Appendix — Building & Construction Trades Department v. Martin

us |

92°13 OyILED |

No. ———— JUL 20 1992

fa eteianbenitionih

“OFFICE OF THE CLERK |

IN THE -- er,

Supreme Court of the United States

OCTOBER TERM, 1992

—

BUILDING AND CONSTRUCTION TRADES DEPARTMENT,

AFL-CIO, et al.,

Petitioners,

v.

LYNN MARTIN, SECRETARY OF LABOR, et al.,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

APPENDIX TO

PETITION FOR A WRIT OF CERTIORARI

LAURENCE J. COHEN

TERRY R. YELLIG

(Counsel of Record)

1125 15th Street, N.W.

Washington, D.C. 20005

(202) 785-9300

Attorneys for Petitioner

Building and Construction

Trades Department, AFL-CIO

ROBERT J. CONNERTON

PHILLIS PAYNE

PAUL GREENBERG

1920 L Street, N.W.

Washington, D.C. 20036

(202) 466-6790

Attorneys for Petitioner

Laborers’ International Union

of North America, AFL-CIO

WILSON - Epes PrintiING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

® ES co

TABLE OF CONTENTS

APPENDIX A Page

Decision of the United States Court of Appeals

for the District of Columbia, Building and Con-

struction Trades Department, AFL-CIO, et al. v.

Lynn Martin, Secretary of Labor, et al., April 21,

OR Riar eed aR A Rea hn NET SEMIN SERS At na la

APPENDIX B

Decision of the United States Court of Appeals

for the District of Columbia, Building and Con-

struction Trades Department, AFL-CIO, et al. v.

Raymond J. Donovan, Secretary of Labor, et al.,

July 6, 1983 ............. Meee

APPENDIX C

Decision of the United States District Court for

the District of Columbia, Building and Construc-

tion Trades Department, AFL-CIO, et al. v. Eliza-

beth H. Dole, Secretary of Labor, et al., September

eee ocaseaesnnbnihg icaeeksnemitconsanatekone aaa aoe

APPENDIX D

Decision of the United States District Court for

the District of Columbia, Building and Construc-

tion Trades Department, AFL-CIO, et al. v. Ray-

mond J. Donovan, Secretary of Labor, et al., De-

I is EE pire ae 72a

APPENDIX E

Decision of the United States District Court for

the District of Columbia, Building and Construc-

tion Trades Department, AFL-CIO, et al. v. Ray-

mond J. Donovan, Secretary of Labor, et al., July

BN MIE aiccdiunkcahs .ctcrgeecacota dca REID CET ee 79a

APPENDIX F

Decision of the United States District Court for

the District of Columbia, Building and Construc-

tion Trades Department, AFL-CIO, et al. v. Eliza-

beth H. Dole, Secretary of Labor, et al., January

eas AEE saci pccuiinatentaiamatnanalhen ded pene ee cer. 98a-

il

TABLE OF CONTENTS—Continued

APPENDIX G Page

Decision of the United States District Court for

the District of Columbia, Building and Construc-

tion Trades Department, AFL-CIO, et al. v. Ray-

mond J. Donovan, Secretary of Labor, et al., De-

COMDSE B1, LOGE ..... es. -venescnenincsniinisiassesmnanmmenete ae

APPENDIX H

Notice Establishing Effective Date for Amend-

ments of 29 C.F.R. Parts 1 and 5, 55 Fed. Reg.

GO14B-BO (ADOC). oncuscccncscinncdacsanseae 104a

APPENDIX I

Procedures for Predetermination of Wage Rates;

Labor Standards Provisions Applicable to Con-

tracts Covering Federally Financed and Assisted

Construction and to Certain Nonconstruction Con-

tracts: Final Rule. 54 Fed. Reg. 4234-44 (1989)... 115a

APPENDIX J

Procedures for Predetermination of Wage Rates;

Labor Standards Provisions Applicable to Con-

tracts Covering Federally Financed and Assisted

Construction and to Certain Nonconstruction Con-

tracts: Proposed Rule. 52 Fed. Reg. 31366-31372

(1008? a eae ssi ape ene oan

APPENDIX K

Procedures for Predetermination of Wage Rates;

Labor Standards Provisions Applicable to Con-

tracts Covering Federally Financed and Assisted

Construction and to Certain Nonconstruction Con-

tracts: Final Rule. 47 Fed. Reg. 23644 and 23658

(1DBR) ......:.:020<<cnsescnsesenensdeeneehe ena eins 18la

APPENDIX L

187 Cong. Rec. H1526-33 (March 7, 1991).............. 28la

APPENDIX M

187 Cong. Rec. S3544-53 (March 19, 1991) ............ 821a

——

iii

TABLE OF CONTENTS—Continued

APPENDIX N Page

137 Cong. Rec. S3627-32 (March 20, 1991) ........ 366a

APPENDIX O

Excerpt from Hearings on “Departments of Labor,

Health and Human Services, Education, and Re-

lated Agencies Appropriations for 1992” before

the Subcommittee on the Departments of Labor,

Health and Human Services of the House Com-

I oo ccccnktennaceasesesnsvessanunauanunstnn 387a

APPENDIX P

Excerpt from House Report 102-121, 102d Cong.,

IR eel Ta Oe ERE ao See 896a

APPENDIX Q

Excerpt from Senate Report 102-104, 102d Cong.,

ee 7 sea beseincesuibnoms 400a

APPENDIX R

Excerpt from Conference Report 102-282, 102d

Cong., Ist Session ......... Teena shy oh Lae LIN Oe 405a

APPENDIXS

137 Cong. Rec. H10856 (November 22, 1991) ...... 409a

APPENDIX T

187 Cong. Rec. 817782 (November 22, 1991) ....... 4lla

APPENDIX U

187 Cong. Rec. H10902 (November 22, 1991) ....... 418a

APPENDIX V

Affidavit of John T. Dunlop (July 15, 1982)........ 422a

APPENDIX W

Affidavit of Robert A. Georgine (April 26, 1989).. 432a

iv

TABLE OF CONTENTS—Continued

APPENDIX X

Affidavit of George A. Miller (December 31,

1990)

APPENDIX Y

Affidavit of James M. Warren (April 26, 1989) _.

APPENDIX Z

Affidavit of Carl E. Booker (April 27, 1989)...

APPENDIX AA

Affidavit of John T. Dunlop (December 17, 1990)

APPENDIX BB

Excerpts from ‘Generel Wage Determinations

issued under the Davis-Bacon and Related Acts”

(U.S. Department of Labor, January 2, 1987)

APPENDIX CC

Relevant Statutory Provisions

Davis-Bacon Act of 1935, 40 U.S.C. § 276a

et seq.

Dire Emergency Supplemental Appropriations

For Consequences of Operation Desert Shield /

Desert Storm, Food Stamps, Unemployment

Compensation Administration, Veterans Com-

pensation and Pensions, and Other Urgent

Needs Act of 1991, Pub. L. No. 102-27, 105

Stat. 130 et seq. ..

Administrative Procedures Act, 5 U.S.C.

§ 553

Administrative Procedures Act, 5 U.S.C.

§ 706 = 7 ae re

Page

442a

449a

465a

474a

479a

520a

523a

524a

526a

la

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 31, 1991 Decided April 21, 1992

No. 905345

BUILDING & CONSTRUCTION TRADES

DEPARTMENT, AFL-CIO, et al.,

Appellants

V.

LYNN MARTIN, SECRETARY OF LABOR, et al.

Appeal from the United States District Court

for the District of Columbia

(Civil Action No. 82-01631)

Terry R. Yellig for appellant Building and Construc-

tion Trades Department, Inc.

Robert J. Connerton, with whom Paul Greenberg was

on the brief, for appellant Laborers’ International

Union of North America, AFL-CIO.

Robert M. Loeb, Attorney, Department of Justice, with

whom Stuart M. Gerson, Assistant Attorney General,

Jay B. Stephens, United States Attorney, and Anthony J.

Steinmeyer, Attorney, Department of Justice, were on

the brief, for appellees.

2a

Jerry L. Hill and Mark Bredemeier were on the brief

for amicus curiae Landmark Center for Civil Rights,

urging that this Court uphold the validity of the helper

regulations.

Maurice Baskin and Patrick J. Stewart were on the

brief, for amicus curiae Associated Builders and Con-

tractors, Inc., urging that the District Court’s decision

be affirmed.

Before D.H. GINSBURG, SENTELLE and HENDERSON,

Circuit Judges.

Opinion for the Court filed by Circuit Judge SENTELLE.

SENTELLE, Circuit Judge: The Building and Trades

Department, AFL-CIO, and the Laborers’ International

Union, AFL-CIO, (“the unions”) appeal from an order

of the District Court vacating its injunctions of the im-

plementation of five regulations promulgated by the Sec-

retary of Labor pursuant to the Davis-Bacon Act. The

provisions in question regulate the wages and use of the

“helper” class of workers on federal construction proj-

ects. We uphold four of the challenged provisions, but

strike down as arbitrary and capricious a formula for

calculating a cap on the ratio of helpers to journeymen on

federal construction projects.

BACKGROUND

In 1931, Congress enacted the Davis-Bacon Act (the

“Act”), 40 U.S.C. § 276a et seg. (1986), to ensure that

workers on federal construction projects were paid no

less than prevailing wage rates in the locality of such

projects. 74 ConG. Rec. 6510 (1931) (statement of Sen.

Bacon). As noted by this Court,

[t]he evil sought to be remedied was that, with the

precise specifications set out in federal contracts and

the increasing standardization of building-material

prices, the low-bidding contractor on a federal job

was generally the one who paid the lowest wages... .

3a

The contractor would accomplish this by taking

advantage of widespread unemployment in the con-

struction industry and hiring workers at substand-

ard wages, often bringing a low-paid crew in from

distant areas.

Building and Construction Trades’ Dept., AFL-CIO v.

Donovan, 712 F.2d 611, 613-14 (D.C. Cir. 1983) (cita-

tions omitted), cert. denied, 464 U.S. 1069 (1984).

Under the Act, the advertised specifications for each fed-

eral construction project in excess of $2,000 must contain

minimum wage provisions for each class of laborer and

mechanic based upon prevailing wages in the locality of

performance as determined by the Secretary of Labor.

40 U.S.C. § 276a(a) (1986).

Pursuant to the broad statutory mandate to set wages

and classify workers, the Secretary of Labor has by reg-

ulation recognized several categories of workers and set

out rules governing their employment on federal construc-

tion projects. Prior to 1982, the regulations permitted

the use of the helper classification only where the tasks

to be performed by helpers were defined and could be

differentiated from the duties of journeymen, and where

the helper classification prevailed in the area where the

contract was to be performed. Regulatory changes pro-

posed in 1982 attempted to redefine helper as a “semi-

skilled worker (rather than a skilled journeyman me-

chanic) who works under the direction of and assists

a journeyman.” 29 C.F.R. §5.2(n)(4) (1991). The

new regulation went on to permit an overlap of duties

between those of a helper and those of a journeyman.

Where the older regulations had permitted the use of

the helper classification in areas where that job title pre-

vailed, the new regulation permitted the use of the classi-

fication where the use of helpers was an “identifiable”

local practice. 47 Fed. Reg. 23,655 (1982). The regu-

lation further permitted the use of no more than two

helpers for every three journeymen. 29 C.F.R. 8 5.5(a)

(4) (iv) (1991).

——

4a

The unions immediately sued to enjoin implementation

of the 1982 helper regulations and several other of the

Secretary’s new proposals. Finding for the unions in part,

the District Court enjoined implementation of the helper

provisions. Building and Construction Trades Dept., AF L-

CIO v. Donovan, 553 F. Supp. 352 (D.D.C. 1982). On

appeal, we affirmed the District Court’s judgment in part

and reversed in part. Building and Construction Trades’

Dept., T7112 F.2d at 633. We agreed that the Secretary had

improperly permitted the use of helpers in localities

where their actual use was merely “identifiable” as op-

posed to “prevailing.” Jd. at 624-26. However, we found

acceptable the Secretary’s broad definition of helper. Jd.

at 626-30. The District Court modified its judgment

accordingly by rescinding its injunction as to the defini-

tion of helper, while leaving in place its injunction as to

the test for whether helpers are “prevailing” and as to the

other helper provisions. Building and Construction Trades

Department, AFL-CIO v. Donovan, 102 Lab. Cas. (CCH)

{34,648 (D.D.C. 1984). The District Court expressed its

willingness to consider rescinding its remaining injunction

if the Department of Labor (“DOL”) revised the helper

regulations. Jd.

The Secretary proposed new helper regulations on

August 19, 1987, 52 Fed. Reg. 31,366 (1987), and gave

notice of their adoption on January 27, 1989, 54 Fed. Reg.

4234-44 (1989). Obedient to our holding in Building and

Construction Trades’ Dept. that a “prevailing” use of help-

ers is more than merely an “identifiable” use, the new

proposal set forth two alternative tests for determining

whether the use of helpers “prevails” in a _ particular

locality. The regulation provides:

(1) If the prevailing wage for a particular journey-

man classification is a wage that is paid to the major-

ity of the journeymen.. ., then the practice followed

by those contractors whose rates are adopted as pre-

vailing for the journeyman shall also be deemed the

5a

prevailing practice in determining whether to Issue a

helper classification. Any ambiguity with regard to

such practice, will be resolved—by following the rule

in paragraph (d)(2) of this section with respect to

those contractors.

(2) If the prevailing wage for a particular journey-

man classification is the average of the wages paid to

the journeymen, weighted by the total number of

journeymen . . ., then the total number of workers in

the classification employed by contractors utilizing

helpers (journeymen plus apprentices, trainees, and

helpers as defined in § 5.2(n) (4) of this chapter) on

reported projects will be compared to the total num-

ber of workers in the classification employed by con-

tractors not utilizing helpers . . ., and the practice

which covers the majority of such workers shall be

deemed the prevailing practice in determining whether

to issue a helper classification.

29 C.F.R. § 1.7(d) (1)-(2) (1991).

In other words, where the Secretary verifies that the

prevailing journeyman wage in a locality where a federal!

construction project is to be situated is the wage paid to

the majority of journeymen in that locality, then the

helper classification is deemed to prevail if contractors

who pay the prevailing wage use helpers. The classifica-

tion is deemed not to prevail if contractors who pay the

prevailing journeyman wage do not use helpers. Second,

if the Secretary has used a weighted average method to

determine the prevailing wage for journeymen, then the

Secretary compares the total number of workers employed

by contractors in the area who use helpers to the total

number of workers employed by contractors who do not.

The practice followed by the employers of the larger num-

ber is deemed the prevailing practice. Jd. In the present

appeal the unions attack these new tests.

‘ ’

The 1989 regulations also revised the “conformance’

procedure prescribed by the Secretary. The conformance

| ciel

6a

procedure is a long-used device for adding an employee

classification to the specifications of an existing govern-

ment contract. Generally, the conformance procedure pro-

vides that whenever an existing contract does not contain

a classification otherwise necessary to perform a govern-

ment contract, the contracting officer may propose the

appropriate classification and wage rate to the Adminis-

trator of the Wage and Hour Division, who is authorized

to approve, modify, or disapprove the contracting officer’s

action within thirty days. See 29 C.F.R. § 5.5(a) (1) (ii)

(1991).

The revised conformance procedure provides that the

contracting officer may approve an additional classifica-

tion and wage rate only when the work to be performed

is not already performed by a classification in the existing

wage determination, the proposed classification “is utilized

in the area by the construction industry,” and the pro-

posed wage rate bears a reasonable relationship to the

Wage rate contained in the determination. 29 C.F.R.

§$ 5.5(a) (1) (ii) (A) (emphasis supplied). The 1989 revi-

sion excepted the helper classification from the prohibition

against performance of work already assigned to another

classification in the contract. 29 C.F.R. § 5.5(a) (1) (ii)

(A) (1) (1991). Additionally, the Secretary of Labor, in

a new provision, expressly added the requirement that

“with respect to helpers ... such a classification prevails

in the area in which work is to be performed,” 29 C.F.R.

§ 5.5(a) (1) (ii) (A) (4) (emphasis supplied), not merely

is “utilized.”

On September 24, 1990, the District Court vacated the

remaining portions of its injunction. It thereby rejected

all of the unions’ challenges, concluding that our prior

opinion compelled it to uphold these regulations. Building

and Construction Trades Department, AFL-CIO v. Dole,

116 Lab. Cas. (CCH) {35,3895 (D.D.C. 1990). Subse-

quently, the unions appealed to this Court. The unions

contend that the “prevailing” test undermines the purpose

7a

and objectives of the Act by, among other things, recog-

nizing “non-prevailing practices.” They further argue

that the DOL’s definition of helper subverts the purpose of

the Act by allowing two or more worker classes to perform

the same task. The unions also object to both of the 1989

modifications to the conformance procedures and to the

cap of two-to-three on the ratio of helpers to journeyman

employable on federal construction projects, 29 C.F.R.

§$ 5.5(a) (4) (iv) (1991), which remained unaffected by

the 1989 modifications.

DISCUSSION

A. The Appropriations Bill Rider

Before discussing the substance of the regulations, we

first note that the unions object to the authority of the

Secretary to implement the helper regulations. On April

10, 1991, Congress attached a rider to an emergency sup-

plemental appropriations bill making furds available for

the United States military operation in the Middle East.

Dire Emergency Supplemental Appropriations for Conse-

quence of Operation Desert Shield/Desert Storm, Food

Stamps, Unemployment Compensation Administration,

Veterans Compensation and Pensions, and Other Urgent

Needs Act of 1991, Pub. L. No. 102-27 § 303, 105 Stat.

130, 151 (1991). The rider prohibited the Secretary from

spending any funds to implement the helper regulations,

stating:

Notwithstanding any other provision of law, no funds

shall be expended by the Secretary of Labor to imple-

- ment or administer the [helper definition, the 2:3

ratio, the test for when helpers are prevailing, and

the revised conformance provision] .. . or to imple-

ment or administer any other regulation that would

have the same or similar effect.

Id. The unions argue that the rider is permanent legisla-

tion—a congressional directive barring implementation.

Sa

They note that the rider has no expiration date apparent

on its face and submit that when a rider’s language sug-

gests a congressional intent that it be made permanent

law, this Court must respect that intent. See, e.g.,

Elizabeth Norcross v. United States, 142 Cl. Ct. 767

(1958). The difficulty with the unions’ argument is that

we see no evidence of a congressional intent that this

rider be made permanent law.

While appropriation acts are “Acts of Congress” which

can substantively change existing law, there is a very

strong presumption that they do not, see TVA v. Hill, 437

U.S. 153, 190 (1978), and that when they do, the change

is only intended for one fiscal year. See Minis v. United

States, 40 U.S. 182, 15 Pet. 443 (1841); National Trea-

sury Employees Union v. Devine, 733 F.2d 114, 120 (D.C.

Cir. 1984); GENERAL ACCOUNTING OFFICE, PRINCIPLES

OF FEDERAL APPROPRIATIONS LAW, 2-34 (1982). In fact,

a federal appropriations act applies only for the fiscal

year in which it is passed, unless it expressly provides

otherwise. See 31 U.S.C. § 1301(e) (2) (1991). Accord-

ingly, a provision contained in an appropriations bill

operates only in the applicable fiscal year, unless its lan-

guage clearly indicates that it is intended to be perma-

nent.

The unions argue that a clear intent to establish a per-

manent bar in this case is present in Congress’ statement

that, ‘no funds shall be expended by the Secretary of

Labor to implement or administer” the disputed regula-

tions. The unions claim that the location of this state-

ment in a rider attached to an act that did not appro-

priate any funds for that purpose further establishes

clarity of intent to bar implementation permanently.

It is true, as the unions note, that the General Account-

ing Office (the “GAO”), in its publication, GAO, PRIN-

CIPLES OF FEDERAL APPROPRIATIONS LAW, recognizes that

the absence of an appropriation for the purpose limited

9a

by the rider is some indication of permanence. /d. at 2-34

—2-37. However, while the absence of such an appropria-

tion may be useful in ascertaining congressional intent,

standing alone it is not enough to indicate permanence.

As the GAO has also stated, “the presence or absence of

words of futurity remains the crucial factor, and the ad-

ditional factors have been used for the most part to sup-

port a conclusion based primarily on this presence or

absence.” Jd. at 2-37. Similarly, as GAO has explained,

“a proviso or general provision [in an appropriations

act] that does not contain words of futurity will gener-

ally not be construed as permanent.” See id. at 2-34

2-35. Principally, courts have recognized that when Con-

gress intends a provision in an appropriations bill to

have permanent effect, it uses words of permanency or

futurity (such as “io apply in all years hereafter’).

See Minis, 40 U.S. at 1384, 15 Pet. at 445; Norcross, 142

Cl. Ct. at 768. In this case Congress used no words of

futurity or permanency. Consequently, we do not infer

from the absence of an appropriation standing alone that

Congress intended to impose a permanent ban.

The unions offer snippets of legislative history in sup-

port of their argument for futurity, but legislative his-

tory can only help to explain a statute; it cannot recon-

struct it. The unions also stress the presence of the words

“notwithstanding any other provision of law .. .” in the

rider. Pub. L. No. 102-27, § 303, 105 Stat. 130, 151. This

language, however, goes to the breadth of the amend-

ment’s effect, not its duration.

In short, nothing in the rider affects the ability of the

Secretary to promulgate the present regulations at any

time other than during the 1991 fiscal year. The record

before us indicates that the Secretary did not expend any

funds to implement or administer the new helper regula-

tions during the 1991 fiscal year. Therefore, the presence

of the appropriations rider offers us no reason to find

error in the District Court’s order.

10a

B. The Content of the Regulations

Having determined that the Secretary retains the stat-

utory authority to implement the regulations, our func-

tion remains the same as it was for our previous review

of these regulations. As we stated then, “our task is lim-

ited to ensuring that the new definition [of helper] is not

one ‘that bears no relationship to any recognized concept

of [the statutory term] or that would defeat the purpose

of the [statutory] program.’” Building and Construc-

tion Trades’ Dept., 712 F.2d at 616, quoting Batterton v.

Francis, 432 U.S. 416, 428 (1977). In other words, we

must ensure that the Secretary “is acting consistently

with the purposes of the statute and that his choice is not

arbitrary.” Building and Construction Trades’ Dept.,

712 F.2d at 618.

1. The revised tests for “prevailing” use of helpers

The unions have in no way demonstrated that the Sec-

retary acted arbitrarily in designing the new tests, or

that the tests defeat the purpose of the Act by recog-

nizing “non-prevailing practices.” In striking the old

“identifiable” standard, we concluded that it defeated the

purpose of the Act. That is, if a federal project could use

the helper classification in a locality where it merely could

be “identified,” but in which, for example, the majority

of workers were on union projects not employing the

helper category and were receiving higher wages than

helpers, then according to any definition of “prevailing,”

the contractor on the project “would not be paying the

wage prevailing for the corresponding class of workers

in that city.” Building and Construction Trades’ Dept.,

712 F.2d at 625.

The new tests do not suffer from the same defect, espe-

cially as, between them, they cover each possibly applica-

ble concept of “prevailing.”’” Any federal project employ-

ing the helper category will reflect either the practice of

contractors employing a majority of journeymen in the

lla

locality or a majority of workers engaged in relevant

employment in a weighted average locality. In neither

instance can the Secretary’s determination that a practice

prevails be said to be arbitrary or contrary to the Act’s

purpose of aligning wages on federal projects with local

rates.

2. Definition of “helper”

Under the rubric of “underclassification,” the unions

renew an attack on the definition of helper rejected by

this Court in Building and Construction Trades’ Dept.,

712 F.2d at 626-30. The underclassification theory holds

that the Act’s attempt to mirror the local wage is sub-

verted when a regulatory definition allows members of a

lower paid and lower skilled class to be hired to perform

tasks which a higher class normally performs in cases

where tasks overlap. The unions contend that the

supervision-based helper definition now proposed by the

Secretary, rather than one based on task surveys, will

bring work performed in the past by unionized laborers

into the job description of lower paid helpers.

The short answer to this objection is that we already

approved the definition in Building and Construction

Trades’ Dept. and, consequently, it will, as the law of the

case, survive the present challenge. See 712 F.2d at 629-

30. Furthermore, we remain fully satisfied with our

treatment of this issue in our previous decision. As we

discussed at length in the earlier opinion, the Secretary’s

statutory authority does not require task-oriented defini-

tions. Jd. Insofar as the unions’ objection is based on the

failure of the Secretary to employ task surveys in im-

plementation of the regulation, that question is not before

us. In this case we review its validity, not its imple-

mentation.’

1 We do not understand the use of the supervision-based definition

to preclude any role for task-based surveys in implementation.

The argument that the regulation sweeps “higher paid”

laborers into the category of “lower paid” helpers is illu-

sory. There is no reason in reviewing the facial validity

of this regulation to believe that the unions’ assumptions

are accurate. That semi-skilled helpers will be paid less

than unskilled or semi-skilled laborers is far from a fore-

gone conclusion. In any event, the whole argument

focuses on the styling of workers rather than either what

they do or who supervises them, and, as we have noted,

nothing in the statute requires the Secretary to imple

ment ‘the union|s’] classification scheme.” Building and

Construction Trades Dept., T12 F.2d at 627.

The argument also ignores the proposal by the DOL

before us here, which would give full weight to the wages

normally paid to unionized laborers when calculating the

“prevailing wage” to be paid to helpers. First, it would

count as helpers all unionized workers who fit the helper

definition. Then, if a helper classification is determined

to prevail in the area, the wages normally paid to union-

ized laborers would be given “full weight” in the calcula-

tion of the prevailing helper wage. “Full weight,”

according to the DOL, means that “if these union workers

are the majority of the helpers in the area, then, gen-

erally, their ‘majority wage’ will be paid to all helpers.

And if they are not the majority, their union wage will

still be accounted for in the weighted average used to es-

tablish the prevailing wage.” Brief of Appellees Secre-

tary of Labor, et al., at 34.

We approve of, and consider this proposal a necessary

interpretation of, the “prevailing” test. Thus, laborers

will be counted as helpers, and the helper wage will be

either that paid to the majority or the average of the

wages paid to the total employed in the helper class. This

method is not only sensible, it is consistent with relevant

provisions of the regulations. 29 C.F.R. § 1.2(a) (1)

(1991) in its entirety states:

13a

The prevailing wage shall be the wage paid to the

majority (more than 50 percent) of the laborers or

mechanics in the classification on similar projects in

the area during the period in question. If the same

wage is not paid to a majority of those employed in

the classification, the prevailing wage shall be the

average of the wages paid, weighed by the total

employed in the classification.

3. Conformance provision

The unions raise several challenges to the revised con-

formance regulation, First, they contend that under the

regulation a helper classification can be added when it is

not “prevailing” in the area. However, the regulation

expressly refutes that contention: ‘The contracting offi-

cer shall approve an additional classification . . . only

when... [wlith respect to helpers ... such a classifica-

tion prevails in the area in which the work is performed.”

29 C.F.R. §5.5(a) (1) (ii) (A) (4) (1991) (emphasis

supplied).

Second, the unions assert that a contracting officer

could add a helper class without DOL approval. This

assertion also is simply incorrect. The conformance regu-

lation expressly requires DOL approval before a helper

class can be added, see 29 C.F.R. § 5.5 (a) (1) (ii) (B)-(C)

(191)—approval the DOL cannot grant unless the class

prevails in the area.

They further object to the regulation’s excepting the

helper classification from the requirement that the work

performed by the requested classification not be per-

formed by a class already in the wage determination.

They fear that this provision will allow a lower-paid

helper classification to replace a higher-paid class of semi-

skilled laborers already in the wage determination and

working under the supervision of a journeyman.

As explained by the Secretary upon adoption of the

regulation, however, the revision to the conformance reg-

l4a

ulation accommodates the helper definition by allowing a

helper’s duties to overlap with a journeyman’s duties. 54

Fed. Reg. 4240-41 (1989). At the same time, the regula-

tion specifically prohibits the addition of a lower-paid

classification to replace an existing classification of semi-

skilled workers, by providing that:

any class of laborers or mechanics, including helpers,

which is not listed in the wage determination and

which is to be employed under the contract shall be

classified in conformance with the wage determina-

tion.

29 C.F.R. § 5.5(a) (ii) (A) (1991) (emphasis supplied).

By the terms of this section, if a class of workers whose

members meet the helper definition is already listed in a

wage determination (regardless of the name given to the

classification in the wage determination), an additional

helper classification would not be issued. Thus, if a

laborer subclassification listed in the wage determination

meets the helper definition, an additional helper classifi-

cation would not be added to the contract. We therefore

agree with the District Court that the revised conform-

ance regulations survive the unions’ challenge.

4. The 2:3 ratio

In 1982 the Secretary added to the helper regulations

a cap of 2:3 on the ratio of helpers to journeymen. See

29 C.F.R. §5.5(a) (4) (iv) (1991). Neither this Court

nor the District Court has ruled on the validity of the

2:3 ratio, but we noted in 1983 that we would not be

barred from considering the issue later if it remained a

part of any reissued regulations. Building and Construc-

tion Trades’ Dept., 712 F.2d at 624 n.7. Today we con-

clude that the regulation setting the ratio reflects a

purely arbitrary choice without rational decisionmaking.

The basis upon which the forty percent cap was selected

by the Secretary as the numerical] limit on the use of help-

ers on Davis-Bacon projects is unexplained. Neither the

15a

1982 regulations nor the Notice of Proposed Rulemaking

which preceded the final rulemaking, see 52 Fed. Reg.

31,366 (1987), explains its origin. At oral argument,

counsel suggested that the Secretary may have relied on a

ratio of nonjourneymen to journeymen found in a particu-

lar project agreement negotiated by the Building and

Construction Trades Department, AFL-CIO, but the Secre-

tary has provided no justification for making it a national

standard. The administrative record shows little consider-

ation of the ratios appearing in the industry and only

minimal experimentation with a 1:5 ratio. See 46 Fed.

Reg. 41,463 (1981).

Such an unsubstantiated imposition of a fixed ratio in

a regulatory scheme based on a statute designed to imple-

ment prevailing practices represents the very essence of

arbitrariness. It is true that a regulation must be sus-

tained as long as the agency has articulated a reasonable

basis for its decision. American Trucking Associations,

Inc. v. ICC, 697 F.2d 1146 (D.C. Cir. 1983). Here, how-

ever, all the agency has done is to state that a 2:3 ratio

better reflects industry use of helpers than did the 1:5

ratio. 55 Fed. Reg. at 50,148-49 (1990). To state a con-

clusion is not to reason. We therefore reverse the District

Court’s vacation of its injunction as to the 2:3 ratio.

CONCLUSION

We affirm the District Court’s vacation of the injunc-

tion against enforcement of 29 C.F.R. §§ 1.7(d), 5.5(a)

(1) (ii) (A) (1), and 5.5(a) (1) (ii) (A) (4). In so doing,

we uphold the revisions of the “prevailing” test and of the

conformance provision. However, we reverse the District

Court’s vacation of the injunction against the enforcement

of 29 C.F.R. § 5.5a(4) (iv), the formula of 2:3 for calcu-

lating a cap on the ratio of helpers to journeymen on

federal construction projects, and invalidate this one pro-

vision as arbitrary and capricious.

Affirmed in part and reversed in part.

l6a

APPENDIX B

UNITED STATES COURT OF APPEALS,

DISTRICT OF COLUMBIA CIRCUIT

Nos. 83-1118, 83-1157

BUILDING & CONSTRUCTION TRADES’ DEPARTMENT,

AFL-CIO, et al.

V.

RAYMOND J. DONOVAN, Secretary of Labor, et al.,

Appellants.

BUILDING & CONSTRUCTION TRADES’ DEPARTMENT,

AFL-CIO, et al.,

Appellants,

V.

RAYMOND J. DONOVAN, Secretary of Labor, et al.

Appeals from the United States District Court

for the District of Columbia

(D.C.Civil No. 82-01631).

Argued May 6, 1983

Decided July 5, 1983

J. Paul McGrath, Asst. Atty. Gen., Washington, D.C.,

with whom Stanley S. Harris, U.S. Atty., Carolyn B.

17a

Kuhl, Deputy Asst. Atty. Gen., Robert E. Kopp, Anthony

J. Steinmeyer, Frank A. Rosenfeld, Attys., Dept. of Jus-

tice, and Karen I. Ward, Associate Sol., Dept. of Labor,

Washington, D.C., were on the brief, for appellants/cross-

appellees.

Laurence Gold and Terry R. Yellig, Washington, D.C.,

with whom Laurence J. Cohen and Robert J. Connerton,

Washington, D.C., were on the brief, for appellees /cross-

appellants. Linda Lipsett, Washington, D.C., also entered

an appearance for appellee in 83-1118.

Thomas S. Martin, Washington, D.C., was on the brief

for Associated Builders and Contractors, Inc., amicus

curiae urging reversal in 83-1118 and affirmance in

83-1157.

G. Brockwel Heylin and Michael E. Kennedy, Wash-

ington, D.C., were on the brief for Associated Gen. Con-

tractors of America, Inc., amicus curiae urging reversal

in 88-1118 and affirmance in 83-1157.

Before EDWARDS, Circuit Judge, and McGOWAN and

MacKINNON, Senior Circuit Judges.

Opinion for the Court filed by Senior Circuit Judge

McGOWAN.

McGOWAN, Senior Circuit Judge:

This appeal brings before us on an expedited basis five

provisions of certain final rules issued by the Secretary

of Labor (“the Secretary”) under the Davis-Bacon Act,

40 U.S.C. § 276a et seq. (1976), and the Copeland Anti-

Kickback Act, 40 U.S.C. § 276¢ (1976). These statutes,

essentially unchanged since their enactment or amend-

ment in the 1930’s, guarantee to workers on federal con-

struction projects a minimum wage based on_ locally

prevailing wage rates. Three of the new regulatory provi-

sions of concern here would alter the method for finding

the prevailing wage. Another set of regulations would

allow federal contractors far greater freedom to use semi-

18a

skilled helpers on projects than has previously been per-

mitted. The Secretary asserts that this expanded use of

helpers would better reflect the practice on private proj-

ects. The fifth provision is intended to ease the regulatory

burden on federal construction contractors by reducing

the detail required in their weekly submissions to the

government regarding wages. All of the regulations under

challenge are expected to reduce federal construction costs;

the Secretary has estimated that the last two provisions

alone would save the government or its contractors about

$463 million per year. See 47 Fed.Reg. 23,657, 23,662,

23,664 (1982) (regulatory impact statement).

This action was brought by the AFL-CIO, sixteen AFL-

CIO unions or departments, and the Teamsters union

(“the unions”), seeking an injunction against implemen-

tation of the new regulations and a declaration that the

rules are contrary to law. No claims of procedural irregu-

larity were pressed. The District Court granted the

requested relief in part. We affirm in part and reverse

in part. We uphold all of the new regulations as within

the broad administrative discretion contemplated by Con-

gress, except for (1) the provision simplifying submis-

sions of wage data to the government, which we find to be

inconsistent with the language and purpose of the statu-

tory command that the submissions contain wage data as

to “each employee,” and (2) part of the expanded per-

mission to use helpers, which part we find similarly con-

trary to statutory language and purpose.

I

As noted, the Davis-Bacon Act was enacted during the

Great Depression to ensure that workers on federal con-

struction projects would be paid the wages prevailing in

the area of construction. The evil sought to be remedied

was that, with the precise specifications set out in federal

contracts and the increasing-standardization of building-

material prices, the low-bidding contractor on a federal

19a

job was generally the one who paid the lowest wages. See

generally S.REP. No. 332, 74th Cong., Ist Sess. pt. 2, at 4

(1935) (“variations between bids submitted by competing

contractors are due most frequently to different estimates

of labor costs”). The contractor would accomplish this by

taking advantage of widespread unemployment in the

construction industry and hiring workers at substandard

wages, often bringing a low-paid crew in from distant

areas. Id. at 7-8.

This practice was deemed to be a problem for two rea-

sons. First, and apparently most important, it tended to

undercut one of the purposes of the massive federal build-

ing program of the times, which was to distribute employ-

ment and federal money equally throughout the country.

S.RepP. No. 1445, 71st Cong., 3d Sess. 1-2 (1931). Local

contractors and workers, used to a certain wage and living

standard, could not compete with the migratory labor of

the winning bidder. Jd. at 2; see also 4 ConG.REc. 6510

(1931) (remarks of Senator Bacon) (“I think it is a fair

proposition where the Government is building these post

offices and public buildings throughout the country that

the local contractor and local labor may have a ‘fair

break’ in getting the contract.”) ; 10 Comp.Gen. 294, 295

(1931) (‘The Government should be the last employing

agency to expect or countenance the performance of its

construction contracts at the sacrifice of its citizens.’ ’’)

(quoting letter from Treasury Secretary proposing ad-

ministrative predecessor of Davis-Bacon Act).

Second, the lower wages led to labor strife and to

broken contracts by contractors who speculated on the

labor market unwisely, thus preventing “the most eco-

nomical and orderly granting of Government contracts.”

S.REP. No. 332, supra p. 613, pt. 2, at 8; see also 74 Conca.

Rec. 6510 (1931) (remarks of Rep. LaGuardia) (“the

workmanship of the cheap imported labor was of course

very inferior’). Nevertheless, under a ruling by the

Comptroller General, federal contracting agencies could

a

20a

not insist on contractors paying the prevailing wage be-

cause of the statutory requirement that federal contracts

go to the lowest bidder. 10 Comp. Gen. 294, 301 (1931)

(prevailing wage requirement would “remove| | from com-

petitive bidding on the project an important element of

cost and tend|] to defeat the purposes of the [low-bid]

statute”). Thus, legislation was called for.

The original Davis-Bacon Act was enacted in 1931 and

required that federal contractors on certain projects pay

the prevailing wage in the area, as determined by the

contractors. Any disputes over the contractors’ determi-

nations were to be referred to the Secretary for conclu-

sive determination. Davis-Bacon Act, ch. 411, 41 Stat.

1494 (1931). Dissatisfaction with this arrangement sur-

faced quickly, however, as widespread violations and

abuses were discovered. An attempt to provide for pre-

determination of the prevailing wage by the Secretary and

penalties for failure to pay that rate was vetoed by Presi-

dent Hoover in 1932 as “obscure and complex and .. .

impracticable of administration,” 75 CoNc.REc. 15,589

(1932) (veto message) ; see id. at 14,590 (“The whole de-

sign of the new . . . proposal requires an expansion of

bureaucratic control over activities which now function

effectively with the minimum of interference by the Gov-

ernment and that only when dispute arises.’’).

Congress had greater success in 1935. It passed wage

predetermination and enforcement provisions that have

remained essentially unchanged to this day. The Act now

provides that the advertised specifications for every fed-

eral construction project in excess of $2,000 that requires

the employment of mechanics and/or laborers

shall contain a provision stating the minimum wages

to be paid various classes of laborers and mechanics

which shall be based upon the wages that will be

determined by the Secretary of Labor to be prevail-

ing for the corresponding classes of laborers and

2la

mechanics employed on projects of a character simi-

lar to the contract work in the city, town, village, or

other civil subdivision of the State, in which the work

is to be performed.

40 U.S.C. § 276a(a) (1976). The construction contract

must contain a stipulation requiring that the advertised

wages be paid, and the applicable wages must be posted at

the site. Id. The contracting agency is empowered to

withhold payment to ensure compliance with the minimum

wage requirements. /d.

In response to some of the abuses prevalent under the

1931 act, Congress in 1934 also passed the Copeland

Anti-Kickback Act, which generally makes it a crime for

a federal contractor to require or coerce workers to return

a portion of their contractual pay to their employer.

Copeland Anti-Kickback Act, ch. 482, $1, 48 Stat. 948

(1934) (codified as amended at 18 U.S.C. $ 874 (1976) ).

The section of the Copeland Act that is relevant here di-

rects the Secretary to make reasonable regulations for

federal contractors, “including a provision that each con-

tractor and subcontractor shall furnish weekly a state-

ment with respect to the wages paid each employee during

the preceding week.” 40 U.S.C. § 276c (1976).

The regulations at issue seek to implement these two

statutes. They would alter the present regulatory scheme

by (1) eliminating the so-called “thirty-percent rule” by

which a locally prevailing rate could be set at the rate

paid to a thirty-percent plurality of local workers; (2)

combining data from adjacent rural! counties but exclud-

ing any nearby urban counties when wage data in a given

rural county is insufficient to determine a locally prevail-

ing wage; (3) excluding from the prevailing-wage calcu-

lation for most building projects wages paid on similar

local projects that were subject to the Davis-Bacon Act;

(4) expanding the permitted use of semiskilled helpers in

a number of ways, including permitting such a classifica-

22a

tion in areas where it is only an “identifiable” practice

rather than a “prevailing”? one and eliminating the re-

quirement that helpers may do only tasks distinct from

those undertaken by other classes of workers; and (5)

allowing contractors to submit a weekly statement certify-

ing compliance with Davis-Bacon wage requirements, in-

stead of requiring the submission of the actual weekly

payrolls. See 47 Fed.Reg. 23,648, 23,657, 23,677 (1982)

(to be codified at 29 C.F.R. § 3.3 and in scattered sections

of 29 C.F.R. pts. 1 & 5).

Shortly after the rules were promulgated on May 28,

1982, the unions brought suit seeking declaratory injunc-

tive relief. After a hearing on a motion for interim relief

and cross-motions for summary judgment, the District

Court on July 22, 1982, five days before the new regula-

tions’ scheduled effective date, granted a preliminary in-

junction barring implementation of all five provisions.

Building & Construction Trades ,Department v. Donovan,

543 F.Supp. 1282 (D.D.C.1982). On December 23, 1982,

the District Court granted summary judgment for plain-

tiffs on four of the five provisions at issue. Building &

Construction Trades Department v. Donovan, 553 F.Supp.

352 (D.D.C.1982). The court declined to enjoin the elimi-

nation of the thirty-percent rule in the formula for calcu-

lating the locally prevailing wages. As to this provision,

the court found that the statute left the task of defining

the term “prevailing wage” to the Secretary, and that

“Congress was fully aware that the definition might or

would be adjusted depending on existing conditions.” Jd.

at 354 (citing, inter alia, 74 CONG.REC. 6516 (1931); 75

ConG.REC. 12,365 (1932) ).

The District Court found the statutory language and

legislative history as to the remaining four provisions

somewhat ambiguous, and relied heavily on contempo-

raneous and consistent administrative practice as a clue

to Congress’s intent. The court relied most heavily—

almost exclusively—on this contrary administrative prac-

23a

tice in striking down the proposed exclusion of urban

counties from the prevailing wage calculation in rural

areas and the exclusion of local Davis-Bacon projects from

that calculation. See id. at 353-54.

With regard to the remaining two provisions, the court

found, in addition to administrative practice, more direct

indications of congressional intent. The court struck down

the rule that a contractor need only submit a generalized

affidavit certifying compliance with wage laws, rather

than detailed payrolls, because the statute by its terms

required weekly statements as to the Wages paid “each

employee,” 543 F.Supp. at 1288, and because the new

regulation “would render the Act largely unenforceable,”

553 F.Supp. at 354. The court overturned the proposals

for allowing increased use of semiskilled helpers because

the distinction that the Act intended to draw between

skilled and unskilled labor in practice could be main-

tained “only if the tasks of the helper class are defined

as discrete and distinguishable from those of laborers and

mechanics,” id. at 355, and because allowing contractors

to use helpers when it was merely an “identifiable” classi-

fication in the area would be contrary to the statutory

command that wages set by the Secretary be “prevailing

for... classes” in the area, 543 F.Supp. at 1285.

Both parties appealed. We discuss each provision of

the new regulations in turn.

II

A. The Thirty-Percent Rule

Under a regulatory procedure in effect since 1935, the

Secretary follows a three-step process to determine the

prevailing wage for a given class of workers in a given

area. First, if any single wage is paid to a majority of

the workers in that class, that is deemed the prevailing

wage. Second, if there is no single wage paid to a ma-

jority of workers, any wage paid to at least thirty per-

24a

cent of the workers is the prevailing wage. Third, if no

single wage is paid to a thirty-percent plurality, then a

weighted average becomes the prevailing wage. 29 C.F.R.

§1.2(a) (1982); accord Labor Department Regulation

No. 503 § 2 (1935), reprinted in Joint Appendix (J.A.)

at 180-81. The new regulation proposed by the Secretary

for defining the term “prevailing wage” would eliminate

the second step: if a majority of the workers in a given

class did not earn a single wage, then a weighted average

would be used. 47 Fed. Reg. at 23,652 (to be codified at

29 C.F.R. § 1.2(a) (1)).

The rationale offered by the Secretary for the change

was that the thirty-percent rule does not comport with

the definition of “prevailing,” that it “gives undue weight

to collectively bargained rates,” and that it is inflation-

ary. IJd.-at 23,644, 23,645. The unions argue that the

new definition does not fit within the common meaning of

“prevailing” and that Congress’s refusal to change the

statute in 1932 and 1935 when informed of the Secre-

tary’s policy of setting the prevailing wage at the rate

paid the greatest number of workers indicates that Con-

gress intended the prevailing rate to be the “modal” rate.

The unions also assert that under the new rule a third

or more of the wage rates issued by the Secretary would

be based on “artificial” averages rather than any actual

rate, which they say is contrary to the policy of the Act.

We affirm the District Court’s upholding of the new

rule, generally for the reasons stated in its opinion. See

553 F.Supp. at 354. In brief, the statute delegates to the

Secretary, in the broadest terms imaginable, the authority

to determine which wages are prevailing. See 40 U.S.C.

§267a(a) (1976) (“the wages that will be determined

by the Secretary of Labor to be prevailing’). The legis-

lative history confirms that it was envisioned that the

Secretary could establish the method to be used. See,

e.g., 74 CONG.REC. 6516 (1931) (remarks of Rep. Kopp)

(“A method for determining the prevailing wage rate

might have been incorporated in the bill, but the Secre-

25a

tary of Labor can establish the method and make it known

to the bidders.”). There is no indication that Congress’s

failure to change the method used by the Secretary since

1932 was intended to bind him to that method forever,

and we will not infer such an intent when the statutory

language is so plainly to the contrary.

Having determined that the statute empowers the Sec-

retary to adopt “regulations with legislative effect,” Bat-

terton v. Francis, 482 U.S. 416, 425, 97 S.Ct. 2399, 2405,

53 L.Ed.2d 448 (1977) (interpreting statute providing

that term “unemployment” is to be “determined in accord-

ance with standards prescribed by the Secretary”), our

task is limited to ensuring that the new definition is not

one “that bears no relationship to any recognized concept

of [the statutory term] or that would defeat the purpose

of the [statutory] program.” Jd. at 428, 97 S.Ct. at

2407. The Secretary’s new definition of “prevailing” as,

first, the majority rate, and, second, a weighted average,

is within a common and reasonable reading of the term.

Cf. 75 CoNnG.REC. 12,365 (1932) (remarks of Rep. Con-

nery, floor manager of 1932 amendments) ( endorsing

an averaging method of determining the prevailing

wage). The definition also would not defeat the essential

purpose of the statute, which was to ensure that federal

wages reflected those generally paid in the area.

B. Exclusion of Urban Counties from Rural Wage

Determinations

The Secretary’s proposed regulations provide that,

where there has not been sufficient similar construction

in the county in which a project is located to determine

a prevailing wage, he is to look to wages paid on similar

construction in surrounding counties, except that projects

in metropolitan counties may not be used as a source of

data for projects in rural counties and vice versa. 47

Fed.Reg. at 23,655 (to be codified at 29 C.F.R. § 1.7(b) Bs

The target of the unions’ attack in this case is the final

26a

proviso regarding exclusion of urban counties from rural

wage determinations,' which the unions assert is a de-

parture from longstanding administrative practice and

inconsistent with congressional intent. Neither party

questions the Secretary’s basic claim of authority to look

beyond the county line if necessary to determine the

prevailing wage in the county in which the project is

located. Because the basis for this general recognition

of administrative authority is not entirely obvious, and

because it is important to our upholding the new regula-

tion, some discussion of it is warranted.

The language of the statute instructs the Secretary to

determine the wages that are prevailing for classes of

laborers and mechanics “employed on projects of a char-

acter similar to the contract work in the city, town, vil-

lage, or other civil subdivision of the State, in which the

work is to be performed.” 40 U.S.C. § 276a(a) (1976).

Although on its face this language would appear to refer

the Secretary only to projects in the same civil subdivi-

sion as the contract work, no one has interpreted it that

way. Since at least 1935, the Secretary has routinely

looked to nearby locales if there was insufficient prior

construction in the project county to determine a prevail-

ing wage. See, e.g., Labor Department Regulation No.

503 § 7(2) (19385), reprinted in J.A. at 182 (if there

has been no similar construction in county in recent

years, “the report shall cover wage conditions in the

nearest large city”); 29 C.F.R. §1.8(b) (1982) (if no

similar construction in area, “wage rate paid on the near-

est similar construction may be considered’) ; 21 Fed.Reg.

5801, 5802 (1956) (same). Further, as noted, neither the

parties nor the amici here seriously dispute that con-

struction.

1Since there is usually enough similar construction in metro-

politan areas to provide data necessary to make a wage determina-

tion, the proviso would generally affect wage determinations only

in rural areas, where there tends to be less construction.

27a

Most important, the legislative history of the statute

Suggests that Congress contemplated that the Secretary’s

authority to determine prevailing wages extended to find-

ing the best way to do so. The Davis-Bacon Act itself and

the 1935 amendments passed through both houses of Con-

gress with no discussion of the problem of how the pre-

vailing wage would be determined in villages too small

to have a settled wage for the various crafts needed.

However, during the House debate on the vetoed 1932

amendments, which were substantially identical to the

1935 amendments on this point, the floor manager,

Representative Connery of Massachusetts, addressed the

question: .

Mr. O'CONNOR. But there may be many villages

that have no plumbers in them, men actually work-

ing as plumbers. Bricklayers and metal workers and

other highly skilled trades may not be found in a

village in sufficient numbers to enable the Secretary

of Labor to establish a prevailing rate of wage.

Mr. CONNERY.- I think the Secretary of Labor,

when he figures out these predetermined rates of

wages, will be able to determine that. Generally there

is a town near enough to ascertain the prevailing

rate of wage for that town. If there is a job in a

little town in New York, there will be a city near

enough in order to determine the prevailing rate of

wage for that little town.

Mr. O’CONNOR. But the bill reads “in the city,

town, or village where the public work is carried

on.” [3 :

Mr. CONNERY. As a practical matter, they have

had no trouble in that regard in connection with the

Davis-Bacon bill.

? The bill actually read “in the city, town, village, or other civil

subdivision of any State or Territories in which all or the principal

part of the particular contract work is located.” 75 CoNG.REC.

12,363 (1932) (first reading of S. 3847).

28a

Mr. O’CONNOR. If they limit it to the language

in this bill, there may be trouble about it.

Mr. CONNERY. In the Davis-Bacon bill there is

the same proposition, and they have been getting

along.

75 CONG.REC. 12,366 (1932). See also id. at 12,877 (re-

marks of Rep. Connery) (“The only practical way the

committee found [to determine the prevailing wage in

towns without wage scales] was that if you had a small

town between two large cities they would take the pre-

vailing wage scale of those two cities.’’).

This passage, while not crystal clear, suggests that

Congress did not view the language in the statute as fore-

closing the Secretary from implementing the Act in the

way necessary to achieve its purposes. Clearly, if a pre-

vailing wage could not be set in a given county by looking

only to projects in that county, it was essential to the

attainment of the general purpose of Congress—the pre-

determination of locally prevailing wages—that another

mechanism be found. In essence, Congress anticipated

that the general authorization to the Secretary to set the

prevailing wage would encompass the power to find a way

to do so in the interstitial areas not specifically provided

for in the statute. Cf. generally Permian Basin Rate

Cases, 390 U.S. 747, 780, 88 S.Ct. 13844, 1866, 20 L.Ed.2d

312 (1968) (“we are, in the absence of compelling evi-

dence that such was Congress’ intention, unwilling to

prohibit administrative action imperative for the achieve-

ment of an agency’s ultimate purposes.”’).

In cases where there is insufficient data from a given

civil subdivision to determine a prevailing wage, therefore,

the Secretary is acting pursuant to the same kind of

delegation of authority that we discussed above with re-

gard to the formula for deriving a prevailing wage from

the data collected, see supra p. 616. We thus do not think,

as the unions appear to argue, that Congress intended to

29a

bind the Secretary to the method suggested by Repre-

sentative Connery—adopting for rural areas the prevail-

ing wages of the nearest city. The thrust of the passage

is that the entire question was left to the Secretary.

Representative Connery’s suggestion was apparently in-

tended merely to show that some method of determining

a wage would be found. Moreover, no language was in-

serted into the statute that would implement the sug-

gestion, as one might expect for so specific an instruction.

We review the Secretary’s choice of methods only to

ensure that he is acting consistently with the purposes of

the statute and that his choice is not arbitrary. We think

it clear that the new regulation is rational and furthers

the purposes of the statute. The Secretary’s justification

for the provision was that, because of the disparity be-

tween urban and rural wages, using demographically

dissimilar counties for such determinations is unreliable.

46 Fed.Reg. 41,443, 42,445 (1981) (proposed rulemaking).

Furthermore, the Secretary claimed, importation of high

urban wages to rural areas has disrupted labor relations

in rural areas because employees have been unwilling to

return to their usual pay scales after a Davis-Bacon proj-

ect has been completed. See 47 Fed.Reg. at 23,647. His

answer to the unions’ argument that higher urban wages

are justified in nearby rural areas because it is the urban

workers who often do the work was that if that is gener-

ally true the wage scales for the surrounding rural coun-

ties would reflect that. Jd. All of this makes sense, and

the new regulation has not been shown to undermine the

central purpose of the statute, which is to ensure that

federal contractors pay the wages prevailing in the local-

ity of the project. While it might be true that in some

cases the reference rural counties might be more distant

from the urban center than the project county, and that

looking to them thus would not reveal the higher wages

that should be paid in the project county, the bare allega-

tion of that fact cannot overturn the Secretary’s informed

30a

exercise of authority in an area in which he has con-

siderable expertise and discretion.

The District Court relied exclusively or almost exclu-

sively on what it saw as a longstanding and consistent

administrative practice contrary to the proposed regula-

tions in striking down the rural-urban wage determination

provision and the exclusion of federal projects from wage

determinations, see infra pp. 619-22. See 553 F.Supp. at

353-54; 543 F.Supp. at 1286-87. It should be noted first

that with regard to the exclusion of urban data from

rural determinations the administrative practice has not

been quite as consistent as the District Court, in the rush

of its expedited proceedings, appears to have been told.

At least since 1977, the Secretary’s Manual of Operations

for Issuance of Wage Determinations Under the Davis-

Bacon and Related Acts has provided that “[g]enerally,

a metropolitan county should not be used to obtain data

for a rural county (or visa [sic] versa).” J.A. at 104.

Moreover, it is not only the present administration, but

also that of President Carter, that has sought to formalize

this practice in new regulations. See 46 Fed.Reg. 4305, ©

4314 (1981) (final rule) (providing for exclusion of metro-

politan counties except in “extraordinary circumstances”),

stayed, 46 Fed.Reg. 11,253 (1981), and replaced, 47 Fed.

Reg. 23,643 (1982).

More fundamentally, our disagreement with the District

Court’s heavy reliance on administrative practice stems

from our view that in promulgating these two rules—

excluding urban data from rural wage determinations and

excluding federal projects from all wage determinations—

the Secretary was acting in an area as to which he had

some discretion to reach a number of different results

rather than an area of pure statutory interpretation as

to which there is in theory only a single answer. As the

District Court recognized, see 543 F.Supp. at 1290, prior

administrative practice carries much less weight when

reviewing an action taken in the area of discretion, when

-.—_

3la

little more than clear statement is required, than when

reviewing an action in the field of interpretation, where

it is thought that the agency’s contemporaneous and con-

sistent interpretation of one of its enabling statutes is

reliable evidence of what Congress intended. Compare

CBS v. FCC, 454 F.2d 1018, 1026 (D.C.Cir.1971) (deci-

sion under discretionary “public interest” standard), and

Greater Boston Television Corp. v. FCC, 444 F.2d 841,

852 (D.C.Cir.1970) (same), cert. denied, 403 U.S. 923,

891 S.Ct. 2238, 29 L.Ed.2d 761 (1971), with United

States v. Leslie Salt Co., 350 U.S. 388, 395-97, 76 S.Ct.

416, 423-24, 100 L.Ed. 441 (1956) (interpreting statu-

tory terms “debenture” and “certificate of indebtedness’’).

C. Exclusion of Federal Projects from Wage Deter-

minations

The new regulations make a more dramatic break with

the past in excluding from the prevailing-wage calcula-

tion prior federal or federally assisted projects subject to

the Davis-Bacon Act’s prevailing wage requirements. The

new rules provide that such projects are not to be con-

sidered in wage determinations for building and residen-

tial construction projects “unless it is determined that

there is insufficient wage data to determine the prevailing

wages in the absence of such data.” 47 Fed.Reg. at 23,652

(to be codified at 29 C.F.R. § 1.3(d)). The provision will

not apply to highway and heavy construction projects, id.,

where there is little nonfederal] construction.*

8 The Manual of Operations for Issuance of Wage Determinations

Under the Davis-Bacon and Related Acts defines ‘‘residential con-

struction” as “the construction, alteration, or repair of single family

houses or apartment buildings of no more than four (4) stories in

height”; “building construction” is other construction of “sheltered

enclosures with walk-in access”; “highway construction” means

more or less what it says; and “heavy construction” is a catch-all

category that includes such major projects as dams, railroads, ski

tows, subways, and canals. J.A. at 100-02.

inl

32a

The Secretary’s rationale for the provision is that in-

eluding federal projects in the wage determination skews

the survey results upward, contrary to the purpose of

Congress. See id. at 23,645. Neither the District Court

opinion nor the unions dispute the factual basis for this

conclusion. Rather, the unions argue that the Act and

its legislative history, including congressional acquiescence

to administrative practice, forbid exclusion of federal

projects.

The language of the statute on this point refers to the

wages determined to be prevailing for laborers and me-

chanics employed “on projects of a character similar to

the contract work.” 40 U.S.C. § 276a(a) (1976). The

unions point out, quoting the District Court’s opinion, that

this language mandates the Secretary to consider “projects

of a character similar,” not “private projects of a char-

acter similar.” See 543 F.Supp. at 1286. Leaving to one

side the question of whether this point would require

the Secretary to consider wages paid on federal projects

if it no longer served the purposes of the statute to do so,

there is substantial evidence in the legislative history and, -

more importantly, in the premises of the Act, that sug-

gests that Congress did not intend wages on federal

projects to be considered at all.

First, both the Senate and House reports to the original

1931 bill open, after a summary recommendation that the

bill pass, with the following description of its purpose:

“The purpose of this measure is to require contractors

and subcontractors engaged in constructing, altering, or

repairing any public building of the United States...

to pay their employees the prevailing wagegrates when

such wage rates have been established by private indus-

try.” S.Rep. No. 1445, supra p. 614, at 1 (emphasis

added) ; H.R.Rep. No. 2453, 71st Cong., 3d Sess. 1 (1931)

(emphasis added). When the Act was introduced onto the

floor of the House, and several times during the debate,

the purpose to have federal wages mirror those in private

33a

industry was reiterated. 74 ConG.REC. 6505 (1931) (re-

marks of Rep. Welch); id. at 6515 (Rep. Kopp) (“This

bill simply requires the contractors not to pay less than

is paid in private industry.”) ; id. at 6520 (Rep. Zihlman).

(There was practically no debate on the bill in the Senate.

See id. at 3918-19.)

We might be reluctant to rely on these somewhat off-

hand and isolated remarks in the legislative history were

it not that they so plainly reflect the true purpose of the

Act. The premise underlying the statute was that there

was something wrong with the federal bidding process

that prevented the government from achieving subsidiary

goals of its construction program that a private con-

tractor might be able to attain. Because federal projects

were required by statute to be awarded to the lowest bid-

der, the government could not, as a private builder might,

require that fair wages be paid on the project in order to

be sure of quality workmanship, to ensure against labor

strife, to maintain its name in the community, or, in the

case of the federal government, to pursue equitable dis-

tribution of public construction monies. Such substandard

wages might also have been more prevalent on federal

projects because of their national sponsorship, which

might have made them more likely to attract unscrupulous

pricecutters than a private, local builder, advertising

locally, would have been. Whatever the reason, the result

was that workers on government building projects were

being paid less than their counterparts in neighboring

private projects. Thus, the 1931 committee reports state:

The Federal Government must, under the law,

award its contracts to the lowest responsible bidder.

This has prevented representatives of the depart-

ments involved from requiring successful bidders to

pay wages to their employees comparable to the wages

paid for similar labor by private industry in the

vicinity of the building projects under construction.

34a

S.Rep. No. 1445, supra p. 614, at 2; H.R.Rep. No. 2453,

supra p. 620, at 1-2; see also S.REP. No. 332, supra p. 613,

at 8 (reviewing legislative history of the Act) (the prob-

lem of contractors paying below prior prevailing wage

and transporting cheap labor to jobs “was particularly

true of Government contracts where competitive bidding

was in effect”) ; Regulation of Wages Paid to Employees

by Contractors Awarded Government Building Contracts:

Hearings on H.R. 12, 122, 7005, 7254, and H.J.Res. 38

Before the House Comm. on Labor, 72d Cong., Ist Sess.

15 (19382) (testimony of AFL President William Green)

(“Because contractors seeking and securing Government

contracts attempted to exploit workers and pay them a

rate of wages that was far below the prevailing rate in

private industries in the respective localities where build-

ings were erected, we strongly appealed to the Congress

to enact this prevailing rate of wage law.”) ; cf. id. at 63

(testimony of a general contractor) (“[I]n river and

harbor work... I will guarantee [that] our company

and all the private companies are paying higher wages

to the dredge men than the Government is” when it acts

as its own contractor.). See generally supra pp. 613-14

(discussion of purposes of Act).

With this as the Act’s premise, it would make no sense

to regutre the Secretary, when setting prevailing wages,

to include federal projects in his survey. Since the prob-

lem to be remedied was the low wages paid on federal

projects, to include them would only impede attainment

of the ultimate goal of counterbalancing the flaws in the

federal bidding system and equalizing federal and private

wages.

The fact that the Secretary almost immediately began

including federal projects in his wage surveys does not

cast doubt upon this reading of congressional intent. The

unions acknowledge that the Secretary did so, as the

District Court put it, “notwithstanding the congressional

mandate,” only because as the Depression deepened there

35a

was very little private construction from which to derive

a private prevailing wage. 543 F.Supp. at 1286. There-

fore, what the unions must argue is that Congress, in its

refusal in the 1985 amendments to bar the Secretary from

using federal data, not only acquiesced in such use but

affirmatively required it.

What the unions and the District Court point to as

evidence that Congress intended to mandate the practice

is the change in the statutory language from wages “for

work of a similar nature” in the 1931 Act to wages “for

the corresponding classes of laborers and mechanics em-

ployed on projects of a character similar to the contract

work” in the 1935 amendments. Compare Davis-Bacon

Act, ch. 411, $1, 46 Stat. 1494 (1931) with 40 U.S.C.

$ 276a(a) (1976). What types of projects, the argument

goes, could be more “of a character similar to the contract

work” than federal ones?

The legislative history is very specific as to the intent

of this change. After the passage of the 1931 Act, it de-

veloped that craftsmen in some industries were paid more

than employees performing the same craft in other in-

dustries. In the 1932 House hearings, one witness gave

the examples of riveters and electricians in the general

building industry who would receive a higher wage, but

would be employed far less steadily, than their brethren

in the shipbuilding field. Regulation of Wages Paid to

Employees by Contractors Awarded Government Building

Contracts: Hearings on S. 3847 and H.R. 11,865 Before

the House Comm. on Labor, 72d Cong., Ist Sess. 67 (1932)

[hereinafter cited as Hearings on S. 3847 (testimony of

shipbuilding trade representative, proposing addition of

“in the same industry” to statute). To clarify that fed-

eral construction work wages should parallel the construc-

tion work wages prevailing in the area and not the ship-

building wages, Congress added the language that the

unions cite. The committee reports explain:

36a

A provision in the bill makes clear the meaning

of the standard “prevailing . .. on work of a similar

nature.” The present language leaves some doubt as

to whether the statute refers to wages in the same

craft or wages paid on similar construction. The

provision would make the wage rates contained in the

specifications conform to those “prevailing” for “the

corresponding classes of laborers and mechanics em-

ployed on projects of a character similar to the con-

tract work.”

H.R.REP. No. 1756, 74th Cong., Ist Sess. 3 (1935) ; accord

S.Rep. No. 1155, 74th Cong., Ist Sess. 3 (1935).

It was thus no part of Congress’s intent to require the

Secretary to include federal projects in his wage surveys.

Excluding such data was the path most consistent with

the purposes of the statute. The Secretary nevertheless

exercised his discretion to include these projects as a

necessary expedient during the Depression in order to

achieve the ends of Congress. See generally supra p. 618

(implied power to take action imperative for the achieve-

ment of the statute’s purpose). To continue to include

them now that federal wages are far above those paid in

the private sector, however, would only exacerbate in the

opposite. direction the kind of problem—an inequality be-

tween federal and private wages—Congress was seeking

to avoid. The fact that no Secretary has previously aban-

doned the practice does not take away from the current

Secretary’s power to fine tune his exercise of diseretion.

D. Expanded Use of Helpers

Under current practice, the Secretary recognizes five

classes of employees covered by the Act: skilled journey-

men; unskilled laborers; and semiskilled apprentices,

trainees, and helpers. The journeyman and laborer classes

are well-defined and universally recognized; the former is

generally identified with the traditional crafts, such as

electrician or roofer, and often defined by whether the

37a

employee uses the tools of the trade. Apprentices and

trainees, as the terms imply, are employees learning the

journeyman’s craft and therefore are permitted to do

some traditional journeyman’s work, but they must be

enrolled in a formal apprenticeship or trainee program

approved by the Secretary. See 29 C.F.R. §§ 5.2(c¢),

5.5(a) (4), 5.15 (1982). The Secretary currently recog-

nizes a helper classification only if (1) the scope of the

helpers’ duties—meaning the physical tasks performed—

is defined and can be differentiated from that of journey-

man duties, and (2) the particular helper classification

prevails in the area. See 47 Fed.Reg. at 23,647, 23,649,

23,659; DeNarde Construction Co., Case No. 78-8, at 2

(Wage Appeals Bd. May 14, 1979), reprinted in Plain-

tiffs’ Reply Memorandum of Points and Authorities in

Support of Their Motion for Summary Judgment, exhibit

2, Record at 14.‘

The new regulations would alter both of these limita-

tions on the use of helpers on federal construction jobs.

First, they would allow some overlap between the duties

4 Occasionally, but not always, a third criterion for recognition

of a helper classification is mentioned: “the helper is not used as

an informal apprentice or trainee.” 47 Fed.Reg. at 23,649. But see

id. at 23,647, 23,659 (not mentioned); DeNarde (same). This

criterion appears to have been climinated in the new regulations.

The parties have not focused on it, however, and therefore neither

do we.

The requirement that a classification be prevailing in an area

also applies to journeymen and laborers, but appears not to apply

to apprentices and trainees. See 29 C.F.R. § 1.2(a) (1982) (Secre-

tary sets prevailing wage rate “for each classification of laborers

and mechanics which [he] shall regard as prevailing in an area”) ;

id. §5.5(a)(4)(i) (apprentices permitted to earn less than pre-

determined wage for the work they perform, if they are registered) ;

id. § 5.5(a)(4) (ii) (same for trainees). The new regulations would

eliminate the prevailing-in-the-area requirement for journeymen and

laborers, see 47 Fed.Reg. at 23,655 (to be codified at 29 C.F.R.

§ 1.7(d)) (“Classifications and wage rates will be issued for iden-

tifiable ‘classes of laborers and mechanics.’ ”), but the unions do not

complain about this provision.

38a

_ \

of helpers and those of journeymen. While some distinc-

tion between skilled and semiskilled tasks would be re-

tained, the essential functional distinction would be not

the nature of the task done but rather the subordinate

position of the helper vis-a-vis a journeyman. The new

classification would be defined as follows:

A “helper” is a semi-skilled worker (rather than

a skilled journeyman mechanic) who works under the

direction of and assists a journeyman. Under the

journeyman’s direction and supervision, the helper

performs a variety of duties to assist the journeyman

such as preparing, carrying and furnishing materials,

tools, equipment, and supplies and maintaining them

in order; cleaning and preparing work areas; lifting,

positioning, and holding materials or tools; and other

related, semi-skilled tasks as directed by the journey-

man. A helper may use tools of the trade at and

under the direction and supervision of the journey-

man. The particular duties performed by a helper

vary according to area practice.

47 Fed.Reg. at 23,667 (to be codified at 29 C.F.R. § 5.2

(n)(4)); see also id. at 23,668 (to be codified at 29

C.F.R. § 5.5(a) (1) (ii) (A) (1)) (when new categories not

listed in wage determination are added to contracts, work

to be performed by new classifications must not be per-

formed by any existing classification, except as to help-

ers.). The second major change in the permitted use of

helpers is that any given helper classification would need

to be only “identifiable,” rather than “prevailing,” in the

area in order to be included in the wage determination

for a project. Jd. at 23,655 (to be codified at 29 C.F.R.

§ 1.7(d)).

In addition, the new regulations would provide a new

numerical limitation on the use of helpers under which

there could be no more than two helpers for every three

journeymen, i.e., a maximum of forty percent of the total

39a

number of helpers and journeymen could be helpers. /d.

at 23,670 (to be codified at 29 C.F.R. § 5.5(a) (4) (iv) ).

Also, if a worker listed on the payroll as a helper per-

formed duties outside the-definition provided in the regu-

lations, or exceeded the forty-percent limitation, the worker

would have to be paid the applicable wage for the work he

or she actually did. /d.°

The Secretary’s rationale for allowing expanded use of

helpers was that the present limitations do not_ reflect

“the widespread industry practice” of employing both

particular craft and general utility helpers on construction

projects. Id. at 23,647. The Secretary estimated that the

expanded use of helpers would save the government

$363.16 million in construction costs. Jd. at 23,651. In

addition, he stated, the new rules would increase job

opportunities for less skilled workers, including young

people, women, and minorities; encourage training; in-

crease productivity; and enable more contractors to com-

pete for government work. Jd.

This last reason is presumably based on the fact that

unions have historically permitted very limited use of

helpers, seeking instead to ensure demand for skilled

journeymen and the integrity of the apprenticeship route

to that position. See, e.g., id. at 23,651 (“there are few

helpers in union firms”) ; A. THIEBLOT, THE DAVIS-BACON

Act 154 (1975), reprinted in Record at 3893, 3978

(71.1% of nonunion contractors and 16.1% of union con-

tractors surveyed use helpers for various crafts); S.

SLICHTER, UNION POLICIES AND INDUSTRIAL MANAGEMENT

5 There are two other provisions that would apply to the use of

helpers. First, an existing contract that does not contain a helper

classification could be altered to allow the expanded use permitted

by the new regulations. Jd. at 23,668 (to be codified at 29 C.F.R.

§ 5.5(a)(1)(ii)(A)). Second, variances from the 40% rule could be

obtained in areas where the current practice allows use of helpers

in excess of forty percent of the total number of helpers and journey-

meu. See id. at 23,659.

40a

46 (1941) (“The building trades . . . undertake to pre-

vent helpers from becoming competitors of journeymen

by regulating the work of the helper in such a way that he

does not have an opportunity to learn the trade,”’ such as

by prohibiting him from using the tools of the trade.) ;

Affidavit of Herbert R. Northrop (Wharton School Pro-

fessor of Industry), J.A. at 108 (“More efficient deploy-

ment of labor [such as by allowing extensive use of help-

ers| is one reason why open shop construction today con-

trols 65 percent of all construction ... .”); Affidavit of

Robert A. Georgine (President, AFL-CIO Bldg. & Constr. |

Trades Dept.), J.A. at 122-23 (collective bargaining agree-

ments preclude many contractors from taking advantage |

of the changes in the new regulations). Apparently, the

Secretary believes that more nonunion contractors would

be able to compete for government jobs under the new

regulations because they would be able to use the employee

classification system that they are accustomed to using.

See Affidavit of John L. Fiedler (construction firm presi-

dent), J.A. at 114 (“[A] contractor who regularly uses

helpers on privately funded construction work must re-

classify helpers when he does work subject to the Davis-

Bacon Act... [This is economically unwise, since the

productivity of the worker is not commensurate with his

wage. Therefore, many merit shop contractors are de-

terred from performing federal or federally assisted con-

struction contracts.” ) .°

®It is unclear whether the Secretary, in finding that more con-

tractors would be able to compete for government work under the

new rules, simply ignored the likely decrease in the number of

unionized contractors who would be able to compete for such work,

see Affidavit of Robert A. Georgine, supra, J.A. at 122-23, or in-

stead believed that that decrease would be more than offset by the

increase in nonunion bidders.

The unions disputed many of the claimed benefits of the expanded

use of helpers, arguing inter alia that the new rules would discour-

age apprenticeship and training programs because contractors would

find it easier simply to hire helpers to fulfill their need for semi-

skilled labor rather than set up a formal program. Because helpers

LL ee

4la

We consider first the provision that a helper classifica-

tion need only be “identifiable” in an area to be used, and

second the enlarged definition of a helper’s duties,”

l. “Jdentifiable” Classifications

The provision requiring that a he!per classification need

only be “identifiable” in an area must be struck down

because it operates to undermine the fundamental] purpose

of the Act: that wages on federal construction projects

mirror those locally prevailing. We think it plain that,

in the scheme of the Act, either of two methods will serve

to lower the wages paid for certain work below those paid

for the same work in the surrounding community. First,

the work may be classified as it is in the community—as,

receive far less training than do apprentices, the unions argued, the

new rules would tend to deny advancement to minorities, young

people, and women, and would lead to a Shortage of skilled crafts-

men. See, €.g., 47 Fed.Reg. at 23,647; Affidavit of Ray Marshall

(former Labor Secretary), J.A. at 133, 138-40. In this court, the

unions rely largely on the argument that the new regulations are

directly contrary to the language and intent of the statute rather

than on the ill effects of the changes.

7 The District Court enjoined the operation of all the new regula-

tions governing the use of helpers, including the 40% rule, the

procedure for conforming existing contracts to the new regulations,

and the procedure for a variance from the 40% rule for certain

existing projects. See 543 F.Supp. at 1292 (preliminary injune-

tion); 553 F.Supp. at 356 (permanent injunction). Nevertheless,

like the unions in this court, the District Court only discussed the

expanded definition of “helper” and the provision that a helper

classification need only be “identifiable” in an area to be used.

Evidently, the court regarded the helper provisions as a package,

the essential elements of which were the two that it discussed: once

those were struck down, there was no need to deal with the others

since the Secretary would surely redraft the package, perhaps

changing the minor aspects of it in the process. Not having the

benefit of any significant discussion of the issues, we decline to rule

on these aspects of the helper provision. Should the Secretary in-

clude them in any reissued rules, we will not be barred from con-

sidering them then.

_ 42a

say “carpenter work’—but a lower wage may be paid

for that classification than is paid in the community.

Second, the same wage rate may be set for each job

classification, but the work may be classified in a lower

paying category—such as “carpenter’s helper work’—

than it is in the community. Thus, if a given lower paid

job classification need only be “identifiable” in the com-

munity to be used on a government construction site, the

wages paid for some work may well be less than those

“prevailing” for that work in the community. To take a

simplified example, suppose that unions dominate the con-

struction industry in a certain city and require that any

worker using carpenters’ tools be a journeyman carpenter

or apprentice. Nevertheless, suppose that one or two non-

union firms in the city use lower paid carpenter’s helpers

to rough-cut beams. In that case, a federal project that

permitted workers who rough-cut beams to be termed

“carpenter’s helpers,” because such a classification could

be “identified” in the city, would not be paying the wage

prevailing for the corresponding class of workers in that

city. The prevailing wage for that kind of work would

actually be the union wage for journeyman carpenters or

apprentices.

We need not rely merely on logic to know that use of a

less-than-prevailing classification may result in payment

of lower wages than those prevailing in the community

for the same work, and that that is prohibited by the Act.

Congress in 1935 was quite clear that it understood that

“prevailing wage scales [could be] broken down by inter-

mediate classification,” S.REP. No. 332, supra p. 613, pt. 3,

at 12, and that such “underclassifi{cation],” id., was an

evasion of the Act. The Senate committee reviewing the

operation of the law in 1935 described the problem as

follows: “The act also fails to be explicit on the 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

43a

fell within the purview of one of the skilled crafts.” Jd.

pt. 2, at 5; see also id. at 2 (listing creation of “arbitrary

classifications known as semi-skilled labor” as a method or

device “to underpay labor” engaged on public works pro-

grams). The report gave the example of “rough ‘saw and

hammer’ men” working on Public Works Administration

projects who :

were paid at a rate considerably less than [the Wages]

prevailing for carpenters, although the work being

performed was regarded by labor-union regulations

aS carpentry work. In a similar way, new grades

and classifications Sprang up all over the country,

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.

Id. pt. 8, at 12.

Although the 1935 committee recommended that “the

“classification” question “should be clarified by new legis-

lation,” id. pt. 2, at 5, it is not clear whether the statu-

tory language regarding “classes of laborers and me-

chanics” was added with this in mind. See infra pp.

627-29. The House and Senate reports on the bill itself

mention this language only with regard to the somewhat

different problem of differing wages being paid for the

Same craft in different industries. H.R.REp. No. 1756,

supra p. 622, at 3; S.Rep. No. 1155; supra p. 622, at 3;

See supra pp. 621-22. Nevertheless, various references in

the legislative history strongly suggest that Congress

thought either that such underclassification was already

barred—for example, the earlier 1935 committee’s refer-

ences to contractors that “circumvent the law” and its

conclusion that the law should be “clarified”—or that it

certainly would be under the law as amended, see Hear-

ings on S. 3847, supra p. 621, at 110 (remarks of Rep.

Welch) (“If that were brought to the attention of the

Secretary of Labor, if this bil] were in full force and ef-

fect ....[he] would not permit it... .”),

44a

What is clear is that Congress regarded underclassifica-

tion as contrary to the purposes, and most probably to

the terms, of the Act. We have concluded that the Secre-

tary’s identifiable-classification regulation would virtually

ensure underclassification in union-dominated areas. At

least where the Secretary has not found the use of help-

ers as provided for in the new rules to be a nearly uni-

versal practice, see 47 Fed.Reg. at 23,647 (practice is

merely ‘“widespread”); Affidavit of John T. Dunlop

(former Labor Secretary), J.A. at 188 (“The fact is that

helpers exist in some areas and in some trades, and not

in others.”),* he is barred from allowing work that is

“prevailing” categorized in one job classification to be

placed in a lower paid classification merely because such

a practice can be “identified” in the area.

2. Definition of Helper Duties

While we thus think it clear that the provision allow-

ing use of helpers wherever the classification is “identi-

fiable’”’ must be struck down, whether the broadened defi-

nition of a helper’s duties may stand is a far closer ques-

tion. The issue is essentially this: if it is the prevailing

practice in a community to allow lower paid hut super-

vised helpers to undertake tasks that overlap with these

of higher paid journeymen or laborers, may the Secretary

allow that practice to be followed on federal projects in

* We do not here attempt to define all the circumstances under

which a new class of employees must be prevailing in an area before

the Secretary may allow its use. We merely suggest that there may

be some circumstances in which, perhaps for reasons of administra-

tive convenience or because of a need to further some other con-

gressionally expressed policy, ¢.g., National Apprenticeship Act, 29

U.S.C. §50 (1976) (Secretary is directed “to bring together em-

ployers and labor for the formulation of programs of apprentice-

ship’), or for other reasons, the Secretary could provide for classifi-

cations that do not prevail in a certain area. No such reason appears

here. The propriety of eliminating the requirement that classifica-

tions of journeymen and laborers be prevailing in an area is not

before us. See supra note 4,

45a

that town? The central objection to the Secretary’s new

regulation is that it would no longer define the “classes”

of laborers and mechanics by the tasks a particular em-

ployee does, but rather in large part by whether he or

she is acting under the supervision of a journeyman. See

993 F.Supp. at 355 (“the new regulations would allow

helpers . . . to perform tasks of all sorts”) ; 543 F.Supp.

at 1285 (“Under the new regulations, helpers not only are

not defined in traditional terms, but they may perform

any task throughout the entire construction field rs

® A more fundamental objection to the Secretary’s new regulations

might be that the Davis-Bacon Act does not contemplate any semi-

skilled labor classifications whatsoever. This objection, not clearly

pressed on us, see infra, would be based primarily on the fact that

the statute speaks only of “laborers and mechanics,” and not of

“helpers.” There is some legislative history supporting such an

interpretation of the statute. For example, the report of the Senate

committee investigating the operation of the Act in 1935 cited the

following practice as a “device[] ... to underpay labor’:

Instances of failure hy Federal Emergency Relief Adminis

tration officials to pay the prevailing wage on Public Works

projects, and the creation by such officials of arbitrary classi fi-

cations known as semiskilled labor specifically prohibited by the

Federal Emergency Relicf Administration re gulations.

S.ReP. No. 332, supra p. 613, pt. 2, at 2 (emphasis added).

There are, however, indications elsewhere in the legislative his-

tory that Congress used the term “laborers and mechanics” to mean

all manual workers on construction sites, and not to exclude semi-

skilled employees. For example, at the end of the part of the Senate

report just quoted, the committee recommended amendment of the

Act so that it would require that the specifications for any project

which “involve[d] the employment of mechanics and/or laborers .. .

contain a provision stating the minimum wages to be paid various

classes of skilled, unskilled, and interme diate labor,” and that the

contracts for such projects obligate the contractor to pay “all

mechanics and laborers employed” the wages in the specifications.

Id. at 9 (emphasis added). Since it would make no sense to set

wages for intermediate or semiskilled workers if they were not to

he covered by the Act, it appears that the committee thought the

term “mechanics and laborers” included some intermediate classifi-

cations other than skilled and unskilled labor. (The language “skilled,

unskilled, and intermediate labor” was replaced by the phrase “labor-

46a

There is some legislative history that suggests that

Congress in 1935 was thinking of a task-based definition

of “classes” when it spoke of the problem of “under-

ers and mechanics” before the amendments were enacted, but no

explanation of the change appears. The change may have been

intended merely to make the language of the statute, which refers

to “laborers and mechanics” thirteen other times, consistent

throughout. In any case, the fact that the two phrases could appear

so close together in a considered committee recommendation in

which they must be read to refer to the same categories of workers

suggests that it was not assumed by all that the two were contra-

dictory.) Moreover, elsewhere in its report the committee plainly

used the term “laborers and mechanics” to mean manual workers

generally, with no thought of excluding semiskilled workers. See,

e.g., id. at 1 (“public hearings were conducted and testimony of 100

witnesses (laborers and mechanics, representatives of labor, con-

tractors, and representatives of various Government departments)

was received”) (emphasis added).

In addition, it appears that the Fedcral Emergency Relief Ad-

ministration (FERA) regulations referred to in the Senate renort

themselves recognized semiskilled labor classifications, the wage rates

for which were to ‘‘depend upon local custom.” Federal Civi] Work-

ers Administration Rules and Regulations No. 10 at 2 (1933), re-

printed in J.A. at 198 (the Civil Works Administration was an arm

of the FERA). Thus, what the committee referred to as a device to

underpay labor in violation of the FERA regulations must not have

been the use of intermediate classifications per se, but the “crea-

tion” of “arbitrary” semiskilled classifications not reflected in local

practice, in order to underpay skilled labor.

Further support for a reading of the statute that does not bar the

use of semiskilled classifications entirely is provided by the Secre-

tary’s longstanding interpretation of the Act to allow at least a

limited use of helpers. See supra p. 622. Also, the District Court

in this case clearly thought the current use of helpers was per-

mitted by the Act. See 543 F.Supp. at 1285. Moreover, the unions

in this court appear not to quarrel with this view, for they quote

the District Court’s opinion at length and endorse its conclusions,

see Brief for Appellees-Cross-Appellants at 31-33; elsewhere they

argue that Congress’s intent in this regard “had been consistently

recognized and followed by the Secretary of Labor” until the chal-

lenged reguiations, id. at 43. But see id. at 38-39 (disputing the

government’s view that the Senate committee accepted the use of

legitimate semiskilled classifications). (The unions’ position was

47a

classification.” For example, the 1935 Senate committee

considering the operation of the Act described th® prob-

lem of contractors assigning to common laborers “tasks

which fell within the purview of the skilled crafts,” sce

Supra p. 625 (emphasis added), and referred to the

“rough saw and hammer men” ‘ategory as a violation of

the rule that “any man using carpenter’s tools shall be

paid carpenter’s wages,” S.REp. No. 332, supra p. 613,

pt. 3, at 17.

Nevertheless, we do not think Congress intended to bind

the Secretary to the job classification existing at that

time, but rather merely spoke against a background of

the task-based union practice being the prevailing one.

The Senate report seems to take some pains to point out

that the reason the “rough saw and hammer men” classi-

fication resulted in underpayment of labor was that it was

“a direct violation of the union rule in general effect

throughout the country,” id. (emphasis added) : see id. at

12 (the work being performed “was regarded by labor-

union regulations as carpentry work’’).

Moreover, there is no language in the statute that

might be said to implement the Supposed intent to man-

date the union classification scheme. The only otherwise

unequivocally stated in their memoranda filed in the District Court:

“|W le do not take the position that Congress precluded recognition

of semiskilled helpers under the Davis-Bacon Act... . Quite clearly,

the Davis-Bacon Act does allow recognition of semi-skilled workers

when they do, in fact, represent a prevailing practice and form a

distinguishable class who perform discrete tasks.” Plaintiffs’ teply

Memorandum of Points and Authorities in Support of Their Mo-

tion for Summary Judgment at 10, 11, Record at 14 (emphasis in

original.)

While we think the argument that any helper classifications was

barred by the statute is at least colorable, the long-held view of the

Secretary and the leyvislative history of the statute taken as a whole

persuade us to agree that the Secretary is empowered to recognize

at least some form of semiskilled classification. The remainder of

the present section considers Whether the specific definition of

“helper” proposed by the Secretary is barred by the statute.

48a

unexplained change worked by the 1935 amendments was

the addition of the phrases “various classes of laborers

and mechanics” and “corresponding classes of laborers

and mechanics” in place of the 1931 reference to the rate

of wage for “all laborers and mechanics.” We see noth-

ing inherently task-oriented about the term “classes.” It

seems likely that the addition of the word “classes” was

intended merely to describe in a general way the nature

of the wage predetermination the Secretary was to make

under the new statute. Had the amendments required

only that advertisements for bids contain “a provision

stating the minimum wages to be paid all laborers and

mechanics which shall be based upon the wages. . . pre-

vailing for work of a similar nature,” it might conceiv-

ably have been thought that a single minimum wage was

to be set for construction work rather than a set of wages

for the various classes or grades of workers involved.”

©The vetoed 1932 act contained the term “grades” instead of

“classes.” The legislative history does not reveal the reason for the

change, although it may have been to counter an interpretation of

the word “grades” that was advanced by President Hoover’s Secre-

tary of Labor in a memorandum that accompanied the President’s

veto message. Secretary Doak wrote that the new law would

require[{ | the determination of the rate of wages for the “vari-

ous grades of mechanics and laborers,” clearly indicating that

the rate is to be determined not only for the different trades,

as bricklavers and carpenters, but for the different grades of

such workers within each trade, which would require an official

determination of the comparative efficiency of individual work-

ers employed on the work by the contractor or subcontractor.

75 CONG.REC. 14,589 (1932). The new term “classes” may have

been inserted to assure that qualitative evaluations of workers

within a certain type need not be made. Prior to the 1932 act,

concerns about underclassification were voiced similar to those ex-

pressed prior to the 1935 amendments, see Hearings on S. 3847,

supra p. 621, at 109 (testimony of shipbuilding trade representa-

tive) (“in the shipyards the line between the mechanic and the

helper and the seimskilled man has been very largely broken down”),

suggesting that the change from “grades” to “classes” was not

intended to take into account new information c: underclassifica-

tion.

49a

Further evidence that Congress did not intend to man-

date the then-existing union practice is that, as the unions

here admit, Congress specifically rejected a scheme

whereby wages would be set at the union wage in all

areas. See Wages of Laborers and Mechanics on Public

Buildings: Hearing on S. 5904 Before the Senate Comm.

on Manufacturers, 71st Cong., 3d Sess. 9 (1931); Brief

for Appellees-Cross-Appellants at 60: Reply Brief for

Appellees-Cross-Appellants at 6. The following exchange

during the House debate on the 1932 bill clearly indicates

the congressional intent on the matter:

Mr. JOHNSON of South Dakota. .. . I want to

know if the union scale is to govern in all matters

in this bill, particularly in those cities where I am

convinced the racketeering end of union labor has

taken control.

Mr. CONNERY. The Secretary of Labor is the

final arbiter, and I do not believe that he has taken

the union scale absolutely. He has taken the pre-

vailing rate of wage in those cities.

Mr. JOHNSON of South Dakota. Then it would

not be the intention of the chairman of the committee

|Mr. Connery} that the union scale in all cases would

be the prevailing rate?

Mr. CONNERY. Personally, that is what I would

like to see.

Mr. JOHNSON of South Dakota. It would not be

so construed in the bill if it is passed?

Mr. CONNERY. No.

75 CONG.REC. 12,377 (1932) ; accord id. 12.379 (remarks

of Rep. Ramspeck) (in some cases, the Secretary has not

required the union scale). Since, as we have discussed,

wage rates and classifications are essentially two sides of

the same coin—they must be fixed in tandem to ensure

that a given wage will be paid for given work—Congress’s

rejection of the then widespread union pay scale as the

conclusive basis for the Secretary’s predetermination of

50a

wages suggests that it similarly favored locally prevail-

ing practices over the union classification scheme.

At bottom, we are unwilling to read the fairly ambig-

uous legislative references to a task-based classification

system in such a way as to vitiate the clearly expressed

congressional purpose to have federal wages mirror those

prevailing in the area. See, e.g., S.REP. No. 509 72d

Cong., Ist Sess. 2 (1932) (“This bill will in no way in-

terfere with the natural increase or decrease of prevail-

ing wage scales ... .”); H.R.REP. No. 1756, supra p.

622, at 1 (The bill’s “object is to reinforce and extend the

principle of . . . the ‘Bacon-Davis Act’. . . which requires

the payment of the prevailing rate of wages to laborers

and mechanics employed” on federal projects.) ; see also

H.R.ReEP. No. 308, 88th Cong., Ist Sess. 2 (1963) (the

Act “was designed . . . to prevent the disturbance of the

local economy”). Yet were the Secretary barred in all

cases from allowing helpers to do work that overlaps with

the tasks done by journeymen, the wages paid on fed-

eral projects for certain work would sometimes not be the

same as those prevailing in the area for the same work.

We do not say that there is no content to the statutory

term “classes.” See generally Donahue, The Davis-Bacon

Act and the Walsh-Healey Public Contracts Act: A Com-

parison of Coverage and Minimum Wage Provisions, 29

LAW & CONTEMP. PROBS. 488, 508 (1964) (written by

Labor Dep’t Solicitor) (‘|T]he Secretary generally takes

the local corresponding classes of laborers and mechanics

as he finds them, although he may not use criteria which

detract from the term ‘classes,’ as used in the act.”). We

simply say that the core concept of that term—that those

things within the class be differentiable from those things

outside of it—is not weakened by a definition that makes

the common element supervision by journeymen rather

than use of tools.

The unions and the District Court present a subtler

argument than one based on a direct congressional intent

5la

to define “classes” in a certain way. They appear to

agree that the legislative history discussed above suggests

only that Congress was aware of the need to prevent

workers doing skilled work from being underpaid by

being classified as semiskilled employees. The “crux” of

the argument, as the District Court put it, is that “in

practice” the distinction between skilled and unskilled or

semiskilled labor “can be maintained only if the tasks of

the helper class are defined as discrete and distinguish-

able from those of laborers and mechanics.” 553 F.Supp.

at 355. The argument is, in other words, thai as a prac-

tical matter the Secretary is wrong to think that his

definition is capable of enforcement, because it is simply

too difficult to tell a helper from a journeyman on a job

Site.

We agree that discerning whether a person using cer-

tain tools is being directed and supervised by a journey-

man is far harder than merely telling whether that per-

son is using the tools of the trade. Nevertheless, there is

a substantial policy that argues against simply choosing

a rough and simple distinction, and that is that such a

distinction might mean the wage scales on federal work

would no longer reflect the prevailing practice in the

area, which would be counter to the central purpose of

the Act. We think the Secretary is entitled to try to come

closer to achieving that purpose than his predecessors

have. Cf. American Trucking Associations v. Atchison,

T. & S.F. Ry., 387 U.S. 397, 416, 87 S.Ct. 1608, 1618, 18

L.Ed.2d 847 (1967) (“[Wle agree that the Commission,

faced with new developments or in light of reconsidera-

tion of the relevant facts and its mandate, may alter its

past interpretation and overturn past administrative rul-

ings and practice.’’).

The change may mean that some unscrupulous con-

tractors will find it easier to shift what the prevailing

practice denominates journeyman work onto helpers, but

we find it difficult to second-guess the Secretary’s view

52a

that he can catch them. We do not mean that we cannot

review the Secretary’s decision against a charge that he

has effectively abandoned the field. But our deference to

his choice is properly near its greatest when his decision

turns on the enforceability of various regulatory schemes.

He and not the courts can best balance such shifting dy-

namics as the incentive to violate the rules, the willing-

ness of construction workers and competitors to complain,

the ability of his inspection staff to respond and to dis-

cover violations, and the effectiveness of sanctions. See,

e.g, FCC v. WNCN Listeners Guild, 450 U.S. 582, 596-

97, 101 S.Ct. 1266, 1275-76, 67 L.Ed.2d 521 (1981) (“pre-

dictions as to the probable conduct of licensees and the

functioning of the broadcasting market and .. . the Com-

mission’s assessment of its capacity to make the deter-

minations required by [the alternative approach]

are within the institutional competence of the Commis-

sion’’).

Moreover, it is important to note that in this case the

Secretary is not overturning a policy that has worked to

perfection. He has concluded that “the current policies re-

garding semi-skilled crafts do not adequately reflect con-

struction industry practices, in particular, the widespread

use of helpers to perform certain craft tasks.” 47 Fed.

Reg. at 23,662. Perhaps as a result, federal wages today,

rather than being below those in the private sector, are

in some cases far above. See GENERAL ACCOUNTING

OFFICE, THE DAVIS-BACON ACT SHOULD BE REPEALED

71 (1979) (on twelve projects where wage determina-

tions were higher than GAO-determined prevailing rate,

average difference was 36.8% ). No one has attacked this

basic finding. The fact that the past practice has not been

entirely successful tends to predispose a reviewing court

to allow the Secretary to try a different scheme that,

while more difficult to enforce, might on balance result

in a closer approximation of the prevailing wage. See

American Trucking Associations, 387 U.S. at 416, 87

58a

S.Ct. at 1618 (regulatory agencies are Supposed “to adapt

their rules and practices to the Nation’s needs in a vola-

tile, changing economy”’).

The Secretary’s definition here is not clearly unreason-

able or on its face impossible to enforce. First, the dis-

tinction between supervised and Supervising personnel is

a common one in the labor field. It is thus not a com-

pletely untested distinction nor one that has proven im-

possible to draw.

Second, the new regulation, as modified by the require-

ment that the classification prevail in an area before it

may be used, is an entirely logical response to the prob-

lem of federal construction practice not reflecting the

widespread, but not universal, practice of using helpers.

The new regulation would lower the current federal

wages for the most part in those nonunion areas where

they are significantly above the wages paid in the area.

See, e.g., A. THIEBLOT, supra p. 623, at 94, reprinted in

Record at 3948 (effect of 35-day suspension of Act in

1971 was “negligible” in highly unionized areas, but “of-

ten substantial” in nonunion areas). In the union areas

of the country where helpers are little used, they would

not be allowed on federal projects. Thus, the new regula-

tion would be narrowly aimed at correcting the federal

practice in areas where it has not worked well, and would

not result in a wholesale reduction in journeyman wages.

Third, but by no means least important, the Secretary

has increased the likelihood that gross violations will be

caught, or at least that evasion will not get too far out

of line, by putting the forty-percent cap on the use of

helpers. While it might be desirable for the cap to reflect

the extent of use in the area, rather than provide a single

nationwide cutoff, the existence of some cap at least in-

creases our confidence that the Secretary has considered

the enforcement problems of the new definition and re-

sponded to them. See 46 Fed.Reg. at 41,456 ( proposed

1:5 helpers-to-journeyman ratio was intended “to protect

54a

against possible abuse’’).’’ All things considered, the

unions have not shown the Secretary’s choice of regula-

tory schemes to be arbitrary or capricious.

E. Allowing Submission of Summary Statement of

Compliance with Wage Laws

The Secretary’s present regulations require covered

federal contractors and subcontractors to submit weekly

a copy of their payrolls, listing the name and address of

each laborer or mechanic, and his or her classification,

rate of pay, daily and weekly hours worked, deductions

made, and actual wages paid. 29 C.F.R. § 5.5(a) (3)

(1982). With the exception of a three-year hiatus from

1948 to 1951, the regulations have continuously required

the submission of such payrolls since 1935, immediately

after the Copeland Anti-Kickback Act was passed. See

Construction Regulations and Regulations Issued Pur-

suant to So-Called “Kick-Back Statute” pt. II (1935),

reprinted in J.A. at 172, 178-79 [hereinafter cited as

19385 Kick-Back Regulations]; 13 Fed.Reg. 524 (1948)

(eliminating the provision); 16 Fed.Reg. 4430, 4431

(1951) (reinstating the provision).

Initially the Copeland Act required a “sworn affidavit”

with respect to the wages paid, so the regulations re-

quired that the payrolls be accompanied by an affidavit

from the employer swearing that “the attached pay roll

[was] . .. true and accurate” and that no unreported

deduction or rebates had been made. 1935 Kick-Back

Regulations, supra p. 630, pt. II, § 2, reprinted in J.A.

at 178. In 1958, in a law to improve government procure-

ment opportunities for small business concerns, the Cope-

land Act was amended to require a “statement” rather

than a “sworn affidavit” and to make false statements

11 We repeat that we have not been provided with a significant

discussion of the issues regarding the 40% cutoff and therefore do

not here pass on the propriety of it. See supra note 7.

55a

a criminal offense. Act of Aug. 28, 1958, Pub.L. No.

85-800, § 12, 72 Stat. 967. The regulations thus now re-

quire that the payroil be accompanied by a statement in-

dicating that the payroll is correct and complete, that the

wage rates are not less than those determined by the

Secretary, and that the classifications for each laborer or

mechanic conform to the work done. 29 C.F.R. § 5.5(a)

(3) (ii) (1982) (contract provision) ; see id. § 3.3 (reg-

ulatory requirement).

The new regulation would eliminate the requirement

that payrolls be submitted, while maintaining the re-

quired weekly submission of a statement of complianee.

The statement would certify that the payrolls the em-

ployer is required by the regulations to maintain are cor-

rect and complete, that each laborer or mechanic has been

paid the full wages earned without impermissible deduc-

tion or rebate, and that the wage rates paid are the ap-

plicable ones for the classification of work performed. 47

Fed. Reg. at 23,669 (to be codified at 29 C.F.R. § 5.5 (a)

L(3) (ii)); id. at 23,679 (to be codified at 29 C.F.R.

§ 3.3(b)).

The Secretary justified the change as a reduction in

unnecessary paperwork, since the submitted payrolls are

“infrequently used by many Federal agencies.” Id. at

23,662. He estimated that the elimination of the require-

ment would save $100 million in compliance costs. Jd.

The unions disputed the cost Savings involved, arguing

that the estimates ignored the enforcement benefits of the

payroll reporting requirement. Jd. In this court, the

union also cite Labor Department testimony that the pay-

rolls are typically reviewed at the beginning of each

project and spot-checked thereafter, with contractors that

have a history of violations receiving more thorough

checks. See Federal Contractors’ Reporting Require-

ments: Hearing on S. 1681 Before the Subcomm. on

Federal Spending Practices and Open Government of the

Senate Comm. on Governmental Affairs, 96th Cong., 1st

ae

56a

Sess. 18 (1979); see also id. at 147 (memorandum of

HUD Inspector General) (contractor is less likely to un-

derpay if he is required to submit weekly payroll re-

ports). Since we find the Secretary’s relaxation of the

reporting requirement to be contrary to a direct statu-

tory command, we need not reach the question of whether

the payroll reporting requirement is, as the District

Court found, “essential to the achievement of the Act’s

purposes” because of the transient nature of much con-

struction business, 543 F.Supp. at 1288-89; accord 553

F.Supp. at 354 (new regulation “would render the act

largely unenforceable’).

We think that when Congress directed the Secretary

to require contractors to “furnish weekly a sworn affi-

davit with respect to the wages paid each employee dur-

ing the preceding week,’ Copeland Anti-Kickback Act,

ch. 482, § 2, 48 Stat. 948 (1934), it meant that the wages

paid each employee should be separately reported and

sworn to. Under the Secretary’s reading of the statute,

the intent of the reporting provision would be little more

than to add a further criminal penalty—that of perjury

—to the crime of underpaying one’s employees. We think

the reporting provision was intended to play, in addition,

a role in uncovering violations of the law. The most per-

suasive evidence of this is, of course, the word “each” and

the requirement that the submission be “weekly.” If the

provision were meant only to add perjury to the criminal

penalties provided by section 1 of the act, then it would

seem unnecessary to have the affidavit refer to “each”

employee since a statement as to all of them would pre-

sumably be untrue if any one was underpaid. Under the

Secretary’s reading, it would also seem to be unnecessary

to require a “weekly” submission, since a blanket state-

ment at the end of the contract term would serve to

criminalize any single breach during construction. Both

of these provisions are most naturally read if one at-

taches an investigatory purpose to the act, that is, if the

requirement was intended to aid in uncovering, not

57a

merely punishing, violations. Only a requirement that

payrolls be submitted would help uncover violations,

either by exposing contractors who accurately reported

underpayments or by simplifying the task of investigators

in spot-checking for violations or turning up unusual

patterns.

Further support for this reading is provided by the

initial phrase of the section in the original act, which

read, “To aid in the enforcement of the above section.”

The “above section,” section 1 of the act, made it a crim-

inal offense to induce an employee to give up any part of

the compensation to which he or she is entitled. Section

2 would only really “aid in the enforcement” of section

l’s criminal provision if it helped catch violators rather

than if it merely added to the underlying conduct a fur-

ther penalty with apparently the same or greater ele-

ments of proof.

The legislative history of the act does not contradict,

and to a large extent supports, this reading of the statu-

tory language. The affidavit provision was not men-

tioned in the committee reports or on the floor of the

House, where there was no debate on the act at all. There

was also no debate in the Senate, except that Senator

Copeland briefly introduced the bill, stating in part,

It is the purpose of the bill to have the Secretary

. require that an affidavit be made as to the pay

roll each week so that we may have some way of

reaching those who may be guilty of this practice

[of requiring kickbacks from employees].

78 CONG.REC. 7401 (1934). While the words “as to”

slightly support the Secretary’s view that only a general-

ized affidavit about the wages paid was required, the

mention of the weekly “pay roll” tends to support the

unions’ view that a sworn copy of the payroll was re-

quired. Further support for the latter position is pro-

vided by the stated purpose of providing “some way of

58a

reaching those who may be guilty of this practice.” The

word “reaching” must have meant “uncovering,” sup-

porting an inference that the provision had an investiga-

tory purpose, because if the aim was merely further to

criminalize a failure to pay, the penalties of section 1

would already provide “some way of reaching” violators.

Moreover, when the idea of requiring weekly reporting

was advanced in the hearings that led to the enactment

of the provision, the witnesses making the suggestion

were crystal clear that the payroll’s themselves should be

submitted in order to allow them to be ‘“‘watch{ed] ...

constantly.” 1 Investigation of So-called “Rackets’’:

Hearings Before a Subcomm. of the Senate Comm. on

Commerce Pursuant to S. Res. 74, 73d Cong., 2d Sess.

791 (1933); accord id. at 816 (to “follow up” on prede-

termination of wages). Furthermore, in response to one

witness’s mention of a case in which a contractor made

his subcontractor “present his pay roll,” Senator Cope-

land indicated that he thought it a “very practical sug-

gestion that every pay roll should be certified and sworn

to,” clearly implying that the Senator expected that the

payrolls themselves would be filed. /d. at 793 (emphasis

added). Similarly, the 1935 report of the committee in-

vestigating the operation of the Davis-Bacon Act, on

which Senator Copeland served, mentioned the then new

regulations requiring submission of payrolls, which the

report said were issued “[{p]ursuant to the provisions of

the Copeland Act” and which it said would “enable|| a

thorough check of the pay rolls.” S.ReEp. No. 332, supra

p. 618, pt. 2, at 5.

There is no indication that the subsequent amendments

of the Copeland Act were intended to alter this original

intent. See Act of Aug. 28, 1958, Pub.L. No. 85-800, § 12,

72 Stat. 967 (replacing “sworn affidavit” with ‘“state-

ment”); Act of May 24, 1949, ch. 139, § 134, 63 Stat. 108

(deleting reference to section 1 of the act). In fact, when

the law was amended in 1958 to require only a “state-

59a

ment” instead of a “sworn affidavit,” the Senate commit-

tee report stated that the act required the filing of “pay-

roll information.” S.REP. No, 2201, 85th Cong., 2d Sess.

2, 9 (1958) ; see also id. at 16, U.S.Code Cong. & Admin.

News 1958 p, 4021 (reprinting National Advisory Com-

mittee for Aeronautics letter approving the change in “the

filing of payroll information” so that only “a weekly

statement of wages paid” would be required).

We think the Copeland Act clearly contemplated that

the statement required to be submitted would provide

some amount of wages paid to each employee each week.

We do not say that the actual payrolls themselves, com-

plete with their records of deductions and taxes withheld,

must be required to be submitted. But we do think that

the statement required by the act must contain at least

individualized wage information for each covered em-

ployee.

I]

We affirm the District Court as to the Secretary’s elim-

ination of the thirty-percent rule, the provision allowing

use of helpers if that classification is “identifiable” in the

area, and the provision allowing submission of a state-

ment certifying compliance with wage laws. We reverse

as to the provision excluding urban counties from certain

rural wage determinations (and vice versa), the provi-

sion excluding prior Davis-Bacon Act projects from the

wage calculations under the Act, and the expanded defi-

nition of a helper’s duties.

It is so ordered,

60a

APPENDIX C

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Civil Action No. 82-1631 (HHG)

BUILDING AND CONSTRUCTION TRADES DEPARTMENT,

AFL-CIO, et al.,

Plaintiffs,

vy

ELIZABETH H. DOLE, et al.,

Defendants.

MEMORANDUM AND ORDER

| Filed Sep. 24, 1990]

Before the Court is a motion to vacate an injunction

blocking implementation of a regulation promulgated by

the Department of Labor regarding the use of “helpers”

on federally funded construction projects. This Court

issued the injunction in 1982 after concluding that the

regulation violated the Davis-Bacon Act. The Depart-

ment of Labor has since promulgated a new regulation

which, it is claimed by the government, does not conflict

with the Act. Upon consideration of the motion, the

opposition papers, and the entire record, the motion will

be granted.

I

In 1982, Building and Construction Trades Depart-

ment, AFL-CIO, and fifteen national and international

labor unions affiliated with it, initiated the instant action

to enjoin the implementation of new regulations promul-

gated by the Secretary of Labor, inter alia, to permit

6la

businesses to expend the use of “helpers” on federal con-

struction projects under the Davis-Bacon Act, 40 U.S.C.

§ 276a et seq. The acknowledged purpose of the changes

was to reduce federal construction costs.

This Court concluded that the new regulations violated

the Davis-Bacon Act and enjoined their implementation.

Building & Constr. Trades Dept., AFL-CIO v. Donovan,

543 F. Supp. 1282 (D.D.C. 1982) (granting plaintiff's

motion for a preliminary injunction) ; 553 F. Supp. 352

(D.D.C. 1982) (granting in relevant part plaintiff’s mo-

tion for permanent injunction). The Court of Appeals

affirmed in part and reversed in part. Building & Constr.

Trades Dept., AFL-CIO v. Donovan, 712 F.2d 611 (D.C.

Cir. 1983).

After the Court of Appeals decision, this Court modi-

fied its judgment by rescinding its injunctions as to cer-

tain regulations and leaving it in place as to others. 102

CCH Labor Cases {| 34,648 (Dec. 21, 1984). Specifically,

the Court kept in place the injunction against several

regulations governing the use of “helpers” on Davis-

Bacon construction projects. At the same time, the Court

stated that the Department of Labor could “submit to

this Court reissued regulations governing the use of

helpers, and if these regulations conform to the decision

of the Court of Appeals, they will be approved.” Jd. at

p. 46,702. =

The Department of Labor has promulgated new regu-

lations governing the use of “helpers”, see 52 Fed. Reg.

31366 et seq. (August 19, 1987) (notice of proposed reg-

ulation), and 54 Fed. Reg. 4234 et seg. (January 27,

1989) (notice of final rulemaking), and it has moved to

vacate the injunction.

II

The Department of Labor recognizes five classes of

employees covered by the Davis-Bacon Act: skilled

journeymen, unskilled laborers, semiskilled apprentices,

62a

trainees, and helpers. The first four categories are well-

defined and universally recognized. 712 F.2d at 622. In

1982, the Department amended the definition of “help-

ers’ so as to include a semiskilled worker who works

under the direction of, and assists journeymen. 29 C.F.R.

§ 5.2(n) (4). The Court of Appeals upheld the definition.

712 F.2d at 626-30.

In 1982, the Department also expanded the circum-

stances in which helpers may be used in Davis-Bacon

projects. In the past, helpers could work on Davis-Bacon

projects only if it was a prevalent practice to use them

in local construction. The 1982 regulations permitted em-

ployment of helpers where their use was merely iden-

tifiable in an area. 47 Fed. Reg. 23644, 23658 (May 28,

1982). The Court of Appeals struck down this provision

“because it operates to undermine the fundamental pur-

pose of the Act: that wages on federal construction proj-

ects mirror those locally prevailing.” 712 F.2d at 624;

see also, 543 F. Supp. at 1285.

The revised regulation permits the use of helpers only

where that classification prevails in the local area. Under

the regulation, the use of helpers prevails:

(1) if the prevailing journeyman wage is set by the

“majority rule,” te. more than 50 percent of the

journeymen in a given local are paid the same rate,

see 29 C.F.R. 1.2(a) (1), the practice followed by

those contractors whose rates prevail for the jour-

neyman is deemed the prevailing practice for deter-

mining whether a helper classification prevails.

(2) If no prevailing journeyman wage exists, then

the total number of workers in the classification em-

ployed by contractors using helpers (journeymen

plus helpers) will be compared to the total number

of workers in the classification employed by contrac-

tors not using helpers (journeymen only); the prac-

tice which covers the majority of workers determines

whether a helper classification prevails.

68a

52 Fed. Reg. at 4243 (January 27, 1989) to be codified

at 29 C.F.R. §$1.7(d). The sole issue now before the

Court is whether the reissued regulations conform to the

statutory mandate.

Ill

The Act “delegates to the Secretary in the broadest

terms imaginable, the authority to determine which

Wages are prevailing.” 712 F.2d at 616. See also, 553

F. Supp. at 354. Accordingly, the Court reviews the

Secretary’s choice “only to ensure that he is acting con-

sistently with the purpose of the statute and that his

choice is not arbitrary.” 712 F.2d at 618. Moreover, the

Court of Appeals has endorsed a definition of the term

“prevailing”? in the instant case similar to the one as it

was used here in a related context. See 712 F.2d at 616-

17 (endorsing definition of “prevailing” relying first on

majority rate and second on weighted average for de-

termining prevailing wage).

Plaintiffs assert that the regulation is flawed in a

number of interrelated respects: that the methodology

chosen will indicate that the use of helpers prevails when

it is merely identifiable; that the methodology does not

take into account laborers and other classes of workers

in its computations; that the regulation fails to require

task-oriented practice surveys; and that the Department

improperly concluded that helpers will not replace labor-

ers to any large extent. The Court will address these in

turn.

Underlying all these considerations, however, is the

direction of the Court of Appeals that it is the premise

from which the courts must start that the Secretary is in

the best position to determine the methodology to be used.

712 F.2d at 616. Here, the Secretary has considered a

number of alternatives, including several proposed by

plaintiffs, and he has given reasoned explanations for the

rejection of some and the selection of the one ultimately

adopted, 54 Fed. Reg. 4236-40.

64a

Plaintiffs’ attacks on the methodology share a common

flaw. They demonstrate nothing more than that there

are several alternatives for determining whether the use

of helpers is prevailing. Under the Court of Appeals

mandate, it is not relevant that plaintiffs may believe,

and may even have substantial support for the proposi-

tion, that one methodology is preferable to the others.

The issue as it is now before this Court is not whether

alternatives exist, since they obviously do, but rather

whether the methodology chosen by the Department of

Labor is irrational or contrary to the intent of the stat-

ute. Nothing proffered by plaintiffs demonstrates that

this is the case.

The core of plaintiffs’ attack on the agency’s choice of

methodology is that it will allow the use of helpers where

they are merely identifiable as opposed to prevailing.

However, this argument amounts to little more a dis-

agreement with the Secretary about the meaning of the

term “prevailing’—a matter largely within the Secre-

tary’s jurisdiction.

Plaintiffs believe, for example, that in order to be re-

garded as prevailing, the category of helpers must out-

number all other classifications of workers. However,

under this approach the use of helpers would never be

found to be prevailing since DOL regulations expressly

provide that journeymen must outnumber helpers by a

ratio of at least three to two. See 47 Fed. Reg. at 23,670,

to be codified at 29 C.F.R. § 5.5(a) (4) (iv).

Plaintiffs next assert that the Act requires a compari-

son between helpers performing journeymen’s work and

journeymen performing the same work. The argument

appears to be almost entirely based on language in the

Court of Appeals decision to the effect that

[Where the Secretary has not found the use of

helpers as provided for in the new rules to be a

nearly universal practice, he is barred from allow-

ing work that is “prevailing” categorized in one job

65a

classification to be placed in a lower paid classifica-

tion merely because such a practice can be “identi-

fied” in the area.

712 F.2d at 625-26 (citations omitted). This language,

however, merely states the obvious: helpers cannot be

used on Davis-Bacon projects unless their use prevails in

the community. Nothing in the decision mandates the

use of the methodology proposed by plaintiffs, Indeed, it

is doubtful that any court could require the use of a

specific methodology in circumstances such as these.

Equally unavailing is plaintiffs’ suggestion that the

use of helpers cannot prevail unless the number of con-

tractors in an area which use them exceeds those that do

not. The Secretary considered this alternative and _ re-

jected it because did not give weight to the size of a con-

tractor’s work force. 54 Fed. Reg. 4239. The Court is

constrained to hold that the language and the purpose of

the statute do not compel a different result.

IV

Plaintiffs argue that the methodology is flawed because

it fails to take into account the number of laborers.

However, that claim rests on the erroneous premise that

the methodology does not, in fact, do so. A helper is a

semiskilled worker who works under the direction of or

assists a journeyman. The Department is of the view

that if a worker meets that definition, he must be con-

' Plaintiffs argue in this regard that under the Department’s

methodology, the use of helpers will be found to prevail when, in

fact, more journeymen work without their assistance than those

that do. Absent the Court of Appeals direction, this Court would

not necessarily be persuaded by the Department’s contention that

a helper classification should issue “[i]f the majority of workers,

helpers, and journeymen combined, work on projects that use

helpers . . . .” Defendants’ Reply at 26. The normal usage of

language would not countenance the conclusion that in this situation

the use of helpers is prevailing. However, as the Court of Appeals

made clear, the Department’s methodology is to be accepted

66a

sidered a helper regardless of whether his employer or

the union call him a laborer, tender, or any other title.

That interpretation of the helper definition is entitled to

deference, and plaintiffs’ objection must therefore be

rejected.

Plaintiffs contend to the contrary that the job title

assigned by the union or employer should prevail. How-

ever, such an approach would amount to an invitation to

the union and contractor to influence, or even to con-

trol, the outcome of the Department’s determination sim-

ply by changing the workers’ titles. The Court of Ap-

peals appear to have implicitly rejected such a manipu-

lable approach by endorsing a definition of helper irre-

spective of job title and tasks to be performed. 712 F.2d

at 626-30.

Related to this point is plaintiffs’ assertion that the

prevailing practice can only be ascertained by task-

oriented area practiee surveys, which would determine

the craft content of the work to be performed by “help-

ers’. The argument amounts to an attempt to re-litigate

an issue previously settled by the Court of Appeals.

Prior to the codification of the new regulatory definition

of helper, helpers were utilized only if their duties were

separate and distinct from those of journeymen. Under

the new definition, however, “lower paid but supervised

helpers [may] undertake tasks that overlap with those

of higher paid journeymen or laborers.” 712 F.2d at 626.

The Court of Appeals expressly rejected plaintiffs’ claim

that the statute required a task-oriented approach to the

definition of helpers. Jd. at 627-28. In approving the De-

partment’s definition, the court stated that:

While some distinction between skilled and semi-

skilled tasks would be retained, the essential func-

tional distinction would be not the nature of the

task done but rather the subordinate position of the

helper vis-a-vis a journeyman.

67a .

Id. at 622-23. In view of this definition, which distin-

guishes helpers on the basis of a supervisory-subordinate

distinction rather than on the basis of the duties per-

formed, it is difficult to understand what a task-oriented

survey would accomplish: as the Court of Appeals has

determined, helpers may undertake tasks performed by

both journeymen and laborers. See 712 F.2d at 626.2

Plaintiff Laborers’ Union asserts that the Secretary

erred in predicting that helpers generally will not sub-

stitute for laborers since laborers do not perform helper

tasks and do not typically directly assist journeymen.*

But the Secretary’s assessment was based on the Depart-

ment’s experience and on a record that led the Court of

Appeals to draw the conclusion that “in union areas of

the country . . . helpers are little used.” 712 F.2d at 630.

Furthermore, the voluminous record submitted by plain-

tiffs demonstrates at most that helpers may replace labor-

ers on occasion, and that some laborers directly assist

journeymen and are semiskilled. But that record proves

little about prevailing practices nationwide or about the

likely effect of the helper regulation nationwide. In any

event, the analytical statement that helpers will generally

not substitute for laborers does not affect the implementa-

tion of the regulation or its rationale, and it therefore

does not affect the validity of the rule. See Thompson Vv.

Clark, 741 F.2d 401, 404-05 (D.C. Cir. 1984).

V

The Court must also reject plaintiffs’ reliance on the

Department’s 1986 Davis-Bacon Wage Determinations

2? This conclusion also disposes of plaintiffs’ argument that the

task of helpers may not overlap with those of laborers or of other

non-supervisory classifications.

*The preamble to the regulation states that the Secretary has

determined that “it is highly unlikely that helpers will substitute

for laborers” because laborers “do not typically perform [helper }

tasks . . . and do not typically directly assist [journeymen].” 54

Fed. Reg. at 4237.

| |

68a

Manual of Operations, for a number of reasons. First,

the purpose of the wage surveys discussed in the Manual

was to collect data about wages paid to mechanics and

laborers, id. at 48, as opposed to ascertaining whether the

use of helpers is prevailing. Second, the Manual neither

incorporates nor reflects the new “helper” definition ap-

proved by the Court of Appeals. See id. at 21 (employing

former definition). Third, the Manual predates the rule-

making at issue here and thus reveals little about the

Department’s current practices. Fourth, the Department

is entitled to change its policies and practices as long as

it gives a reasoned explanation for doing so. No one

would dispute that the instant regulation, as well as

those upheld by the Court of Appeals, represent a major

shift in the Department’s policies and practices. An out-

of-date Manual of Operations clearly cannot prevent it

from so doing.

VI

Plaintiffs also attack the Department’s proposed con-

formance regulation under which new job classifications

may be added to existing contracts.* See 54 Fed. Reg. at

4243, to be codified at 29 C.F.R. § 5.5(a) (1) (ii) (A).

The regulation addresses the problem that arises when

a job classification needed to complete a project has been

left out of the contract. In such a situation, the contract

may be “conformed” to include the required classifica-

tion. If, for example, a project requiring a roofer does

not provide for the hiring of a roofer, the regulation

would permit the contract to be amended to include one.

Both the new and current regulation provide that work

performed by a classification for which a conformance

is requested cannot be performed by a classification al-

ready in the wage determination. However, in order to

accommodate the helper regulation, which allows the use

4This Court enjoined the operation of the former version of the

rule because it was part of the regulatory package of helper provi-

sions. See 553 F. Supp. at 356.

69a

of helpers whose duties overlap with those of journeymen

and laborers, the new conformance regulation excepts

helper classifications from this requirement. It also adds

the requirement that the use of helpers must prevail be-

fore there can be a conformance.

Plaintiffs assert that the regulation would allow the

contracting officer to determine, without guidance,

whether the use of helpers prevails. The determination

of whether the use of helpers prevails, however, would

still be made under the test set forth in 29 C.F.R. § 1.7

(d), which addresses that very question.

Plaintiffs next object that the regulation would allow

the addition of a helper classification via conformance

when another classification performed the same duties

under the supervision of a journeyman. Such a provi-

sion, however, was necessitated by the definition of help-

ers, which permits such overlapping duties. See 54 Fed.

Reg. 4240.

Plaintiff suggests that contractors may attempt to use

the conformance procedure to add lower-paid workers

after the contract award. However, subsection (ii) (A)

of the regulation specifically prohibits just such a gambit,

providing that

any class of laborer or mechanics including helpers,

which is not listed in the wage determination and

which is to be employed under the contract shall be

classified in conformance with the wage determina-

tion.

By the terms of this section, if a class of workers is

already listed in a wage determination whose members

meet the helper definition, an additional helper classifi-

cation cannot be issued.

VII

The regulation provides that a contractor may not use

more than two helpers for every three journeymen (or

70a

forty percent of the total of journeymen and helpers). The

rule is identical to the one promulgated in 1981 and which

this Court enjoined in 1982. The Department invited

comments on the regulation in 1981, and the final rule

was adopted in 19&2 after consideration of the comments

received. 54 Fed. Reg. 4241.

Plaintiffs assert that the Administrative Procedure Act,

5 U.S.C. § 553 et seq., requires a new round of notice

and comment before the injunction can be lifted on the

proposed regulation governing the numerical limit on the

use of helpers in 29 C.F.R. § 5.5(a) (4) (iv), relying upon

Action on Smoking and Health v. Civil Aeronautics Board,

713 F.2d 795, 799 (D.C. Cir. 1983). But in that case the

Court of Appeals emphasized that the earlier ruling had

“clearly and unequivocally vacated the offending portion”

of the rule in question, 713 F.2d at 797 (emphasis in

original), and new regulations could therefore not be

issued without new rulemaking. /d. at 797-98. Here,

however, the rules were not vacated.

The facts of the instant action are more closely akin

to those in American Federal of Government Employees V.

OPM, 821 F.2d 761 (D.C. Cir. 1987), where the Office of

Personnel Management proposed rules for implementing

reductions-in-force. The rules were held up by riders on

appropriations bills preventing OPM from using funds

to issue the rules. The riders expired in July 1985, and

the agency immediately implemented a revised version of

the rule over the unicns’ objections that renewed notice

and comment was required. The Court of Appeals held

that new notice and comment were unnecessary because

the “invalidity [of the regulations] was merely tempo-

rary” and implementation of the regulations was “virtu-

ally automatic once the ban expired.” 821 F.2d at 764.

Similarly, in the instant case, the Court advised the De-

partment of Labor that it could “submit to this Court

reissued regulations governing the use of helpers and if

these regulations conform to the decision of the court of

i

Tla

appeals, they will be approved.” 102 CCH Labor Cases

7 34,648.°

The short of it is that plaintiffs have failed to show

that the regulations are irrational or contrary to the lan-

guage and purpose of the Davis-Bacon Act, and there is

therefore no basis on which to continue the injunction in

effect.

Accordingly, it is this 24th day of September, 1990

ORDERED that cefendants’ motion be and it is hereby

granted; and it further

ORDERED that the injunction issued by this Court on

December 23, 1982, as subsequently modified, be and it is

hereby vacated.

/s/ Harold H. Greene

HAROLD H. GREENE

United States District Judge

5 Plaintiffs also argue without explanation that the two-to-three

ratio will result in the breakdown of prevailing wage scales because

it does not apply to the use of nonjourneymen other than helpers.

The regulation, however, applies only to the use of helpers, and

there simply is no basis for the Court to direct the Department to

broaden its application.

72a

APPENDIX D

UNITED STATES DISTRICT COURT

DISTRICT OF COLUMBIA

Civ. A. No. 82-1631

BUILDING AND CONSTRUCTION TRADES DEPARTMENT,

AFL-CIO, et al.,

Plaintiffs,

RAYMOND J. DONOVAN, et al.,

Defendants.

Dec. 23, 1982

Laurence Gold, AFL-CIO, Washington, D.C., for plain-

tiffs.

Surrell Brady, U.S. Dept. of Justice, Civ. Div., Wash-

ington, D.C.. for defendants.

MEMORANDUM

HAROLD H. GREENE, District Judge.

On July 22, 1982, 543 F.Supp. 1282, the Court issued

a preliminary injunction restraining the enforcement of

certain regulations which the Secretary of Labor had

issued ostensibly in implementation of the Davis-Bacon

Act, 40 U.S.C. § 276a et seqg., and the Copeland Anti-Kick-

back Act, 40 U.S.C. § 276c. The same matter is now before

73a

the Court on the parties’' cross motions for summary

judgment.

The order granting the preliminary injunction was ac-

companied by a Memorandum which discusses the various

regulations and the issues of this lawsuit at some length

and, except for certain specific matters, no useful purpose

would be served by plowing over the same ground once

again in similar or greater detail.

Briefly, the July 22 Memorandum expressed the Court’s

view that the statutory language and the legislative history

regarding the basis for the five types of regulations at

issue was somewhat ambiguous, with language and history

supporting the Secretary’s interpretation more strongly

with respect to some of the regulations and less strongly

with respect to others. The Court ultimately resolved the

doubts for preliminary injunction purposes in favor of

the plaintiffs because each of the regulations issued by

the present Secretary of Labor is wholly inconsistent with

administrative interpretation contemporaneous with the

enactment of the statutes about 1935 and consistent ad-

ministrative practice since then. See generally Norwegian

Nitrogen Co. v. United States, 288'U.S. 294, 53 S.Ct. 350,

77 L.Ed. 796 (1933). The Court will now simply add the

following to what was said on July 22, 1982.

First. Nothing substantially new has been adduced by

the parties or the amicus or found by the Court with

respect to three of the challenged regulations.

a. The Act directs the Secretary, in his ascertainment

of the prevailing wage, to determine wages for “projects

of.a character similar to contract work.” 40 U.S.C. § 267a.

As the Court previously pointed out, administrative prac-

tice from the early 1930s on has been to consider both

private and public projects in ascertaining the appropriate

1 The Court permitted the Associated Builders and Contractors to

file briefs as amicus curiae in support of the position of the Secre-

tary of Labor.

74a

standard for ascertaining the prevailing wage. The pres-

ent Secretary’s attempt to alter this consistent practice?

is based essentially on nothing more than his policy dif-

ference with the preceding fifteen Secretaries of Labor.

That is not enough. See Memorandum of July 22 at pp.

12-14.

b. The next point of dispute centers around the ques-

tion whether, in setting prevailing wage rates for rural

areas, the Secretary may consider the wages being paid

in nearby metropolitan areas. As the Court previously

indicated, the legislative history of this provision is mixed,

but here, too, the ambiguities are fully resolved by

contemporaneous and consistent administrative practice

against the construction adopted by the present Secretary.

ce. The Copeland Act requires the Secretary to issue

regulations for federal contractors which, inter alia, re-

quire such contractors to “furnish weekly a statement with

respect to the wages paid each employee during the pre-

ceding week.” Secretaries of Labor have always construed

this provision to mean that copies of the actual weekly

payroll must be submitted. The regulations issued by the

present Secretary, however, would require only a state-

ment from the contractor that he had complied with the

Act. The new regulation suffers not only from the same

infirmity as the others referred to above—that it is

contrary to consistent, long-standing administrative prac-

tice—but it is also subject to the additional criticism that

it would render the Act largely unenforceable. See pp.

10-11 of the Memorandum of July 22, 1982.

Second. The Davis-Bacon Act provides that every fed-

eral construction contract shall contain a provision to the

effect that the minimum wages being paid to various

classes of laborers and mechanics shall be those determined

by the Secretary “to be prevailing” for corresponding

classes of laborers and mechanics. The existing regula-

2 This consistent administrative practice was well known to the

Congress, but it was never overruled by that body.

75a

tions define “prevailing wage” as the wages being paid to

at least thirty percent of those so employed. The new

regulations issued by the present Secretary and tempo-

rarily enjoined by the Court would change this standard

to provide in essence that a wage shall be deemed pre-

vailing only if it is paid to a majority (more than fifty

percent) of a particular class.

The Act itself does not provide a definition of “prevail-

ing wage,” and it is abundantly clear that the definitional

task was entirely delegated to the Secretary. There is

nothing intrinsically appropriate or inappropriate to the

thirty percent rule or to any other figure as representing

the “prevailing wage.” Moreover, the legislative history

of the statute and its purposes do not provide support for

any particular figure. The statute quite simply relies on

the Secretary to give content from time to time to the term

‘prevailing wage” in the exercise of his discretion and his

expertise. There is no indication that Congress intended

the first Secretary of Labor following enactment of ihe

law to define the definition of prevailing wage for all

time. To the contrary, contemporaneous and subsequent

legislative materials indicate that Congress was fully

aware that the definition might or would be adjusted de-

pending on existing conditions. See 74 Cong.Rec. 6516

(Feb. 28, 1981); 75 Cong.Rec. 12365 (June 8, 1932) ;

Heavings before Senate Committee on Labor and Human

2esources on Military Construction Authorization Act of

1980, 96th Cong., 1st Sess. at 363 (1979).

In view of the background, which differs significantly

from that of the other regulations at issue here, the Court

concludes that, notwithstanding prior administrative prac-

tice, it was not improper for the Secretary to substitute

the fifty percent standard for the earlier thirty percent

standard. Accordingly, the Court will not enjoin that

part of the new regulation which sets the prevailing wage

76a

as the wage paid to the majority (more than 50 percent)

of the various classes of laborers and mechanics.

Third. The post-argument briefs, including particu-

larly that of the amicus, focus on the “helper” issue. In

its Memorandum of July 22, 1982, the Court expressed

the view that the various regulations which would permit

a substantial increase in the number of “helpers” in the

construction industry probably did not reflect the will of

the Congress. The Associated Builders and Contractors

argue with considerable vigor that the Secretary’s revi-

sions of the “helper” regulations are correct. In this

regard, the amicus points to an alleged statutory mandate

to establish classifications by regulation that would mirror

actual practice; that the scope and significance of the

helper category has expanded dramatically in recent years

(particularly in non-union shops); and that the helper

classification promotes employee opportunity. These argu-

ments proceed from erroneous premises and they are in-

sufficient to overcome the conclusions to be drawn from

the basic legislative purpose.

The crux of the matter is this. The integrity of the

statutery scheme requires that each “class of laborers and

mechanics” be comprised of “members” who perform ‘“‘well-

defined tasks” and do not perform traditional craft work

of another, higher paid class. This is a fundamental prin-

ciple with which apparently neither the Secretary of Labor

nor the amicus quarrel, at least not in theory. Indeed, the

amicus argues that the Secretary’s definition of “helper”

will maintain “the strict lines of demarcation between

skilled and unskilled labor.” Memorandum at p. 15. But

in practice that distinction can be maintained only if the

tasks of the helper class are defined as discrete and dis-

tinguishable from those of laborers and mechanics.

Yet the new regulations would allow helpers to sub-

stitute for laborers and for journeymen, and that helpers

would be allowed to perform tasks of all sorts. Under

77a

these regulations, “helpers” would not be performing well-

defined tasks either with regard to type of skill or to

amount of experience, but they would be available in a

general way to substitute for workers of many types and

many levels of experience.*

The amicus suggests that any problems in this regard

are remedied by the provision in the regulation which

forbids contractors to pay reduced rates for work “prop-

erly performed” by classes other than helpers (Memoran-

dum, p. 17). However, since the entity which will deter-

mine whether a particular task is “properly performed”

by a helper or by a skilled person will be the contractor,

it may reasonably be assumed that his determination will

follow his self-interest: lower-paid helpers will be re-

garded as properly performing many tasks traditionally

beyond their competence. When Congress enacted the

Davis-Bacon Act, it was well aware of these practicalities

(see, e.g., Cong.Rec. Senate, p. 12073. (July 30, 19385) )

and it sought to guard against them. It is quite clear that

the new regulation would subvert the congressional will.

Despite its seeming complexity, the basic issue govern-

ing this lawsuit is relatively simple. Congress enacted the

Davis-Bacon Act and the Copeland Act in the 1930s with

certain purposes in mind. Regulations were issued very

*The legislative history indicates that when “actual practice”

may be equated with a practice to evade the prevailing wage re-

quirement it is not determinative. Cong.Rec. Senate, p. 12073, July

30, 1935.

‘As for the argument of the amicus that increased use of the

helper classification promotes employee opportunity, it appears that

as of 1978 minority participation in joint union-management ap-

prenticeship programs was 21.2 percent while its participation in

open-shop trading programs was only 11.4 percent. Department of

Labor data tabulated for Union and Open Shop Construction, p. 72

(1978). The regulation adopted by the present Secretary is likely

to have the effect of allowing contractors to replace higher wage

minority laborers with lower wage minority helpers.

ee

78a

shortly following the enactments to implement the words

and purposes of the legislature. In spite of substantial

public debate concerning both the laws and the regulations

in the years since then, the Congress has not amended the

law and it has not expressed its displeasure with the regu-

lations. Moreover, fifteen Secretaries of Labor serving

under eight Presidents have never altered the regulatory

scheme. The present Secretary’s claim to have discovered

a wholly different congressional intent rings hollow in the

light of that history.

For the reasons stated, the Court this day permanently

enjoins the enforcement of all the new regulations at issue

here, with the sole exception of the regulation which de-

fines the prevailing wage in terms of a higher percentage

of employees in each class of laborers and mechanics than

was provided for heretofore.

79a

APPENDIX E

UNITED STATES DISTRICT COURT

DISTRICT OF COLUMBIA

Civ. A. No. 82-1631

BUILDING AND CONSTRUCTION TRADES DEPARTMENT,

AFL-CIO, et ai.,

Plaintiffs,

RAYMOND J. DONOVAN, et al.,

Detendants.

July 22, 1982

Laurence Gold, AFL-CIO, Washington, D. C., for plain-

tiffs.

Surrell Brady, U.S. Dept. of Justice, Civ. Div., Wash-

ington, D. C., for defendants.

MEMORANDUM ORDER

HAROLD H. GREENE, District Judge.

This is a motion for a preliminary injunction! which

seeks to restrain the enforcement of certain regulations

1 Plaintiffs are the Building and Construction Trades Depart-

ment, AFL-CIO; the American Federation of Labor and Congress

of Industrial Organizations, and several other labor unions. Ray-

mond J. Donovan, Secretary of Labor; and Robert B. Collyer,

Deputy Secretary of Labor for Employment Standards: and William

M. Otter, Administrator of the Wage and Hour Division, are de-

fendants herein.

80a

issued in implementation of the Davis-Bacon Act, 40

U.S.C. $ 276a et seg., and the Copeland Anti-Kickback

Act, 40 U.S.C. $ 276c. The regulations are to take effect

on July 27, 1982.?

I

The Davis-Bacon Act was enacted in 1931 and substan-

tially amended to achieve its present format in 1935. Its

principal purpose is to protect employees on federal proj-

ects by guaranteeing to them a minimum wage based on

local prevailing wage rates. The Copeland Anti-Kickback

Act was enacted in 1934, its purpose being to deter kick-

back practices by contractors on public construction proj-

ects. The issues here revolve around regulations issued

after appropriate rule-making* by the Secretary of Labor

in May 1982 which depart significantly in five respects

from the regulations or interpretations which have been

in effect since the early 1930s. The plaintiffs challenge

the legality of the regulations in all of these respects.

On this motion for preliminary injunction the Court

must consider whether plaintiffs have demonstrated (1) a

strong showing that they are likely to prevail on the merits

of their claims; (2) that without an injunction they will

be irreparably injured; (3) that issuance of the injunction

will not substantially harm other parties intere

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