive the appropriate prevailing wage rate,

irrespective of any contractual relationship alleged to exist or not to exist between the contractor and

such persons. 29 C.F.R. §§ 5.2(o), 5.2(i), 5.5(a)(2), and 5.5(a)(6). See also Palisades Urban Renewal

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Enterprises, LLP, 2006-DBA-1 (ALJ, Aug. 3, 2007), aff’d, ARB Case No. 07-124 (ARB July 30,

2009); Dumarc Corp., Case No. 2005-DBA-7 (ALJ, Apr. 27, 2006) (prime contractor is responsible for the

payment of back wages owed to employees of its subcontractor, and contract funds may be properly

withheld from the prime contractor to satisfy the violations of the subcontractor under 40 U.S.C. §

3142(c)(3) and 29 C.F.R. § 5.5(a)(2)).

1. Traditional employer/employee relationship not required

ERMG, Inc., 2004-DBA-5 (ALJ June 5, 2007); Ray Wilson Co., ARB Case No. 02-086, 2000-DBA-14

(ARB Feb. 27, 2004) ("partnership" agreement irrelevant); Superior Paving and Materials, Inc., ARB Case

No. 99-065, 1998-DBA-11 (ARB June 12, 2002); Commonwealth of Massachusetts v. U.S. Dep't of Labor,

Case No. 1998-JTP-6 (ALJ Oct. 29, 2001); Star Brite Construction Co., ARB Case No. 98-113, 1997-DBA-12

(ARB June 30, 2000) (lack of a traditional employer/employee relationship between Star Brite and its

workers did not absolve Star Brite from the responsibility to insure that they were compensated in

accordance with the requirements of the Act); All Phase Electric Co., WAB Case No. 85-18 (WAB June 18,

1986); Tap Electrical Contracting, Inc., WAB Case No. 84-1 (WAB Mar. 4, 1985) (the prime contractor is

not relieved of its obligations under the Davis-Bacon Act and the CWHSSA merely because it did not

know about the violations of the subcontractor until after they occurred). Further, a subcontractor is

also responsible for the violations of a lower tier subcontractor. 29 C.F.R. § 5.5(a)(6).

2. Prime contractor liable for lower tier contractor

In Ray Wilson Co., ARB Case No. 02-086, 2000-DBA-14 (ARB Feb. 27, 2004), the Board held that

the prime contractor "is ultimately liable for (the subcontractor's) failure to ensure its own lower-tier

subcontractor's DBA compliance." See also Palisades Urban Renewal Enterprises, LLP, 2006-DBA-1 (ALJ

Aug. 3, 2007), aff’d, ARB Case No. 07-124 (ARB July 30, 2009) (prime contractor responsible for back

wages due employees of subcontractor, but subcontractor is also responsible for failing to pay prevailing

wage rate to its employees) (on appeal to the ARB, Case No. 07-124).

3. The American Recovery and Reinvestment Act of 2009, impact of

The American Recovery and Reinvestment Act of 2009, Pub. L. 111-5 (“Recovery Act”) was

signed into law on February 17, 2009. Construction and infrastructure programs funded by the Recovery

Act are subject to the Federal prevailing wage requirements of the Davis-Bacon Act.

II. Jurisdiction

A. Administrative delay; laches

1. Actual prejudice required for dismissal of complaint

In Bill J. Copeland, 1996-DBA-18 (ALJ Jan. 28, 1997), Respondent moved that the case be

dismissed because of the delay by the Wage and Hour Administration in investigating and referring the

case to the Office of Administration Law Judges after Respondent's request for a hearing. The ALJ noted

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that the four factors to consider when assessing whether there had been a denial of procedural due

process in a case affected by administrative delay are: (1) the length of the delay; (2) the reason for the

delay; (3) the defendant's assertion of his/her rights; and (4) prejudice to the defendant.

In this case, the formal charges were not issued until two and one-half years after the

investigation was initiated and more than two years after the initial withholding of funds. In addition,

over a year passed between Respondent's initial request for a hearing and the Order of Reference. After

assignment to an administrative law judge for hearing, counsel for the Administrator indicated that he

would not be able to proceed to trial before an additional six months. The ALJ noted that, as a result, the

hearing would be five years after the initial investigation and withholding of funds, and he classified this

as excessive administrative delay.

The Administrator's reasons for the delay involved a variety of delays in the investigatory

process, several due to the actions of Respondent. The ALJ found that most of the excuses failed to

adequately explain the delay and that the Administrator's assertion that the delays were attributable to

Respondent was incorrect. Specifically, the ALJ concluded that Respondent's efforts at conciliation could

not be interpreted as a waiver of due process rights. The Administrator cites Respondent's petition to

the Wage Appeals Board requesting an Order of Reference as one reason for delay. The ALJ disagreed,

stating that the Administrator should have anticipated the dismissal of the petition as filed in the wrong

forum and that he should have followed the Board's urging by filing the Order of Reference. The ALJ

found this delay "almost completely unexplained."

The ALJ stated that Respondent repeatedly asserted his rights by requesting hearings,

requesting referral to the OALJ, and objecting to continuances. As for the element of prejudice to

Respondent, the ALJ decided that Respondent had demonstrated that he had been prejudiced where (1)

his chief witness passed away, (2) other witnesses had moved and were unavailable, and (3) he was

unable to secure documents from an employer that went out of business. Thus, the ALJ dismissed the

matter, ordered that monies withheld be returned to Respondent, and denied the request for interest.

On appeal, in Bill J. Copeland, ARB Case No. 97-064, 1996-DBA-18 (ARB Oct. 31, 1997), the ARB

reversed, in part, the ALJ's dismissal with prejudice based on the Administrator's various and

inexcusable delays in processing the complaint and bringing it to hearing. The ARB remanded the case

for a determination on the merits or a showing of "actual prejudice" as a result of the administrative

delays. The ARB took the position that a dismissal without a determination on the merits of the action is

detrimental to the rights of employees who may have been wrongfully underpaid pursuant to the DBA

and the CWHSSA. The ARB found that the rights of the parties need to be balanced and mere allegations

of prejudice due to delay are insufficient to warrant a dismissal - there must be actual prejudice. In

reversing the ALJ's dismissal without a hearing or determination on the merits, the ARB cited Slotnick

Co., WAB Case No. 80-05 (WAB, Mar. 22, 1983); Gemini Construction Co., WAB Case No. 91-23 (WAB,

Sept. 12, 1991); Tom Rob, WAB Case No. 94-03 (WAB, June 21, 1994); Barker v. Wingo, 409 U.S. 514

(1927); Public Developers Corp. (PDC), WAB Case No. 94-02 (WAB, July 29, 1994). See also Ray Wilson

Co., ARB Case No. 02-086, 2000-DBA-14 (ARB, Feb. 27, 2004).

In Public Developers Corp., 1992-DBA-36, aff'd in part, WAB Case No. 94-02 (WAB July 29,

1994), the Wage Appeals Board addressed the issue of whether the ALJ properly dismissed a case based

on laches. Laches is the principle that a party who delays doing a thing at the proper time is barred from

bringing a legal proceeding. The defense of laches may be brought against the federal government upon

a showing that the government's actions were dilatory and resulted in actual prejudice against the

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asserting party. Citing Barker v. Wingo, 407 US 514 (1927), the Board held that administrative delay

must be examined in light of four factors: (1) the length of delay; (2) the reason for the delay; (3) the

defendant's assertion of his/her rights to a hearing; and (4) prejudice to the defendant. The Board held

that, in the case before it, the ALJ erred both by failing to make findings or conclusions on the merits of

the case and by failing to make specific findings of fact to support the conclusion that Respondent was

prejudiced in its ability to present a defense. The laches defense required Respondent to demonstrate

that it was "actually prejudiced" in its ability to present a defense. The presumption of prejudice may

only be used in the most extreme circumstances where the defense may be utilized with or without

demonstrating palpable injury.

By decision on remand in Public Developers Corp., 1992-DBA-36 (ALJ Sept. 19, 1994), the ALJ

held a party asserting "laches" or administrative delay has the burden of proving all elements of the

defense. The party asserting the defense of laches must prove actual prejudice. Actual prejudice may be

either evidentiary or economic. Evidentiary prejudice occurs when a respondent's inability to present a

full and fair defense on the merits is due to the loss of records, the unavailability of witnesses, or the

unreliability of memories of past events, thereby undermining the court's ability to judge the facts.

Economic prejudice may occur where a respondent suffers the loss of monetary investments or incur

damages that would have been prevented by earlier resolution of the matter. Upon review of these

factors, the ALJ concluded that the extreme delay caused by DOL prejudiced Respondent both

economically and evidentially.

1.

Laches not applicable

a. Delay from date of hearing request and referral

The doctrine of laches was not applicable where a hearing was requested in January of 1992,

but the case was not referred to OALJ until September 1994. There had been no delay in charging

Respondent with the alleged violations, and Respondent did not demonstrate that its defense was

impaired by the passage of time. Specifically, Respondent's contention that witnesses were unable to

remember details, such as employees who were allegedly misclassified and underpaid, was not material

as these details would not have bolstered Respondent's defense. The ARB further held that Respondent

actually benefitted from the delay by having the opportunity to continue to secure government

contracts in the interim. P&N, Inc./Thermodyn Mechanical Contractors, Inc., ARB Case No. 96-116,

1994-DBA-72 (ARB Oct. 25, 1996).

b. Delay from commencement of investigation and notice of alleged violations

In Star Brite Construction Co., ARB Case No. 98-113, 1997-DBA-12 (ARB June 30, 2000), the ARB

held that a three year delay between the beginning of the investigation and the official notice of alleged

violations did not result in injury or prejudice to the company such that the doctrine of laches was

inapplicable. The ARB cited to the following four factors in determining whether to apply the doctrine:

(1) length of the delay; (2) reason for the delay; (3) the defendant's assertion of his or her rights; and (4)

prejudice to the defendants. The ARB noted that the company argued that passage of time "blurred the

memories" of the Administrator's witnesses. However, this did not support the application of laches

according to the ARB, where witness testimony at the hearing was consistent and the ALJ specifically

found it to be credible. The ARB further noted that findings of fact turned on key pieces of documentary

evidence, i.e., the company's certified payroll records that were inconsistent with its own internal

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payroll information. The ARB noted that "Star Brite itself controlled this information at one time or

another and the mere passage of time could not prejudice the defense." As a result, the ARB concluded

that general allegations of prejudice were insufficient to support dismissal under the doctrine of laches.

In KP & L Electrical Contractors, Inc., ARB Case No. 99-039, 1996-DBA-34 (ARB May 31, 2000),

Respondent argued that a three year and seven month span of time between issuance of the Wage and

Hour Division's "notice of issues" and its subsequent issuance of the Order of Reference to the Office of

Administrative Law Judges had prejudiced Respondent in its defense of the charges. Respondent

maintained that "the employee witnesses' memories had faded and their testimony at the hearing in

1997 conflicted with written statements they gave in 1992 soon after the events at issue in this case."

The ARB pointed to four factors in determining whether a contractor's rights had been violated by

reason of delay: (1) the length of the delay; (2) the reason for the delay; (3) the defendant's assertion of

his right to a hearing; and (4) prejudice to the defendant. In this vein, the ARB noted that KP&L "ha(d)

not pointed out any particular instances in the record to support its contention that employee witnesses

contradicted their own prior written statements (which were in the record for the ALJ to examine), or

refused to testify because of lost memory." The ARB further noted that KP&L did not allege, or

demonstrate, that any "critical witnesses were made unavailable because of the passage of time." The

ARB then concluded that Respondent failed to make a showing of actual prejudice and the ALJ's

decision, finding Respondent in violation of the Davis-Bacon Act, was affirmed.

c. Delay in scheduling hearing

In Peabody Construction Co., ARB Case No. 04-070, 1994-DBA-45 (ARB, Aug. 31, 2005), the

Board upheld the ALJ's order that funds be disbursed to ten underpaid workers. In so holding, the Board

rejected Respondent's argument that it suffered prejudice from the delay between its August 3, 1993

hearing request and the ALJ's denial of the hearing request on February 4, 2004. In support of this

holding, the Board noted that 29 C.F.R. § 5.11 "does not specify a time limit for when the hearing must

be scheduled or conducted." As a result, the Board denied Respondent's petition for review.

B. Motion for reconsideration

In Thomas & Sons Building Contractors, Inc., ARB Case No. 98-164, 1996-DBA-33 (June 8, 2001),

the ARB held the following:

The Davis-Bacon Act has no explicit grant of authority to reconsider; therefore, if the

Board has authority to reconsider, it perforce must be based on an ‘inherent authority'

theory. To determine whether the Board has such inherent authority in this debarment

case, we would need to examine the statute underlying the decision to determine

whether reconsideration would adversely affect its enforcement provisions or statutory

purposes. Significantly, even if we were to conclude that we had reconsideration

authority, any party seeking reconsideration by this Board would need to make the

request within a reasonable period of time.

From this, the Board noted its concern in accepting motions for reconsideration in debarment matters

because of the "possible conflicts between the Board's authority and the responsibilities of other

Federal officials such as the Comptroller General" who maintains the debarment list. The Board stated

that the question of its authority in non-debarment cases "may follow a different analysis from the

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analysis used in debarment cases." Nevertheless, the Board concluded that it did not have to resolve the

issue because:

In this case, Thomas and Sons filed their request for reconsideration more than five

months after we issued our October 1999 D&O. No new evidence or changed

circumstances have been cited by Thomas and Sons in support of their request, which

essentially raises the same argument that was considered and squarely rejected by this

Board in our prior decision. Moreover, no good cause has been shown for the delay. We

therefore find that the request is untimely.

Slip op. at 7. See also Thomas & Sons Building Contractors, Inc., ARB Case No. 00-050, 1996-DBA-37

(ARB Dec. 6, 2001).

C. Untimely petition for review; appeal period not jurisdictional

In Superior Paving & Materials, Inc., ARB Case No. 99-065, 1998-DBA-11 (ARB Sept. 7, 1999),

the ARB accepted an untimely petition for review and held that the 40 day appeal period was not

jurisdictional; rather, it could be tolled based upon equitable grounds. Under the facts of the case before

it, the ARB found that the government failed to establish that the contractor "slept on its rights" or that

the claim presented was stale. The contractor filed its appeal with the ARB three days late because it

misinterpreted the appeal regulations and initially filed the appeal with the Chief Docket Clerk of the

Office of Administrative Law Judges within the time limits.

D. Portal-to-Portal Act is inapplicable

In Cody Zeigler, Inc., 1997-DBA-17 (ALJ Apr. 7, 2000), aff'd in relevant part , ARB Case Nos. 01014 and 01-015 (ARB, Dec. 19, 2003), the ALJ cited to Progressive Design & Build, Inc., WAB Case No.

87-31 (WAB, Feb. 21, 1990) to hold that the Portal-to-Portal Act at 29 U.S.C. § 255 is inapplicable to

Davis-Bacon Act or Related Act proceedings. See also KP & L Electrical Contractors, Inc., ARB Case No.

99-039, 1996-DBA-34 (ARB, May 31, 2000); Glenn Electric Co. v. Donovan, 755 F.2d 1028 (3d Cir. 1985).

E. Enforcement action not barred by statute of limitations

In Irwin Co. v. 3525 Sage Street Associates, Ltd., 826 F. Supp. 1067 (S.D. Tex. 1992), the ALJ

issued a decision on November 1, 1990 finding that the contractor was liable for $136,024.72 in back

wages due to 45 employees based upon its failure to pay the prevailing wage rate. The decision was not

appealed and, therefore, it became final pursuant to 29 C.F.R. § 6.34. The contractor argued that the

subcontractor's collection suit was time-barred but, as the entitlement issue was timely litigated and

resolved by the ALJ's decision, the court held that "[t]his suit is simply a collection suit based on the

violations previously found" and, as a result, it was not time-barred.

F. Interplay with the Contract Disputes Act

In Herman B. Taylor Const. Co. v. Barram, 203 F.3d 808 (Fed. Cir. 2000), the circuit court held

that disputes over labor standards in federal contracts must be resolved through the provisions of the

Davis Bacon and Related Acts:

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Under the Federal Acquisition Regulations specifying the labor provisions that certain

federal procurement contracts must include, disputes arising out of the labor standards

provisions of the contracts are not to be subject to the Contract Disputes Act, but are to

be resolved in accordance with the procedures of the Department of Labor (which clearly

means by the department). Emerald Maintenance v. United States , 925 F.2d 1425, 1428

(Fed. Cir. 1991). A board of contact appeals must accept the Labor Department's

adjudication of such a dispute, the Board has no jurisdiction itself to determine a labor

provisions dispute or to review the labor Department's ruling on that issue (citations

omitted).

The court further stated, however, that it must be "clear and beyond question that the Labor

Department in fact has found under its established procedures that the contractor has committed such

a violation." Under the facts of the case before it, the court held that, because the parties terminated

the hearing process and settled the case, there was no clear adjudication that the contractor violated

the labor provisions of the contract. Specifically, the court reviewed the terms of the agreement and the

contractor did not concede any violation of the labor laws.

G. ARB lacks authority to intervene in Administrator's discretionary duties

In Greater Kansas City Automatic Sprinkler Contractors Ass'n, ARB Case No. 97-107 (ARB, Sept.

30, 1997), the ARB dismissed an appeal on grounds that it lacked authority to order the Administrator to

initiate a prevailing wage rate survey for sprinkler fitters in the Kansas City area. The ARB stated that it

has "routinely declined to intervene in matters pertaining to the Administrator's discretionary

administrative management of the Wage and Hour Division." The ARB cited to Veterans Canteen

Service, ARB Case No. 96-115 (ARB Oct. 25, 1996) (Administrator's decision not to enforce the Davis

Bacon Act); W.J. Menefee Constr. Co., WAB Case No. 90-15 (ARB Oct. 25, 1993) (Administrator's

decision not to seek back wages); Ames Constr., Inc., WAB Case No. 91-02 (ARB Feb. 3, 1993)

(Administrator's decision to release withheld funds).

K. ARB authority to review oral opinion of Assistant Director that is not a final opinion

In Donald W. Murray, ARB No. 11-043 (ARB July 14, 2011), the Petitioner had filed a complaint

with the Wage and Hour Division alleging that he had been misclassified and underpaid on a contract

covered by the DBA. Wage and Hour determined that there had been underpayments to the Petitioner

and other workers, and the subcontractor issued checks to the effected workers for the amount

calculated by Wage and Hour. Subsequently, the Petitioner wrote to Wage and Hour seeking review and

modification of the back wage calculations. The Assistant District Director responded by telephone,

explaining that because the case was closed, the SCA contract completed, and checks issued to workers,

Wage and Hour lacked authority to pursue his claim. The Petitioner appealed to the ARB. The Acting

Administrator filed a motion to dismiss stating that Wage and Hour did not consider the statements

made in the telephone conversation to constitute a final ruling, noting that the Assistant District

Director had only provided his opinion and had not indicated that it was a final ruling, that he had not

issued a written decision with a notice of appeal rights, and that the oral statements had not been made

by the Acting Administrator. The Acting Administrator stated without a final decision, the ARB lacks

jurisdiction. The ARB issued an Order to Show Cause. The Petitioner informed the ARB that he had

requested reconsideration and asked that the ARB stay his appeal pending the response from the Acting

Administrator. The ARB construed the Petitioner's response as a concession that a final decision had not

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yet been issued by Wage and Hour. The ARB denied the motion for a stay and dismissed the appeal

without prejudice, noting the Petitioner could file a petition for review once the Acting Administrator

issued a decision, should the Petitioner find it necessary to do so.

L. Chief Judge’s authority to reassign case on remand

In William J. Lang Land Clearing, Inc. , ARB Case Nos. 01-072 to 01-079, 1998-DBA-1 through 6

(ARB Sept. 28, 2004), aff’d, William J. Lang Land Clearing, Inc. v. Administrator, Wage and Hour Div.,

520 F. Supp. 2d 870 (E.D. Mich. 2007), aff’d, Case No. 07-2423, 2008 WL 3287097 (6th Cir. Aug. 6, 2008)

(unpub.), contrary to certain conclusions of the ALJ, the ARB affirmed the Administrator’s findings that

the contractor “had improperly taken credit towards its DBA obligations by treating subsistence

payments (meals and lodging) as fringe benefits and by averaging its health insurance costs on an annual

basis instead of using the actual amounts paid per employee per month.” The ARB’s decision was

affirmed by the Sixth Circuit, which remanded the case to the OALJ in order for the ALJ to calculate back

wages for violations found. The employer wanted the case to be returned to the original deciding judge;

however, the Chief Judge assigned the matter to another judge on remand. By decision issued

in William J. Lang Land Clearing, Inc., ARB Case Nos. 01-072 and 01-079, ALJ Case Nos. 1998-DBA-1

through 6 (ARB, Nov. 20, 2008), the ARB noted that the original deciding judge had retired and that the

Chief Judge properly reassigned the matter to another ALJ on remand:

. . . while we agree that it would be preferable for the same ALJ to hear the case on

remand, and we believe that, generally, the Chief Administrative Law Judge routinely

assigns remanded cases to the same ALJs who had originally heard them, the decision

whether to assign a case to a particular ALJ on remand, is within the Chief Judge’s purview,

not the Board’s.

Slip op. at 3-4.

M. Applicability of DBA to military privatization contracts that include a call for construction

ARB FINDS THAT AAM 222, ISSUED BY DOL IN RESPONSE TO THE D.C. CIRCUIT’S DECISION IN

CITYCENTERDC, IS AN INTERPRETATIVE RULE THAT REASONABLY INTERPRETS DBA COVERAGE;

GOVERNMENT OWNERSHIP IS NOT A PREREQUISITE TO A CONTRACT BEING CONSIDERED A “PUBLIC

WORK” COVERED BY THE DBA

In Choctawhatchee Electric Cooperative, Inc., ARB No. 2017-0032 (ARB June 14, 2019) (per

curiam), the ARB affirmed the WHD Administrator’s determination that the Davis-Bacon Act’s prevailing

wage and labor standards apply to the construction component of Eglin Air Force Base (Eglin AFB)’s

electrical system privatization contract.

The Petitioner, which had been awarded a contract for the privatization asked the Administrator

for a ruling on the applicability of the DBA in light of the D.C. Circuit’s ruling in District of Columbia v.

Dept. of Labor, 819 F.3d 444 (D.C. Cir. 2016) (“CityCenterDC”). The Petitioner argued that under that

decision, “the privatization of Eglin AFB’s utility was not a ‘contract for construction of a public work’

under the DBA.” Slip op. at 3. The Petitioner argued that “because the contractor will own the facility

and the government will not finance the construction, the contract does not fall within the provisions of

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the DBA.” Id. The Petitioner further argued that “[e]ven if the contract did involve public funding, . . . the

lack of government ownership precludes the contract from being a ‘public work’ subject to the DBA.” Id.

The Administrator, however, found that the privatization contract involved substantial construction

upgrades that were more than incidental to the privatization, and that the DBA applied.

DBA applies to military privatization contracts where the contract includes construction.

The ARB reviewed the relevant legal authority. This legal background culminated, following the

CityCenterDC decision, in DOL’s issuance of All-Agency Memorandum 222 (Jan. 11, 2017) (AAM 222).

The ARB stated that “AAM 222 announces that the WHD will continue to apply the DBA to military

privatization projects when those projects call for construction, even though the federal government is

not directly a party to the construction contract. . . .” Id. at 8. The ARB noted that it has ruled that AAMs

are interpretative rules which may be relied upon if they are a reasonable interpretation of the DBA, and

concluded that AAM 222 is a reasonable interpretation of DBA coverage. The ARB noted that the facts of

this case were similar to those in CityCenterDC, but found distinguishing factors:

In CityCenterDC, the District of Columbia leased to the private developers and the lease

payments went to the District of Columbia. Moreover, the factors identified in the 1994

OLC Opinion were not present in CityCenterDC, and several factors distinguish the

contract under review here: the federal government is heavily if not fully funding the

construction upgrades and improvements; Eglin AFB’s privatization calls for a fifty-year

contract after which time the federal government may reacquire ownership; and the

primary use of the privatization contract is for CHELCO to supply electricity to Eglin AFB,

a military reservation administered by the federal government. For these reasons, we

affirm the Administrator’s decision that CHELCO’s privatization contract calls for

significant and segregable construction and constitutes a “contract . . . for construction”

for purposes of requiring DBA wages and benefits.

Id. at 9 (emphasis as in original).

“Public work” under the DBA does not require government ownership

The Petitioner argued that “both ‘public funding’ and ‘government ownership’ are required for

‘public works’” — an issue not reached in the CityCenterDC decision. The ARB found that under the facts

of this case, “the value, the duration, and the variety of federal funding of the work [the Petitioner] has

contracted to perform” supported the Administrator’s determination that the privatization contract

included substantial public funding for construction. Id. at 11. The ARB next addressed the Petitioner’s

position that, because the terms of the contract make the Petitioner the owner of the utility

infrastructure and responsible for its use and maintenance, there is a lack of government use or

ownership necessary to be considered a “public work” under the DBA. The Administrator contended in

response that “government ownership is not a statutory requirement to be considered a ‘public work’”,

and that “AAM 222 . . . advises that the WHD will not treat government ownership as a prerequisite to

be considered a ‘public work’ because the ‘interest of [the] general public’ may be met without

government ‘title.’ AAM 222, at 8, citing 29 C.F.R. § 5.2(k).” Id. at 12. The ARB also noted that “the

factors which can establish government ownership under the DEA extend beyond evidence of title and

deed, but can include ownership, occupancy, and use of the final project even in the absence of the

federal government being listed as an owner on the relevant legal documents. AAM 222 at 9-10;

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CityCenterDC, 819 F.3d at 452-53.” Id. Because it had found that the AAM 222 was a reasonable

interpretation of the DBA’s requirements, the ARB declined to disturb the Administrator’s interpretation

of “public work.”

III. Standard of Review

A. By the ALJ

Pursuant to 29 C.F.R. § 6.33(b)(1), the ALJ conducts a de novo review of the record. The

regulation provides, in part, the following:

The decision of the Administrative Law Judge shall include findings of fact and conclusions

of law, with reasons and bases therefor, upon each material issue of fact, law, or

discretion presented on the record. Such decision shall be in accordance with the

regulations and rulings contained in part 5 and other pertinent parts of this title. The

decision of the Administrative Law Judge shall be based upon a consideration of the whole

record, including any admissions made in the respondent’s answer (response) and § 6.32

of this title. It shall be supported by reliable and probative evidence.

29 C.F.R. § 6.33(b)(1).

1.

Adoption of a party’s brief

In Abhe & Svoboda, Inc., ARB Case Nos. 01-063, 01-066, 01-068, 01-069, 01-070, ALJ Case Nos.

1999-DBA-20 to 27 (ARB July 30, 2004), recon. denied (ARB Oct. 15, 2004), aff'd, Abhe & Svoboda, Inc. v.

Chao, 2006 WL 2474202 (D.D.C. Aug. 25, 2006), aff'd, 508 F.3d 1052 (D.C. Cir. 2007), the ARB cautioned

that, although "wholesale adoption of the prevailing party's brief is to be discouraged, an ALJ's findings

of fact will not be set aside if the evidence supports them."

B. By the ARB

In Star Brite Construction Co., ARB Case No. 98-113, 1997-DBA-12 (ARB June 30, 2000), the ARB

held that it reviews the ALJ's findings de novo . Credibility determinations, on the other hand, will be

upheld absent "clear error." See also Ray Wilson Co., ARB Case No. 02-086, 2000-DBA-14 (ARB Feb. 27,

2004); Thomas and Sons Building Contractors, Inc., ARB Case No. 00-050, Case No. 1996-DBA-37 (ARB

Aug. 27, 2001).

With regard to an Administrator's decision, in Phoenix Field Office, Bureau of Land

Management, ARB Case No. 01-010 (ARB June 29, 2001) the ARB cited to 29 C.F.R. § 7.1(e) and held that

“review of decisions issued by the Administrator is in the nature of an appellate proceeding,” and the

Board "will not hear matters de novo except upon a showing of extraordinary circumstances."

C. By the circuit court

In L.P. Cavett Co. v. U.S. Dep't of Labor, 101 F.3d 1111 (6th Cir. 1996), the circuit court held that

the proper standard of review of a decision by the Wage Appeals Board was limited to the question of

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whether the agency action was "arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law." 5 U.S.C. § 706(2)(A); Communities, Inc. v. Busey, 956 F.2d 619, 623 (6th Cir.), cert.

denied, 113 S. Ct. 408 (1992).

D. Statutory construction, generally

In interpreting statutory language, the court in L.P. Cavett Co. v. U.S. Dep't of Labor, 101 F.3d

1111 (6th Cir. 1996) (citing Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S.

837, 842-43 (1984)), held that the first issue is whether Congress has clearly spoken on the precise

question at issue. Under the facts of the case, the Department of Labor asserted that truck drivers were

covered by the DBA prevailing wage rates as the "site of the work" at 29 C.F.R. § 5.2(l) included "both a

batch plant located at a quarry more than three miles away from the highway construction project and

the Indiana highway system that was used to transport materials from the batch plant to the

construction project." The circuit court held the language of the DBA was clear and that 29 C.F.R. § 5.2(l)

was inconsistent with the statute, which requires the payment of prevailing wage rates for "employees

working directly on the physical site of the public work under construction . . . ."

IV. Evidence

A. Burdens of proof

1.

Generally

In Cody Zeigler, Inc., 1997-DBA-17 (ALJ Apr. 7, 2000), aff'd in relevant part, ARB Case Nos. 01014 and 01-015 (ARB Dec. 19, 2003), the ALJ held that the proponent of the Order of Reference in a

Davis-Bacon Act case bears the initial burden of going forward with the evidence and establishing

a prima facie claim. Then the burden shifts to the opposing party who bears the ultimate burden of

proof by a preponderance of the evidence. See also Pythagoras General Contracting Corp., 2005-DBA14 (ALJ June 4, 2008), aff’d, ARB Nos. 08-107, 09-007 (ARB Feb. 10, 2011) ( errata issued Mar. 3, 2011)

(the Administrator has the initial burden of “establishing that the employees performed work for which

they were improperly compensated”; the burden then shifts to Respondent “to come forward with

evidence of the precise amount of work performed or with evidence to negate[e] the reasonableness of

the inference to be drawn from the employees’ evidence”); Ray Wilson Co., ARB Case No. 02-086, 2000DBA-14 (ARB Feb. 27, 2004) (Respondent has the burden to rebut Department's proof of extent and

amount of violations); Thomas & Sons Building Contractors, Inc., ARB Case No. 00-050, Case No. 1996DBA-37 (ARB Aug. 27, 2001) (“the Administrator has the burden of establishing that the employees

performed work for which they were improperly compensated”).

2. Establishing back wages owed

In Thomas & Sons Building Contractors, Inc., 1996-DBA-37 (ALJ Feb. 17, 2000), aff'd, ARB Case

No. 00-050 (ARB, Aug. 27, 2001), order denying reconsideration (ARB Dec. 6, 2001), the ALJ cited to the

Fair Labor Standards Act case of Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), which was

applied to Davis-Bacon Act cases by Trataros Construction Corp., WAB Case No. 92-03 (WAB Apr. 28,

1993), to set forth the parties' burdens in a case involving recovery of unpaid wages. The ALJ determined

that the employee has the initial burden "of proving that he performed work for which he was not

properly compensated." The ALJ further held, however, that the employee is not required to establish

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the "the precise extent of uncompensated work." Rather, the employee's burden is met "if he proves

that he has in fact performed work for which he was improperly compensated and if he produces

sufficient evidence to show the amount and extent of that work as a matter of just and reasonable

inference." Once the employee's burden is carried, then it is the employer's burden to demonstrate the

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

inference to be drawn from the employee's evidence." If the employer fails to carry this burden, then

damages may be awarded to the employee, even if the amount of such damages is approximate.

Moreover, the ALJ noted that, where the Department of Labor reconstructs an employer's payroll, the

burden is on the employer to present evidence, which is sufficiently precise to contradict the

reconstructed payroll. See also Pythagoras General Contracting Corp., 2005-DBA-14 (ALJ June 4,

2008), aff’d, ARB Nos. 08-107, 09-007 (ARB Feb. 10, 2011) ( errata issued Mar. 3, 2011); Dumarc Corp.,

Case No. 2005-DBA-7 (ALJ Apr. 27, 2006) (because accurate payroll records were not maintained by

Respondent, an ALJ may properly “rely on the testimony of witnesses to assess and reconstruct the

hours worked”); Northeast Energy Services, Inc. (NORESCO), Case No. 2000-DBA-3 (ALJ Feb. 12,

2002); Cody Zeigler, Inc., 1997-DBA-17 (ALJ Sept. 18, 2000) (the ALJ concluded that the employer failed

to sustain its burden in challenging the Department's calculations of back wages due its

employees); Peabody Construction Co., 1996-DBA-20 (ALJ Apr. 18, 2000); Arliss D. Merrill, Inc., 1994DBA-41 (ALJ Oct. 26, 1995); Superior Masonry, Inc., 1994-DBA-19 (ALJ Oct. 13, 1994) (failure to maintain

proper records of overtime wages paid).

In Thomas & Sons, The employer filed for reconsideration with the ARB and argued that,

because its employees did not have written documentation that they were underpaid, then the burden

of proof set forth in Anderson had not been satisfied. Thomas & Sons Building Contractors, Inc., ARB

Case No. 00-050, Case No. 1996-DBA-37 (ARB Dec. 6, 2001) (on reconsideration). The ARB noted two

"fundamental errors" in the employer's position:

First, this enforcement case was initiated by the Wage and Hour Administrator. As the

party who brought the case, the initial burden of proof falls on the Administrator – not the

workers.

...

The Zagari employees participated in this case only as witnesses, not as parties, and

therefore did not personally bear any proof burden. This is in contrast to Anderson - a

case under the Fair Labor Standards Act - which was brought directly by the employees,

and in which the employees therefore assumed the initial burden of proof.

Second, nothing in the Anderson methodology requires that any plaintiff or prosecuting

party present ‘written documentation' of wage underpayment. All that is required

is evidence sufficient to show that the employees ‘in fact performed work for which [they

were] improperly compensated[,]' and also sufficient. . . to show the amount and extent

of that work as a matter of just and reasonable inference.'

Slip op. at 2.

It is noted that, in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687-88 (1946), the

Supreme Court held the following in a Fair Labor Standards Act case:

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When the employer has kept proper and accurate records, the employee may easily

discharge his burden by securing the production of those records. But where the

employer's records are inaccurate or inadequate and the employee cannot offer

convincing substitutes, a more difficult problem arises. The solution, however, is not to

penalize the employee by denying him any recovery on the ground that he is unable to

prove the precise extent of uncompensated work. Such a result would place a premium

on an employer's failure to keep proper records in conformity with his statutory duty; it

would allow the employer to keep the benefits of an employee's labors without paying

due compensation as contemplated by the Fair Labor Standards Act. In such a situation

we hold that an employee has carried out his burden if he proves that he has in fact

performed work for which he was improperly compensated and if he produces sufficient

evidence to show the amount and extent of that work as a matter of just and reasonable

inference. The burden then shifts to the employer to come forward with evidence of the

precise amount of work performed or with evidence to negative the reasonableness of

the inference to be drawn from the employee's evidence. If the employer fails to produce

such evidence, the court may then award damages to the employee, even though the

result be only approximate. (citation omitted).

B. Use of payroll records to demonstrate disregard for classification; business records

exception to hearsay

In P&N, Inc./Thermodyn Mechanical Contractors, Inc., ARB Case No. 96-116, 1994-DBA-72 (ARB

Oct. 25, 1996), the payroll records did not reflect an effort by Respondent to properly compensate the

laborers for the sheet metal work they had performed and which had been observed by the Wage and

Hour investigator. In particular, the ARB noted that after the meeting with the DOL investigator,

Respondent should have ensured that the sheet metal foreman was providing accurate payroll

information reflecting the sheet metal mechanics' work being done by employees classified only as

laborers. See also Star Brite Construction Co., ARB Case No. 98-113, 1997-DBA-12 (ARB June 30, 2000)

(given Respondent's lack of records, it was proper for the ALJ to rely on the testimony of witnesses).

In Ray Wilson Co., ARB Case No. 02-086, 2000-DBA-14 (ARB Feb. 27, 2004), the Board held that, despite

their hearsay character, certified payroll records are properly admitted as evidence under the hearsay

exception of allowing "[r]ecords of regularly conducted activity." 29 C.F.R. § 18.803(a)(6).

C. Employer’s obligation to learn applicable wage rates

WHERE A CONTRACT IS SUBJECT TO DAVIS-BACON WAGE RATES, IT IS THE EMPLOYER’S OBLIGATION

TO LEARN WHAT THOSE RATES ARE

In Administrator, Wage and Hour Div., USDOL v. Coleman Construction Co., ARB No. 15-002,

ALJ No. 2013-DBA-4 (ARB June 8, 2016), a subcontractor feigned ignorance of the applicability of DavisBacon Act wage rates to a construction project. The ARB found, however, abundant evidence that the

subcontractor knew, or should have known that the subcontract was subject to the DBA requirements.

For example, the subcontractor had worked on DBA governed contracts in past and had signed

subcontracting documents for the instant project with numerous references to the DBA requirements.

Evidence of record showed that the subcontractor knew the precise DBA rates. The subcontractor

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asserted that the relevant wage determination was unavailable on DOL’s website. The ARB found no

evidence in the record of the alleged website omission, but stated even if there was such an omission, it

would not suffice to excuse the subcontractor’s obligation to pay DBA prevailing wages. The ARB stated

“The law is clear that, if a contract subject to Davis-Bacon lacks the wage determination, it is the

employer’s obligation—here, Coleman Construction’s—to get it. So, even if Coleman Construction did

not know what the correct Davis-Bacon prevailing wage rates were, it was its responsibility to figure it

out.” USDOL/OALJ Reporter at 10 (footnote omitted).

D. Terms of contract to pay prevailing wage controlling

Even if a contractor or developer is not required by force of statute to pay Davis-Bacon wages, it

may elect to pay prevailing wages by contract. Vulcan Arbor Hill Corp. v. Reich, 81 F.3d 1110 (D.C. Cir.

1996), previously 87-WAB-04. In Vulcan, the contractor entered into an agreement with the Department

of Housing and Urban Development (HUD) in which it agreed to pay locally prevailing wages under the

Davis-Bacon Act. Vulcan later disputed that the DBA applied, and HUD agreed that the wage

determinations should not apply to the project due to an exemption. The court, however, held that the

contractor was liable for payment of the prevailing wage rates because it had contracted to pay such

wages. The court reasoned that "[n]othing in the Davis-Bacon Act precludes the parties from contracting

with reference to it, even if by proper interpretation its requirements may not have been applicable by

force of law to the project in question." The court found the language of the contract unambiguous and

declined to look at extrinsic material.

In Cody Zeigler, Inc., 1997-DBA-17 (ALJ Apr. 7, 2000), the ALJ held that, where the contract

stated that work would be performed in Franklin County and it was actually performed in Delaware

County (where the prevailing wage rate was higher) it was too late to modify the contract to reflect the

higher wage rate. Citing to 29 C.F.R. § 1.6(c)(2)(ii) and M.A. Mortenson Dairy Development Ltd., WAB

Case No. 88-35 (WAB Aug. 24, 1990), the ALJ determined that "changing the wage requirement from the

Franklin County rate to the Delaware County rate would constitute an impermissible modification to the

project wage determination after the contract award." The ALJ noted that Employer based its bid and

performed work on the contract based on representations of the Postal Service that the project was

located in Franklin County.

E. Testimony demonstrates lack of compliance with classification requirements

Employer's superintendent testified that the foremen were instructed to tell the laborers not to

use sheet metal tools unless instructed by the foreman because the foreman could split the hours. The

ARB held that this indicated an improper practice of utilizing employees who are otherwise classified as

laborers to perform the work of sheet metal mechanics because it reflected a practice of segregating

workers' hours for the different classifications in which work was performed. P&N, Inc./Thermodyn

Mechanical Contractors, Inc., ARB Case No. 96-116, 1994-DBA-72 (ARB Oct. 25, 1996).

In Ray Wilson Co., ARB Case No. 02-086, 2000-DBA-14 (ARB Feb. 27, 2004), the Board upheld

the ALJ's use of testimony by workers "in the absence of accurate employer records" from either the

contractor or the subcontractor.

In Pythagoras General Contracting Corp., 2005-DBA-14 (ALJ June 4, 2008), aff’d, ARB Nos. 08107, 09-007 (ARB Feb. 10, 2011) (errata issued Mar. 3, 2011), the ALJ cited to Donovon v. New Floridian

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Hotel, Inc., 676 F.2d 468 (11th Cir. 1982) and concluded that it “is permissible to award back pay to nontestifying employees based upon the representative testimony of a small number of employees.”

F. Foreman’s copies of handwritten time records

FOREMAN’S COPIES OF HANDWRITTEN TIME RECORDS SUFFICIENT EVIDENCE TO RAISE INFERENCE OF

AMOUNT AND EXTENT OF DAVIS BACON ACT GOVERNED WORK; NON-MALICIOUS DESTRUCTION OF

RECORDS BY RESPONDENT, AND FOREMAN’S ALLEGED LACK OF AUTHORIZATION TO MAKE COPIES,

WERE BOTH IRRELEVANT TO QUESTION OF RESPONDENT’S LIABILITY

In Administrator, Wage and Hour Div., USDOL v. Coleman Construction Co., ARB No. 15-002,

ALJ No. 2013-DBA-4 (ARB June 8, 2016), the testimony of one of the subcontractor’s foreman,

accompanied by a detailed spreadsheet maintained by the foreman, was sufficient evidence to “show

the amount and extent of [DBA-governed] work as a matter of just and reasonable inference” and to

shift the burden of proof to the Respondents. USDOL/OALJ Reporter at 12, citing Mt. Clemens Pottery .

In the instant case, the Respondents had no evidence to rebut the inference. The possibility that it may

have not had malicious intent when it destroyed time sheet records was not relevant to the

Respondent’s liability. Similarly, the claim that the foreman did not have authorization to copy the

handwritten time records was not relevant to the Respondent’s liability. The ALJ found that the

foreman’s evidence was credible, and that the Respondent had nothing to rebut that evidence. This was

sufficient to affirm the ALJ’s finding that the Respondent had undercounted hours and the ALJ’s

determination of the number of those undercounted hours.

G. Contemporaneous calendar maintained by employee; business records exception to

hearsay

In Star Brite Construction Co., ARB Case No. 98-113, 1997-DBA-12 (ARB June 30, 2000), the

foreman maintained a calendar for Respondent, which set forth the hours worked by employees on any

given day. The company argued that it was prejudiced by the government's failure to provide it with a

copy of the calendar prior to the hearing. The ARB disagreed and stated that "[t]he calendar was, in the

first place, Star Brite's own business record" which was maintained by its foreman and used to report

the hours worked. Moreover, the ARB held that the calendar qualified for the business records

exception to the hearsay rule as provided at 29 C.F.R. § 18.803(6).

H. Stipulations

In Ray Wilson Co., ARB Case No. 02-086, 2000-DBA-14 (ARB Feb. 27, 2004), the Board held that

a "trier of fact may properly reject a stipulation made by counsel or a party in the course of hearing if

the stipulation does not conform to the evidence of record."

I. Challenge to wage determination after contract issued held improper

In Abhe & Svoboda, Inc., ARB Case Nos. 01-063, 01-066, 01-068, 01-069, 01-070, ALJ Case Nos.

1999-DBA-20 to 27 (ARB July 30, 2004), recon. denied (ARB Oct. 15, 2004), aff'd, Abhe & Svoboda, Inc. v.

Chao, 2006 WL 2474202 (D.D.C. Aug. 25, 2006), aff'd, 508 F.3d 1052 (D.C. Cir. 2007), the Board held

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that, "[i]f contractors wish to protest the use of union wage rates as prevailing, it must be at the wage

determination stage, before the award of the contract, and not at the enforcement stage."

J. Persuasive value of Wage and Hour Division’s Field Operations Handbook

ARB CITES SIXTH CIRCUIT DECISION AFFORDING THE FOH SKIDMORE DEFERENCE

In Weeks Marine, Inc., ARB No. 2017-0076, ALJ No. 2009-DBA-00006 (ARB Mar. 10, 2020), the

ARB looked to (in addition to the statute, regulations and caselaw) the Wage and Hour Division’s Field

Operations Handbook (“FOH”) for the agency views on what evidence may rebut the presumption that

lodging is for the benefit of the employee, and thus reimbursable under the interplay of the Davis Bacon

Act, Copeland Act, and Fair Labor Standards Act. In this regard, the ARB noted the Eighth Circuit’s

decision in Baouch v. Werner, Enter., 908 F.3d 1107 (6th Cir. 2018), in which the court determined that

agency interpretative documents—like the FOH—are not afforded the force of law and therefore do not

warrant Chevron-style deference, but nonetheless are entitled to respect under Skidmore based on their

persuasiveness. The court stated that the FOH is not dispositive—but it is persuasive and cannot be

discounted because DOL handles and regulates the application of the FLSA.

V. Discovery

A. Failure to comply with discovery orders

1. Summary decision proper

In Tri-Gem's Builders, Inc., 1998-DBA-17 (ALJ July 14, 1999), the ALJ adopted the Acting

Administrator's findings of fact and issued a summary decision against Tri-Gems Builder. The ALJ found

that the contractor was afforded multiple opportunities to comply with the Administrator's discovery

requests, but failed to do so. The ALJ concluded that summary judgment was proper under 29 C.F.R. §

18.6(d)(2)(v) "because the requested discovery encompassed all of the underlying facts and issues and

because the Respondent's repeated and unjustified failures to cooperate in discovery either voluntarily

or in response to Judge Donnelly's orders clearly established that compliance could not be achieved by

less drastic sanctions." As a result, the ALJ ordered the payment of back wages owed and debarment as

requested by the Acting Administrator. The Respondents appealed, but their appeal was dismissed by

the ARB for failure to prosecute the case. Tri-Gem's Builders, Inc., 1998-DBA-17 (ARB Feb. 25, 2000)

(Order of Dismissal).

2. Ruling against interests

By supplemental order in Cody Zeigler Inc., 1997-DBA-17 (ALJ June 14, 2000), the ALJ issued a

ruling against the Department's interests for its failure to comply with his order directing disclosure of

the witness statements. Specifically, the ALJ concluded that the contractor did not misclassify its

employees and, therefore, it did not owe $13,584.99 in back wages. The ALJ further directed that the

contractor submit an itemized statement of costs and attorney fees "directly attributable to the defense

of (the Department's) claim of the informer's privilege." Slip op. at 1. With regard to an award of fees

and costs, the ALJ initially noted that the Equal Access to Justice Act (EAJA) "clearly applies to

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administrative proceedings." However, in light of the regulatory provisions at 29 C.F.R. § 6.6(a), he found

that EAJA's applicability in a Davis Bacon Act claim would appear to be precluded. The ALJ then cited to 5

U.S.C. § 504(a)(1) of the Administrative Procedure Act which he stated "provides direct authority for the

payment of costs and fees by the United States in an adversary adjudication to the prevailing party

unless it is determined that the position of the agency was substantially justified." Slip op. at 3. The ALJ

noted that the OALJ's procedural rules at 29 C.F.R. §§ 18.1(a), 18.29(a)(6), and 18.29(a)(8) permit resort

to the Federal Rules of Civil Procedure (FRCP). Turning to FRCP 37(a)(4) and 37(b)(2), the ALJ found that

these rules "authorize sanction under circumstances where a party to the proceeding fails to make

disclosure or cooperate in discovery, or comply with an order of the Administrative Law Judge." Slip op.

at 4. Upon review of the record before him, the ALJ determined that the Department did not present

any substantial justification for its refusal to produce the witness statements. As a result, the ALJ found

that the Department was liable for a total of $1,856.25 in attorney's fees.

B. Privileges

1.

Informants' privilege

a. Upheld

By discovery order in Thomas & Sons Building Contractors, Inc., 1996-DBA-33 (ALJ Nov. 10,

1987), the ALJ noted that the provisions at 29 C.F.R. § 6.5 prohibited disclosure of the identity of any

employee who makes a written or oral statement during an investigation under the Davis-Bacon Act

without the prior consent of the employee. The ALJ further determined that the FOIA provisions at 5

U.S.C. § 552a(b)(7)(D) exempts from public disclosure matters which are part of "investigatory records"

to the extent that such disclosure of a confidential source is at issue. The ALJ also stated that FRCP

26(b)(1) provides for discovery of all relevant information which is not privileged. From these rules and

regulations, the ALJ concluded that the contractor was not entitled to obtain the names of those

employees who made statements during the investigation. Rather, the ALJ held that redacted versions

of their statements sufficiently protected the due process rights of the contractor. See also Star Brite

Construction Co., ARB Case No. 98-113, 1997-DBA-12 (ARB June 30, 2000) (in response to the company's

allegations that it was prejudiced by the interview statement of one of its employees which was not

provided before the hearing, the ARB noted that the ALJ relied upon the employee's testimony at the

hearing which paralleled his interview statement; the interview statement was not relied upon in the

ALJ's decision; and the ARB stated in a footnote that, pursuant to 29 C.F.R. § 6.5, "it is not likely that (the

employee's) interview statement could have legally been disclosed prior to the hearing").

In Woodside Village v. Secretary of Labor, 611 F.2d 312 (9th Cir. 1980), the court affirmed the

ALJ's application of the informant's privilege to protect the names of persons making statements to the

government as well as the statements where the action was brought on behalf of the government.

b. Denied

In Cody Zeigler, Inc., 1997-DBA-17 (ALJ Apr. 7, 2000), the ALJ ordered that counsel for the DOL

produce copies of all witness statements to Respondents where the DOL investigator testified that she

relied, in part, upon the statements to determine the proper classification of the employees' jobs. Citing

to 29 C.F.R. §§ 5.6(a)(5) and 6.5 and invoking the informant's privilege, counsel for DOL argued that such

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statements would not be released unless the informants were called to testify. The ALJ acknowledged

the validity of the informant's privilege, citing to Roviaro v. United States, 353 U.S. 53 (1957) which

upheld the existence of such a privilege as a qualified, not absolute, one.

The ALJ further noted that, on January 2, 1997, the DOL issued Secretary's Order 5-96 which

"delegates from the Secretary authority for the Assistant Secretary for Employment Standards to carry

out the functions to be performed by the Secretary of Labor under a variety of statutes including the

Davis Bacon Act." Slip op. at 28. The ALJ stated that this delegation of authority specifically

encompassed invocation of "all appropriate claims of privilege." Slip op. at 28. The ALJ determined that

the interests of each of the parties to the case were compelling and he stated that "the reoccurring

problem concerning production of witness statements in these proceedings is caused by a conflict in the

government's interest in enforcing the Act, the informer's right to be protected against possible

retaliation and also in the Respondents' need to prepare for trial."

The ALJ concluded that the regulatory provision at § 6.5 "does not address the question of nontestifying potential witnesses." He further stated that, pursuant to the Secretary's Order 5-96 , the Wage

and Hour Administrator must "personally" review the materials sought to be covered by the privilege

and the privilege must be invoked in writing. In finding that the privilege was not properly invoked, the

ALJ found that "[t]his case record includes no evidence of an Administrator affidavit claiming the

privilege nor of any document review by the Acting Administrator." Given the government's failure to

comply with the ALJ's discovery order, the ALJ concluded that the classification issue would be decided

in favor of the Respondents pursuant to 29 C.F.R. § 18.6(d)(2)(ii). The ALJ further requested that

Respondents submit an itemized statement of requested attorneys' fees and costs expended in defense

of that part of the case directly attributable to the DOL's claim of informer's privilege.

C. Validity of prevailing wage determination; discovery not permitted

In Thomas & Sons Building Contractors, Inc., 1996-DBA-33 (ALJ Nov. 10, 1997), the ALJ denied

the contractor's request for discovery related to challenging the validity of the wage determination. The

ALJ concluded that the proceedings before him were limited to proper classification of employees and

the payment of wages owed. He noted that the Federal Acquisition Regulations contain the procedures

which a contractor must use to challenge the validity of a wage determination.

D. Protective order

In Northeast Energy Services, Inc. (NORESCO), 2000-DBA-3 (ARB Apr. 20, 2001), the ALJ issued

an order to protect the identity of informants and "the information provided to the Department by

them" pursuant to 29 C.F.R. §§ 6.5, 18.14, and 18.15. The ALJ held that it was proper to protect the

informant's identity and the information s/he provided to the government but, citing to Jencks v. United

States, 353 U.S. 657 (1957), once the informant is called to testify for the government, then his or her

statement must be made available to the opposing party. The ALJ stated the following:

I find that neither the Department nor (subcontractor) Brilliant has standing to object

from (contractor) Taj obtaining from Brilliant communications to the latter from any other

party, so long as such communication does not reveal the identity of the Department's

informants, statements of the informants to the Department, or the mental impressions,

conclusions, opinions, legal theories, or work product of Brilliant's own counsel.

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Slip op. at 4.

VI. Classification of employees

A. Disregard for classification established by payroll records

The payroll records did not reflect an effort by Respondent to properly compensate the laborers

for the sheet metal work they had performed and which had been observed by the Wage and Hour

investigator. Respondent only took steps to ensure that laborers would not be using sheet metal tools in

the future. The ARB found that, after the meeting with the DOL investigator, Respondent should have

ensured that the sheet metal foreman was providing accurate payroll information reflecting the sheet

metal mechanics' work being done by employees classified as laborers. P&N, Inc./Thermodyn

Mechanical Contractors, Inc., ARB Case No. 96-116, 1994-DBA-72 (ARB Oct. 25, 1996).

B. Wage determination determined solely by Secretary; cannot be determined by employer

It is noted that the Administrator's prevailing wage determinations, as well as his or her

decisions whether to add classifications, must be directly appealed to the ARB. American Building

Automation, Inc., ARB Case No. 00-067 (ARB Mar. 30, 2001).

The ALJ is without discretion to adjudicate the propriety of a prevailing wage determination. 29

C.F.R. §§ 1.8 and 1.9 (2000). The ALJ may, on the other hand, determine whether an employee is

properly classified for purposes of determining the appropriate prevailing wage rate. Pythagoras

General Contracting Corp., 2005-DBA-14 (ALJ June 4, 2008), aff’d, ARB Nos. 08-107, 09-007 (ARB Feb.

10, 2011) (errata issued Mar. 3, 2011).

In Thomas & Sons Building Contractors, Inc., ARB Case No. 98-164, 1996-DBA-23 (ARB Oct. 19,

1999), recon. denied (ARB June 8, 2001), the ARB cited to United States v. Binghamton Construction Co.,

347 U.S. 171, 177 (1954) as support for its holding that the Secretary has sole authority to issue

prevailing wage determinations under the Act, the propriety of which are not subject to review. With

regard to job classifications, however, the ARB held the following:

In short, relevant precedent plainly affirms the Secretary's (and the ALJ's) authority to

determine the correct trade classifications for Thomas and Sons' employees on the Naval

Reserve and Air National Guard contracts.

In P&N, Inc./Thermodyn Mechanical Contractors, Inc., ARB Case No. 96-116, 1994-DBA-72 (ARB

Oct. 25, 1996), the contractor challenged the ALJ's determination that it be debarred because it

misclassified and underpaid its workers. The government maintained that it was improper to pay

workers performing roofers' duties at the laborers' rate. The ARB held that an employer cannot

unilaterally establish a classification for "sheet metal mechanics' helpers" by using semi-skilled laborers

in a capacity that required them to use sheet metal tools with a pay rate less than that required by the

relevant wage determination. The record provided no basis from which to conclude that the position of

helper to a sheet metal mechanic would meet the requirements for a helper position under the

pertinent guidelines.

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See also Actus Corp., 1996-DBA-1 (ALJ Jan. 29, 1999) (the Administrator has the right to rely

upon the statement of employees to determine their proper classification and area collective bargaining

agreements are properly considered in determining whether employees have been

misclassified); Berbice Corp., 1998-DBA-9 (ALJ Apr. 16, 1999) (a company cannot rely on a contracting

officer's advice; the Secretary or Secretary's designee determines the classification of employees;

reliance on classification of a prior contract is improper). See also Dumarc Corp., Case No. 2005-DBA-7

(ALJ Apr. 27, 2006) (the ALJ is authorized to determine an employee's classification for purposes of

determining the appropriate prevailing wage rate; a "worker's classification depends upon the tasks he

performs and the tools he uses"); Thomas and Sons Building Contractors, Inc., ARB Case No. 00-050,

Case No. 1996-DBA-37 (ARB Aug. 27, 2001), order denying reconsideration (ARB Dec. 6, 2001)

(Respondent's argument, that the Administrator's prevailing wage determination was incorrectly based

on union wages in the area rather than the wage survey, amounted to a request for review of the wage

determination which must be made prior to the contract award and must be timely filed directly with

the ARB).

Cases involving the Department's conformance regulations at 29 C.F.R. § 5.5(a)(1)(ii)(A), which

explain how the Secretary determines the wages for a type of job that is left out of the Department's

pre-bid wage decision, but that a contractor subsequently requires for a project, are appealed directly

from the Administrator to the Administrative Review Board. See Mistick PBT v. Chao, 440 F.3d 503 (D.C.

Cir. 2006). For a discussion of an Administrator's obligations in conducting prevailing wage surveys,

particularly with regard to considering collective bargaining agreements, see Mistick Construction, ARB

Case No. 04-051 (ARB Mar. 31, 2006).

In Cox v. Bland, 2006 WL 3059988, Civil No. 3:00 CV 311 (CFD) (D. Conn. Oct. 27, 2006), the

district court summarily denied an employer's challenge to the Davis-Bacon wage rates for a new

classification of asbestos removal workers. The court determined that the contractor failed to exhaust

its administrative remedies where "the U.S. Department of Labor . . . must hear most matters related to

the Davis-Bacon wage rates in the first instance" as required by 29 C.F.R. §§ 5.5(a)(9), 5.11, and 5.13.

Notably, the court stated that challenges to wage determinations must be first lodged with the

Administrator. It noted that "[t]he DOL's wage rate decisions are final and a contractor's reliance on

even incorrect wage rates which are later changed is not actionable by the contractor." In dicta, the

court held that the Administrator's decision could be appealed to the administrative law judge and

ultimately, to the Administrative Review Board.

C. Classification by work actually performed

DAVIS BACON ACT OBLIGATIONS REQUIRE CLASSIFICATION BY WORK ACTUALLY PERFORMED, NOT BY

CLASSIFICATIONS BASED ON RESUMES, APPLICATIONS, LICENSURES, OR EXPERIENCE

In NCC Electrical Services, Inc., ARB No. 13-097, ALJ No. 2012-DBA-6 (ARB Sept. 30, 2015), the

ARB Majority (Igasaki and Corchado) upheld ALJ’s summary decision that Respondents falsely certified

nine employees on project as part of a bona fide apprenticeship program, and misclassified employees

as “apprentices” or “laborers” as opposed to electricians. Board Majority finds that while mere

violations of obligations under the law do not constitute a “disregard,” for debarment, evidence must

establish a level of “culpability beyond negligence.” “Some element of intent“ is required although

intent need not arise to “willful attempts to avoid the DBA’s requirements.” (Italics in original)

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Admission of subcontractor that he created his own classifications based on the applications, resumes,

licensure, and experience of employees rather than the work performed as required under the DBA; its

certification of apprenticeship program without verification of certification; and its failure to review DBA

requirements, reflects necessary “element of intent.” Three year debarment upheld.

D. False Claims Act

1. Held applicable

In United States v. C.W. Roen Const. Co., 183 F.3d 1088 (9th Cir. 1999), the circuit court held

that, where a contractor falsely certified to the government that its workers received the prevailing

wage rate in a worker classification dispute, the contractor could be held liable under the False Claims

Act.

2. Held inapplicable

In United States v. DynCorp, Inc., 895 F. Supp. 844 (E.D. Va. 1995), the court held that the

provisions of the False Claims Act, at 31 U.S.C. §§ 3729-3733, are designed to prevent federal

contractors from defrauding the government in obtaining, concealing, or reducing federal monies to

which the contractor was not entitled. In this vein, the court concluded that a worker classification

dispute does not, in and of itself, support a claim under the False Claims Act. Rather, such a dispute

must be resolved by the Department of Labor under the provisions of the Davis Bacon Act.

E. Sporadic nature of work irrelevant to classification determination

An employer who utilizes employees in more than one classification must ensure that those

employees are properly paid for the various types of work performed and for the hours such work was

performed. The ALJ erred in relying on the sporadic nature of the mechanics' work that was performed

by the laborers; that some of Employer's laborers were underpaid on an intermittent, rather than a

continuous, basis did not negate the finding that they were underpaid because they were misclassified. P&N, Inc./Thermodyn Mechanical Contractors, Inc., ARB Case No. 96-116, 1994-DBA-72 (ARB

Oct. 25, 1996).

F. Unforeseen circumstances; wage determination cannot be rescinded

For a Coast Guard construction project described as "New Family Housing," the ARB in Joe E.

Woods, Inc., ARB Case No. 96-127 (ARB Nov. 19, 1996), held that Wage and Hour correctly characterized

the project as "residential" where the All Agency Memorandum 130 provided that residential

construction projects were "those involving the construction, alteration, or repair of single family houses

or apartment buildings of no more than four (4) stories in height." Woods argued, however, that the

Coast Guard's description of the project was so inadequate that imposition of relief was justified

pursuant to 29 C.F.R. § 1.6(f). The ARB disagreed, stating that the description submitted by the Coast

Guard was sufficiently clear and unambiguous such that only the residential construction category

clearly applied. The ARB also rejected Woods argument that it was forced to pay higher wage rates that

those contained in the wage determination due to the complexity of the siting, terrain, and location in

the Seismic 3 zone. The ARB responded that the wage determinations merely establish the

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minimum wages and fringe benefits that must be provided. There is no guarantee that the minimum

wages contained in a wage determination will be the wages required to actually be paid to perform the

contract. Unforeseen circumstances do not constitute a legal basis for rescinding the application of the

wage determination.

G. Retroactive imposition of wage determination

ADMINISTRATOR MUST CONSIDER EQUITABLE FACTORS OF DBA RULING LETTER 2004-01 WHEN

CONSIDERING WHETHER TO IMPOSE THE ADDITIONAL WAGE DETERMINATION TO AN ALREADY

COMPLETED PROJECT

In City of Ellsworth, Maine, Bayside Road Wastewater Treatment Facility, ARB No. 14-042 (ARB

June 6, 2016), the ARB affirmed the Wage and Hour Division Administrator’s determination that a

contract for a road wastewater treatment facility and pump station, partially funded by the Federal

government and therefore subject to the Davis-Bacon Act and related acts, should have included a wage

determination for building construction in addition to a heavy construction wage determination. The

contracting city argued that it had relied in good faith on guidance received on different project the

threshold found in AAM 130 and 131. The ARB found, however, that the Administrator correctly

determined that the building component was substantial and required a separate wage determination,

the component meeting both 20% of the total project and independent $1 million thresholds.

The city next argued that the WHD lacked authority under 29 C.F.R. 1.6(f) to impose the building

wage post-bid and after contract commencement. The ARB, however, agreed with the Administrator

that the WHD has the authority to require retroactive incorporation of a second building wage

determination notwithstanding that the contract already had a valid wage determination. The ARB

cited Central Energy Plant, ARB No. 01-057 (Sept. 30, 2003). The ARB, however, remanded the case to

the Administrator to determine whether equitable grounds existed to decline to retroactively impose a

wage determination to the already completed project. The ARB cited in this regard DBA Ruling Letter

2004-01 (June 3, 2004). The ARB found that the Administrator had only made generalized conclusions

on the WHD’s discretion to impose the wage determination retroactively. The ARB stated:

Where the Administrator has failed to articulate the factual basis, equitable or otherwise,

upon which the decision requiring retroactive application of the Building wage

determination was reached, the Board cannot conclusively determine whether the

Administrator’s determination in this case is reasonable, or, instead, an unexplained

departure from past determinations.

USDOL/OALJ Reporter at 16.

I.

Collateral estoppel

1. Held inapplicable

a. Work performed at “dedicated” plant

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In Lloyd T. Griffin, Jr., 1991-DBA-92 (ALJ 1999), rev'd ARB Case Nos. 00-032 and 00-033 (ARB

May 30, 2003), the ALJ reconsidered his holdings in light of the remand issued by the United States

District Court in Griffin v. Reich, 956 F. Supp. 98 (D.R.I. 1997). On remand, the ALJ was confronted with

whether equitable estoppel should be applied against the Department of Housing and Urban

Development (HUD) to preclude recovery of back wages owed from the contractor. Based on the

evidence before him, the ALJ concluded that, if the contractor had not received erroneous advice from

HUD, he would have abandoned the project or "handled labor matters differently." Under the final

element of equitable estoppel as set forth by the district court, the ALJ found that the contractor

complied with HUD's advice and policies on the project. Consequently, it was determined that the

contractor was entitled to equitable estoppel relief for work performed at the Veazie Street plant and

the DOL was precluded from recovering back wages owed to the Veazie Street plant workers.

By decision dated May 30, 2003, however, the Board reversed the ALJ's holding and concluded

that collateral estoppel did not apply to the Veazie Street plant workers. In support of this holding, the

Board cited to 29 C.F.R. § 5.2(l)(2) (1993) which provides, inter alia , that "an off-site fabrication facility

like the Veazie Street plant would be covered by the prevailing wage regulation as long as its production

was covered by the Davis-Bacon-covered project it was serving." Respondent again appealed to the

district court and, by decision in Phoenix-Griffin Group II, Ltd. v. Chao, 376 F.Supp.2d 234, (D.R.I. 2005),

the court affirmed the Board's conclusion that the contractor was not entitled to application of

collateral estoppel with regard to wages owed to the Veazie Street plant workers. In this vein, the court

noted its agreement with the Board that, because the prefabricated materials generated at the Veazie

Street were for the sole purpose of DBA-covered construction sites, "[t]his single finding of fact alone

should have served as an absolute bar" to use of collateral estoppel.

b. DOL debarment proceeding distinct from HUD criminal proceeding

In Facchiano Const. Co. v. U.S. Dep't of Labor, 987 F.2d 206 (3d Cir. 1993), the court held that

collateral estoppel did not preclude the DOL from seeking debarment of the contractor, even when HUD

already obtained debarment. The court reasoned that, by its regulatory authority, HUD only has

authority to debar contractors from participation in HUD programs for a specific period of time. The

DOL, on the other hand, has authority to debar a contractor from any and all federal contracts under 29

C.F.R. § 5.12(a)(1). The court further noted that the standard for obtaining debarment under HUD is

different than that required for DOL debarment:

Not only are the parties different, but the two violations do not constitute the same cause

of action. Although the HUD violation involved the same underlying wrongful conduct,

the two debarment proceedings arose from different statutes and different evidence.

What was material to the HUD proceeding was the criminal conviction and mitigating

factors that would demonstrate that the Company was now a ‘responsible' party that

could again be entrusted with HUD contracts. The facts material to the DOL proceeding

were actual evidence of the violations, the extent and nature of the mis-classification and

under payments, evidence of previous violations and falsification of the certified payrolls.

Finally, the demand for recovery in each of these proceedings was different. DOL

demanded a three year, government-wide debarment for willful and aggravated violation

of Davis-Bacon Related Acts. HUD demanded a debarment from HUD programs only, for

a period of up to three years.

Id. at 213. See also Actus Corp., 1996-DBA-1 (ALJ Jan. 29, 1999).

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I. Contractual relationship between contractor and employees irrelevant

In Ray Wilson Co., ARB Case No. 02-086, 2000-DBA-14 (ARB Feb. 27, 2004), Respondent argued

that certain workers were not covered employees because they were partners or owner-operators of

the company. The ARB disagreed and noted that the Act required payment of the prevailing wage to all

workers performing construction activity on a covered project "regardless of any contractual

relationship which may be alleged to exist between the contractor or subcontractor and the laborers

and mechanics." 40 U.S.C. § 3142(c); 29 C.F.R. § 5.2(o). See also EMRG, Inc., 2004-DBA-5 (ALJ June 5,

2007).

Similarly, in Pythagoras General Contracting Corp., 2005-DBA-14 (ALJ June 4, 2008), aff’d, ARB

Nos. 08-107, 09-007 (ARB Feb. 10, 2011) (errata issued Mar. 3, 2011), the ALJ held that Respondent

failed to properly pay janitorial employees who “were employed on the site of the work.” The ALJ

rejected Respondent’s argument that janitorial work was not required under the contract and would

not, therefore, be covered by the Davis-Bacon Act requirements. To the contrary, the ALJ concluded that

requirements of the Act override contractual arrangements and “Respondents (had) failed to provide

any support for their assertion that the DBA only covers work that is required under the contract” (italics

in original).

J. Classification based on area of practice by unions and signatory contractors

In Abhe & Svoboda, Inc., ARB Case Nos. 01-063, 01-066, 01-068, 01-069, 01-070, ALJ Case Nos.

1999-DBA-20 to 27 (ARB July 30, 2004), recon. denied (ARB Oct. 15, 2004), aff'd, Abhe & Svoboda, Inc. v.

Chao, 2006 WL 2474202 (D.D.C. Aug. 25, 2006), aff'd, 508 F. 3d 1052 (D.C. Cir. 2007), the Board held the

following:

[T]he contractors had to pay prevailing wages in accordance with the way local unions

classified the work. Where, as in this case, previous wage rates are based upon a collective

bargaining agreement, proper classification of duties under the Wage Determination

must be determined by the area of practice of the unions that are parties to the

agreement.

The Board further held that, in a Davis-Bacon Related case, "the rate to be paid for particular tasks is the

rate found to be prevailing in the locality for that work, regardless of what tools the workers use." Thus,

under the facts of Abhe & Svoboda, the Board noted that "[t]he industry paid painters' wage rates

contained in the Connecticut Statewide Bridge Agreement for all tasks associated with bridge painting,

including construction of scaffolds and containment structures, and cleanup of lead waste." In this vein,

the Board held that it was improper for the contractors to make their classifications of workers "based

on the tools of the trade" analysis where one worker using a blasting hose or spray gun would be paid as

a painter and another worker using a screw gun and wood would be paid as a carpenter. See also

William J. Lang Land Clearing, Inc., ARB Case Nos. 01-072 to 01-079, 1998-DBA-1 through 6 (ARB Sept.

28, 2004), aff’d, William J. Lang Land Clearing, Inc. v. Administrator, Wage and Hour Div., 520 F. Supp.

2d 870 (E.D. Mich. 2007), aff’d, Case No. 07-2423, 2008 WL 3287097 (6th Cir. Aug. 6, 2008) (unpub.).

K. “Side bar” agreements unenforceable

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In Abhe & Svoboda, Inc., ARB Case Nos. 01-063, 01-066, 01-068, 01-069, 01-070, ALJ Case Nos.

1999-DBA-20 to 27 (ARB July 30, 2004), recon. denied (ARB Oct. 15, 2004), aff'd, Abhe & Svoboda, Inc. v.

Chao, 2006 WL 2474202 (D.D.C. Aug. 25, 2006), aff'd, 508 F.3d 1052 (D.C. Cir. 2007), the Board held that

a "side bar" agreement between the contractor and local union for new classifications of employees,

that was not in the wage determination, was unenforceable as a matter of law. See also EMRG, Inc.,

2004-DBA-5 (ALJ June 5, 2007) (alleged agreement between Respondent and worker that worker would

accept substandard rate irrelevant; statutory requirements control).

L. No estoppel based on actions of contracting agency

In Abhe & Svoboda, Inc., ARB Case Nos. 01-063, 01-066, 01-068, 01-069, 01-070, ALJ Case Nos.

1999-DBA-20 to 27 (ARB July 30, 2004), recon. denied (ARB Oct. 15, 2004), aff'd, Abhe & Svoboda, Inc. v.

Chao, 2006 WL 2474202 (D.D.C. Aug. 25, 2006), aff'd, 508 F.3d 1052 (D.C. Cir. 2007), the Board held that

"[t]he Department of Labor cannot be estopped by the actions of a contracting agency." Citing to L.T.G.

Construction Co., WAB Case No. 93-15 (WAB Dec. 30, 1994), the ARB noted that "mistakes of one

agency cannot be used to estop another agency from carrying out its statutory responsibilities." As a

result, the Board held that acquiescence or erroneous advice from the state's contract administrator

with regard to classification and payment of employees on a Davis-Bacon Related Act job site was not

binding on the Department of Labor.

M. Exempt employees

Under the Davis-Bacon Act, the term laborer or mechanic does not apply to workers whose

duties are primarily administrative, executive, or clerical. The regulations at 29 C.F.R. § 5.2(m) provide

that persons in a bona fide executive, administrative, or professional capacity "as defined in part 541 of

this title are not deemed to be laborers or mechanics."

1. Executive employee

Under 29 C.F.R. § 541.1, an employee is considered to be "employed in a bona fide executive

capacity" and exempt from coverage under the Act if his or her primary functions are executive in

nature and s/he spends less than 20 percent of the work hours doing activities that are not directly and

closely related to the performance of executive functions.

In Dumarc Corp., Case No. 2005-DBA-7 (ALJ Apr. 27, 2006), the ALJ found that, although one

employee "did act as a foreman or manager" of Respondent, "he spent the vast majority of his time

working as a fire sprinkler fitter along with the other employees" and, thus, was covered by the Act.

2.

Ownership interest and/or control

Under 29 C.F.R. § 541.1(e), an employee may be exempt from coverage under the Act if s/he "is

in sole charge of an independent establishment or a physically separated branch establishment, or who

owns at least a 20-percent interest in the enterprise in which he is employed."

In Dumarc Corp., Case No. 2005-DBA-7 (ALJ Apr. 27, 2006), the ALJ noted that Respondent was

legally owned by Mr. Hannan, who was involved with the company's operations as much as his illness

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would permit. The evidence of record established that Mr. White "ran the company, made the payroll,

and controlled company cash" and otherwise helped Mr. Hannan's wife keep the business operating

after Mr. Hannan became ill. However, in determining whether Mr. White was exempt from the Act's

coverage, the ALJ found that there was sufficient evidence that Mr. Hannan, his wife, Mr. White, and

another employee of Respondent shared management of company such that Mr. White was not "in sole

charge" of the business and he was not exempt from coverage under the Act.

N. Contractor presumed to know the Frye Brothers rule

In Frye Brothers, 1977 WL 24823 (W.A.B. 1977), a contractor is on notice under the Davis-Bacon

Act that it must pay employees according to locally prevailing practices.

In Abhe & Svoboda, Inc., ARB Case Nos. 01-063, 01-066, 01-068, 01-069, 01-070, ALJ Case Nos.

1999-DBA-20 to 27 (ARB July 30, 2004), recon. denied (ARB Oct. 15, 2004), aff'd, Abhe & Svoboda, Inc. v.

Chao, 2006 WL 2474202 (D.D.C. Aug. 25, 2006), aff'd, 508 F.3d 1052 (D.C. Cir. 2007), the District Court of

the District of Columbia held that the employer "may indeed have been unaware of the rule announced

in Frye Brothers, but it is not unreasonable to hold plaintiff responsible for knowing the rule" (italics in

original). The D.C. Circuit Court of Appeals agreed that the contractor had adequate notice of the Frye

Brothers rule. In particular, the court noted that, while the case was not officially published “its inclusion

in a commercial reporter and its treatment in subsequent judicial and administrative cases provide

adequate notice that contractors must use the job classifications of signatory unions when wage

determinations are based on collective bargaining agreements." The circuit court further noted that the

Davis-Bacon Act "also should have alerted the company to the fact that it could not apply its own

methodology of classifying jobs" because "[f]rom start to finish, the focus of the Act is on local practice."

In George Campbell Painting Corp. v. Chao, 463 F. Supp. 2d 184 (D. Conn. 2006), the district

court agreed with the decision in Abhe & Svogoda, Inc. v. Chao, 2006 WL 2474202 (D.D.C. Aug. 25,

2006) and held that, "since the leading decision in Fry Brothers Corp., 1977 WL 24823 (DOL W.A.B.

1977), contractors have been on notice under the DBA that they have to pay employees according to

locally prevailing practices." The court held that, because DBA wage determinations only list job

classifications and minimum wages without containing job descriptions, the contractor must turn to

"locally prevailing practices, and that, where union rates prevail, the proper classification of duties under

the wage determination is established by the area practice of union contractors signatory to the

relevant collective bargaining agreement. Further, the court cited to 29 C.F.R. § 5.13 to hold that it was

incumbent upon Respondent to obtain clarification of any questions or concerns from the Wage and

Hour Administrator."

VII. "Site of work" determinations

A. Controlling law

The Davis-Bacon Act, 40 U.S.C. § 276a, provides that for all contracts involving the federal

construction projects, mechanics and laborers employed directly on the site of the work shall be paid

local prevailing wage rates as determined by the Secretary of Labor. 29 C.F.R. § 5.2(l) was amended in

November and December 2000 and states:

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(1) The site of the work is the physical place or places where the building or work called

for in the contract will remain; and any other site where a significant portion of the

building or work is constructed, provided that such site is established specifically for the

performance of the contract or project;

(2) Except as provided in paragraph (l)(3) of this section, job headquarters, tool yards,

batch plants, borrow pits, etc., are part of the site of the work, provided they are

dedicated exclusively, or nearly so, to performance of the contract or project, and

provided they are adjacent or virtually adjacent to the site of the work as defined in

paragraph (1)(l) of this section;

(3) Not included in the site of the work are permanent home offices, branch plant

establishments, fabrication plants, and tool yards, etc., of a contractor or subcontractor

whose location and continuance in operation are determined wholly without regard to a

particular Federal or federally assisted contract or project. In addition, fabrication plants,

batch plants, borrow pits, job headquarters, tool yards, etc., of a commercial or material

supplier, which are established by a supplier of materials for the project before opening

of bids and not on the site of work as stated in paragraph (1)(l) of this section, are not

included in the site of the work. Such permanent, previously established facilities are not

a part of the site of the work, even where the operations for a period of time may be

dedicated exclusively, or nearly so to the performance of a contract.

29 C.F.R. § 5.2(l) (2000).

B. Scope of definition limited

In general, the courts have held that the statute requires the payment of prevailing wages for

those workers "employed directly upon the site of the work" such that, in some cases, the courts have

found the language at 29 C.F.R. § 5.2(l)(2) to be inconsistent with the plain, unambiguous language of

the statute. In L.P. Cavett Co. v. U.S. Dep't of Labor, 101 F.3d 1111 (6th Cir. 1996), the Department

asserted that the Secretary was not precluded from applying the broader definition of the phrase "site

of the work," as encompassed in 29 C.F.R. § 5.2(l), than that permitted by the Davis-Bacon Act because

the Federal-Aid Highway Act, which also applied, did not limit its scope to employees working directly at

the site of the work. The court rejected this argument, noting that the Federal-Aid Highway Act, 23

U.S.C. § 113(a), provided that employees "shall be paid wages at the rates not less than those prevailing

on the same type of work on similar construction in the immediate locality as determined by the

Secretary of Labor in accordance with the . . . Davis-Bacon Act . . . ." (emphasis added). Thus, the court

held that the Federal-Aid Highways Act incorporated from the Davis-Bacon Act not only its method of

determining prevailing wage rates, but also its method of determining prevailing wage coverage.

Accordingly, because the Department's interpretation of 29 C.F.R. § 5.2(l) was inconsistent with the

Davis-Bacon Act, it was inconsistent with the Federal-Aid Highways Act. In addition, the court noted that

if the Department of Labor truly believed that the Federal-Aid Highways Act dictated a more expansive

prevailing wage coverage than the Davis-Bacon Act, it would not have enacted only one set of

implementing regulations for both statutes. See also Cody Zeigler, Inc. v. Administrator, Wage & Hour

Division, ARB Case Nos. 01-014 and 01-015 (ARB Dec. 19, 2003) (although prequalification and

solicitation materials stated that project located in Franklin County, Ohio, work was performed in

Delaware County, Ohio and workers were entitled to higher prevailing wage rate for that location).

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C. Sites which are not covered

1. Batch plants - truck drivers hauling asphalt from batch plant to site

In L.P. Cavett Co. v. U.S. Dep't of Labor, 101 F.3d 1111 (6th Cir. 1996), Cavett was awarded a

contract to resurface ten miles of Indiana road. The contract specified that Cavett would perform

surface and shoulder removal, widening of the highway, and then resurfacing with a bituminous mix.

The parties decided that a bituminous plant would be established approximately three miles from the

midpoint of the highway to be reconstructed. Cavett obtained a subcontractor to haul materials,

supplies, and equipment from the bituminous batch plant to the highway. This subcontract did not

contain a Davis-Bacon prevailing wage standard. The DOL determined that the truck drivers hauling

asphalt from the batch plant to the highway site should have been paid at the prevailing wage rate

because the batch plant could be considered as part of the "site of the work" and assessed $11,202 in

back wages against Cavett. The Wage Appeals Board and magistrate upheld this determination.

The Sixth Circuit Court of Appeals held that the phrase "directly upon the site of the work" in the

statute is not ambiguous, and it followed the D.C. Circuit which had ruled that the provisions in the

Davis-Bacon Act were unambiguously intended to apply only to workers on the actual physical site of

the public work. Ball, Ball & Brosamer, Inc. v. Reich, 24 F.3d 1447 (D.C. Cir. 1994); Building &

Construction Trades Dep't. AFL-CIO v. U.S. Dep't of Labor Wage Appeals Bd., 932 F.2d 985 (D.C. Cir.

1991) ("Midway" case). In Ball, subcontractors transporting sand and gravel from a batch pit two miles

from the nearest point of the construction site were not covered. In Midway, the court found that the

phrase "mechanics and laborers employed directly on the site of the work" restricted the coverage to

employees working directly on the physical site of the building." Thus, stating that it was not

unreasonable to conclude that a facility located three miles from the site was not considered a part of

that site, the court in L.P. Cavett Co. v. U.S. Dep't of Labor, 101 F.3d 1111 (6th Cir. 1996), ruled that the

employees at issue were not working directly at the site of the work and, therefore, Cavett was not

responsible for payment of the prevailing wage rate.

In Bechtel Constructors Corp., 1991-DBA-3 (ALJ Aug. 21, 1997) (remand from ARB Case No. 95045A), the ALJ held that batch plants located 2 to less than 1/4 miles from the construction site were not

on the "site of the work" pursuant to the regulation at 29 C.F.R. § 5.2(l). See Building and Const. Trades

Dep't, AFL-CIO v. U.S. Dep't of Labor Wage Appeals Board (Midway), 932 F.2d 985 (D.C. Cir. 1991).

2. Transportation to and from dedicated borrow pit

In Les Calkins Trucking, 1990-DBA-65 (ALJ July 13, 1995), the ALJ cited to Ball, Ball & Brosamer,

Inc. v. Reich, 24 F.3d 1447 (D.C. Cir. 1994) and held that the statutory phrase "employed directly upon

the site of work," means "employed directly upon the site of work." Consequently, laborers who fit that

description are covered by the statute. Id. at 1452-53. On the other hand, those workers who are not

employed directly upon the site of work are not covered by the DBA. Id. at 1453. Based on the facts

before him, the ALJ concluded that employees engaged in the transporting of materials from a

dedicated borrow pit to the actual construction site were not entitled to the prevailing wage rate under

the Davis-Bacon Act.

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3. Tow truck operators assisting motorists on public highways

In Aetna Bridge Holding Co. v. Coletta's Downtown Auto Services, Inc., ARB Case No. 97-095,

1994-DBA-54, slip op. at 2 (ARB Oct. 29, 1996), the ARB held that tow truck drivers who assist motorists

and tow disabled vehicles from travel lanes on a bridge undergoing repair are not "laborers" or

"mechanics" performing "construction" within the meaning of the DBA and its related Acts, specifically

the Federal-Aid Highway Act, 23 U.S.C. § 113. The applicable wage determination did not contain a wage

for tow truck drivers, but the Wage and Hour Administration argued that the tow trucker drivers should

have been paid the wages provided in the wage determination for two-axle heavy or highway

construction vehicles. The ALJ determined that the tow truck drivers performed work on the site of the

construction, as required by the DBA, because they were located in actual or virtual adjacency to the

construction site. He also found that the drivers are analogous to employees of traffic service companies

who set up and service traffic control devices and are specifically covered by the DBA. The ARB

disagreed, stating that the tow truck drivers were clearly not part of a construction crew and that their

service was provided as a convenience to the public. Slip op. at 2-3. The tow truck operators performed

no work that facilitated the completion of the construction project, and the ARB held that, under these

facts, the work performed was too removed and weakly connected with actual construction work for

the tow truck operators to be considered "laborers" or "mechanics" under the DBA and related Acts. See

also Aleutian Constructors and Universal Services, Inc., WAB Case No. 90-11 (WAB Sept. 27, 1991)

(holding that food service workers and janitors were too indirectly tied to the construction project to be

covered).

C. Sites that are covered

1. Batch plant employee - site was integral and adjacent to work area for long,

continuous project (“dedicated” plant)

In Bechtel Constructors, Corp., ARB Case No. 95-045A (ARB July 15, 1996), Respondents were

engaged in a massive construction project consisting of 330 miles of aqueduct and pumping plants.

Batch plants were constructed near each of the pumping stations under construction, but were also

used to supply concrete for the aqueduct construction. The issue was whether employees at the

temporary batch plants were employed on the "site of work" and consequently covered by the

DBA. See 29 C.F.R. § 5.2(l)(1). The ARB interpreted the decision of the D.C. Circuit in Ball, Ball &

Brosamer, Inc. v. Reich, 24 F.3d 1447 (D.C. Cir. 1994), to permit coverage of workers working at

"temporary batch plants on land integrated into the work area adjacent to the pumping plants." The

Board also held that in work of the kind involved in the case before it, where the project consistent of

miles of narrow aqueduct, "work performed in actual or virtual adjacency to one portion of the long

continuous project is to be considered adjacent to the entire project." The ARB thereby rejected an

interpretation that the Ball decision requires that the statutory phrase "directly upon the site of the

work" limits the wage standards of the DBA to the "physical space defined by contours of the

permanent structures that will remain at the close of work."

The ARB noted that one Respondent argued that because "it supplied concrete to more than

one contractor on the project, its temporary batch plants were not dedicated exclusively to one contract

and therefore the functional test was not satisfied which the regulations and our predecessor, the Wage

Appeals Board applied in determining whether work was performed on site. United Construction

Co., WAB Case No. 82-10, January 14, 1983." The Board found, however, that "the applicable section of

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the regulations, Section 5.2(l)(1) does not explicitly contain a functional test" and that "to the extent

that a functional test is read into Section 5.2(l)(1), the Board refuses to draw an artificial distinction

between one portion of the project that is let under one contract and another portion of the same

project that is let under a separate contract." (footnote omitted). See also Phoenix-Griffin Group II, Ltd.

V. Chao, 376 F.Supp.2d 234 (D.R.I. 2005) (workers at a pre-fabrication facility "dedicated" to producing

material for a Davis-Bacon-covered worksite are covered); Winzler Excavating Co., 1987-DBA-3 (ALJ Feb.

17, 1988), aff'd. , WAB Case No. 91-02 (WAB, Feb. 23, 1993) (a borrow pit located 12 miles from the

sewer construction site was covered); Abhe & Svoboda, Inc., ARB Case Nos. 01-063, 01-066, 01-068, 01069, 01-070, ALJ Case Nos. 1999-DBA-20 to 27 (ARB July 30, 2004), recon. denied (ARB Oct. 15, 2004),

aff'd, 508 F.3d 1052 (D.C. Cir. 2007).

2. Off-duty police officers directing traffic

In Superior Paving & Materials, Inc., 1998-DBA-11 (ALJ Feb. 19, 1999), aff'd in relevant part,

ARB Case No. 99-065 (ARB June 12, 2002), the ALJ held that off duty police officers, who directed traffic

around a federal highway construction site, were entitled to the prevailing wage rate as flaggers. The

company argued that the police officers were independent contractors. Citing to N.B.A. Enterprises,

Ltd., CCH Lab. Cas. Admin. Rulings 32,068 (WAB 1991), the ALJ held that "if a person works on a job site

covered by the Davis-Bacon Act, that person is an employee within the meaning of the Act regardless of

the contractor. Congress clearly intended covering such workers regardless of the attempts of the

contractor to distance itself from Davis-Bacon obligations." In affirming the ALJs decision, the Board

noted that the police officers "performed the manual and physical work of ‘flaggers'" and they were,

therefore, "laborers" under the Act. The Board stated that the terms "laborer" and "mechanic" are

defined as follows in the regulations:

The term laborer or mechanic includes at least those workers whose duties are manual

or physical in nature (including those workers who use tools or who are performing the

work of a trade), s distinguished from mental or managerial . . . . The term does not apply

to workers whose duties are primarily administrative, executive, or clerical, rather than

manual.

29 C.F.R. § 5.2(m) (2001). See also Arliss D. Merrell, Inc., 1994-DBA-41 (ALJ Oct. 26, 1995).

3. Warehouse workers

In Dworshak Dam, Idaho, WAB Case No. 72-04 (WAB June 1, 1973) (holding that duties of

warehouse workers were directly related to the completion of the project such that they were covered).

4. Lease for construction of federal facility

In Phoenix Field Office, Bureau of Land Management, ARB Case No. 01-010 (ARB June 29,

2001), the ARB held that the Bureau of Land Management's (BLM) "lease" contract for construction of a

field office building in Phoenix was subject to the DBA's prevailing wage requirements. In so holding, the

ARB stated that "Davis-Bacon coverage does not depend on the contracting agency exercising complete

authority over the building that will be leased" and it cited to Military Housing, Ft. Drum, New York,

WAB Case No. 85-16 (Aug. 23, 1985) wherein the Wage Appeals Board held that the DBA applies to "a

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lease construction contract even while explicitly recognizing that the developers had some flexibility

with regard to building design, materials, and equipment."

VIII. Compensation

A. Constitutes part of prevailing wage rate; properly deemed a fringe benefit

Of central importance in determining whether certain fringe benefits are properly credited

against a worker's prevailing wage rate is whether the fringe benefit is "vested." In Cody Zeigler, Inc.,

ARB Case Nos. 01-014 and 01-015 (ARB Dec. 19, 2003), the Board held that "pension or other fringe

benefit plans which provide for immediate vesting are similar to deferred cash payments, whereas a

fringe benefit plan that does not provide for immediate vesting is not the functional equivalent of a

deferred cash payment that is creditable for DBA purposes."

Moreover, citing to 40 U.S.C. § 3142(2)(B) and 29 C.F.R. § 5.29(c) and (d), the Board noted that

"a particular fringe benefit need not be recognized beyond a particular area for the Secretary to find it

prevailing in that area; but in the ordinary case a fringe benefit will be considered bona fide only if it is

common in the construction industry." William J. Lang Land Clearing, Inc., ARB Case Nos. 01-072 to 01079, 1998-DBA-1 through 6 (ARB Sept. 28, 2004), aff’d, William J. Lang Land Clearing, Inc. v.

Administrator, Wage and Hour Div., 520 F. Supp. 2d 870 (E.D. Mich. 2007), aff’d, Case No. 07-2423,

2008 WL 3287097 (6th Cir. Aug. 6, 2008) (unpub.).

1. Contributions to employee pension plans

In Cody Zeigler, Inc., ARB Case Nos. 01-014 and 01-015, 1997-DBA-17 (ARB Dec. 19, 2003), the

Board held that "only the proportion of the pension fund contributions attributable to Davis-Bacon work

is credited toward the prevailing wage requirement." The Board noted that Employer contributed to the

pension fund at a rate that varied depending on an employee's job classification while working on a

Davis-Bacon contract. Employer also contributed "at a lower flat rate for all employees when working on

a private, non-Davis-Bacon project." Employer was not permitted to take a credit for pension plan

contributions based on non-Davis-Bacon work. But see Mistick v. Reich, 54 F.3d 900 (D.C. Cir. 1995)

(pension plan contributions not required to be annualized as the Department "presented no evidence

that Employer (was) funding its private pension fund contributions with Davis-Bacon Act work" and the

plan was vested).

B. Does not constitute part of prevailing wage rate

1. Bonuses

In Cody Zeigler, Inc., 1997-DBA-17 (ALJ Apr. 7, 2000), aff'd in relevant part, ARB Case Nos. 01014 and 01-015 (ARB Dec. 19, 2003), the ALJ disallowed Respondents' Christmas bonus as a fringe

benefit. Citing to Cody-Zeigler, Inc., WAB Case No. 89-19 (WAB Apr. 30, 1991), the ALJ held that bonuses

do not constitute bona fide fringe benefits or wages under the Davis-Bacon Act.

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In William J. Lang Land Clearing, Inc., 1998-DBA-1 through 6 (ALJ Feb. 22, 2001), aff'd in

relevant part, ARB Case Nos. 01-072 to 01-079 (ARB Sept. 28, 2004), aff’d, William J. Lang Land

Clearing, Inc. v. Administrator, Wage and Hour Div., 520 F. Supp.2d 870 (E.D. Mich. 2007), aff’d, Case

No. 07-2423, 2008 WL 3287097 (6th Cir. Aug. 6, 2008) (unpub.), the ARB upheld the ALJ's finding that

"the irregularly made cash payments to employees were not bona fide vacation fringe benefits"; rather,

they constituted "bonus" payments that could not be considered fringe benefits under the Act. The

Board cited to testimony of the employees and pre-hearing deposition testimony in support of finding

that the irregular cash payments were "bonuses."

2. Employer's administrative costs

In Cody Zeigler, Inc., 1997-DBA-17 (ALJ Apr. 7, 2000), aff'd in relevant part, ARB Case Nos. 01014 and 01-015 (ARB Dec. 19, 2003), the ALJ cited to Collinson Construction Co., WAB Case No. 76-09

(WAB, Apr. 20, 1997) and held that Employer improperly sought to claim its administrative costs in

providing employee benefits as a fringe benefit. Employer argued that 29 C.F.R. § 5.5(a)(1) provided for

a deduction for such costs. However, the ALJ noted that Employer was required to obtain approval from

the Secretary of Labor before making these payments to a third party to administer the employees'

benefits which it failed to do.

3. Vacation and holiday benefits, unfunded plans

In Cody Zeigler, Inc., 1997-DBA-17 (ALJ Apr. 7, 2000), aff'd in relevant part, ARB Case Nos. 01014 and 01-015 (ARB Dec. 19, 2003), the ALJ noted that vacation plans are among the enumerated

fringe benefits at 29 C.F.R. § 5.29. However, he found that Employer's plan was unfunded "as there

(was) no evidence that Employer relinquished control over the fringe benefit funds involved." As an

unfunded plan, the ALJ noted that it did not comply with the requirements of 29 C.F.R. § 5.28(b). He

stated that there was no evidence that Employer "had provided a written explanation of the vacation

plan to its employees or that it even had a written plan." Slip op. at 37. Moreover, the ALJ found that

employees were not eligible for the vacation plan until they had worked for the company for one year

such that those working for Employer less than a year "clearly could not legally enforce their rights

pursuant to § 5.27(b)(2) to the amount deducted from their prevailing wage for this claimed benefit." As

a result, the ALJ ordered Employer to pay back wages to those employees ineligible for vacation or who

did not receive their vacation. See also William J. Lang Land Clearing, Inc., 1998-DBA-1 through 6 (ALJ

Feb. 22, 2001), aff'd in relevant part, ARB Case Nos. 01-072 to 01-079 (ARB Sept. 28, 2004), aff’d,

William J. Lang Land Clearing, Inc. v. Administrator, Wage and Hour Div., 520 F. Supp. 2d 870 (E.D.

Mich. 2007), aff’d, Case No. 07-2423, 2008 WL 3287097 (6th Cir. Aug. 6, 2008) (unpub.) (vacation

payments did not qualify as fringe benefits under 29 C.F.R. § 5.5(a)(1)(i) because they were not paid on a

regular basis- i.e. , at least quarterly).

4. Apprentice training program; no “reasonable relationship” established

In Royal Roofing Co., 1999-DBA-29 (ALJ June 11, 2003), aff'd, ARB Case No. 03-127 (ARB Nov.

30, 2004), the ALJ held that, pursuant to Miree Const. Corp. v. Dole, 930 F.2d 1526 (11th Cir. 1991),

Respondent violated the Act by taking "credit for excessive training contributions it made to . . . (the)

apprenticeship training program" and the amount claimed by Respondent did "not bear a reasonable

relationship to the actual benefit received by Royal Roofing employees." The ALJ noted that

"contributions were taken from employees' paychecks without their knowledge and without any

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tangible benefit to the employees." Further, Respondent "failed to offer a reasonable explanation for

the high administrative and legal expenses other than apparently as start-up costs either predating or

postdating the period at issue . . .." The ALJ noted that Respondent deducted hourly contributions in the

amounts of $0 to $6.99 from employees who were making the same wages. Moreover, Respondent

admitted that $0.20 per hour per employee was sufficient to meet training expenses. The ALJ found that

the "unreasonableness of the excess contributions" was buttressed by the "erratic and disorganized

manner in which employees were charged with fringe benefit contributions . . .." Specifically, the ALJ

noted that fringe benefits payments to apprenticeship programs were charged "against both

apprentices and journeymen despite journeymen lacking a direct benefit." Finally, the ALJ found the

contributions were unreasonable because of Respondent's failure to place the contributions in a fund

managed by a trustee or third person as required by 40 U.S.C. § 276a(b) and 29 C.F.R. § 5.26.

The ALJ concluded that "[u]sing funds contributed on behalf of Royal Roofing's employees to

defend a case against these employees does not benefit these employees" and "[c]learly, this is not a

‘fringe benefit' for these employees." The ALJ also noted that Respondents failed to notify employees, in

writing, of the fringe benefit contributions as required by § 276a of the Act. Finally, the ALJ held that

Respondent must apply the "annualization principle" to determine proper fringe benefit contributions

per Davis-Bacon Act employee "when the actual contributions are not reasonably related to training":

[T]he IRCC plan contemplates year round training and thus year-long benefits to the apprentices

enrolled therein. Since Royal Roofing contributed only to the IRCC plan during Davis-Bacon projects and

the IRCC plan contemplates year-round benefits for its apprentices, Royal Roofing's contributions must

be annualized.

In this vein, the ALJ held that dividing Royal Roofing's total contribution into the IRCC plan in

1996 by the total number of hours working by Royal Roofing employees on all projects in 1996 in order

to yield an annualized credit amount of $.50 per hour for apprentice training for each Davis-Bacon

employee.

As previously noted, the ALJ's decision was subsequently affirmed in Royal Roofing, Inc. v.

Administrator, Wage & Hour Division, ARB No. 03-127 (ARB Nov. 30, 1994). Notably, a federal district

court and the Ninth Circuit also affirmed the ALJ's decision in Independent Roofing Contractors Council

Apprentice Training Trust Fund ex rel, Royal Roofing, Inc. v. Chao, Case No. 5:05-CV-03603 JW (N.D.

Cal. Sept. 18, 2006), aff’d, Case No. 06-16983 (9th Cir. Nov. 14, 2008) (unpub.).

5. Profit-sharing plans

In Cody Zeigler, Inc. v. Administrator, Wage & Hour Division, ARB Case Nos. 01-014 and 01-015

(ARB Dec. 19, 2003), the Board affirmed disallowance of Employer's claim for credit for contributions to

a profit-sharing plan as a fringe benefit credit against the prevailing wage rate. See 29 C.F.R. § 5.28(b)(4).

6. Health insurance

In Cody Zeigler, Inc., 1997-DBA-17 (ALJ Apr. 7, 2000), aff'd in relevant part, ARB Case Nos. 01014 and 01-015 (ARB Dec. 19, 2003), the ALJ held that health insurance constitutes a bona fide fringe

benefit which justifies a credit towards the prevailing wage determination. However, the ALJ found that

the employer failed to properly account for co-pays and it used a "blended rate for family and individual

health coverage rather than determining the benefit to each employee based on his or her type of

coverage" such that back wages were due for these violations. Moreover, the ALJ held that it was

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improper for the employer to seek a "deduction for benefits that employees were ineligible to receive"

because they were on a union plan with a waiting period. See also William J. Lang Land Clearing, Inc.,

1998-DBA-1 through 6 (ALJ Feb. 22, 2001), aff'd in relevant part, ARB Nos. 01-072 to 01-079 (ARB Sept.

28, 2004), aff’d, William J. Lang Land Clearing, Inc. v. Administrator, Wage and Hour Div., 520 F. Supp.

2d 870 (E.D. Mich. 2007), aff’d, Case No. 07-2423, 2008 WL 3287097 (6th Cir. Aug. 6, 2008) (unpub.) (it

was improper to take a prevailing wage credit by averaging more expensive family premiums with less

expensive individual premiums).

7. Meals and lodging

In William J. Lang Land Clearing, Inc., ARB Case Nos. 01-072 to 01-079, 1998-DBA-1 through 6

(ARB Sept. 28, 2004), aff’d, William J. Lang Land Clearing, Inc. v. Administrator, Wage and Hour Div.,

520 F. Supp. 2d 870 (E.D. Mich. 2007), aff’d, Case No. 07-2423, 2008 WL 3287097 (6th Cir. Aug. 6, 2008)

(unpub.), the ARB noted that the provisions at 40 U.S.C. § 276(b)(2)(B) provide for a number of fringe

benefits which may be credited towards the prevailing wage rate, but the provisions do not specifically

mention meals and lodging. The ARB further concluded that meals and lodging do not constitute

"other bona fide fringe benefits" that are creditable against the prevailing wage rate. In disallowing

meals and lodging paid by Respondent for long-distance Davis-Bacon contracts, the Board reasoned:

The employee lodging and food expenses in this case were clearly undertaken for Lang's

primary benefit. Lang could only perform its far distant DBA contracts (and benefit

thereby) if its employees incurred the substantial detriment of traveling to locales far

from their homes for most of every work week. Lang's employee travel to the ‘special'

out-of-area jobs served the primary purpose and benefit of the employer. Lang required

employees to travel to the ‘special' jobs as a condition of their employment. The

employees had no choice but to travel on Lang's business in order to get and keep their

jobs. (citations omitted). We accordingly conclude Lang's subsistence payments for its

employees meals and lodging were for the primary purpose of furthering the employer's

business and not for the primary benefit of the employees. These subsistence payments

cannot be credited as acceptable DBA cash payments in lieu of fringe benefits.

Slip op. at 18. See also Matter of Calculus, Inc., 1993 WL 537381, WAB Case No. 93-06 (WAB Oct. 29,

1993).

ARB FINDS IN SPLIT DECISION THAT A BALANCING OF BENEFITS TEST APPLIES TO DETERMINE

WHETHER AN EMPLOYER IS OBLIGATED TO REIMBURSE EMPLOYEES FOR LODGING EXPENSES

DAVIS-BACON ACT; REIMBURSEMENT FOR LODGING EXPENSES SHOULD BE BASED ON ACTUAL

EXPENSES WHERE EMPLOYER LEFT IT TO EMPLOYEES TO FEND FOR THEMSELVES; PER DIEM MAY BE

CONSIDERED, HOWEVER, WHERE IT WAS A PARTIAL PAYMENT FOR SUBSISTENCE COSTS

In Weeks Marine, Inc., ARB Nos. 12-093, -095, ALJ No. 2009-DBA-6 (ARB Apr. 29, 2015), the ALJ

concluded that the Respondent violated the Davis-Bacon Act (DBA) by failing to reimburse certain of its

employees who did not live within daily commuting distances, for lodging costs for the amount above

the per diem during the dredging of the beach at Fire Island, New York. The ALJ, however, rejected

WHD's assessment that the Respondent owed $21,831.35 in unreimbursed lodging costs to the

employees based on their actual incurred lodging costs. Instead, the ALJ ordered the Respondent to pay

a total of $9,058.84 to the employees based on the lowest lodging rate incurred by the employees, less

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credit for any CBA per diem received that was not previously credited against other violations pursuant

to an earlier partial settlement. Both the Respondent and the WHD Administrator appealed to the ARB.

The ARB stated that "the primary issue before [it] is whether an employer is obligated under 40 U.S.C.A.

§ 3142 of the Davis Bacon Act to reimburse lodging expenses incurred by employees who exclusively

work for the employer at a job site beyond commuting distance from their home residence."

USDOL/OALJ Reporter at 6. The ARB further stated that "[t]he question before us is thus whether, by

requiring the Local 25 employees to pay their own lodging costs, Weeks Marine effectively shifted to the

employees a cost that was the employer's obligation to bear; a cost that could not lawfully have been

directly deducted from the employees’ wages had Weeks Marine provided their lodging at company

expense." Id. at 7.

Reviewing statutory and caselaw authorities, the ARB found that to determine whether the

Respondent is obligated under the DBA to reimburse the employees their lodging costs, it must initially

be determined "whether the employees’ on-site, away-from-home lodging was primarily for the benefit

and convenience of Weeks Marine or primarily benefited the Local 25 workers. If the substantial

evidence of record supports the ALJ's finding that the lodging was primarily for Weeks Marine's benefit

and convenience, the company is obligated to reimburse the employees, as the failure to do so would

effectively constitute a de facto deduction in the employees’ required prevailing wages. If, on the other

hand, the lodging was primarily for the benefit of the employees, Weeks Marine is not obligated to

reimburse the Local 25 employees, provided Weeks Marine establishes that it regularly furnishes such

lodging to all of its employees or that the same or similar facilities are customarily furnished by other

employers engaged in the dredging business." Id. at 11. The ARB remanded to the ALJ to make findings

of fact on these questions.

The ARB rejected the Respondent's contention that a ruling requiring it to reimburse its

employees’ lodging costs constitutes an unlawful rule by adjudication and/or violates its due process

rights. The ARB held that it rejected "both contentions to the extent that any final ruling eventually

issued in this case is consistent with the ‘balancing of benefits’ test, which relies on established legal

principles. While KP&L, Lang , and Calculus may address different contexts in which the applicability of

40 U.S.C.A. § 3142(c)(1) was raised, the test in each instance, equally applicable in this case (as has been

discussed) is whether or not the lodging at issue is for the primary benefit and convenience of the

employer or the employees. Consequently, if the final decision reached in this case requires Weeks

Marine to reimburse its employees’ lodging costs, that decision constitutes neither rulemaking through

adjudication nor a violation of Weeks Marine's due process rights." Id. at 14 (footnote omitted). The

precise nature of the Respondent's argument is not set out in the ARB's decision, but it appears to have

been centered on whether a Respondent is required to affirmatively reimburse employees for lodging

costs, as opposed to refraining from deducting those costs from their pay.

The ARB reversed the ALJ's determination that employees were only entitled to a discounted

lodging reimbursement. The ARB found that should the employees ultimately be found to prevail, they

would be entitled to reimbursement of actual lodging costs because "40 U.S.C.A. § 3142(c)(1) requires

the "unconditional" payment of the prevailing wage without deduction or rebate." Id. at 14. The ARB,

however, found that the per diem payment, which was effectively a partial reimbursement for

subsistence costs, could be taken into consideration in calculating the amount of any reimbursement

owed. The ARB found that the Respondent, by leaving it to the employees to find their own lodging,

placed itself at risk for paying whatever lodging costs the employees were forced to assume. The ARB

suggested that an employer subject to the DBA had options, such as providing reasonable lodging, or

identifying reasonable lodging for which the employer would provide reimbursement.

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One member of the ARB panel dissented:

I would reverse the ALJ and, therefore, respectfully dissent for several reasons. I will

simply list those reasons due to the age of this case and that we are remanding it for

further consideration. The precise question I see in this unique case is whether federal

law requires Weeks Marine to pay the relocation, lodging, and food expenses of a nonemployee (new hire) who accepts new employment at a worksite disclosed in the job

solicitation for employment under the facts of this case. In my view, none of the law cited

by the Administrator (statutes, regulations, written guidance policy manual, cases)

requires the payment of such extraordinary expenses for a new employee who chooses

to work away from his home. After the bidding and contracting process ended in this case,

nothing in the record shows that a payment of this extraordinary expense was required

or that such payment was the prevailing practice in the industry. Weeks Marine hired

individuals for a job at Fire Island, New York. Folks who took that job chose to go there.

The record is unclear about the emergency work in Philadelphia and perhaps that needs

to be clarified. To send this back to the ALJ to apply a "balancing test" assumes that there

is a statute, regulation, or other binding law that would potentially obligate Weeks Marine

for the expenses sought in this case. I believe the "benefit of the employer" rule does not

apply to this case. In my view, Congress must pass this type of legislation.

Id. at 16.

ADMINISTRATOR FAILED TO REBUT PRESUMPTION THAT LODGING IS FOR THE BENEFIT OF

EMPLOYEES WHERE: EMPLOYEES WERE REQUIRED TO TRAVEL IF THEY WANTED TO REMAIN ACTIVELY

EMPLOYED—EMPLOYEES HIRED OFF OUT-OF-WORK LIST OF LOCAL UNION EMPLOYEES DID NOT HAVE

EXPECTION OF WORKING IN ANY ONE LOCATION OR PRIMARILY IN THEIR PLACE OF RESIDENCE—CBA

PROVIDED FOR A PER DIEM—EMPLOYEES STAYED AT MOTELS OR HOTELS BECAUSE THEY WERE NOT

RESIDENTS OF THE AREA

In Weeks Marine, Inc., ARB No. 2017-0076, ALJ No. 2009-DBA-00006 (ARB Mar. 10, 2020), the

ARB had previously remanded the case for the ALJ to indicate what evidence was weighed when finding

that lodging secured for nine Local 25 employees was primarily for the benefit of Weeks Marine, Inc.

(“Weeks”), the contractor on a dredging project subject to the Davis-Bacon Act (“DBA”). The question

was whether Weeks was liable for lodging costs above a $35 per diem provided for by the collective

bargaining agreement. On remand, the ALJ made further findings of fact, weighed the balance of the

benefits, and again concluded that the housing primarily benefited Weeks. The ALJ ordered payment of

$17,006.55 to the Local 25 employees for the underpayment. On appeal, the ARB reversed, vacated the

ALJ’s award of relief, and remanded with instructions for the ALJ to deny the claim for relief.

The ARB first outlined the relevant provisions of the DBA, the Copeland Act, the Fair Labor Standards

Act, the implementing regulations, and the Second Circuit’s decision in Soler v. G. & U. Inc., 833 F.2d

1104 (2d Cir. 1987). The ARB noted that under Soler, the Administrator has the burden to rebut a

presumption that lodging is for the benefit of the employees by showing that the lodging instead

benefited the employer. The ARB stated that it agreed with Weeks that “the DBA does not affirmatively

require an employer to pay employee lodging costs in addition to prevailing wage and fringe benefits

and the ALJ erred in so concluding.” Slip op. at 5. The ARB also looked to the Wage and Hour Division’s

Field Operations Handbook (“FOH”) for guidance on what constitutes rebuttal evidence. Taking all this

into consideration, the ARB held that:

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the Administrator can rebut the presumption that lodging is primarily for the benefit of

the employee by showing that the employee fits under the on-the-road exception, where

the employee is required to live on site, where the employee has to be “on call,” or where

the employee is burdened by the lodging for the convenience of the employer.

Id. at 7.

In the instant case, the ARB found that testimony that most dredging jobs are not near

employees’ homes and require employees to travel to the work site was sufficient to invoke the

presumption that the lodging secured by Weeks for the Local 25 employees was for the benefit of those

employees. The ARB was not persuaded by the findings relied on by the ALJ to find that the

Administrator rebutted the presumption: that dredging employers need experienced and qualified

employees to further the employer’s job; that Local 25 employees were more specialized that Local 138

employees, as they were capable of operating more sophisticated machinery but who may live outside

the commuting area; that the CBA’s partial payment supported an inference that the expense benefits

the employer; and that local lodging allowed the employees to work long shifts which allowed for timely

completion of the project.

The ARB determined that none of these reasons was relevant rebuttal. The ARB observed that

the ALJ had not cited findings that Local 25 employees were “on the road” or that Weeks mandated

where they stayed. The ARB stated the Local 25 employees were not “on call” and that it could not be

said that where the employees chose to live was for the convenience of Weeks. The ARB was not

persuaded by the comparison to Local 138 employees as those employees worked under a different

CBA. The ARB also distinguished the caselaw precedent relied on by the ALJ. The ARB determined that

the ALJ had made sufficient findings of fact for the ARB to conclude that the WHD failed to rebut the

presumption. Specifically, the ARB pointed to the following findings of fact:

•

•

•

•

Local 25 members are required to travel throughout the territorial zone covered by the Local 25

CBA if they want to remain actively employed.

Employees hired off of an out-of-work list of Local 25 employees “are not hired with the

expectation that they are going to work for the company in any one location or to work

primarily in their place of residence.”

The CBA provides for a minimum subsistence allowance of thirty-five dollars a day to defray the

costs of obtaining housing, meals, laundry, and work clothes.

The Employees stayed at motels or hotels during the Fire Island job because they were not

residents of the area and had to reside within commutable distance of the job site.

Id. at 8-9 (citations to ALJ decision omitted).

C. Overtime wages cannot be reduced by fringe benefits

In Cody Zeigler, Inc., 1997-DBA-17 (ALJ Apr. 7, 2000), aff'd in relevant part, ARB Case Nos. 01-014

and 01-015 (ARB Dec. 19, 2003), the ALJ held that the regulations at 29 C.F.R. §§ 5.32(a) and 5.32(c)(2)

prohibit the reduction of overtime rates based on Davis Bacon fringe benefit contributions. He cited

to Delta Construction, WAB Case No. 81-15 (WAB Sept. 20, 1983) and held that "[c]ash wages may not

be reduced when determining overtime wages."

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D. Integral and indispensible part of the principle activity, compensation required

In Pythagoras General Contracting Corp., 2005-DBA-14 (ALJ June 4, 2008), aff’d, ARB Nos. 08-107,

09-007 (ARB Feb. 10, 2011) (errata issued Mar. 3, 2011), Respondent had a contract with the New York

Housing Authority to renovate interiors and exteriors of residential buildings. Respondent argued that

employees should only be compensated for performing actual work on the buildings. The ALJ, on the

other hand, held that “the time Pythagoras employees spent gathering tools and supplies and receiving

daily instructions is an integral and indispensible part of the principle activity (of renovating the

buildings), and, therefore, these actions are compensable” under Steiner v. Mitchell, 350 U.S. 247, 253

(1956).

IX. Relief

A. Debarment

1. Generally

a.

Different debarment standards under DBA and DBA-related acts

DEBARMENT STANDARDS ARE DIFFERENT UNDER THE DAVIS-BACON ACT (DBA) AND THE DAVISBACON RELATED ACTS (DBRA); DBA STANDARD IS MERE DISREGARD WHERE AS DBRA STANDARD IS

AGGRAVATED OR WILFUL; DBA STANDARD MANDATES A THREE-YEAR PERIOD OF DEBARMENT

WHEREAS DBRA DEBARMENT IS “NOT TO EXCEED” THREE YEARS

In Administrator, Wage and Hour Div., USDOL v. Coleman Construction Co., ARB No. 15-002,

ALJ No. 2013-DBA-4 (ARB June 8, 2016), the ARB found that the ALJ had erred by conflating the

standards for debarment under the Davis-Bacon Act, and the standard under the Davis-Bacon Related

Acts. The ARB explained:

The legal standards for debarment under the Davis-Bacon Act are different from the legal

standards for debarment under Davis-Bacon Related Acts. Under the Davis-Bacon Act, the

Comptroller General keeps “a list of the names of persons whom the Comptroller General

has found to have disregarded their obligations to employees.” Davis-Bacon prohibits

federal contracts from being awarded to such persons “until three years have elapsed

from the date of publication of the list.”

In contrast, the National Housing Act and Contract Work Hours and Safety Standards Act,

the two Davis-Bacon Related Acts under which this case is being brought, do not include

a debarment provision. Rather, it is the Department of Labor regulations, duly

promulgated pursuant to Reorganization Plan No. 14 of 1950, that provide for debarment

for violations of a Related Act. While similar to the Davis-Bacon Act language, the relevant

regulatory language applicable to Related Acts is not identical. The relevant provision

prohibits the awarding of federal contracts to those “found . . . to be in aggravated or

willful violation ” of the labor standards provisions of a Davis-Bacon Related Act and

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imposes debarment “for a period not to exceed 3 years.” In other words, debarment

under the Davis-Bacon Act differs from debarment under Related Acts in two substantive

ways: First under Davis-Bacon, the standard for debarment is relatively low—a mere

“disregard[ing]” of one’s obligations suffices—whereas under Related Acts such as at

issue here, the standard for debarment is a tad more stringent—one has to have been in

“aggravated or willful violation” of the relevant labor standards provisions. Second, the

Davis-Bacon Act and implementing regulations mandate a three-year period of

debarment, whereas under a Related Act, the regulations provide for a debarment period

“not to exceed 3 years.”

USDOL/OALJ Reporter at 16-17 (footnotes omitted). In the instant case, the ALJ’s conflation of the two

standards was harmless because the Respondent’s violations unequivocally were deliberate and

intentional within the meaning of the regulatory “willful” standard. The ARB noted that its predecessor,

the Wage Appeal Board, held that “once the Administrator shows that a violation is ‘aggravated or

willful,’ debarment should be for the full three years except in ‘extraordinary circumstances.’” Id. at 80

(footnote omitted). In the instant case, the Respondent knowingly misclassified workers, and purposely

destroyed time records in an attempt to shortchange workers of nearly $100,000 in wages. The ARB

noted that this was precisely the type of behavior for which a three year debarment will be upheld. The

ARB also debarred the subcontractor’s president.

STANDARD FOR DEBARMENT FOR A DAVIS-BACON RELATED ACT VIOLATION IS HEIGHTENED,

REQUIRING A FINDING OF A WILLFUL OR AGGRAVATED VIOLATION; ALJ’S APPLICATION OF WRONG

STANDARD MAY BE HARMLESS ERROR WHERE SHE FOUND A WILLFUL VIOLATION, BUT ONLY IF THE

FINDING OF WILLFUL VIOLATION IS SUPPORTED BY SUBSTANTIAL EVIDENCE (WHICH IN THE INSTANT

CASE IT WAS NOT)

WILLFUL OR AGGRAVATED VIOLATION OF A DAVIS-BACON RELATED ACT (DBRA) REQUIRES ACTUAL

KNOWLEDGE OR AWARENESS OF THE VIOLATION, AND NOT MERELY ONE’S OBLIGATIONS UNDER THE

DBRA OR ANY APPLICABLE CONTRACTS

In J.D. Eckman, Inc., ARB No. 2017-0023, ALJ No. 2015-DBA-00030 (ARB July 9, 2019) (per

curiam), the ALJ had ordered certain Respondents (a first-tier subcontractor — 446 Painting — and its

president — Hauth) to be debarred for violating the prevailing wage provisions at 29 C.F.R. § 5.5(a)(1)

and (4), in a matter involving the Federal-Aid Highway Act, which is a Davis-Bacon Related Act (DBRA).

On appeal, it was uncontroverted that the ALJ had cited the wrong debarment standard. She had

“applied the debarment standard for the DBA [29 C.F.R. § 5.12(a)(2)] (requiring only a disregard of

obligations for debarment), rather than the heightened requirement for debarment for DBRA violations

[29 C.F.R. §5.12(a)(l)] (requiring a willful or aggravated violation for debarment).” Slip op. at 4-5

(footnotes omitted). The WHD Administrator, however, argued that this was harmless error because the

ALJ had found that the Respondents in question had willfully violated the Act. The ARB stated that this

finding may have been dispositive if supported by substantial evidence—however it was not. The ALJ

had relied on the fact that a then vice-president of one of the Respondents had failed to read the “DBA”

provisions in the contract and had not ensured compliance as warranted. The ARB wrote:

Willful or aggravated violation of the DBRA requires actual knowledge or awareness of

the violation, and not merely one’s obligations under the DBRA or any applicable

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contracts. The closest the ALJ came to finding that Hauth had any knowledge of violations

was “that he was at least on notice that there was a delay in Panthera’s payrolls” because

of “paperwork requirements, ” despite his and Respondent Manganas’ denials at the

hearing that Hauth had anything to do with payroll. While these findings of constructive

knowledge may tend to support a “disregard of obligations” debarment standard, they

fall significantly short of satisfying the appropriate “aggravated or willful” standard.

Indeed, the Assistant District Director for the district office of the Wage and Hour Division

testified that other than the contract that originated the work in this case, he did not have

any documentation that would support a contention that Hauth willfully violated the Act.

. . . He also testified that there was no evidence that Hauth knew about a violation other

than that he represented himself as vice-president and signed the contract as such. . . .

Thus, we hold that the ALJ’s putative finding that Hauth “committed willful violations of

the DBA,” . . . is not supported by a preponderance of the evidence of record.

Slip op. at 6 (citations and footnotes omitted) (emphasis as in original). The ARB also found that the ALJ’s

finding that Respondent Hauth was not “entirely credible” did not constrain a reversal by the ARB, as

credibility was not relevant to the ALJ’s legal error; her credibility determination was ambiguous insofar

as it was not linked to any specific findings of fact related to the error; and the ALJ’s reference in relation

to the credibility determination to the “DBA” rather than the “DBRA” was clearly erroneous. The ARB

remanded for the ALJ to issue revised findings of fact and conclusions of law consistent with the record,

the ARB’s decision, and the correct regulation.

b.

Debarment is remedial, not punitive

In finding that Respondent failed to pay the prevailing wage and fringe benefits and

misrepresented that rates paid to the contracting agency, the ALJ, in Minor Construction Co., 1995-DBA42 (ALJ June 12, 1997), held that debarment for three years was a remedial measure, rather than a

punishment. See also Palisades Urban Renewal Enterprises, LLP, 2006-DBA-1 (ALJ Aug. 3, 2007), aff’d,

ARB Case No. 07-124 (ARB July 30, 2009) (debarment is intended to be "remedial" in nature; violations

of the Act "do not per se result in debarment") (on appeal to the ARB, Case No. 07-124); S.A. Healy Co.

v. Occupational Safety & Health Review Comm'n, 96 F.3d 906, 911 (7th Cir. 1996); United States v.

Bizzell, 921 F.2d 263, 267 (10th Cir. 1990); Bae v. Shalala, 44 F.3d 489, 493 (7th Cir. 1995).

c. Intent to violate required

In Pythagoras General Contracting Corp., 2005-DBA-14 (ALJ June 4, 2008), aff’d, ARB Nos. 08107, 09-007 (ARB Feb. 10, 2011) (errata issued Mar. 3, 2011), the Administrative Law Judge properly

concluded that debarment was warranted because company officials signed and certified the accuracy

of incomplete and inaccurate payroll records reflecting misclassification of workers, these records were

“manipulated” with regard to one employee, the company did not correct ongoing violations to ensure

future compliance, and company officials engaged in attempted witness coercion or intimidation. The

only modification made by the Board was that the back pay and fringe benefit award was increased

from the judge’s finding of $447,670.36 to $792,396.19.

In Sundex, Ltd., ARB Case No. 98-130, 1994-DBA-58 (ARB Dec. 30, 1999), the ARB declined to

disturb the ALJ's findings that the contractor's owner was not a credible witness and violations of the

Davis-Bacon Act and the CWHSSA were committed. The ARB noted that the ALJ's findings were based

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upon his first-hand observations of the witness' demeanor on the stand. Turning to the issue of

debarment, the ARB found that establishment of a "level of culpability beyond mere negligence,

involving some element of intent" was required. Citing to G&O General Contractors, Inc., WAB Case No.

90-35 (WAB Feb. 19, 1991), the ARB stated that, once an intentional violation is established, "the

standard for debarment is a ‘bright-line' test, i.e. a 3-year debarment period is mandatory, without

consideration of mitigating factors or extraordinary circumstances." The ARB noted that, while there is a

statutory debarment provision under the Davis-Bacon Act, the DOL's regulations also provide for

debarment for violations of "related acts," including the CWHSSA. Therefore, where the contractor

intentionally failed to pay proper overtime as required by the CWHSSA, the ALJ properly entered an

order of debarment.

For additional cases, see Cody Zeigler, Inc. v. Administrator, Wage & Hour Division, ARB Case

Nos. 01-014 and 01-015 (ARB Dec. 19, 2003) (employer was on notice that certain fringe benefit costs

could not be credited against the prevailing wage rate and fact that Employer still claimed a credit

constituted a "willful" violation); Thomas and Sons Building Contractors, Inc., ARB Case No. 00-050,

Case No. 1996-DBA-37 (ARB Aug. 27, 2001), order denying reconsideration (ARB Dec. 6, 2001)

("disregard for obligations" under the Act means a level of culpability beyond mere negligence, involving

some element of intent; "once a violation is established, the standard for debarment is a ‘bright line'

test, i.e., a three-year debarment period is mandatory, without consideration of mitigating factors or

extraordinary circumstances"); Berbice Corp., 1998-DBA-9 (ALJ Apr. 16, 1999) (evidence must establish a

level of culpability beyond mere negligence).

DEBARMENT REQUIRES DISREGARD OF OBLIGATIONS UNDER THE DAVIS BACON ACT INVOLVING

SOME ELEMENT OF INTENT

In NCC Electrical Services, Inc., ARB No. 13-097, ALJ No. 2012-DBA-6 (ARB Sept. 30, 2015), the

ARB Majority (Igasaki and Corchado) upheld ALJ’s summary decision that Respondents falsely certified

nine employees on project as part of a bona fide apprenticeship program, and misclassified employees

as “apprentices” or “laborers” as opposed to electricians. Board Majority finds that while mere

violations of obligations under the law do not constitute a “disregard,” for debarment, evidence must

establish a level of “culpability beyond negligence.” “Some element of intent“ is required although

intent need not arise to “willful attempts to avoid the DBA’s requirements.” (Italics in original)

Admission of subcontractor that he created his own classifications based on the applications, resumes,

licensure, and experience of employees rather than the work performed as required under the DBA; its

certification of apprenticeship program without verification of certification; and its failure to review DBA

requirements, reflects necessary “element of intent.” Three year debarment upheld.

Dissent (Brown) would have found that Napie’s testimony created a sufficient issue of material

fact as to “intent.” Dissent asserts that prior cases do not support Majority’s conclusions as to intent. He

would remand for an evidentiary hearing.

d.

Authority to lessen three year period of debarment

i. ALJ without authority

In Structural Concepts, Inc., 1994-DBA-23 (ALJ Feb. 23, 1995), the ALJ held that while mitigating

factors may affect debarment under labor standards regulations, they do not have an impact on the

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debarment issue under the Davis-Bacon Act. 29 C.F.R. § 512(a)(1). Additionally, it was held that an ALJ

lacks the discretion to lessen the three year period of debarment as contained in 40 U.S.C. § 276(a)(2).

ii. Administrator has authority

Abuse of authority

In Bhatt Contracting Co., ARB Case No. 97-068, 1993-DBA-124 (ARB Jan. 26, 1998), the ARB

rejected the "untimely decision" of the Administrator who denied the contractor relief from debarment.

The ARB noted that the Acting Administrator "breached a material term of the consent decree by not

placing Bhatt on the ineligible list for nine months." Moreover, the ARB stated that the Acting

Administrator "failed to take advantage of the remedial nature of our prior ruling by not ‘immediately'

issued a decision regarding Bhatt's renewed request for relief." Rather, the ARB noted that it took the

Acting Administrator 78 days to issue its denial of the contractor's request for relief from debarment

pursuant to 29 C.F.R. § 5.12(c) (a contractor may request removal from the debarment list after six

months). As a result, the ARB rejected the Acting Administrator's decision and determined that the

contractor's petition set forth sufficient facts under § 5.12(c) to support relief from debarment.

d. Debarment of individuals, as well as company, authorized

In Facchiano Const. Co. v. U.S. Dep't of Labor, 987 F.2d 206 (3d Cir. 1993), the circuit court held

that, pursuant to 29 C.F.R. § 5.12(a)(1), it was proper to debar responsible corporate officers, in addition

to the company, for a period three years. However, the court declined to assess liability against

corporate officers unless they had knowledge of the violations committed by their subordinates,

i.e. their conduct was "willful or aggravated." See also Pythagoras General Contracting Corp., 2005DBA-14 (ALJ June 4, 2008), aff’d, ARB Nos. 08-107, 09-007 (ARB Feb. 10, 2011) (errata issued Mar. 3,

2011) (company president was also debarred as he had “constructive knowledge” that Respondent’s

employees were misclassified for wage payment purposes and his certified payroll records were not

corrected to comply with the Act’s requirements); Abhe & Svoboda, Inc., ARB Case Nos. 01-063, 01-066,

01-068, 01-069, 01-070, ALJ Case Nos. 1999-DBA-20 to 27 (ARB July 30, 2004), recon. denied (ARB Oct.

15, 2004), aff'd, Abhe & Svoboda, Inc. v. Chao, 2006 WL 2474202 (D.D.C. Aug. 25, 2006), aff'd, 508 F.3d

1052 (D.C. Cir. 2007); Ray Wilson Co., ARB Case Nos. 02-086, 2000-DBA-14 (ARB Feb. 27, 2004)

(debarment of subcontractor and its president and vice president was proper because of disregard to

employees); Hugo Reforestation, Inc., ARB Case No. 99-003, 1997-SCA-20 (ARB Apr. 30, 2001) (owner

and president of Respondent charged with supervision of day-to-day operations must be debarred for

CWHSSA and SCA violations); Berbice Corp., 1998-DBA-9 (ALJ Apr. 16, 1999); Superior Masonry, Inc.,

1994-DBA-19 (ALJ Oct. 13, 1994) (president and owner of company was debarred; he controlled and

managed company operations and directed falsification of the payroll records).

e. CWHSSA and SCA violations - different debarment standards

In Hugo Reforestation, Inc., ARB Case No. 99-003, 1997-SCA-20 (ARB Apr. 30, 2001), the ARB

held the following with regard to debarment under the CWHSSA and SCA:

[T]he SCA and CWHSSA impose different standards for assessing liability for debarment.

Under the CWHSSA - a Davis-Bacon Related Act - the burden is on the Secretary to

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establish that the violations are ‘aggravated or willful' such that debarment is warranted.

20 C.F.R. § 5.12(a). Under the SCA, on the other hand, debarment is presumed once

violations of that Act have been found, unless the violator is able to show the existence

of ‘unusual circumstances' that warrant relief from SCA's debarment sanction. 29 C.F.R. §

4.188(a) and (b). Ventilation and Cleaning Eng'rs., Inc., Case No. SCA-176 (Sec'y Sept. 27,

1974) Labor L. Rep. (CCH) ¶ 30,946.

The debarment sanction differs under the two Acts as well. By statute, debarment under

the SCA is for three years, without modification. By comparison, under the Department's

regulations and Board precedent, a contractor debarred under the Davis-Bacon Related

Acts (including the CWHSSA) is placed on the ineligibility list for a period ‘not to exceed'

three years, 29 C.F.R. § 5.12(a)(1), from which the contractor may petition to be removed

after six months. 29 C.F.R. § 5.12(c).

Accordingly, charges of CWHSSA violations (e.g., overtime under payments and

recordkeeping) must be analyzed under the Davis-Bacon Related Acts applicable to the

CWHSSA, while SCA violations (e.g., fringe benefit and holiday under payments, and

recordkeeping) must be analyzed under the SCA debarment standard.

Slip op. at 8-9.

2. Debarment not proper

a. Unsuccessful attempts to pay required wages established

In Mr. Paint, Inc., 1992-DBA-27 (ALJ Mar. 31, 1995), the ALJ examined what constitutes a

disregard of obligation necessary to debar a respondent under the Davis-Bacon Act. The ALJ noted that a

respondent's failure to pay the required wages to its employees alone does not equate to a disregard of

obligation in support of debarment. When a respondent makes valiant efforts to pay employees, it has

not disregarded its obligations under the Act.

b. No evidence of fraud; consistent payment practices

In Cody Zeigler, Inc., 1997-DBA-17 (ALJ Apr. 7, 2000), the ALJ held that debarment was not

warranted where there was "no evidence of altered records, fraud, deceit or any of the other telltale

signs of knowing violation of the law." Slip op. at 40. The ALJ noted that the issues presented in the case

were "highly technical" and Employer's "methods were consistent" and were unquestioned during prior

audits.

3. Debarment proper

e.

Falsification of payroll records

In P & L Fire Protection, Inc., 1994-DBA-66 (ALJ May 15, 1997), the ALJ determined that

debarment is warranted where a respondent has "disregarded its obligations to employees." Falsifying

payroll records and certified payrolls constitutes a sufficient basis for debarment. See also Dumarc

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Corp., Case No. 2005-DBA-7 (ALJ Apr. 27, 2006); Abhe & Svoboda, Inc., ARB Case Nos. 01-063, 01-066,

01-068, 01-069, 01-070, ALJ Case Nos. 1999-DBA-20 to 27 (ARB July 30, 2004), recon. denied (ARB Oct.

15, 2004), aff'd, Abhe & Svoboda, Inc. v. Chao, 2006 WL 2474202 (D.D.C. Aug. 25, 2006), aff'd, 508 F.3d

1052 (D.C. Cir. 2007) (the Board held that underpayment of prevailing wages and submission of falsified

payrolls "that masks the underpayments" constitute a willful violation of the DBRA and warrants

debarment); Commonwealth of Massachusetts v. U.S. Dep't of Labor, Case No. 1998-JTP-6 (ALJ Oct. 29,

2001); Star Brite Construction Co., ARB Case No. 98-113, 1997-DBA-12 (ARB June 30, 2000); KP&L

Electrical Contractors, Inc., 1996-DBA-34 (ALJ Dec. 31, 1998), aff'd in part, ARB Case No. 99-039 (ARB

May 31, 2000) (failure to pay prevailing wages and failure to submit accurate certified payroll records in

compliance with the Copeland Act constitutes grounds for debarment); Fred Wiggins, 1999-DBA-30 (ALJ

Mar. 3, 2000); Thomas & Sons Building Contractors, Inc., ARB Case No. 00-050, 1996-DBA-37 (ARB Aug.

27, 2001), order denying reconsideration (ARB Dec. 6, 2001) (Employer's "failure to offer any verifiable

explanation of the discrepancies between the certified and home payroll records"); Sundex, Ltd., 1994DBA-58 (ARB Dec. 30, 1999) (significant discrepancies between the employee's paychecks and certified

payrolls constituted violations of the Davis-Bacon Act and CWHSSA sufficient to warrant debarment;

Superior Masonry, Inc., 1994-DBA-19 (ALJ Oct. 13, 1994) (debarment proper where Contractor falsified

payroll records to simulate prevailing wage compliance); Trataros Construction Corp., WAB Case No. 9203 (WAB Apr. 28, 1993); Ace Contracting Co., WAB 76-23 (WAB May 30, 1980); Thomas L. Moore,

T.A.M., Inc., WAB 79-5 (WAB Aug. 16, 1979).

Although the evidence in P&N, Inc./Thermodyn Mechanical Contractors, Inc., ARB Case No. 96116, 1994-DBA-72 (ARB Oct. 25, 1996) did not demonstrate flagrant, intentional payroll falsification, the

circumstances clearly demonstrated that Respondent's misclassification of laborers, especially after the

meeting with the Wage and Hour investigator, was more than merely negligent. Having been reminded

of its obligations under the DBA and advised of its failure to fulfill those obligations by misclassifying and

underpaying employees, Respondent was responsible for policing the supervision of such employees to

ensure compliance with DBA requirements. Conduct which evidences intent to evade its DBA

obligations, and a purposeful lack of attention to statutory responsibilities, support debarment. The ARB

held that "blissful ignorance" is no defense to debarment. Consequently, rather than simply relaying the

direction to the sheet metal foreman on site, Respondent's managers should have taken steps such as

regularly visiting the site, observing the work being done, and reviewing payroll records, to ensure that

the employees, who were actually performing the work of sheet metal mechanics, were being paid the

proper hourly rate.

b. Actual or constructive knowledge of misclassification

The ALJ improperly required evidence that Respondent's officers had direct, certain knowledge

that employees classified as laborers were performing the work of sheet metal mechanics. An earlier

meeting with a Wage and Hour investigator put Respondent on notice regarding the misclassification of

laborers who were, during some periods, performing the work of sheet metal mechanics. Allowing the

violations to persist demonstrated a "reckless disregard" for Respondent's obligations to pay its

employees in accordance with the wage determination. P&N, Inc./Thermodyn Mechanical Contractors,

Inc., ARB Case No. 96-116, 1994-DBA-72 (ARB Oct. 25, 1996). See also KP&L Electrical Contractors, Inc.,

1996-DBA-34 (ALJ Dec. 31, 1998), aff'd in part, ARB Case No. 99-039 (ARB May 31, 2000) (the ALJ held

that Respondent misclassified employees as laborers when they actually performed the work of

electricians or carpenters).

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47

In Pythagoras General Contracting Corp., 2005-DBA-14 (ALJ June 4, 2008), aff’d, ARB Nos. 08107, 09-007 (ARB Feb. 10, 2011) (errata issued Mar. 3, 2011), the ALJ held that Respondent should be

debarred and reasoned the following:

While the violations in the instant case to not demonstrate flagrant, intentional payroll

classification, the evidence clearly demonstrates that Respondents misclassified the

majority of employees as Tier B laborers, even after meeting with the Wage and Hour

investigator. Said actions are more than merely negligent and demonstrate an intent to

evade the prevailing wage requirements under the DBA. As such, Respondent’s actions

are willful and subject them to debarment.

Also, the judge found the evidence of record sufficient to conclude that “shortly after several

witnesses were identified, or before they were scheduled to testify, they received unannounced home

visits by the owner and manager of Pythagoras” designed to discourage testimony against the company,

which the judge found to be “wholly inappropriate.” Finally, the ALJ found that the company president

should be debarred as he also had “constructive knowledge” that his employees were misclassified for

wage payment purposes and his certified payroll records had not been corrected to meet the

requirements of the Act.

c. Failure to pay prevailing wages

In Lloyd T. Griffin, Jr., 1991-DBA-94 (ALJ Dec. 12, 1999), the ALJ noted on remand that the

violation of a prevailing wage statute does not, in and of itself, constitute a per se aggravated or willful

violation warranting debarment. Citing to Miller Insulation Co., WAB Case No. 91-38 (WAB Dec. 30,

1992), slip op. at 10-11, the ALJ stated that finding hat "reckless disregard" satisfies the standard for

debarment and there is no de minimus principle to avoid debarment where the violation is aggravated

or willful. The ALJ noted that, in Miller Insulation, the contractor falsified payroll records to conceal its

failure to pay overtime and the violation was no less willful or aggravated where only three employees

on one contract were affected. The ALJ found, in the case before him, that the contractor engaged in

multiple sc

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