Respondents Brief — Universities Research Assn., Inc. v. Coutu

=

*’ Supreme Court, U. S.

FILED

AUG4 1980

No. 78-1945 {.WICHAEL RODAK, JR., CLERK |

3n the

Supreme Court of the Gnited States

Octoser TrRM, 1979

=

UNIVERSITIES RESEARCH ASSOCIATION, INC.,

Petitioner,

v

STANLEY E. COUTU, ET AL.,

Respondents.

On Writ of Certiorari to the United States Court of

Appeals for the Seventh Circuit.

BRIEF FOR THE RESPONDENTS

Hvuexu B. ARNOLD

DanreL N. Kapgan

ARNOLD AND KapJAn

11 South LaSalle Street

Chicago, Illinois 60603

(312) 236-0415

Counsel of record for Service

Rosert Jay Nye

Nyz anp Nyrg

420 North Euclid Avenue

Oak Park, Illinois 60302

(312) 386-7373

Attorneys for Respondent

Stanley E. Coutu, and the

Respondent Class.

The Scheffer Press, Inc.— (312) 263-6850

—_—tA~Aa~

QUESTIONS PRESENTED FOR REVIEW

i. Whether a government contractor which performs

Davis-Bacon Act (40 U.S.C. §§276a-276a-7) “construction,

alteration and/or repair” work with its own employees

is required to pay those employees the minimum wage

rates published in the Federal Register which the Aet

requires for that work, and is the statutory requirement

for payment of those wage rates incorporated in its gov-

ernment contract by operation of law and by refererice,

when the contract specifies that:

(a) the contractor is responsible for “sonstrastion,

alteration and/or repair” concerning the public

buildings and public works on the government

project,

(b) the contractor will include Davis-Bacon Act

wage stipulations in subcontracts letting portions

of the contract work to others, and

(c) if the contractor performs Davis-Bacon work

with its own employees the contract will be modi-

fied to incorporate Davis-Bacon Act stipula-

tions.

2. Whether the Supreme Court will consider the ques-

tion presented by petitioner concerning existence of an

employee private remedy under the Davis-Bacon Act,

when:

(a) that question was not raised, briefed, argued or

ruled on in the proceedings below which have

been brought here for review, and

(b) the record does not therefore include (as it did

in McDaniel v. University of Chicago, 7 Cir. 1975,

512 F.2d 583, vacated and remanded for fur-

ther consideration 423 U.S. 809 (1975), reaf-

firmed on remand, 1977, 548 F.2d 689, certiorari

denied 434 U.S. 1033 (1978) ), evidence or ad-

missions establishing the ineffectiveness of cer-

tain express remedies provided in the Act.

—~ sn

3. If the Supreme Court elects to consider this issue

presented by petitioner: Whether wage-earners have a

right of action against their contractor-employer to re-

cover unpaid wages required by the Davis-Bacon Act (40

U.S.C. §§276a-276a-7) and by the government contract

provisions required by §276a of the Act, when—because

there are ne contract amounts withheld sufficient to as-

sure employee payments (see 40 U.S.C. §276a-2(a)) nor

is there a surety payment bond for the protection of em-

ployees (see 40 U.S.C. §276a-2(b))—such employee right

of action is the only remedy available to make effective

the congressional purpose of the Davis-Bacon Act to

require contractors to pay their employees the waiges

required by the Act.

LIST OF PARTIES

The petitioner in this Court is Universities Research

Association, Ine. Petitioner is the named defendant in a

complaint filed in the district court for the Northern

District of Illinois. The respondent in this Court is

Stanley E. Coutu, on his own behalf and on behalf of

a class which has been certified by the district court. The

class as so certified is described as follows:

“All ‘mechanics and/or laborers’ employed by defen-

dant pursuant to Contract No. AT(49-8)-3000 be-

tween defendant and the United States of America

‘for construction, alteration and/or repair, inelud-

ing painting and decorating, of public buildings and

public works of the United States’ who have been

paid wages less than ‘the wages * * * determined by

the Secretary of Labor to be prevailing for the vari-

ous classes of laborers and mechanics * * * in the

city, town, village, or other civil subdivision of the

State’ in which the work was performed, all as stated

and defined in the Davis-Bacon Act, 40 U.S.C. §276a,

et seq.”

— 4 —

TABLE OF CONTENTS

PAGE

Questions Presented for SIE satiate auteiicincnstiscen t

RETRO AREAS ELE ON SER REDD SERIA et «Se AEE u

I cleat pe itt

laa lcnimntinamiai vu

rE ot RRR eT, 1

ST OIG ais icsssstsassevecsnene sinc vermcsaenss 8

MIT, si ietistcidsitedasateakan oraicahdiorsinasS Rinssanbeiaataighicsmbdiapiaenanclconats 10

I. The Davis-Bacon Act (40 U.S.C. §§276a-276a-

7) requires payment to wage-earners of mini-

mum wage rates contained in the Secretary

of Labor’s prevailing wage determinations, for

all labor concerning “construction, alteration

and/or repair including painting and deco-

rating, of public buildings or public works of

the United States” (see 40 U.S.C. §276a).

This statutory requirement prevails although

the contractor-employer’s government contract

may fail to contain an express stipulation by

the contractor-employer to pay the statutory

WED THEOD- TOF GRE WORK, onscsessesicserssecesesessmeccoese 10

A. The Davis-Bacon Act exists to protect em-

ployees from substandard earnings by fix-

ing a floor under wages on Government

projects, Our respondent class of laborers

and mechanics are the “especial” bene-

I eT, BO, tisnieirciieneerestntpttinensnsin 10

1. The Government contract requires

ROTI - TTR, — cs cercecrnteansnsinttinperesveniese 10

2. Purpose and policy of the Act to in-

sure payment of prevailing wages. .... 12

3. Right to minimum wage is fixed by

IE I cacshasciiacinscisippnunteienaaniaitadusibiiaieatcassien 13

pay ee

PAGE

4. Character of laborers’ work deter-

RD i so a noilaaeamicumacanes 15

B. Where a government contract clause is re-

quired by statute or by procurement reg-

ulation to be included in a government

contract, that clause is deemed incorpo-

rated, as a matter of iaw, into the con-

tract. The Davis-Bacon Act minimum wage

stipulation is part of the subject govern-

ment contract by operation of law, and

employees who perform Davis-Bacon Act

work must be paid the minimum wage rates

established by the Secretary of Labor’s

published wage determinations. .............. . 16

1. Davis-Bacon clauses in our contract. .... 17

2. The Davis-Bacon Act mandatory re-

SINS." Seasnthsmstecussarensheicarsmncimaaeenaienes 18

3. Incorporation of mandatory clauses—

the “Christian Doctrine”. . ............008 20

4, Applicable prevailing wage determina-

UIE INE iiipseiisistnedsncenihichontstaehinnintpensenenicegiins 23

C. A contractor takes a government contract

subject to all applicable statutes. All

statutes relating to the subject matter of

the contract and existing at the time of

contracting become a part thereof and

must be read into the contract. Our peti-

tioner contractor-employer is charged with

knowledge that construction work per-

formed by its employees is subject to the

Davis-Bacon Act and is obligated to pay

the statutory wage rates. ........csssesseseeees 25

1. Davis-Bacon is part of all government

CONSTTUCHION CONTACTS. .......sessececeecessees 25

2. Petitioner’s actions imply assumption

of Davis-Bacon obligations. ................ 26

—v—

D. Contrary to petitioner’s Point I.D. (Petr.

E.

F.

Brief at 25-28), the Seventh Cireuit’s deci-

sion is not inconsistent with express terms

of the Davis-Bacon Act. The defense that

a contract was not advertised or bid, but

is instead a negotiated cost-plus-a-fixed-fee

contract, was expressly anticipated by

Congress in 40 U.S.C. §276a-7. Further,

the claim that federal law grants AEC/

ERDA/DOE authority to establish con-

trary specific wage rates is not true and

is no defense under 40 U.S.C. §276a-3. ....

1. Davis-Bacon applies to all contract

SIO. . - scsisncarscinanssehinedstisimsaa

2. No federal law or approval for con-

CERRY WHO -TOBOB. .cccccinicnsicccitentien

The Davis-Bacon Act 1935 amendments

were intended, inter alia, to prevent. utili-

zation by contractors and agencies alike

of every device resulting in non-payment

of proper prevailing wages at government

projects, including the “arbitrary classifi-

cation” and “underclassification” device. ....

1. Senate hearings and Davis-Bacon vio-

NIE, evseasssieciidecntiicdeneeeenee

2. The “arbitrary classification” and “un-

derelassification” deviCe@. ..ccccccsececeee

3. Neglect of the prevailing wage prin-

GED, sisriinstdissimocnuenntnnaiaamann

The Executive and the Judiciary must de-

fer to Congressional policies represented

by the Davis-Bacon Act. The Davis-Bacon

Act Congressionally-mandated effects on

the procurement process may not be

avoided, even to satisfy other proper pro-

CUTOUNENE ODIOCEIVOD. ..,000<ceyercszenrgderavespyronnqeonnes

PAGE

31

31

31

33

34

Sey

— a

G. The decision of the Seventh Circuit does

not affect administrative functions under

the Davis-Bacon Act. Further, there is no

administrative procedure available to an

employee for adjudication and vindication

of his claim that he has performed Davis-

Bacon Act work under a Davis-Bacon Act

contract, for which his contractor-employer

has not paid the published Davis-Bacon

II WOUND, sc cscesccocsessccssescscssncscoesveces

II. Wage-earners have a right of action against

their contractor-employer to recover unpaid

wages required by the Davis-Bacon Act (40

U.S.C. $§§276a-276a-7) and by the govern-

ment contract provisions required by 4$276a

of the Act, when—because there are no con-

tract amounts withheld sufficient to assure em-

ployee payments (see 40 U.S.C, 4§276a-2(a) )

nor is there a surety payment bond for the

protection of employees (see 40 U.S.C. §276a-

2(b))—such employee right of action is the

only remedy available to make effective the

Congressional purpose of the Davis-Bacon Act

to require contractors to pay their employees

the wages required by the Act. .....ccscsseesereveees

A. The “right of action” question was not

raised, briefed, argued or ruled on in the

proceedings below which have been brought

here for review. Should the Supreme

Court elect, nevertheless, to consider this

question, it must be presumed that the

courts below have found and concluded (as

in McDaniel v. University of Chicago, 7

Cir, 512 F.2d 583 and 548 F.2d 689,

certiorari denied 434 U.S. 1033) that such

employee right of action is the only remedy

available to make effective the Congres-

sional purpose to require contractors to

pay their employees the wages required by

I iii i hasdanmsasisnninorssesvhscesasensstoossocsnenes

PAGE

36

39

— vu —

PAGE

B. There is a private right of action for back

wages against a contractor in favor of em-

ployees who have performed Davis-Bacon

Act work under a contract procuring

Davis-Bacon Act work of “construction,

alteration and/or repair, including paint-

ing and decorating, of public buildings or

public works of the United States”. There

is no administrative determination that

this contract is not covered by the Act,

nor does the right of action here asserted

require any such determination. ............... 41

1. The Davis-Bacon Act governs concern-

eee Ss - UIE ncdicctdiinbetion 41

2. This right of action is predicated on

Davis-Bacon Act rights. ......cccccsseseees . 42

3. Congress has approved, not disap-

proved, the private right... 45

COD iciscesiisiaccsicscacieanicsasiienededinnclsdateaedibsscunsictaiaians 50

DOE, cisincsssnemictiosiveiiniedteniniaininbipmnanainaaiiis At

TABLE OF AUTHORITIES

CasEs

PAGE

Ainslie Corp, v. Middendorf, 381 F.Supp. 305 (D.

BE, TICE). | cancsciinteinennimsrerisnlininsimaastauiacciiins 20

Antoni v. Greenhow, 107 U.S. 769, 2 S.Ct. 91

EAIIIOED savaiscnsidininatinssinneaanedeinslaiageieashlaaieanneniabncaeiitiadins 26

Armour Packing Co. v. United States, 209 U.S. 66,

ae en FINE sduthensscicentdadsssuiilebiniuipteidaseanbiobiaiaailainaiadienanes ~

Art Center School v. United States, 142 F. itll 916

CCE ATL, WR) — i csiercscstericncosssnsicessvanieneniatiasiosersitacmevensantan 24

Assn. of American Railroads v. Castle, 562 F.2d 1310

COB TEE. OTT csvecsisnissscermersniccmansiteassttonbetiels perenne 19

Bateson-Stolte, Ine. v. United States, 305 F.2d 386

(CECI. TOGB) cnccrorsrcscsrscivrccascsnssonneroncnsssptsiedosssessioonseseseseoes 13

— viii —

PAGE

Beley v. Naphtaly, 169 U.S. 353, 18 S.Ct. 354

I Si a a ee 14

Board of Supervisors v. Lackawanna Iron & Coal

.Co., 93 U.S. 619, 23 L.Ed. 989 (1877) woes 28

Bulkley v. United States, 86 U.S. 37 (1874) wu 28

Bushman Construction Co. v. Conner, 260 F.Supp.

FE IL, IE» Sitcsegeineaninensccraenenonovicvinesmnceininrchadanes

Cannon v. University of Chicago, 99 S.Ct. 1946

(L9TD) sesssssessscsssseessssseesesesssnsssesssssnsecssnsnsessesnsnesensnsnsssessanneees 49

City of Tullahoma v, Coffee County, 204 F.Supp. 794

- (E.D. Tenn. 1962), rev’d on other grounds 328 F.2d

NL NINE ics chapetissubncnietsaiaticeibonpsconnctsncediennstonisien 21

Commissioner v. Bilder, 369 U.S. 499, 82 S.Ct. 881

UIE SEI aisccslaigec scctlec i iasdasdannaiamanmaboatieiatbawaaaasenanioinoutace 14

Compagnie Generale Transatlantique v. American

Tobacco Co., 31 F.2d 663 (C.C.A. 2, 1969) ....0....... 22

Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d

RI Sica ahd ala ara ai aunt aks ate uleddgbigimboacoe 44

Coutu v. Universities Research Association, Inc., 595

F.2d 396 (C.A. 7, April 4, 1979) ....2, 6, 11, 30, 37, 40, Az

Drivers, Salemen, Local Union No, 695 v. N.L.R.B.,

Sen ee ee AAT, TR) eivincehictstnaviccccoeens 13

Farmers’ & Merchants’ Bank v. Federal Reserve

Bank, 262 U.S. 649, 43 S.Ct. 651 (1923) wo... 25

Gillioz v. Webb, 99 F.2d 585 (C.A. 5, 1988) oe. 13

G. L. Christian and Associates v. United States, 312

F.2d 418, 160 Ct.Cl. 1 (1963), opinion on reargu-

ment denied 320 F.2d 345, 160 Ct.Cl. 58 (1963),

certiorari denied, 376 U.S. 954 (1963), rehearing

denied 376 U.S. 929, 377 U.S. 1010 (1964) ........ 20, 21, 41

G.L. Christian and Associates v. United States

(Christian [), 312 F.2d 418, 160 Ct.Cl. 1 (1963 ..21, 41

ait.

PAGE

G.L. Christian and Associates v. United States

(Christian IT), 320 F.2d 345, 160 Ct.Cl. 58 (1963) ..21, 41

Hartford Accident & Indemnity Co, v. N.O. Nelson

Mfg. Co., 291 U.S. 352, 54 S.Ct. 392 (1934) ...:.... 23

Hendrickson v. Apperson, 245 U.S. 105, 38 S.Ct. 44

PURIST P ssicncestcinshedssinnnsteeehiciepnabiedkcnnbaniiadmeniiaionsiiaiatiaademnammaaaaa 25

Home Building & Loan Assn. v. Blaisdell, 290 U.S.

Sam OE TRAM, SRR GRBIR) ccserentvcnccsenicenn 25

Hudson Distributors, Inc. v. Eli Lilly & Co., 377 U.S.

ma OE EA. BSTD CTRGO) cette . 14

J.I. Case v, Borak, 377 U.S. 426 (1964) wc ecco 12

McCown v. Heidler, 527 F.2d 204 (C.A. 10, 1975) .... 14

McDaniel v. University of Chicago, 512 F.2d 583 (C.A.

7, 1975), vacated and remanded, 423 U.S. 809, 96

S.Ct. 20, 46 L.Ed.2d 30 (1975), reaffirmed on re-

mand, 548 F.2d 689 (C.A. 7, 1977), certiorari

denied, 434 U.S. 1033, 98 S.Ct. 765, 54 L.Ed.2d

780 (1978) ssiunsaiensisicaebasbaiectacemnieesisaniabaniaanc aaa i, 6, 40, 44

MeDaniel v. University of Chicago (McDaniel I),

S53 F298 G66: (CA. T, AUG) ccctcctie 9, 12, 40, 44, Aw

McDaniel v. University of Chicago (McDaniel II),

548 F.2d 689 (C.A. 7, 1977) ........... 9, 12, 40, 44, 45, Av

McLean v, United States, 226 U.S. 374, 33 S.Ct. 122

EIIEAE D scosiicionisntssincionsanonnnadioupesnanesiciniinienpneielianiaessiaaaanaananaIAm 14

M’Cracken v. Hayward, 11 L.Ed. 397 (1844) ........... 26

Northern Pacific Ry. Co. v. Wall, 241 U.S. 87, 36 S.Ct.

MD TING) acs ccniceticcresticerssientincemninainiitienaaas 25

Ogden v. Saunders, 25 U.S. (12 Wheat.) 212, 6 L.Ed.

COG (1827) crresesssescesssesssnseessssnesssneessssnsnsnnersnntecssneneseanessenns 26

Paul v. United States, 371 U.S. 245, 83 S.Ct. 426

CRD wscssctisesissierssinnsetnennintiretex vseseteineninentesteimnnstaemeaai 16

Perry v. Sindermann, 408 U.S. 593, 92 S.Ct. 2694

CRETE) asvceenssrssnnnsenacsessssasansinaseneenianiecinnsciegetsannhtnianneliennninan 28

— J ==

PAGE

Piper v, Chris-Craft Industries, Inc., 430 U.S. 1, 97

SR NY MUTED. serintniotcinnichhitichiouh setaccatnadesneesiabecksbiiabesun 50

Seaboard Surety Co. v. Standard Acc. Ins. Co., 277

SGe INTL EINE ok cccscanhhdiasnpisspndbn deena ditahbenatiboniis 47

Securities Investor Protection Corp. v. Barbour,

421 U.S. 412, 95 S.Ct. 1733, 44 L.Ed.2d 263

SUIITIT-(ieshcassdiceitadiasnthatiiddhigsacadidcaiasideataeadiabesaaahinlnbcaicuentesia 44

Southern Surety Co. v. Oklahoma, 241 U.S. 582, 36

MAINE ETI s,s. csicat Lassen erpbapnnsdedleeiasiausnionasaansiokans 26

Strong v. American Fence Const. Co, 245 N.Y. 48,

I alas ea cela ki cae neck Se etal 47

Touche Ross & Co. v. etsiaetiai 99 S.Ct. 2479

| ___RREEIP AETS SPEN por aera ese Un sono PRUE ae TEO NOI EO ore 50

Transamerica Mortgage Advisors, Ine. v. Lewis, 100

i _, ga rnreRececyec enncee eer svenmn enn Ce PRI 49

United States v. Binghamton Construction Co., 347

U.S, 171, 74 S.Ct. 438, rehearing denied 347 U.S.

UW WT TR CED secesscericessssnacssnccssvsesssheresisiens 5,

940, 74 S.Ct. 625 (1954) woe 5, 13, 14, 19, 30, 50

U.S. (Hillsdale Rock Co., Inc.) v. Cortelyou & Cole,

Inec., 581 F.2d 239 (C.A, 9, 1978) ......cccccscesccrrseees 39

United States ex rel. Von Hoffman v. City of Quincy,

Ba OD uaneitiaanitintitenitapinncatinanicbtinitiomnnliie .26, 48

United States v. McKinnon, 289 F.2d 908 (C.A. 9,

ETS TERR RRR NeeeT aeRO s DOEPREEO renee ON Hea OER

United States v. New Orleans Public Service, Inc.,

oo EF Fuk Se Se |. y 5 een neeenmennnenrenne .20, 22

Walker v. Whitehead, 83 U.S. 314, 21 L.Ed. 357

IN ‘cisichsbsichcd tlhe siobie pm seiniaavbainstiophnanonseiednanliagnae a 26

Whirlpool Corp. v. Marshall, 100 S.Ct. 883 (1980) .... 50

Winston Bros. Company v. United States, 458 F.2d

AQ (CLC), 1972) errsseesscrossssessrrsnnessesnnnneeessnnnecessannneessssnne 24

Woods v. Lovett, 313 U.S. 362, 61 S.Ct. 983 (1941) .... 25

a oe

PAGE

STATUTES

Contract Disputes Act of 1978, 41 U.S.C. §§601-613, |

a 36

Copeland (Anti-Kickback) Act, section 2, 40 U.S.C.

ae SESE EAN eat am alin she RN dol et 20

Davis-Bacon Act, 40 U.S.C. §§276a-276a-7 ....i, ii, 10, 39, 46,

47, At

0 i scuesenitaes M, 5, 34,

I UIE cctesactiacsbccesdenscsagassuass 10, 18, 29, 37, 42,45

I I a Cs saenbsaiesmuaciowuinantiogs Ai

a ash caesessiomneninhonaaanal 42

OP Res SPEND | Sac vcscesesccncnashciccvtecsconosensi it, 37, 39, 40, 42

Oe Pe ETD ecsccacesacasiccsienstsainacsnaeeconsncncsoas ii, 39, 40, 42

Re I I Shien ihisscsdtinscicansactnesomsananmvavevebeoncniis 28, 29

I oo casdainilcnnasnnanenapbsapedndontuandanoonnaaee 36

I I a a aici. ch aempanadeennlienbaconians 28, 29

Department of Energy Organization Act of 1977,

P.L. 95-91, 42 U.S.C. $7194 (Title V, §504, 91 Stat.

er ERE Ae Miele tee et eA Ce a SR Se Snr eR ARP 36

Federal Property and Administrative Services Act of

I i I EE vided cocenessndusnsbainanpensahviannschicuiniiaid 29

Freedom of Information Act, 5 U.S.C. §552 et seq. ....11, 27

McNamara-O’Hara Service Contract Act of 1965,

REN IEEE actinicecasucencterinticaneencissctelanstatenesaaiaionives 34

Miller Act, 40 U.S.C. §§$270a-270e oo... cccecssseeceesseeee 47

RR RID "cdi LasSiccanishsianctanabhacanionooionoexenisdsvetuesinnes 47

Portal-to-Portal Act of 1947 ..ccccssssssssssnessnesssecsssesenseenes 46

NE ic caiga clic ads dede tats iaaanecnanneaneibasiepacaion 46

RE EN REESE aU RRS TS EE OO aT 47

29 U.S.C. §259(b)(B) ccssessssccsescssescssessssseccescsescessessseseseen 30

— Ti —

PAGE

Reorganization Plan No. 14 of 1950, 5 U.S.C. $903

note, 15 F.R. 3176, 64 Stat, 1267 ceccoccssseccusssseesseaen 20

Walsh-Healey Public Contracts Act, 41 U.S.C. $435-

WED scenssninsnsersssuicnnihelianssibipibnnaddamamiadad auger 34, 46

OTHER LEGISLATIVE AUTHORITIES

93 Cong. Rec. 1488-1517, 1556-1574, 4383-4391

COON ccsessniciniaivucastadsiat aes (cee een 46

93 Cong. Rec. 2081-2098, 2110-2135, 2175, 2192-2198,

2230-2277, 2287-2311, 2348-2377, 4371-4372 (1947) .... 46

120 Gomme. Bee: TOR CUBED scstncnctea . 46

H.R. 2157, 80th Cong., Ist Sess. (1947) wu... 46

H.R. Hearings on Administration of the Davis-Bacon

Act, Committee on Education and Labor, 87th

Cong., 2nd Sess. (1962) ou... 24, 30, 35, 37, 38, 43, 44

H.R. Report 74-1162, 74th Cong., 2nd Sess. (eencern-

che Devine. Bab) ocnciincicnossmmucsiamaae 35

H.R. Report 80-71, 80th Cong., Ist Sess. (1947) .... 46

H.R. Report (Conference Report) 80-326, 80th Cong.,

Be i CREE) « seciiccceensiecctcieenenanenl 46

H.R. Report 89-948, 89th Cong., lst Sess. (concern-

ing Service Contracting Act) ......cccsssssscesssseeseeees 36

H.R, Report 91-468, 91st Cong., Ist Sess. eee 35

S. 70, 80th Cong., Ist Sess. (1947) ...semscsersessee 46

S. Hearings on Administration of the Davis-Bacon

Act, Committee on Education and Labor, 73rd

Coma, Bad Gan. (IBDE) .scccenrdessnssicmneieesschpeeeiins 31, 32, 34

S. Report 74-332, 74th Cong., Ist Sess. (1935) ........ 32, 33

S. Report 74-1157, 74th Cong., 1st Sess. (concern-

Seame “Walele- Tica Rah) ncescectcesesnsevorenstiorcmncnnentn 35

—

S. Report 80-37, 80th Cong., Ist Sess. (1947) wo...

S. Report 80-48, 80th Cong., Ist Sess. (1947) cou.

S. Report 91-427, 91st Cong., Ist Sess. woe

Ruites Anp REGULATIONS

Rules of the United States Supreme Court

Rule 23-1(c) ............... ee nniinnsnsecenssanesvensonss

Rule 21.1(a) (effective June 30, 1980) wwe.

AEC/ERDA/DOF Regulations

Equitable Adjustments Clause, 41 C.F.R. §9-

oi cri ccxanmsuseseuisdinasesseonassececsene

Disputes Clause, 41 C.F.R. §9-7.802-5 (1978

E.R.D.A. procurement regulations, 41 C.F.R. §§9-

18.701-52(b) and (b)(1) (1977 ed.) ccsccceccssssssseee |

Department of Energy procurement regulations,

41 C.F.R. %§9-18.701-52(b) and (b)(1) (1979

Department of Labor Regulations

29 C.F.R. §§1.5(b) and 1.7(a)(2) (1977 ed.) uu...

ME MINED WED oscscsscsescosesesecsacecsnsncacnsesessscese

Department of Labor Wage Determinations

42 F.R. 30078 et seq. (June 10, 1977) wn. eeeeeee

43 F.R. 11360 et seq. (March 17, 1978) «0...

43 F.R. 11360, 11379-11383 (March 17, 1978) ....

Federal Procurement Regulations, 41 C.F.R. $1-

sa svanasitensesesncsensecoscceteabes

36

16

24

— sw —

PAGE

MISCELLANEOUS AUTHORITIES

17 Am.Jur.2d, Contracts, §257, at 654-656 (1964 ed.) .. 26

1 Commission on Government Procurement Report

(1969 Commission on Government Procurement) .. 35

3 Corbin on Contracts, §51, at 197 (1960 ed.) «0.00... 26

3 Corbin on Contracts, §551, at 200-201 (1960 ed.) .... 23

17A Corpus Juris Secundum, Contracts, §330, at 295

RI NE icsssbsscns slasictcmsisicapsnmiesnntecenunniinaianicnasninnobmandnnse 26

ER EERE ESOL PS SCS A 23

ge SEA TCR Ra ey Bereta Rt eeehr LS ele 28

Dees and Ginsberg, Contract Interpretation and De-

fective Specifications, (Gov’t. Contracts Monograph

No. 4, 1975 ed.; The George Washington Univer-

ED csssinssnssossicrsndssemnncannhapesiessansesnnnieseibocinionsiecssenimenss 20,21

Opinion of the Attorney General, 43 Op. Att’y. Gen.

No. 14 (March 9, 1979), 1979 Labor Law Reports

EArt a HURL IIII: saicdesansetsin cteascapstlichelg soasitsollesiapebstiencsaun 35

Williston on Contracts, §615, at 1767 (1936 ed.) ........ 26

4 Williston on Contracts, §615, at 597 (ed ed. 1961) .. 26

In THE

SUPREME COURT OF THE UNITED STATES

Ocroser TERM, 1979

No. 78-1945

UNIVERSITIES RESEARCH ASSOCIATION, INC.,

Petitioner,

v

STANLEY E. COUTU, ET AL., :

Respondents.

On Writ of Certiorari to the United States Court of

Appeals for the Seventh Circuit.

BRIEF FOR THE RESPONDENTS

STATEMENT OF THE CASE

1. Certiorari was granted in this cause to review a:

decision of the Seventh Circuit which reversed a sum-

mary judgment entered by the district court and re-

manded the case for completion of discovery and for

trial. The district court description of the motion and

affidavit, pursuant to which that summary judgment had

been entered, is as follows (See J.A. 31-32, 81):

“Defendant has filed a motion for summary judg-

ment supported by the affidavit of John R. Frazier,

Chief Legal Counsel for the Fermi National <Ac-

celerator Laboratory claiming that there is no issue

of material fact and Defendant is entitled to judg-

=

ment as a matter of law. Defendant asserts that the

only contract between defendant and the United

States government is Contract No. EY-76-C-2-3000, as

amended, formerly designated AT(49-8)-3000, and

that ‘{nJo Davis-Bacon Act, 40 U.S.C. §276, et seq.,

stipulations requiring the payment of prevailing

wages have ever been made a part of or incorporated

in said contract .. .’ [Affidavit of John R. Frazier,

para. 3].”

2. An accurate description of the nature of this cause,

the government contract in issue, the contentions of the

parties, and the conclusions of the court of appeals, is

found in the opinion of the Seventh Circuit, Coutu v.

Universities Research Association, Inc., 595 F.2d 396

(J.A. 35-46). For the convenience of the Court, relevant

portions of that opinion are reprinted in the Appendix

to this brief, at Az.

3. The government contract pursuant to which re-

spondent and his class were employed manifestly pro-

cures and continues today to procure “construction, al-

teration and repair” of the buildings, facilities and sys-

tems at the Fermi National Accelerator Laboratory site

owned by our government. Indeed, under the original

January 23, 1968 contract and until fourteen modifica-

tions and some four years later, the parties had expressly

excluded “operation, maintenance, and use” from the

petitioner’s responsibilities. Thus, paragraph “1” of Ar-

ticle XXXVIII of the contract, the last article in the

contract, reads (Contract, page 70):

“The operation, maintenance, and use of the ac-

celerator complex when completed are not within the

scope of this contract.”

=

Modification No. 14, dated April 6, 1972, continues the

construction responsibilities of the petitioner (see, @.g.,

Contract, Recitals, Modification No. 14, at 1) and adds—

as only part of “Phase II” of the work procured by the

contract—certain “operation, use and maintenance” func-

tions. Phase IT also added certain “alterations and modi-

fications” and certain “construction of additional new

facilities [and] alterations or repair of existing facili-

ties” responsibilities. (Contract, Article II, Modification

No. 14, at 8, 10.)

4. Neither petitioner nor the United States as amicus

has pointed to any governmental ruling or decision char-

acterizing this government contract as not covered by the

Davis-Bacon Act. They appear simply to infer the exist-

ence of such a ruling from contract provisions which first

provide that Davis-Bacon Act work under the contract

should be subcontracted out by petitioner rather than

performed with petitioner’s own employees, second re-

quire that petitioner include in those subcontracts the

appropriate Davis-Bacon Act stipulations, and third state

that if petitioner does use its own employees for Davis-

Bacon Act work the contract will be modified to include

Davis-Bacon Act clauses so far as petitioner’s own work-

force is concerned. Those contract provisions, however,

are consistent only with conclusions that the contract is

covered by the Davis-Bacon Act and that the contracting

agency does view it as covered.’ They both contemplate

that Davis-Bacon work is being procured by means of

Further evidence exists, too, establishing that both

the petitioner and the agency know that the contract is

covered by the Davis-Bacon Act. Discovery, until it was

stayed to permit summary judgment proceedings on pe-

titioner’s “the contract does not contain express Davis-

—_

the government contract, and require that Davis-Bacon

work be subject to contract clauses applicable to that

work. Thus, contrary to the contention of the petitioner

that the contract “does not specify that [Davis-Bacon

prevailing wage] rates be paid” (see “Question Pre-

sented”, Petr. Brief, at 2), and contrary to the conten-

tion of the United States that the contract “has been ad-

ministratively determined not to call for Davis-Bacon

work” (see “Question Presented”, Amicus Brief, at 1),

it is clear that the contract does specify that Davis-Bacon

wage rates be paid and the contracting agency has de-

termined that the contract calls for Davis-Bacon work

to which Davis-Bacon obligations are applicable.

5. The petitioner has appended to its contract an

“Appendix B” containing certain employee classifications

* (Continued)

Bacon Act stipulations” point, disclosed the existence of

approximately 135 forms entitled “Request for Davis-

Bacon Determination,” dated almost monthly between

September 13, 1968 and December 5, 1975. The forms

were initially prepared by petitioner, then submitted to

AEC/ERDA for the views of the area manager and his

three-man “Davis-Bacon Committee,” thereafter circu-

lated among the members of the committee, and finally

returned to petitioner with a “recommendation” (by the

committee) which the area manager “approved” concern-

ing whether or not the Davis-Bacon Act was applicable

to the work thus described by petitioner. We do not yet

know whether petitioner submitted descriptions of all

work to be performed under the contract; nor do we yet

know how many or which of the forms actually submit-

ted (if any) include work which was performed by the

respondent class. Without commenting on the propriety

or legal effect of those forms and recommendations, how-

ever, there were 129 recommendations that “Davis-Bacon

Act is applicable” and 6 recommendations that “Davis-

Bacon Act is not applicable”.

— po

and salary and benefit schedules. As the United States

has noted (Amicus Brief, at 11, n. 11):

“The hourly rates specified by the contract for con-

tractor employees * * * are somewhat less than the

prevailing wages established by the Department of

Labor for similar classifications of Davis-Bacon Act

workers * * *.”

These “Appendix B” classifications and salary schedules

do not, under the contract (see, e.g., Contract “Appendix

B”’ at 33; J.A. 61) or under the Davis-Bacon Act, set the

upper limit of wages to be paid petitioner’s workers. See

United States v. Binghamton Construction Co., 347 U.S.

171, 177-178 (1954). The contracting agency itself does 1.0t

view petitioner’s action in preparing those classifications

and schedules and their attachment to the contract as rep-

resenting binding contracting agency representations

that they are proper. See Kennedy Deposition, at 79-82.

6. The issue in the courts below, and that which was

initially presented to this Court in petitioner’s certiorari

petition (see “Question Presented”, Petition, at 2), did

not question the very existence of a private remedy to

respondent and his class for nonpayment of their Davis-

Bacon minimum wages. The appeal below was from a

summary judgment based simply on the one sentence in

petitioner’s counsel’s affidavit that

“No Davis-Bacon Act, 40 U.S.C. §276a, et seq.,

stipulations requiring the payment of prevailing

wages have ever been made a part of or incorporated

in said Contract .. .” (Pet. App. C, at A25; J.A.

31-32, 81). |

The first district judge to rule on the sufficiency of the

complaint had rejected that same contention when he

denied petitioner’s prior motion to dismiss the suit. See

~~ a

Pet. Appendix B, at Al5; J.A. 24. The Seventh Circuit,

in its decision now under review, likewise rejected that

contention, declaring (Pet. App. A, at A5; J.A. 39; 595

F.2d 396, 398): |

“We hold that summary judgment was improperly

entered against plaintiff and his class because the

required wage stipulations were incorporated by op-

eration of law.”

The question of the existence of a private remedy was

neither briefed nor argued in the Court of Appeals. In

fact, that question was treated by petitioner as settled in

its brief to the Seventh Circuit (Deft. Brief at 1, 8, 17-18;

7th Cir. Docket No. 78-1165).

After request by this Court that respondent submit a

brief in response to the Petition in this cause, our Brief

in Opposition was filed. Then Supreme Court Rule 23-

1(¢) (now Rule 21.1(a)) was quoted and, inter alia, re-

spondent and the class pointed out that

“arguments by petitioner to the effect that respond-

ent has no right of action under or by reason of the

Act, and that respondent has failed to exhaust ad-

ministrative remedies, are not so fairly comprised

[in the “Question Presented”] and have already been

recently considered by this Court twice in related

litigation.” (Brief in Opposition, at 26-29.)

The related litigation, there noted, is McDaniel v. Uni-

versity of Chicago, 512 F.2d 583 (C.A. 7, 1975), vacated

and remanded “for further consideration in light of

SIPC v. Barbour, 421 U.S. 412, 95 S.Ct. 1733, 44 L.Ed.2d

263 (1975) and Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080,

45 L.Ed.2d 26 (1975)”, 423 U.S. 809, 96 S.Ct. 20, 46

L.Ed.2d 30 (1975), reaffirmed on remand, 548 F.2d 689

(C.A. 7, 1977), certiorari denied, 434 U.S, 1033, 98 S.Ct,

Pon. Jom

765, 54 L.Ed.2d 780 (1978). Counsel are the same in both

the instant Coutw and the McDaniel cases, and the Uni-

versity of Chicago is one of the members of petitioner

Universities Research Association, Inc. |

Certiorari was granted without specific designation

by the Court of the issues to be argued. Thereafter pe-

titioner filed its brief on the merits, much of which deals

with the question of the existence of a private remedy.

See, e.g., Petr. Brief, at 15-21, 28-32, 33. All of the brief

by the United States as amicus curiae deals with that

question. See “Question Presented” and “Argument”,

Amicus Brief, at 1, 17.

7. Further, the record in the instant Coutw case does

not fairly present questions concerning the existence

vel non of a private remedy on behalf of respondent

and his class. McDaniel on the contrary did present that

record. There the record established, among other things,

that no surety payment bonds upon which wage-earners

might sue were required of or submitted by the contractor

(see McDamel Appendix at 21-22, 7th Cir. Docket No. 73-

1438), and that no funds were withheld from the contrac-

tor with which to pay those wage-earners (see [bid., Affi-

davit at 23-24). We may, of course, speculate in the cause

now on review that because of the virtually-identical fact

situations presented in both cases, the express statu-

tory remedies here were as ineffective as there. But

this Court has never been known for a proclivity to render

advisory opinions on questions neither presented nor

supported by a record made below. Respondent does

not, in this cause, contend that the Davis-Bacon Act. con-

tains an alternative private federal remedy for laborers

and mechanics who simply choose not to utilize express

remedies provided by the Act in situations where those

ce oes

remedies are effective to afford them the relief intended

by Congress. Respondent does submit, however, that if

this Court elects to hear and decide questions concerning

the existence under the Davis-Bacon Act of a private

federal remedy other than on surety payment bonds, fun-

damental fairness requires that the ineffectiveness of the

express statutory remedies otherwise provided in the

Davis-Bacon Act be presumed.

SUMMARY OF ARGUMENT

Our respondent employees have performed Davis-Bacon

Act work under a Davis-Bacon Act government con-

tract, for which their contractor-employer has paid them

less than the published Davis-Bacon Act minimum wage

rates. The contract expressly concerns “construction”

work, expressly informs petitioner that Davis-Bacon Act

duties are applicable to such work, and expressly con-

templates that the petitioner pay its own employees in

accordance with the Davis-Bacon Act if those employees

perform Davis-Bacon work. There is no ageney view

contrary to the conclusion that this contract’ concerns

Davis-Bacon Act work to which the statutory obligations

extend. The Act represents fundamental procurement

and socio-economic policies established by Congress. Un-

der applicable legal doctrine and precedents, both the

Act and the mandatory government contract clauses

prescribed by the Act are part of the contract by opera-

tion of law. In addition, references in the contract to the

Act, petitioner’s experience with applying the Act to its

own subcontractors, and petitioner’s performance of

Davis-Bacon work with its own employees, necessarily

imply the incorporation ci Davis-Bacon obligations into

the contract and oblige petitioner to pay the statutory

_ on

wage. The court of appeals correctly concluded that pe-

titioner’s mere assertion that the contract contains “no

Davis-Bacon Act stipulations” is no basis for a summary

judgment in favor of the petitioner-employer.

The question of the existence of an employee right of

action to recover unpaid Davis-Bacon Act minimum wages,

was not raised, briefed, argued or ruled on in the pro-

ceedings below in this cause. In the event the Supreme

Court elects to consider this question, the Court must.

presume a record which reflects—as in the recent related

McDaniel case, 7 Cir., 512 F.2d 583 (1975), 548 F.2d 689

(1977), certiorari denied 434 U.S. 1033 (1978)—that there

are no withheld contract amounts to assure employee

payments and no surety payment bond upon which re-

spondents might recover. Our respondents assert, thus,

that their right of action exists under circumstances

which render other statutory relief unavailable. This

employee right of action is the only remedy here avail-

able to make effective the Congressional purpose of the

Davis-Bacon Act to require contractors to pay their em-

ployees the wages required by the Act. Congress created

the federal statutory right to these minimum wages and

conferred a private right of action on employees under

the Act. The Congressional purpose will be undermined

in the circumstances of this case absent relief against

the contractor-employer by these particular persons in-

tended to be protected by the Act. This remedy is an

essential and rational part of and complement to its

remedial scheme. There is, finally, no ageney—other

than our courts—assigned by law to adjudicate respond-

ents’ claims and enforce their rights.

— =

ARGUMENT

I.

THE DAVIS-BACON ACT (40 U.S.C. §§276a-276a-7)

REQUIRES PAYMENT TO WAGE-EARNERS OF

MINIMUM WAGE RATES CONTAINED IN THE

SECRETARY OF LABOR’S PREVAILING WAGE DE.

TERMINATIONS, FOR ALL LABOR CONCERNING

“CONSTRUCTION, ALTERATION AND/OR REPAIR

INCLUDING PAINTING AND DECORATING, OF

PUBLIC BUILDINGS OR PUBLIC WORKS OF THE

UNITED STATES” (see 40 U.S.C. §276a). THIS STAT-

UTORY REQUIREMENT PREVAILS ALTHOUGH

THE CONTRACTOR-EMPLOYER’S GOVERNMENT

CONTRACT MAY FAIL TO CONTAIN AN EXPRESS

STIPULATION BY THE CONTRACTOR-EMPLOYER

TO PAY THE STATUTORY WAGE RATES FOR SUCH

WORK.

A. The Davis-Bacon Act exists to protect employees

from substandard earnings by fixing a floor under

wages on Government projects. Our respondent class

of laborers and mechanics are the “especial” bene-

ficiaries of the Act.

1. The Government contract requires Davis-Bacon

work. The Government contract involved in this case

clearly contemplates, by its express terms, the perform-

ance of construction work within the meaning of the

Davis-Bacon Act (40 U.S.C. §§276a-276a-7). Among other

provisions, it characterizes the “two categories of work

contemplated by this contract” (Contract No. AT(49-8-

3000, Appendix “A” thereof) for which petitioner is re-

sponsible, as

“a. Construction: Includes design, fabrication or

procurement, erection, test and inspection, assembly

a

and installation of the systems, components, build-

ings, etc., comprising the accelerator and the conven-

tional facilities, as described * * * below.

“b, Research and Development: * * *” [Appen-

dix “A” to Contract, at p. 1.].

Further, by Supplemental Agreement dated April 6, 1972

“effective as of July 1, 1971” the contract was revised,

certain prefatory Recitals stating, iter alia, that “the

Association shall continue the design and construction

of the accelerator and related facilities” (Modification No.

14, at 1).

And if that were not enough to demonstrate that peti-

tioner is the contractor primarily responsible for the con-

struction called for by the contract, we also have peti-

tioner characterizing itself as “This Federally assisted

construction contractor’ in a November 25, 1978 certi-

fication to the government that it does not maintain seg-

regated facilities for its employees “under its Prime

Contract No. AT (4908)-3000”.?

*The contract, originally dated January 23, 1968, “ef-

fective as of January 5, 1967” is not in the trial court

record and, of course, not therefore in the Record on

Appeal in the Court of Appeals. It, or portions of it,

may have been furnished to the district court by the

petitioner. Respondent has secured a copy of the contract,

or portions of it, through Freedom of Information Act

procedures. 5 U.S.C. $552 et seq. Discovery procedures

initiated by the respondent and his class prior to sub-

mission by petitioner of the summary judgment motion

which resulted in the district court judgment reversed

in this case by the Seventh Circuit, including procedures

for production of documents (see J.A. 64 entitled

“Amended First Request to Produce”), were stayed pend-

ing disposition of the said motion and determination of the

legal question presented. See also Coutu opinion, 595 F.

2d 396, at 397. It is apparent that there may be other agree-

ments and documents yet to be discovered, concerning

petitioner’s Davis-Bacon duties.

a

2. Purpose and policy of the Act to insure payment of

prevailing wages.

In McDaniel I,’ the Seventh Circuit, noting that “we

should be especially ‘alert to provide such remedies as are

necessary to make effective the congressional purpose’ J.1.

Case v, Borak, 377 U.S. 426, 433 (1964), described that

purpose as “insuring the payment of ‘prevailing wages to

laborers and mechanics on all government contracts in ex-

cess of $2000” and the “basic premise of this legislation

* * * to foster economic stability throughout the nation by

requiring that those employed on federal projects receive

fair and equitable wages.” (512 F.2d 583, 587; emphasis

supplied.) In McDaniel II, again holding that a private

remedy under the Davis-Bacon Act is necessary to effectu-

ate the intention of Congress in enacting that statute, the

court quoted from 1931 and 1964 legislative history and

declared, inter alia, that “the plaintiff class of laborers

and mechanics are the ‘especial’ beneficiaries of the Davis-

Bacon Act,” that the Act “by its terms mandates that the

contract * * * provide that laborers and mechanics hired

by the contractor be paid the minimum wages determined

by the Secretary of Labor to be prevailing for the cor-

responding class of laborers in the locality,” that the

laborer is “not only the principal beneficiary of the statute,

but also a third-party beneficiary of a contract provided

for by the statute,” and that “the fundamental purpose of

the Act was to benefit laborers and mechanics by paying

them wages prevailing in private industry” (548 F.2d

689, 692-693; emphasis supplied). Noting also that “the

Supreme Court of the United States recognized in United

*The McDaniel case involves employees at Argonne

National Laboratory in DuPage County, Illinois; the

instant Coutu case involves employees at the National

Accelerator Laboratory in Kane County, Illinois.

=

States v. Binghamton Const. Co., Inc., 347 U.S. 171, 74

S.Ct. 488, 98 L.Ed. 594 (1954) that laborers are. the

primary beneficiaries of the Davis-Bacon Act” (tbid.),

the Seventh Cireuit quoted this Court’s Binghamton hold-

ings that:

“The language of the [Davis-Bacon] Act and its

legislative history plainly show that it was not en-

acted to benefit contractors, but rather to protect their

employees from substandard earnings by fixing a

floor under wages on Government projects” (347 U.S\:

at 176-77, 74 S.Ct. at 441); and “On its face, the

[Davis-Bacon] Act is a minimum wage law designed

for the benefit of construction workers” (347 U.S. at

178, 74 S.Ct. at 442).

See, also, Bateson-Stolte, Inc. v. United States, 305 F.

2d 386 (Ct.Cl. 1962), where the court said (305 F. 2d at

389): ‘‘Let it be remembered that the provision for the

payment of a minimum wage was not for the benefit of

the contractor and was no warranty that he would not

be required to pay a higher wage. United States v. Bing-

hamton Construction Co. 347 U.S. 171, 74 S. Ct. 438, 98

L.Ed. 594.’’

3. Right to minimum wage is fixed by the Act. Plainly,

if the Davis-Bacon Act is to serve the manifest purpose

and policy of Congress, it must be recognized that the

Act is remedial and required to be “liberally construed to

effectuate its beneficent purpose” (Driers, Salesmen,

Local Union No 695 v. N.L.R.B., 361 F.2d 547, 553 (C.A.

D.C. 1966); Gillioz v. Webb, 99 F.2d 585 (C.A. 5, 1938)).

To construe the Act as requiring payment of the statutory

wages only if the government contract contains a com-

mitment by the defendant in language even more express

and explicit than that which we already have, is to disre-

gard completely the meaning of the Act, its history, its

purpose, and indeed, the basic principle that the goal of

ol oe

statutory construction is to ascertain and effectuate Con-

gressional intent.‘

Further, all the authoritative references to the effects

and the purposes' of the Davis-Bacon Act, speak of rights

assured to workmen on government projects by the Act.

For example, this Court, also in Binghamton, teaches that

itis the Act itself which fixes and vests the right to the

minimum wage. Thus, “The Davis-Bacon Act requires

that the wages * * * shall be not less than the minimum

wages” (347 U.S. at 172, 74 S.Ct. at 439; emphasis sup-

plied). When referring to the Act, our legislators and our

courts uniformly and invariably describe it as legislation

which assures payment to such workmen of the statu-

torily-defined minimum wage. Neither the Congress nor

* See, e.g., Hudson Distributors, Inc. v. Eli Luly & Co.,

377 U.S. 386, 395, 84 S.Ct. 1273, 1280 (1964) (stating that

where “legislative history clearly indicate[s] the purpose

of Congress that purpose must be upheld”) ; Commissioner

v. Bilder, 369 U.S. 499, 505, 82 S.Ct. 881, 884 (1962)

(declaring that “we must give the statute effect in

accordance with the purpose so clearly manifested by

Congress”); McLean v. United States, 226 U.S. 374, 33

S.tC, 122, 125 (1912) (stating that the Court must “keep

in mind the purpose which impelled the enactment”) ;

Beley v. Naphtaly, 169 U.S. 353, 359-360, 18 S.Ct. 354,

356) (1898) (“The act of Congress should not be so con-

‘strued as to except from its remedial provisions those

who were without an actual grant * * *. Such a construc-

tion ought to be put upon a statute as will best answer

the intention which the makers had in view * * *. The

equitable construction which restrains the letter of a

statute is defined by Aristotle * * *.”); McCown ve

Heidler, 527 F.2d 204, 207 (C.A. 10, 1975) (“the Act

should be interpreted to attain that end” and “should be

construed ‘not technically and restrictively, but flexibly

to effectuate its remedial purposes’ ”, and “No legislative

enactment should be rendered ineffective to attain its

purpose if such a construction can be avoided”.),

_ we

the courts view the Act (as petitioner would have us view

it) as legislation simply establishing contract formalities

to be followed or not followed at the whim or pleasure

of the contracting parties and, if not followed, of no

benefit to workmen otherwise performing Davis-Bacon

Act construction work.

4. Character of laborers’ work determines coverage.

The purpose of the Davis-Bacon Act is, of course, to

establish substantive rights of workers actually to receive

the benefit of the wage rates which Congress has pro-

vided for them when they are engaged upon covered work.

Both the Federal Procurement Regulations and the regu-

lations of the contracting agency in the subject case

(E.R.D.A., now the Department of Energy, formerly the

A.E.C.), confirm that position. For example, 41 C.F.R.

§1-18.701-2 (1977 ed.) (Federal Procurement Regulations

—Labor Standards for Contracts Involving Construe-

tion), states in pertinent part:

‘*{C]ontraets predominantly for nonconstruction work

may also involve construction work. Construction

items under such contracts are not exempted from

the requirements of this subpart simply because the

work is to be performed under a contract which also

requires, for example, the furnishing of supplies.”’

And again, so far as E.R.D.A. regulations are concerned,

41 C.F.R. §§$9-18.701-52(b) and (b)(1) (1977 ed.) (Admin-

istrative controls and criteria for application of the

Davis-Bacon Act in operational or maintenance activities),

state in pertinent part:

‘*(b) The classification of a contract as a contract

for operational or maintenance activities does not

necessarily mean that all work and activities at the

contract location are classifiable as outside of Davis-

Bacon Act coverage, since it may be necessary. to

—

separate out work which should be classified as

covered. Therefore, heads of procuring activities shall

establish and maintain controls for the careful

scrutiny of proposed work assignments under such

a contract to assure that: (1) * * * If the actual work

assignments do involve coverec work, the contract

should be modified to include applicable provisions

of the Davis-Bacon Act.” [Emphasis supplied].°

Thus we see that even under applicable Regulations,

it is the actual work performed by a workman which

determines whether he is entitled to the Davis-Bacon

minimum wage. How the contractor’s government contract

may be characterized or classified by him or by the con-

tracting agency is not controlling. And it is further clear

that under these, as well as previously cited, regulations,

the ‘‘applicable provisions of the Davis Bacon Act’’ must

be deemed included in the contract and the contract thus

appropriately modified, as to work performed by laborers

which is within the scope and coverage of the Act. See

Paul v. United States, 371 U.S. 245, 255, 83 S.Ct. 426,

433 (1963) (declaring that Federal Procurement Regula-

tions have ‘‘of course, the force of law’’).

B. Where a government contract clause is required by

statute or by procurement regulation to be included

in a government contract, that clause is deemed in-

corporated, as a matter of law, into the contract.

The Davis-Bacon Act minimum wage stipulation is

part of the subject government contract by opera-

tion of law, and employees who perform Davis-Bacon

Act work must be paid the minimum wage rates

established by the Secretary of Labor’s published

wage determinations.

'The new 5 ya of Energy regulation is iden-

- See 41 C §§9-18.701- 52(b) and (b)(1) (1979

= oe

1. Davis-Bacon clauses in our contract. Of course, the

government contract involved in this cause expressly con-

templates that construction work, to which Davis-Bacon

Act minimum wage requirements apply, will be per-

formed. The contractor-employer is also required to

include all provisions relative to Davis-Bacon Act work

in all subcontracts it lets for such construction, although

that clause states that it ‘‘does not contemplate the per-

formance of [Davis-Bacon] work by the Association, with

its own employees’’. Article XXXIII, para. 1, of the

contract (J.A. 55). In addition, however, by letter dated

the date of the original contract (January 23, 1968), from

the A.E.C. Chicago Operations Office Manager to the

president of the petitioner contractor-employer, the fur-

ther ‘‘understandings’’ of the government and the con-

tractor concerning that contract provision were stated

that:

‘‘If * * * work be performed by the Association

with its own employees which AEC determines is

subject to the Davis-Bacon Act, the contract will be

modified as appropriate to incorporate the provisions

relative to labor and wages required by law.’’ [Em-

phasis supplied.]* (J.A. 62).

And, further, the district judge to whom the case had

first been assigned and to whom, apparently, ‘‘a copy

of [the contract] ha{d] been submitted * * * by defen-

dant’’ (J.A. 21), referred in his opinion—rejecting peti-

tioner’s motion to dismiss—to further like correspondence

between A.E.C. and petitioner, dated April 6, 1972 (the

date of Modification No. 14 to the contract), which he

*This is the only other express contract provision yet

discovered by respondent class relative to Davis-Bacon

= obligations imposed on the contractor-employer it-

self.

—;

noted ‘‘has seemingly been incorporated into the alleged

contract’’ (J.A. 24, 63).

Even in the light of the these express contract provi-

sions referring to and confirming the application of

Davis-Bacon Act requirements to petitioner itself when

and if it performs Davis-Bacon work with its own em-

ployees, petitioner still claims that it itself is not bound

by any such contract provisions, even as to Davis-Bacon

Act work actually performed by its own employees. Mani-

festly, the requirements are expressed in petitioner’s con-

tract, whether or not they are in the precise language

that petitioner would prefer.

And as we shall see below, the requirements are in peti-

tioner’s contract by operation of law, whether they ap-

pear therein via the explicit words which petitioner pre-

fers must be persent, or not.

2. The Davis-Bacon Act mandatory requirement. Sec-

tion 1 of the Davis-Bacon Act (40 U.S.C. §276a) requires,

inter alia, that

“every contract * * * shall contain a stipulation that

the contractor or his subcontrator shali pay all

mechanics and laborers * * *the full amounts accrued

at time of payment, computed at wage rates not less

than those [determined by the Secretary of Labor to

be prevailing for the corresponding classes of laborers

and mechanics employed on projects of a character

similar to the contract work in the (locality) in

which the work is to be performed]. (Emphasis

supplied).

The requirement that every contract involving construc-

tion on government projects shall contain the required

minimum wage stipulation, cannot be construed as any-

A

thing but mandatory. As was recently said in Assn. of

American Railroads v. Castle, 562 F.2d 1310, 1313 (C.A,

D.C. 1977), “The word ‘shall’ is the language of command

in a statute, and there is no doubt that the Congress has

commanded [what the statute requires}.” (Emphasis sup-

plied.)

But we need not rely alone on mere, albeit accurately

applicable generalizations. This Court has already author-

itatively construed the Davis-Bacon Act as mandatory. In

Binghamton—as here—a government contractor claimed

that the wage rates expressly contained in its contract

amounted to a binding representation or warranty as to

the wage rates which it must actually pay its workers

for Davis-Bacon work. This Court concluded—as the Sev-

enth Circuit has concluded in the case at bar—that the

contractor’s contention must be rejected (347 U.S. at 178,

74 S.Ct. at 442):

**On its face, the Act is a minimum wage law de-

signed for the benefit of construction workers, The

Act does not authorize or contemplate any assurance

to a successful bidder that the specified minima

will in fact be the prevailing rates. Indeed, its re-

quirement that the contractor pay ‘not less’ than the

specified minima presupposes the possibility that the

contractor may have to pay higher rates. Under these

circumstances, even assuming 2, representation by the

Government as to the prevailing rate, respondent’s

reliance on the representation in computing its bid

cannot be said to have been justified.” [Emphasis sup-

plied. ]

Further, it is not only the Davis-Bacon Act itself and

the decisions of this Court construing it, whieh mandate

the inclusion of the minimum wage stipulation in our con-

tract. The regulations issued by the Secretary of Labor

eT ee

pursuant to 40 U.S.C. §276ce’ and Reorganization Plan

No. 14 of 1950,° complement the requirements of the Act

by commanding a like incorporation of the applicable

regulations, among which are included the standard con-

tract clauses which stipulate compliance with the Act’s

minimum wage obligations, See the Secretary’s regula-

tions $3.11 (29 C.F.R. §3.11 (1978 ed.)). “Regulations

part of contract”. Here, too, there is no doubt that “the

verb ‘shall’ in the regulation is mandatory”, Aimslie Corp.

v. Middendorf, 381 F.Supp. 305, 308 (D.Mass. 1974).

3. Incorporation of mandatory clauses—the ‘“Chris-

tian Doctrine”. It is clear that the Davis-Bacon Act

minimum wage provisions represent long-standing and

fundamental procurement policies of the United States.

The cases which deal with government contracts teach

that contract clauses made mandatory by procurement

regulation, are incorporated into government contracts

as a matter of law. Is it not even more certain that con-

tract clauses made mandatory by statute are so incor-

porated as a matter of law! Dees and Ginsburg, Con-

tract Interpretation and Defective Specifications at 4

(Government Contracts Monograph No. 4, 1975 Edition;

The George Washington University); G.L. Christian and

Associates v. United States, 312 F. 2d 418, 160 Ct. Cl.

1, opinion on reargument denied 320 F. 2d 345, 160 Ct. Cl.

58, certiorari denied 375 U.S. 954 (1963), rehearing denied

376 U.S. 929, 377 U.S. 1010 (1964). See also, e.g., United

States v. New Orleans Public Service, Inc., 553 F.2d

"Section 2 of the Copeland (Anti-Kickback) Act of

June 13, 1934, c. 482, 48 Stat. 948; as amended May 24,

1949, c. 139, §134, 63 Stat. 108, and August 28, 1958, P.L.

85-800, §12, 72 Stat. 967.

*5 U.S.C. $903 note, 15 F.R. 3176, 64 Stat. 1267.

aie

459 (C.A. 5, 1977); City of Tullahoma v. Coffee County,

204 F. Supp. 794 (E.D. Tenn. 1962), rev’d on other

grounds 328 F. 2d 683 (C. A. 6, 1964).

In Dees and Ginsburg, Contract Interpretation and

Defective Specifications (Government Contracts Mono-

graph No 4, 1975 Edition; The George Washington

University), the authors cited, among others, the three

federal statutes that “impose certain minimum standards

for wages * * * of employees working for Government con-

tractors” (id., at 1-2), spoke of the rule that such “statu-

tory requirements aud regulations which implement [them]

have the force and effect of law [and] contracts made in

violation of such requirements are illegal” (7d., at 3), and

discussed the doctrine which requires that government

contracts be interpreted as incorporating mandatory

clauses specified by law:

“In G. L. Christian & Associates v. United States,

the Court of Claims held that the Termination for

Convenience clause which had been consciously omit-

ted by the Government (and the contractor) had the

force and effect of law and was incorporated in the

contract as a matter of law. The Court emphasized

the fact that pertinent regulations made the incorpo-

ration of the clause in a contract mandatory and that

a Termination for Convenience clause was historical-

ly an important component of a Government con-

tract.” (id., at 4; emphasis supplied.)

So far as the Christian case opinions themselves are

concerned (Christian I, 312 F.2d 418, 160 Ct.Cl. 1 (1963) ;

and Christian IT, 320 F.2d 345, 160 Ct.Cl. 58 (1963)), it

should be noted that there the contractor’s prime objec-

tion to the “incorporation” doctrine was that the subject

contract clause was required only by “pre-existing regula-

tion,” the court pointing out that there was no question

al

but that “if a statute requires the inclusion of a * * °

clause, such a provision would be read into the agree-

ment whether the negotiators put it there or not” (320

F.2d at 350; emphasis supplied). And, speaking further

concerning the “incorporation” doctrine, the Court of

Claims said (320 F.2d at 350-351):

“The concept of such incorporation is not novel.

* * * It was important then, and it is important

now, that procurement policies set by higher author-

ity not be avoided or evaded (deliberately or negli-

gently) by lesser officials, or by a concert of contrac-

tor and contracting officer. * * * Obligatory Congres-

sional enactments are held to govern federal contracts

because there is a need to guard the dominant legisla-

tive policy against ad hoc encroachment or dispensa-

tion by the executive [citation].”

“Like other individuals who deal with the Federal

Government [citation], potential contractors can

validly be bound to discover the published directives

telling them the limits and the scope of the agree-

ments the Government can make. Our concern is not

at all whether the policy of embodying mandatory

contractual provisions in regulations is the best one.

Our special interest is only the legality of such a

practice, and we hold that, in the procurement field as

in others, an authorized regulation can impose such

peremptory requirements on federal officials and those

who seek to enter into transactions with the Govern-

ment.” [Italics by the court; other emphasis sup-

plied. ]

See too, e.g., United States v. New Orleans Public Service,

Inc., 553 F.2d 459, 469 (C.A. 5, 1977), holding “the clause

is incorporated into the contract, even if it has not been

expressly included in a written contract or agreed to by

the parties”; Compagnie Generale Transatlantique v.

American Tobacco Co., 31 F.2d 663, 666 (C.C.A. 2, 1929),

jth ou

holding that “a lawful statute in force at the time the

contract was made is read into the contract and becomes

part of it” and “Such a contract must be and is deemed

to be modified to conform to the statute”; 3 Corbin on

Contracts, §551, at 200-201 (1960 ed.), noting the same re-

sult “even though the parties know nothing of the statute

and do not include the provision, and even though they

know of it and expressly agree upon the exact contrary”;

17A Corpus Juris Secundum, Contracts, §330, at 301

(1963 ed.), noting that “where a provision is integrated

into a contract by force of statute, as a matter of public

policy, it must be interpreted and given effect in ac-

cordance with the intention of the legislature, irrespective

of how the contractors understood it”.

Also of particular signifiance on this point is this

Court’s opinion in Hartford Accident & Indemnity Co. v.

N. O. Nelson Mfg. Co., 291 U.S. 352, 54 S.Ct. 392 (1934),

where the Court required that a contractor’s bond be con-

strued to include a clause required by state statute but

omitted from the express terms of the bond, and said:

“All that the statute does by force of section 3

is to standardize the form, at least in some particu-

lars, when bonds are freely given, and to define the

consequences attaching to the standard thus pre-

scribed. ° * °

“Liberty of contract is not an absolute concept.

[citations.] It is relative to many conditions of time

and place and circumstance. * * * Principal and surety

in writing it became subject to the statutes then in

force, and by these they must abide.” [291 U.S. at

359, 360-361; 54 S.Ct. at 395-396; emphasis supplied. ]

4. Applicable prevailing wage determinations exist.

The district court entered the summary judgment, the

reversal of which by the Seventh Cireuit is here on

| eee

review, under the erroneous belief that there are and

have been no prevailing wage determinations by the

Secretary of Labor applicable to the subject government

contract. On the last page of its Memorandum Order,

the court commented that “it would be improper for this

court to declare in the first instance that this contract is

now subject to the Davis-Bacon Act and to make appro-

priate wage determinations for the parties” (see J.A. 34).

The trial court need have had no such concern. For

many years the Secretary of Labor has issued wage de-

terminations, all published in the Federal Register, ap-

pliacble to labor on government projects in Kane County,

Illinois, where the subject project is located and where

the construction activities required under the contract are

being and have been performed. See Statement of Arthur

J. Goldberg, Secretary of Labor (Hearings on Admini-

stration of the Davis-Bacon Act, Committee on Educa-

tion and Labor of the House of Representatives, 87th

Cng., 2d Sess., 1962), at 47, 48, 50; 29 Code of Federal

Regulations, Labor, Subtitle A, Part I, Procedures for

Predetermination of Wage Rates, §§1.5(b) and 1.7(a)(2)

(1977 ed.) ; 43 Federal Register 11360, 11379-11383 (March

17, 1978); 42 Federal Register 30078 et seq. (June 10,

1977).

There is no problem in locating the published “Gener-

al Wage Determinations Decisions” of the Secretary of

Labor. One of the most recent compilations is found in

43 Federal Register 11360 et seg. (March 17, 1978) and,

of course, constructive notice of those determinations

exists by reason of their publication in the Register (see,

e.g., Art Center School v. United States, 142 F.Supp. 916,

918 (Ct.Ci. 1956); Winston Bros. Company vy. United

States, 458 F.2d 49, 52-53 (Ct.Cl. 1972).

~

C. A contractor takes a government contract subject

to all applicable statutes. All statutes relating to the

subject matter of the contract and existing at the

time of contracting become a part thereof and must

be read into the contract. Our petitioner contractor-

employer is charged with knowledge that construc-

tion work performed by its employees is subject to

the Davis-Bacon Act, and is obligated to pay the

statutory wage rates.

1. Davis-Bacon Act is part of all government con-

struction contracts. Whether or not the mandatory stipula-

tion required by the Davis-Bacon Act to be included in

“every contract * * * for construction, alteration, and/or

repair, including painting and decorating, of public build-

ings or public works * * *” is deemed incorporated, as a

matter of law, into the contract, it is basic hornbook

law that the Davis-Bacon Act itself is a part of the con-

tract. Statutes relating to the subject matter of a contract

and existing at the time of execution of such contract,

become a part thereof and must be read into the contract,

as if they were expressly referred to or incorporated in

its terms.

See, e.g., Woods v. Lovett, 313 U.S. 362, 370, 61 S.Ct.

983, 987 (1941) (“laws which subsist * * * enter into and

form a part of it, as if they were expressly referred

to or incorporated in its terms”); Home Building & Loan

Assn. v. Blaisdell, 290 U.S. 398, 429-430, 54 S.Ct. 231,

237 (1934) (concerning Minnesota Mortgage Moratorium

Law); Farmers’ ¢ Merchants’ Bank v. Federal Reserve

Bank, 262 U.S. 649, 660, 48 S.Ct. 651, 655 (1923) (“This

principle embraces alike those laws which affect its con-

struction and those which affect its enforcement or dis-

charge”); Hendrickson v. Apperson, 245 U.S. 105, 38

S.Ct. 44, 45 (1917) (Kentucky statute authorizing appoint-

ment of special collectors); Northern Pacific Ry. Co. v.

=

Wall, 241 U.S. 87, 91-92, 36 S.Ct. 493, 495 (1916) (Car-

mack Amendment to the Interstate Commerce Act);

Southern Surety Co. v. Oklahoma, 241 U.S. 582, 587, 36

S.Ct. 692, 694 (1916) (Oklahoma enabling act and Okla-

homa Constitution); d4rmour Packing Co. v. United States,

209 U.S. 66, 81, 82, 28 S.Ct. 428, 435, 486 (1907) (“the

design of the statute to prohibit” “abuses of unequal

rates”); Antoni v. Greenhow, 107 U.S. 769, 2 S.Ct. 91,

95 (1883) (rule applies to “those laws which affect its

validity, construction, discharge, and enforcement”) ;

Walker v. Whitehead, 83 U.S. 314, 317, 21 L.Ed. 357, 358

(1873) (Georgia statute held to impair obligation of

contract); United States ex rel. Von Hoffman vy. City of

Quincy, 71 U.S. 535, 550 (1867) (“These are as much

incidents and conditions of the contract as if they rested

upon the basis of a distinct agreement”); M’Cracken v.

Hayward, 11 L.Ed. 397, 399 (1844) (“laws in existence

* * * measure of the obligation to perform”); Ogden v.

Saunders, 6 L.Ed. 606, 621-622 (1827) (“the law of the con-

tract * * * forming a part of it”); 17A C.J.S., Contracts,

$330, at 295 (1963 ed.); 17 Am.Jur.2d, Contracts, §257, at

654-656 (1964 ed.); 3 Corbin on Contracts, $51, at 197

(1960 ed.); Williston on Contracts, §615, at 1767 (1926

ed.) ; 4 Williston on Contracts, §615, at 597 (3d ed. 1961).

Thus, as the Ninth Circuit declared in United States v.

McKinnon, 289 F.2d 908, 909 (C.A. 9, 1961), concerning

a claim for extra work by a government contractor, “one

just must take his government contracts subject to appli-

cable statutes.”

2. Petitioner’s actions imply assumption of Davis-

Bacon obligations. It is asserted in this cause by respon-

dent and the respondent class that they, as employees of

the petitioner, were assigned and did perform work con-

stituting construction work within the meaning of the

ae” a

Davis-Bacon Act. At this point in the proceedings, and

for purposes of the summary judgment now on appeal

which was granted on other grounds, this assertion must

be taken as true. It is clear, then, that to the extent the

petitioner’s employees were performing Davis-Bacon Act

construction work so assigned to them, the petitioner is

and has placed itself in the position of a subcontractor

under its prime contract. Article XXXIII (“Labor Provi-

sions”) of the contract prescribes that such work is to

be done by subcontract which shall “contain the provi-

sions relative to labor and wages” required by Davis-

Bacon. In the capacity of a subcontractor performing

construction work on the project, well knowing of the

contract requirement that all such subcontractors are

obligated to pay the statutory wages, petitioner must

be deemed by implication to have undertaken those same

obligations.°

It is not unusual for a general contractor also to act

as a subcontractor on the job. Indeed, in Bushman Con-

struction Co. v. Conner, 260 F.Supp. 779 (D.Colo., 1966),

it is noted that “The prime contractor did only the

cement and carpentry work. All of the other construction

was subcontracted” (260 F.Supp. at 782). And anyone

familiar with construction activities is familiar with the

practice of the general contractor “acting as his own

carpentery (or cement, or electrical, or plumbing, or

painting) subcontractor.”

* Indeed, petitioner in its capacity as prime contractor

has entered into a number of construction subcontracts,

al] including the Davis-Bacon Act required stipulations

and the standard contract clauses promulgated by pro-

curement regulations and included within printed forms

used with those subcontracts. Copies of certain of those

subcontracts have heen obtained by the respondent class,

again through Freedom of Information Act procedures.

5 U.S.C. $552 et seq.

— oan

That which is implied in a contract situation is as

effectual as what is expressed. Bulkley v. United States,

86 U.S. 37, 40 (1874) (saying, in addition, that “Human

affairs are largely conducted upon the principle of im-

plications”’; Board of Supervisors v. Lackawanna Iron

é Coal Co., 93 U.S. 619, 624, 23 L.Ed. 989, 991 (1877);

Perry v. Sindermann, 408 U.S. 593, 599-602, 92 S.Ct. 2694,

2699-2700 (1972) (affirming reversal of a summary judg-

ment in a teacher’s action claiming the existence of a

“de facto tenure program” for “absence of such an explicit

contractual provision may not always foreclose the possi-

bility”). Indeed, the rules with respect to the creation

of implied contracts apply in government contract situa-

tions, and “A contract may be implied where all the

formalities in connection with the execution of a contract

have not been complied with” (91 C.J.S., United States,

§89, at 170 (1955 ed.)).

Assuming then, arguendo, that by reason of the gov-

ernment contract in the case at bar our _petitioner-

contractor is not bound by the Davis-Bacon Act in its

capacity as prime contractor, it is nonetheless bound as a

subcontractor who, without question, is expressly au-

thorized by that contract to perform Davis-Bacon Act

work and likewise obliged to pay the statutory wage.

D. Contrary to petitioner’s Point I.D. (Petr. Brief at 25-

28), the Seventh Circuit’s decision is not inconsistent

with express terms of the Davis-Bacon Act. The de-

fense that a contract was not advertised or bid, but

is instead a negotiated cost-plus-a-fixed-fee contract,

was expressly anticipated by Congress in 40 U.S.C.

§276a-7. Further, the claim that federal law grants

AEC/ERDA/DOE authority to establish contrary

specific wage rates is not true and is no defense un-

der 40 U.S.C. §276a-3.

1. Davis-Bacon applies to all contract types. Peti-

tioner has plainly forgotten to read the last section in

—_

the Davis-Bacon Act. Congress in that section anticipated

the very defense which petitioner now asserts in its

sub-point I.D.I. (Petr. Brief, at 25-26). That sub-point is

entitled “The Act Does Not Apply to a Contractor Unless

the Bid Specifications Set Forth the Wage Rate Require-

ments” (Jd. at 25). Yet Congress has mandated to the

contrary :

§276a-7. Cost-plus-a-fixed-fee contracts; contracts

without advertisement

The fact that any contract authorized by this or

any other Act is entered into without regard to sec-

tion 3709 of the Revised Statutes of the United

States [41 U.S.C. $5], or upon a cost-plus-a-fixed-fee

basis or otherwise without advertising for proposals,

shall not be construed to render inapplicable the

provisions of the Act of March 3, 1931, as amended

by the Act of August 30, 1935 (49 Stat. 1011; U.S.C.,

title 40, sec. 276(a)), if such Act would otherwise

be applicable to such contract.’

2. No federal law or approval for contrary wage

rates. Simply because AKC/ERDA/DOE has authority

to enter into contracts does not mean that it has au-

thority to “provide for the establishment of specific

wage rates” within the meaning of 40 U.S.C. §276a-3.

Further, the mere fact that certain employee classifica-

tions and salary schedules were prepared by petitioner

and appended to its contract, does not mean that AEC/

ERDA/DOE has established those classifications and

rates. Nor does that contracting agency itself view peti-

tioner’s action in preparing those classifications and

schedules and their attachment to the contract as repre-

senting binding contracting agency representations that

they are “established” (see, e.g., Kennedy Deposition,

See also 41 U.S.C, §258 to the same effect.

— ven

at 79-82). Petitioner’s sub-point I.D.2. (Petr. Brief, at

26-28, entitled “The Act Does Not Apply to the Extent

the Government Otherwise Has Established Specific Wage

Rates” (Id., at 26), is without substance. As the Seventh

Cireuit said (595 F.2d at 401-2) in this connection, among

other things “defendant has been unable to identify any-

thing in the Atomic Energy Act or any other federal

statute that authorizes ERDA to establish specific wage

rates.” —

The Portal-to-Portal Pay Act, at 29 U.S.C. §259(b(3),

designates the only agency upon whose written deter-

minations a contractor may rely in defense of its failure

to pay Davis-Bacon minimum wages. That agency is the

Secretary of Labor, not ERDA nor any other agency,

administrator or department. And finally, this Court’s

Binghamton decision precludes petitioner’s claim that a

contracting agency — whether the Corps of Engineers

there or the AEC/ERDA/DOE here — gives “assurance”

to the contractor that wage rates included in a govern-

ment contract “will in fact be the prevailing rates” (347

U.S. at 178).™

* At least since the Bmghamton decision in 1954, and

most probably for many years before, government con-

tractors acknowledged that it is the contractor’s responsi-

bility under the Davis-Bacon Act properly to classify

and set rates for their workmen, rather than a responsi-

bility of the contracting agency. See, e.g., the prepared

statement of the Associated General Contractors of

America before the Special Subcommittee on Labor of

the Committee on Education and Labor of the House

of Representatives (H. Hrgs. 1962 on “Administration

of the Davis-Bacon Act”, at 456-457): “The Davis-Bacon

Act requires that contractors classify and pay their

mechanics and laborers at least the required minimum

wage rate for the classification commonly used to per-

form the particular work in the locality of the project”

(Emphasis supplied.).

i aes

E. The Davis-Bacon Act 1935 amendments were in-

tended, inter alia, to prevent utilization by contrac-

tors and agencies alike of every device resulting in

non-payment of proper prevailing wages at govern-

ment projects, including the “arbitrary classifica-

tion” and “underclassification” device.

1. Senate hearings and Davis-Bacon violations. The

1935 amendments expanded the scope of the Act and

sought to prevent all abuses to which the prevailing

wage principle in the 1931 Act had been subjected. They

were adopted after lengthy hearings in 1934 before a

Subcommittee of the Committee on Education and Labor

of the Senate, pursuant to Senate Resolution 228 au-

thorizing “an investigation of the relationship existing

between certain contractors and their employees in the

United States”. During those hearings it became clear

that the 1931 Davis-Bacon Act requirements were being

disregarded on large numbers of government projects.

Neither size of the project, nor identity of the govern-

ment department for which it was being performed,

served to insulate a project from non-compliance. None

were immune. Sworn testimony was heard concerning

devices to evade payment of prevailing wages at, among

others, the Department of Justice Building (S. Hearings,

at 83-85, 91, 108, 117), the Senate Office Building (Jd., at

87), the New House Office Building (Jd., at 90-91, 109-

117, 152, 153), and even the United States Supreme

Court Building in which this brief has been filed and this

cause is now pending (/d., at 91, 117).”

2. The “arbitrary classification” and “underclassifica-

tion” device. Among the devices which Congress was in-

* More than 90 other federal projects, in the District

of Columbia and elsewhere around the nation, were the

subject of like testimony at the Senate Subeommittee

hearings,

a tn

formed were in use as a means to deprive workers on

government projects of the prevailing wage which Con-

gress had in 1931 directed that they receive, was the

so-called “arbitrary classification” or “underclassification”

device. Thus, in its report submitted pursuant to S. Res.

228 (S. Rept. No. 332, part 2, 74th Cong., 1st Sess.), the

Committee on Education and Labor, chaired by Senator

Walsh, pointed out;**

“Instances of failure by Federal Emergency Relief

Administration officials to pay the prevailing wages

on Public Works projects, and the creation by such

officials of arbitrary classifications known as semi-

skilled labor” (S.Rept. No. 332, part 2, at 2).

“(T]he matter of classification, with the result that

many contractors were able to circumvent the law

by hiring mechanics as common laborers, and then

assigning them to tasks which fell within the pur-

view of one of the skilled crafts” (Jd. at 5).

“The Board of Labor Review [created to hear issues

under contracts by the Public Works Administration

pursuant to the National Industrial Recovery Act]

heard many cases in connection with these com-

plaints [concerning “new grades and classifications

* * * permitting high-grade skilled laborers to be

placed in lower categories so that their rates of pay

were less than those prevailing for skilled labor’’]

but, in the opinion of this committee, have been

unable to rectify conditions as affecting a considerable

portion of the underclassified laborers” (Jd., at 12).

“The * * * rates * * * have been largely broken

down by intermediate classifications of labor * * *.

Testimony concerning the “arbitrary classification”

device is found in S. Hrgs, Ed.-Lab Subcom. (1934) at

76-77, 82-83, 105, 108, 110, 188, 160, 161, 206, 211, 212, 213,

414, 460, 469, 471, 473, 483.

sepec nies

The whole tendency has been for wages of the skilled

group to descend toward the level of the unskilled

group, this by reason of intermediate classification

devices” (Id., at 16-17).

These “arbitrary”, “under-”, “mis-”, and “intermediate”

classifications had the effect, of course, — if not the

purpose — of reducing wages being paid to workmen

on government projects below Congress-mandated pre-

vailing wage rates for similar work elsewhere in the

community. They still have that effect, and in this cause

now on review concerning these respondent workmen

before this Court. For, as accurately noted by the United

States as amicus curiae (Amicus Brief, at 11, n. 11):

“The hourly rates specified by the contract for con-

tractor employees * * * are somewhat less than the

prevailing wages established by the Department of

Labor for similar classifications of Davis-Bacon Act

workers * * *.”

3. Neglect of the prevailing wage principle. Con-

gress, of course, can only legislate; it is for the other

agencies of government to apply Congresional policy.

Yet Congress was informed in the Senate Subcommittee

hearings, of numbers of instances where agencies were

either ineffective concerning or neglectful of the Davis-

Bacon Act minimum wage principle. Thus the Senate

Committee on Education and Labor reported that there

is “laxity toward contractors guilty of improper practices

[existing] in certain Government departments’’ (S. Re-

port No. 332, part 3, 74th Cong., Ist Sess., at 3), that

notwithstanding complaint to certain agencies ‘‘no action

was forthcoming” (/d., at 4), and that “It is not ap-

narent to the committee in the survey it has caused to

oe

be made * * * that any agencies have been effective in

obtaining the results set out for them” (/d., at 16).%*

The hearings further revealed the identity of many

government projects concerning which, notwithstanding

claims made to government agencies, workers had never

received payment or restitution for unpaid portions of

their wages.*° Deficiencies in the District of Colum-

bia alone were asserted to ‘‘run into the millions’”’ (S.

Hearings, 1934, at 6).

F. The Executive and the Judiciary must defer to Con-

gressional policies represented by the Davis-Bacon

Act. The Davis-Bacon Act Congressionally-mandated

effects on the procurement process may not be

avoided, even to satisfy other proper procurement

objectives.

No one can deny that the procurement process would

be easier and cheaper for the government and for cer-

tain government contractors, had Congress not enacted

the Davis-Bacon Act (40 U.S.C. §276a et seq.), the Walsh-

Healey Public Contracts Act (41 U.S.C. $35 et seq.) and

the McNamara-O’Hara Service Contract Act (41 U.S.C.

§351 et seq.). Yet these statutes represent important

* Testimony supporting these conclusions is in Hear-

ings before the Subcommittee of the Committee on Edu-

cation and labor of the U.S. Senate, 73d Cong., 2d Sess.,

pursuant to S.Res. 228 (1934), at, e.g. 16-17, 18, 24, 30,

60, 62, 68-69, 95-96, 138, 141, 142, 144, 150, 176, 181,

538, 623.

% Among these projects were, again, the Department of

Justice Building (S. Hearings, 1934, at 84), the New

House Office Building (Jd. at 91), the N.Y. Federal Court-

house (Jd. at 137, 138), and others noted at Id. 6, 10,

17, 18, 19, 21, 24, 26, 32, 60, 76, 88, 89, 107, 118, 141, 142,

193, 203, 259. The workers were made whole, however,

an the Supreme Court Building project (Jd. at

—

policy decisions which have been consistently reaffirmed

by Congress, notwithstanding their impact on the pro-

curement porcess.** Thus, the Attorney General of the

United States, in an opinion issued on March 9, 1979,

in response to a request of the President (43 Op. Atty.

Gen. (op. no. 14); see 1979 Labor Law Reports (C.C.H.),

731,253 (4-13-79)), has noted:

‘Congress considered the contract labor standards

statutes to be among the ‘ancillary’ statutes which

affect procurement [citing at fn, 32: S.Rept.91-427,

9ist Cong., 1st Sess., at 6, 13-14; H.R.Report 91-

468, 91st Cong., Ist Sess., at 151.]. * * *

“(These are] statutory socio-economic programs

implemented through the procurement process * * *

[which the 1969 Commission on Government Procure-

ment] viewed * * * as extraneous burdens on the

procurement system [noting at fn. 49: See CGP Re-

port, vol. 1, at 111-18. The report refers to the Labor

Department’s wage-hour regulations as ‘collateral’

ones that ‘affect’ procurement. Id. at 33.]

‘*As the Commission report points out, these pro-

grams serve a broad variety of interests: labor, en-

vironment, small business, anti-discrimination, pro-

tection of domestic industry, and others. * * * The

contract wage-hour statutes in particular are the re-

sult of a strong legislative concern that the govern-

ment’s general interest in efficient, economical pro-

curement will not be satisfied at the expense of

contractors’ employees. [noting at fn. 52: See H.R.

Rept. 1162, 74th Cong., 2d Sess., at 2 (Davis-Bacon

Act); S.Rept. 1157, 74th Cong., 1st Sess., at 4 (Walsh-

7° “7 A] clear public policy of insisting that all who do

business with the Government pay employees minimum

prevailing wages thus seems to be indicated.” Statement

of the Deputy General Counsel, Office of the Comptroller

a H.R. Hearings, 1962, at 287 (emphasis sup-

plied),

=

Healey Act); H.R.Rept. 948, 89th Cong., 1st Sess.,

at 3 (Service Contracting Act).].’’

The effects of the legislative policies represented by the

Davis-Bacon Act and thus described, are effects which

the government procurement agencies and government

contractors must accept, and to which the courts must

defer. Our petitioner has, of course, any number of con-

tractual, administrative, judicial and statutory remedies

in proceedings involving the government, for any uncer-

tainties, inequities and improprieties petitioner has sus-

tained or may hereafter suffer by reason of its contract.”

Congress has authorized a suspension of the provisions

of the Act only by the President, and by him only ‘‘in

the event of a national emergency’’ (40 U.S.C. §276a-5).

Its requirements cannot be suspended, nor liability for

violation of its provisions defended, by simply disregard-

ing or neglecting it.

G. The decision of the Seventh Circuit does not affect

administrative functions under the Davis-Bacon Act.

Further, there is no administrative procedure avail-

able to an employee for adjudication and vindica-

tion of his claim that he has performed Davis-Bacon

Act work under a Davis-Bacon Act contract, for

which his contractor-employer has not paid the pub-

lished Davis-Bacon Act minimum wage.

The Seventh Circuit in the case at bar has done nothing

to affect or impair whatever any administrative func-

17 See, for example: (a) Contract Disputes Act of 1978,

41 U.S.C. §§601-613, P.L. 95-563, (b) Wunderlich Act, 41

U.S.C. §§321-322, (c) 42 U.S.C. §7194(a)(b), providing

for Department of Energy adjustments to rules, regula-

tions and orders to prevent special hardship, inequity

or unfair distribution of burdens, (d) Disputes Clause,

AEC/ERDA/DOE regulations, 41 C.F.R. §9-7.802-5, (e)

Equitable Adjustments Clause, AEC/ERDA/DOE regula-

tions, 41 C.F.R. §9-1.5004-2.

tions assigned by the Davis-Bacon Act. Its decision that

the Act applies concerning this government contract has

no effect on the functions of the Secretary of Labor in

making the prevailing wage rate determinations upon

which respondent here relies (40 U.S.C. §276a), the func

tions of the Comptroller General to pay over to laborers

(from any accrued contract payments which may have

been withheld) any wages found to be due them pursuant

to the Act (40 U.S.C. §276a-2(a)), or the functions of

the Comptroller General to distribute a list of defaulting

contractors to all departments of the government (40

US.C. §276a-2(a)).

Further, the decision does not interfere with or disre-

gard any agency or agency procedure assigned by law to

adjudicate respondent’s claims and vindicate his rights.

There is no such agency, nor any such procedure. The

court of appeals sought unsuccessfully to uncover some

(see 595 F.2d 396, 400; J.A. 43); the United States noted

that there is none (see Amicus Brief, at 9, fn. 7); and

the petitioner has failed to point to one. Finally, the

Solicitor of Labor, the Comptroller General, and even

the (then) Atomic Energy Commission, have all testified

(H.R. Hearings before the Special Subcommittee on

Labor of the Committee on Education and Labor, on

“Administration of the Davis-Bacon Act”, 87th Cong.,

2d Sess., 1962) that even among the agencies themselves

there is no agreement concerning decision-making under

the Act—except for the above-noted functions explicitly

“There is no administrative procedure now available

expressly providing review * * *. Several contracting

agencies, including the Department of Energy, have ob-

jected to the proposed regulations * * *.” (Zbtd.)

a he

assigned by the Act itself.’ Is it any wonder, then, that

neither the Seventh Circuit nor the United States nor

the petitioner nor the respondent has found an agency—

other than our courts—in which the within claims and

rights can be adjudicated and enforced.”

** See, for views of the Labor Department on this| “situa-

tion which is presently complicating effective administra-

tion and enforcement of the act”, H.R. Hearings 1962, at

831-832, 901-902 [“‘we say the law has meant one thing

and * * * the Comptroller General * * * has said that it

means another”], 912-919; for views of the Comptroller

General that “jurisdiction over enforcement activities

under the act is at best divided”, H.R. Hearings 1962, at

284, 285 [“delays enforcement action and promotes incon-

sistencies”], 285-286 [“assumption of authority to de-

termine amounts of wage underpayments under * * * the

Secretary’s regulations has caused conflict”], 290, 295

(“The Davis-Bacon Act, itself, appears to make us re-

sponsible for determining the extent of violations for

purposes of debarment and wage adjustments”], 297

[“Nobody is given the authority to make the final de-

termination. Certainly it is denied to the contracting

agencies and is not given to the Secretary of Labor.”],

298-300, 321, 322, 1127-1128 [“the Secretary of Labor

must be eliminated from consideration for the reason that

there is no language giving him authority except that of

determining prevailing wage rates. * * * Nowhere is a

contracting agency authorized to make final determina-

tions of the amounts due aggrieved workers * * *.], 1128-

1131; for views of the Atomic Energy Commission, H.R.

Hearings 1962, at 615-616, 619-620 [“It is all very in-

formal and sort of works this way.”], 634-635 [“A.E.C.

procurement regulations * * *are not regulations in the

most formal sense * * *.”].

2°TIn addition to the noted conflict among the agencies

as to which has what functions in attempts to enforce the

Davis-Bacon Act, it is also clear that the statutory scheme

does not place the matter of construction of the cover-

age terminology within the special competence of any of

the various agencies. As the Solicitor of Labor advised

in his additional prepared statement, H.R. Hearings,

ceed cet

II.

WAGE-EARNERS HAVE A RIGHT OF ACTION

AGAINST THEIR CONTRACTOR-EMPLOYER TO

RECOVER UNPAID WAGES REQUIRED BY THE

DAVIS-BACON ACT (40 U.S.C. §§276a-276a-7) AND BY

THE GOVERNMENT CONTRACT PROVISIONS RE-

QUIRED BY §276a OF THE ACT, WHEN—BECAUSE

THERE ARE NO CONTRACT AMOUNTS WITHHELD

SUFFICIENT TO ASSURE EMPLOYEE PAYMENTS

(see 40 U.S.C. §276a-2(a)) NOR IS THERE A SURETY

PAYMENT BOND FOR THE PROTECTION OF EM.-

PLOYEES (see 40 U.S.C. §276a-2(b))—SUCH EM.

PLOYEE RIGHT OF ACTION IS THE ONLY REM.

EDY AVAILABLE TO MAKE EFFECTIVE THE CON-

GRESSIONAL PURPOSE OF THE DAVIS-BACON ACT

TO REQUIRE CONTRACTORS TO PAY THEIR EM-

PLOYEES THE WAGES REQUIRED BY THE ACT.

A. The “right of action” question was not raised,

briefed, argued or ruled on in the proceedings below

which have been brought here for review. Should the

Supreme Court elect, nevertheless, to consider this

question, it must be presumed that the courts below

2° (Continued)

1962, on “Administration of the Davis-Bacon Act,” at 822:

“No attempt was made by Congress in 1931, 1932 or 1935

to formulate definitions for the terms ‘construction, al-

teration and/or repair,’ or the terms ‘public buildings

and public works.’ It thus seems clear that Congress in-

tended no specialized meaning for this language. * * * The

terms ‘construction, ‘prosecution,’ ‘completion,’ and ‘re-

pair’ have also been defined by the regulations to incor-

porate the generally accepted, practical meaning of these

words as intended by Congress * * *.” And, of course,

our courts have no difficulty in applying statutory lan-

guage to the facts. See, e.g., U.S. (Hillsdale Rock Co.,

Inc.) v. Cortelyou & Cole, Inc., 581 F.2d 239, 243 (9th

Cir. 1978), where the Ninth Cireuit agreed with the dis-

trict court that “Hillsdale’s efforts were involved in the

‘construction, alteration, or repair of any public build-

>’ 9

ing or public work of the United States’ ”.

ay ee

have found and concluded (as in McDaniel v. Unt-

versity of Chicago, 7 Cir., 512 F.2d 583 and 548 F.2d

689, certiorari denied 434 U.S. 1033) that such em-

ployee right of action is the only remedy available

to make effective the congressional purpose to re-

quire contractors to pay their employees the wages

required by the Act.

Respondents have heretofore, in our “Brief in Opposi-

tion to Petition for Certiorari (at 26-29) and in para-

graphs 6-7 of the “Statement of the Case” in our instant

brief (at 5-8), sufficiently delineated the factual and

procedural posture of this cause at the time it was

brought here for review. There was no question in the

courts below on the summary judgment which the Sev-

enth Cireuit reviewed and reversed (Coutu v. Universi-

ties Research Association, Inc., 7 Cir., 595 F.2d 396-402;

J.A 35-46) concerning the existence of an employee right

of action. The closest petitioner ever got to that ques-

tion, and only then with respect to the “contract” issue

(Point I in this brief) rather than to any “right of ac-

tion” issue was petitioner’s assertion that “Plaintiff

Failed To Exhaust Administrative Remedies” (Deft.

Brief, 7th Cir. Docket No. 78-1165, at 14-16).

Further, our respondents assert in this case that their

right of action exists under circumstances which render

other statutory relief unavailable. Thus it must be pre-

sumed (as the lower courts doubtless would have found

if the “right of action” issue had been raised below) that

there are no amounts withheld by the government from

which respondents might be paid, see 40 U.S.C, §276a-

2(a), and that petitioner has not submitted a surety pay-

ment bond on which respondents might sue to recover un-

paid wages, see 40 U.S.C. §276a-2(b).

— on

The argument under this point II, therefore, is pre-

sented in the event this Court elects to consider the

“right of action” question.

B. There is a private right of action for back wages

against a contractor in favor of employees who have

performed Davis-Bacon Act work under a contract

procuring Davis-Bacon Act work of “construction,

alteration and/or repair, including painting and dec-

orating, of public buildings or public works of the

United States”. There is no administrative determina-

tion that this contract is not covered by the Act, nor

does the right of action here asserted require any

such determination.

1. The Davis-Bacon Act governs concerning this con-

tract. Both petitioner and the United States as amicus

concede that the right of action does exist if the Davis-

Bacon Act “obligation was assumed or * * * contemplated

by the contracting parties” (Petr. Brief, at 30), or if the

suit concerns “a contract that contains Davis-Bacon stip-

ulations” (Amicus Brief, at 17, n. 14), and that “An em-

ployee should also be able to recover in a contract action

if Davis-Bacon Act stipulations are inadvertently omit-

ted from a contract [since] the Davis-Bacon stipulations

would be deemed to be incorporated by operation of law”

(Iitd.)** The instant suit satisfies those descriptions of

employee private suits which even petitioner and the

United States agree are proper.

* Amicus, suggests that the “incorporation by opera-

tion of law” doctrine described in the Christian opinions,

312 F.2d 418 (Ct. Cl.), rehearing denied, 320 F.2d 345,.

cert. denied, 375 U.S. 954 (1963), requires that “the con-

tracting agercy concedes that the omission was erro-

neous’’ (Amicus Brief, at 17, n.14). No such require-

ment for a government agency concession is present in

the Christian case cr in the other authorities which deal

with the doctrine.

a oe

Respondents have hereinbefore summarized the facts

which show that the instant government contract is

covered by the Davis-Bacon Act and that the contracting

agency (AEC/ERDA/DOE) does view it as covered.

Statement of the Case, at 3-4. The facts are also

clear that to the extent that the petitioner contractor-

employer uses its own employees for Davis-Bacon Act

work, the ageney views that work as covered. [bid. Pe-

titioner and amicus, however, without pointing to any

governmental ruling or decision characterizing the con-

tract as not covered by the Act, make that non-existent

ruling the sime qua non and the essence of their position.

(See, e.g., Petr. Brief at 2, Amicus Brief at 1, 17).

Respondent and the respondent class do not, however,

assert the existence of any “erroneous coverage determina-

tion”, and their right of action does not depend upon the

assertion or existence of administrative error.

Whatever may be the reason—and whether that rea-

son involves administrative or eontractor individual or

collaborative error, disregard, neglect or intent—the ex-

press statutory requirements provided in the Davis-Bacon

Act as means by which respondent wage-earners might

recover their unpaid minimum wages have not been im-

plemented. The contracting agency did not withhold funds

from the petitioner, see 40 U.S.C. §276a, and the peti-

tioner did not submit a surety payment bond, see 40

U.S.C. §276a-2(b). In addition the ageney did not in-

voke available sanctions of termination, see 40 U.S.C.

§276a-1, and the Comptroller General did not invoke

the available blacklisting procedure, see 40 U.S.C. §276a-

2(a).

2. This right of action is predicated on Davis-Bacon

Act rights. The Davis-Bacon Act manifestly confers a

private right of action upon wage-earners. Congress in-

= =

tended it and the Act refers to it. Petitioner, however,

would have that suit limited only to situations where the

government contract contains explicit and complete con-

tract clauses detailing all a contractor’s Davis-Bacon Act

duties. The United States, on the other hand, approves

suit ‘‘if Davis-Bacon Act stipulations are imadvertently

omitted from a contract’’ (Amicus Brief, at 17, n.14), but

would have that suit limited only to situations where the

contracting agency concedes that the omission was in-

advertent. Neither limitation is proper nor required by

the Act, by administrative functions assigned by the Act,

or by concerns for economy.

Neither the United States nor this Court need be con-

cerned about the costs involved in complying with Davis-

Bacon nor the extent of private litigation to be anticipated.

At least as late as 1962, it was made clear by the De-

puty General Counsel of the Office of the Comptroller

General and the Chairman of the House Subcommittee

on Labor, that very few enforcement attempts—govern-

mental or private—had been made by any procedures

whatever”; and by the then Solicitor of Labor that even

employee wage suits on the required payment bounds

have ‘‘not been effective in the past; it has not been

used. It exists under the Davis-Bacon Act, but it has not

been used under the Davis Bacon Act.’’ H.R. Hearings,

1962, at 902. And so far as costs are concerned, the

Solicitor’s prepared statement submitted to the Subcom-

mittee on Labor of the Committee on Education and

Labor of the House of Representatives, contained a sec-

tion entitled ‘‘Does the Davis-Bacon Act Inflate Federal

Construction Costs’’, answered ‘‘no’’ to that question,

summarized the evidence for that conclusion, and restated

7? H.R. Hearings, 1962, on “Administration of the Davis-

Bacon Act’’, 87th Cong. 2d Sess., at 301-302.

mer ven

the congressional policy decision upon which the Act is

based. (H.R. Hearings, 1962, at 818-819.)**

Thus we come to one of the few suits ever filed under

the Davis-Bacon Act—the suit which did deal directly

with the right of wage-earners to sue their contractor-

employer when there is no payment bond available—

McDamel v. University of Chicago, 512 F.2d 583 (7th

Cir. 1975), reaffirmed on remand, 548 F.2d 689 (7th

Cir. 1977), certiorari denied, 434 U.S. 1033 (1978). There

the right of action upon which in the instant case, too,

respondents rely, was discussed. In McDaniel I, the

Seventh Circuit held that since the employees had avail-

able to them neither direct payment by the government

out of amounts withheld, nor an action against their em-

ployer and its surety on a surety payment bond, the em-

ployee suit against their contractor-employer alone was

required and “consistent with the congressional purpose

in the Davis-Bacon Act”. See 512 F.2d at 585, 587.

In McDaniel II, after remand by this Court ‘‘for fur-

ther consideration in light of Securities Investor Pro-

tection Corp. v. Barbour, 421 U.S. 412 (1975) and Cort v.

Ash, 422 U.S. €% (1975)”, 423 U.S. 809 (1975), the Sev-

enth Circuit reaffirmed McDaniel I. In the course of its

second opinion, the ccurt in McDaniel II dealt at length,

inter alia, with the two factors which petitioner and

amicus now claim as the basis for denying the right of

our respondents to whatever remedy remains under the

Davis-Bacon Act after agency and contractor non-compli-

ance with the withholding and bonding requirements es-

** See also the Solicitor’s testimony that “Congress has

not injected a cost factor into the Davis-Bacon Act = one

of the standards to be used in determinin

rates will apply’’ (H.R. Hearings, 1962, at in), ama. and <n

like testimony of then Secretary of Labor Arthur J.

Goldberg (id., at 47, 49, 53, 55)).

ea tem

tablished by law.* In McDaniel II, the court con-

sidered all factors in light of this Court’s opinions in

Cort and Securities Investor, and disagreed ‘directly and

emphatically with assertions now again made by peti-

tioner and amicus. Thus the Seventh Circuit held, inter

alia, (a) that far from there being any congressional in-

tent to deny this remedy, Congress intended it, (b) that

Congress later also recognized ‘‘that laborers have rights

of action under the contractual provisions required by 40

U.S.C. §276a,” (c) that Congress also recognized that

“laborers are able to sue at least as third-party bene-

ficiaries of the contract required by 40 U.S.C, §276a,”

(d) that “Davis-Bacon Act contemplates by its terms some

private enforcement” and “a private action,” and that

“the policy * * *, private suit, is not really in question,”

and (e) that because the other remedies based on with-

holding of contractor payments and the submission of

a@ surety payment bond were “ineffective” this “private

right of action in the Davis-Bacon Act is necessary to

effectuate the intention of Congress in passing the

statute”. See 548 F.2d at 694-695.

3. Congress has approved, not disapproved, the pri-

vate right. Amicus claims that Congress rejected em-

ployee wage suits because it rejected Congressman Goo-

dell’s amendment which would have allowed ‘‘judicial

review’’ (Amicus Brief, at 24-25). The amendment was

introduced for the purpose of permitting judicial review

of the Secretary of Labor’s prevailing wage determina-

* The two factors asserted in defense of the existence

of an employee private suit, are “strong evidence of con-

essional intent to deny any remedy other than the en-

orcement provisions expressly contained in the Davis-

Bacon Act” (see amicus brief, at 23; petr. brief, at 31);

and “It would also be inconsistent with the legislative

scheme to imply a private enforcement remedy” (see

am'cus brief, at 30; petr. brief, at 31).

—_ ee

tions.”* In the case at bar, as in McDaniel, the wage-earners

rely on the Secretary’s wage determinations, and simply

seek in this suit to recover what they are due by reason

of those determined wage rates.

Amicus also claims that Congress did not know what it

was doing when it enacted the Portal-to-Portal Act limi-

tations provisions concerning suits (including class ac-

tions) under the Davis-Bacon Act. (Amicus Brief, at 24-

29). Plainly, however, Congress knew what it was about.

Much of the debate in 1947 related to the advisability and

propriety of including the Davis-Bacon Act and the Walsh-

Healey Public Contracts Act, along with the Fair Labor

Standards Act, in the 1947 legislation.*® Congress also

knew what it was doing when it rejected S. 70, a bill similar

to H.R, 2157, but which contained no reference whatever

to the Davis-Bacon Act or to the Walsh-Healey Public

Contracts Act. Cf. S. Report No. 37 (80th Cong., 1st Sess.)

concerning S. 70.*"

*° See, e.g., Congressman Fogarty’s statement, 110 Cong

Ree. 1201 (1964).

*° In addition to at least 70 separate references to)the

Davis-Bacon Act in the Senate debates (93 Cong. Ree.

2081-2098, 2110-2135, 2175, 2192-2198, 2230-2277, 2287-2311,

2348- 2377, 4371-4372 (1947)), and over 20 separate refer-

ences to the Davis-Bacon Act in the House debates (93

Cong. Ree. 1488-1517, 1556-1574, 4383-4391 (1947)), there

are like references in the lengthy 8. Report No, 48, in

H.R. Report No. 71, and in the Conference Report (H.R.

Report No. 326, 80th Cong., 1st Sess.), on H.R. 2157 which

became the Portal-to-Portal Pay Act of 1947.

7 Further, amicus’ assertion that ‘‘ reference in 29 U.S.C.

255 to the Walsh-Healey and Davis-Bacon Acts was itself

an afterthought’’ reflects just what vocal opponents of the

Portal-to-Portal Act argued in seeking to exclude the

Davis--Bacon Act and Davis-Bacon suits from its coverage.

See, e.g., S. Report No. 48, ‘‘Minority Views,’’ at 2-3.

Both the Senate and the House rejected that assertion,

and H.R. 2157, as amended in conference, became law.

poy. geen

Amicus forgets that there is no limitation provision set

forth in the Davis-Bacon Act, 40 U.S.C. $§$276a-276a-7.

There is a one-year provision for suits under the Miller

Act, 40 U.S.C. §§270a-270e, concerning ‘‘Every suit insti-

tuted under this section’’ [§270b(b)]. Suits instituted

under the Davis-Bacon Act are not suits instituted under

section 270b of the Miller Act. In addition, however, suits

arising under the Davis-Bacon Act and predicated on

rights established by that Act alone, are expressly subject

to the Portal-to-Portal Act two-year (if by willful vio-

lation, three-year) limitation provision (29 U.S.C. $255

(a)). Thus the Portal-to-Portai Act not only affirms the

existence of a Davis-Bacon Act private action, but clearly

excludes the proposition that such right of action is pre-

dicated upon or is limited to an action pursuant to the

provisions of the Miller Act. Were the right of action in-

deed so limited, it would have to be barred after one

year — not two years (and for willful violation, three

years) — to be consistent with the Miller Act and to

obviate additional multitudes of legal and practical prob-

lems arising out of any presumed conflict between these

limitations provisions.

Amicus suggests next that a private right of action in

favor of laborers and materialmen ‘‘cannot be inferred

from the obligations imposed on contractors under [the

Miller Act]”, so “there is no reason to infer a similar pri-

vate right of action in favor of laborers and mechanics

from the obligations imposed under [the Davis-Bacon

Act]” (Amicus Brief, at 29, n. 23). The fact that the one

statute is not the other, and the differences in the pur-

poses and history of them both, are reason enough. But in

addition, the basic premise of amicus is incorrect, for

“Where the general contractor fails to furnish such

a bond, the laborers and materialmen * * * may sue

the general contractor and recover from him. Strong

v. American Fence Const. Co., 245 N.Y. 48” (Seaboard

a

Surety Co. v. Standard Acc. Ins. Co., 277 N.Y. 429

(1938); emphasis supplied).

Thus, the prime authority quoted by amicus for its propo-

sition is noted as authorizing and not rejecting a private

remedy for an intended beneficiary when there is no con-

tractor’s bond. And as to the remaining cases cited (Ami-

cus Brief, at 28-29), none of them stand for the proposition

asserted.

Finally, amicus suggests that it ‘‘would be inconsistent

with the legislative scheme” (Amicus Brief, at 30-35) to

permit these wage-earners a remedy for the deprivation

of their wages earned under and assured to them by the

Davis-Bacon Act. There is no inconsistency. We have al-

ready pointed to the evidence establishing that this suit

does not affect administrative functions under the Davis-

Bacer Act, that there are no administrative procedures

available to employees for adjudication and vindication

of their Davis-Bacon Act rights, and, indeed, that ‘‘ Nobody

is given the authority to make the final determination’”’

(Resp. Brief, at 38). In these circumstances, then, to

refuse respondents a remedy when Congress has so clearly

intended that they be paid for their labor the amounts to

which the Act entitles them by right, would amount to

action patently inconsistent with the legislative scheme.

And that deprivation would not alone be contrary to the

legislative purpose and scheme; it would conflict with

basic Fifth Amendment due process rights. See United

States ex rel. Von Hoffman v. City of Quincy, 71 U.S.

403, 410 (‘‘A right without a remedy is as if it were not.

For every beneficial purpose it may be said not to exist.

** * A different result would leave nothing * * * but an

abstract right—of no practical value—and render the pro-

tection of the Constitution a shadow and a delusion.’’)

Notwithstanding the general and conclusory assertions

by petitioner and amicus concerning the effect upon re-

ice,

spondents’ cause of this Court’s recent ‘‘private right of

action’’ trilogy (see Petr. Brief, at 30-31; Amicus Brief, at

19-20, 34), it is clear that this private suit satisfies all

the appropriate criteria. Thus, for example,

(1)

(2)

(3)

(4)

(5)

(6)

this being a situation ‘‘in which it is clear that

federal law has granted a class of persons certain

rights,” the remedy exists unless it is shown that

Congress had ‘‘an explicit purpose to deny such

cause of action.” Cannon v. University of Chica-

go, 99 S.Ct. 1946, 1956 (1979) ;

the remedy being ‘‘necessary or at least helpful

to the accomplishment of the statutory purpose,

the Court is decidedly receptive to its implication

under the statute.’’ Cannon, id., at 1961;

the fact that other provisions of the Davis-Bacon

Act (see, e.g., 40 U.S.C. §$276a—2) ‘‘create express

remedies [is not acceptable] as a sufficient reason

for refusing to imply an otherwise appropriate

remedy under a separate section’”’ (see 40 U.S.C.

§276a). Cannon, id., at 1965;

to the extent that Congress may be said to have

failed ‘‘expressly to consider [this] private reme-

dy is not inevitably inconsistent with an intent

on its part to make [this] remedy available’’ for

this intent appears ‘‘implicitly in the language

or structure of the statute, or in the circumstances

of its enactment.’’ Transamerica Mortgage Advt-

sors, Inc. v. Lewis, 100 S.Ct. 242, 246 (1979).

since the statute declares and creates certain em-

ployee rights, the statute ‘‘by its terms neces-

sarily contemplates that the issue of [those rights]

under its criteria may be litigated somewhere.’’

Transamerica, ibid.

the fact that employees were intended by Con-

gress as the especial beneficiaries of the minimum

wage rates required to be paid them under the

Davis-Bacon Act, ‘‘strongly suggests that Con-

gress was [not] unwilling to impose * * * poten-

tial monetary liability to a private suitor’’. Trans-

america, id., at 248.

(7)

(8)

—_

this being a situation in which ‘‘the statute in

question * * * prohibited certain conduct or

created federal rights in favor of private par-

ties,’’ it falls within the class of those cases in

which implied private remedies exist. Touche Ross

¢é Co. v. Redington, 99 S.Ct. 2479, 2485 (1979).

this is a situation ‘‘where congressional purposes

are likely to be undermined absent private en-

forcement’’ and the private remedy is sought by

‘the particular class intended to be protected by

the statute’’. Piper v. Chris-Craft Industries, Inc.,

430 U.S. 1, 25, 97 S.Ct. 926, 941 (1977). Plainly,

since a purpose of ‘‘conferring a right of action

on employees to recover from the contractor”’

(Umted States v. Binghamton, 347 U.S. 171, 176

(1954) is expressed in the statute itself, the

private remedy serves ‘‘rationally to complement

its remedial scheme’’ (see Whirlpool Corp. v.

Marshall, 100 S.Ct. 883, 891 (1980)).

CONCLUSION

The judgment of the court of appeals should be affirmed.

Respectfully submitted,

Huecu B. Arnoup

Dantet N. Kansan

ARNOLD AND Kapgan

11 South LaSalle Street

Chicago, Illinois 60603

(312) 236-0415

Rosert Jay Nve

NYE AND NYE

420 North Euclid Avenue

Oak Park, Illinois 60302

(812) 386-7373

Attorneys for Respondent

Stanley E. Coutu, and the

Respondent Class.

August 1, 1980

eer) a8

APPENDIX

Portions of opinion of the Court of Appeals

for the Seventh Circuit, in Coutu v.

Universities Research Association, Inc.,

595 F.2d 396 (J.A. 35-46):

“This action was brought by plaintiff, an electro-

nies technician, and his class seeking $5,000,000 in

damages and other relief on the ground that defen-

dant did not pay them the prevailing wages required

by the Davis-Bacon Act (40 U.S.C. §276 et seq.) for

their construction work. Defendant is a not-for-profit

consortium of universities formed to facilitate scien-

tific research and to design, construct and operate

the Fermi National Accelerator Laboratory in Ba-

tavia, Illinois. This facility is a 6800-aecre Kane Coun-

ty site containing laboratories, research offices, re-

lated facilities, and the world’s largest proton ac-

celerator system. It is used to earry out research in

the field of high-energy physics by numerous scien-

tists from institutions located throughout the world.

(App. 50 n. 3.) The Davis-Bacon Act requires govern-

ment construction contracts to contain a provision

stating that the minimum wages to be paid various

classes of laborers and mechanies shall be based upon

the wages to be determined by the Secretary of Labor

to be prevailing where the work is to be performed.

40 U.S.C. §276a(a). * * *.

“Plaintiff and his class alleged in their ‘First

Cause of Action’ (hereinafter ‘Count I’) that defen-

dant violated the Davis-Bacon Act by not paying

members of plaintiff’s class the minimum wages ‘re-

quired to be paid pursuant to the said contract and

the prevailing wage determinations of the Secretary

of Labor and the Davis-Bacon Act’ (App. 2). Count

I was dismissed in an unreported October 8, 1975,

— Au—

memorandum opinion and order of [a district judge].

However, that order did not dismiss the remaining

six Counts of the complaint.

“On August 10, 1976, [another district judge] to

whom the class action had been transferred, certi-

fied the plaintiff class. Discovery was apparently

stayed in February 1977. In March 1977, defendant

filed a motion for summary judgment. In November

1977, [the district judge] handed down a memoran-

dum order granting that motion. The court noted

that in Count IT the plaintiff class alleged that the

contract fell within the purview of the Davis-Bacon

Act and that the contract by its terms provides for

‘payment to members of plaintiff class at the legal

wage rate applicable to work actually performed.’

* * * The court then held that the contract failed to

contain the ‘requisite Davis-Bacon Act specifications

for maintenance of the claims stated in Count IIT’

and accordingly dismissed that Count. Counts III

through VII of the complaint were based on state

claims, and the district court declined to assert pend-

ent jurisdiction over them ‘due to the legally insub-

stantial nature of the federal claims.’ Therefore, the

complaint was dismissed in its entirety.

«* * * [I]n dismissing Count I [the first district

judge] held only that if the contract was not a Davis-

Bacon Act contract plaintiff could not recover. Clear-

ly if a contract contains the required wage stipula-

tions, this would show that it was a Davis-Bacon Act

contract. [That district judge] apparently recognized,

however, and we agree, that clauses in the contract

other than the wage stipulations may reveal that the

contract was one for Davis-Bacon Act work (App.

25).

“Thus two theories of recovery remained open to

the plaintiff class after [the first district judge’s]

dismissal: (1) there may have been Davis-Bacon Act

stipulations in the contract or (2) there may have

— Aut —

been other evidence that the contract was oné for

Davis-Bacon Act work, in which case the required

stipulations arguably become a part of the contract

by operation of law. [The second district judge’s]

grant of summary judgment was based on the affi-

davit (n. 4 supra) tending to disprove only the first

of these two theories. We hold that summary judg-

ment was improperly entered against plaintiff and

his class because the required wage stipulations were

incorporated by operation of law.

*‘The Davis-Bacon Act Applies to Construction,

Alteration or Repair Work Performed

by Defendant

“The key provision in the contract between de-

fendant and the United States Government acting

through ERDA is Article XXXIII which provides

in pertinent part as follows:

‘This contract does not contemplate the per-

formance of work by the Association, with its

own employees, which the Commission determines

is subject to the Davis-Bacon Act. Such work,

if any, performed under this contract shall be

procured by subcontracts which shall be subject

to the written approval of the Commission and

contain the provisions relative to labor and wages

required by law to be included in contracts for

the construction, alteration and/or repair, in-

cluding painting and decorating, of a publie build-

ing or public work.’

In this lawsuit, plaintiff contends that defendant’s

own employees performed and are performing con-

struction, alteration and repair work at the Fermi

Laboratory, so that the Davis-Bacon Act wage pro-

visions are applicable to the work done by plaintiff

and his class. We agree that. if the defendant actually

performed such work with its own employees at the

rom

Fermi Laboratory, they became entitled to the pre-

vailing wages in Kane County where the work was

to be performed. * * *

“Indeed, in a January 23, 1973 [sic. 1968], letter

from the Atomic Energy Commission’s Chicago Op-

erations Office Manager to the president of the de-

fendant, both these parties foresaw that conditions

might arise which might make it necessary for the

defendant to perform Davis-Bacon Act work and in

such instance to modify the contract to incorporate

the Davis-Bacon Act provisions relative to labor and

wages. Since under McDaniel I the contract was al-

ready so modified by operation of law, amendments

to the cotnract were not needed to accomplish that

result.

«* * * Because the provision to pay the prevail-

ing wage rate was incorporated by operation of law,

the affidavit relied upon by the district court to the

effect that no Davis-Bacon Act ‘stipulations requir-

ing the payment of prevailing wages have ever been

made a part of or incorporated in’ the contract (see

n. 4 supra) is insufficient to support the grant of

summary judgment. * * *

“Tt is uncontested that the Secretary of Labor has

published general wage determinations in decisions

published in the Federal Register that are applicable

to labor on government projects in Kane County,

Illinois, where the Fermi Laboratory is located and

where the defendant’s alleged construction activity

has been performed. Therefore the district court was

mistaken in concluding that to sustain plaintiff’s posi-

tion would require it to make wage determinations for

the parties.

= AY —

“Exhaustion of Administrative Remedies

Is Not Required

“If defendant or our own research had uncovered

administrative regulations affording plaintiff and his

class relief in this situaton, we might require recourse

to that remedy before permitting this lawsuit to pro-

ceed. The Davis-Bacon Act itself does not contain a

provision requiring exhaustion of administrative rem-

edies in this kind of case. Moreover, we rejected

such an argument in the second McDaniel case where

the University of Chicago had argued that admin-

istrative procedures afforded adequate relief to the

individual employees of a government contractor.

* * * As the Government itself recognized in Mc-

Daniel IT.

‘Neither the statute nor the regulations promul-

gated thereunder provide any administrative

remedy in favor of an employee who has been

injured by the failure to include the prevailing-

wage provisions in a contract.’ (Solicitor Gen-

eral’s amicus curiae brief opposing the petition

for a writ of certiorari in University of Chicago

and Argonne v. McDaniel, 434 U.S. 1033, at 25,

n. 20.)

«* * * Plaintiff must now be permitted to resume

discovery (or employ other suitable means) to de-

termine whether defendant used plaintiff and his

class to perform construction, alteration or repair

work at the Fermi Laboratory. If so, under the

Davis-Bacon Act they will be entitled to recover

wages that the Secretary of Labor has determined

to be prevailing for the corresponding classes of

laborers and mechanics employed on similar projects

in Kane County, Illinois. Since the district court

had jurisdiction over Count II, it also had pendent

jurisdiction to decide state claims presented in Counts

TII- 7”