# Respondents Brief — Universities Research Assn., Inc. v. Coutu > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_2151%3A06 ## Record - **Collection:** Supreme Court brief - **Document type:** Respondents Brief - **Published:** January 1, 1981 - **Citation:** 450 U.S. 754 ## Text = *’ 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’ 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