Kiewit-Shea, 1984-DBA-34 (ALJ Sept. 6, 1985)

USDOL/OALJ Reporter

CCASE: Kiewit-Shea, Prime Contractor DDATE: 19850906 TTEXT: ~1 [1] [85-24 ATTACHMENT] U.S. Department of Labor Office of Administrative Law Judges 1111 20th Street, N.W. Washington, D.C. 20036 In the Matter of Disputes concerning payment of prevailing wage rates by: Kiewit-Shea, Prime Contractor, Case No. 84-DBA-34 BHB Trucking, Subcontractor, Maryland Equipment, Inc., Lower Tier, Subcontractor, With respect to Laborers and mechanics employed by subcontractor aryland Equipment, Inc., under Washington Metropolitan Area Transit Authority Contract No. 1B0091 (Sec. B-9, Glenmont Route, Forest Glen Station and Line). Adin C. Goldberg, Esquire For the Respondents Arthur J. Corrado, Jr., Esquire For the Secretary of Labor Before: FRANK J. MARCELLINO Administrative Law Judge Decision and Order This proceeding arises under the labor standards provisions of the Urban Mass Transportation Act of 1964, 49 U.S.C. Section 1609 (1981) and regulations for Davis-Bacon and related acts issued at 29 C.F.R. Part 5. The case was instituted by the filing of an Order of Reference by the Administrator of the Department of Labor, Wage and Hour Division on May 3, 1984, pursuant to the regulations at 29 C.F.R. [sec] 5.11(b). Based on an investigation the Administrator found reasonable cause to believe that Maryland Equipment failed to pay its employees the prevailing wage required under the negotiated contract. A [1] ~2 [2] hearing was scheduled for May 1, 1985, but the parties agreed to the issuance of a decision on the basis of the record, briefs of the parties and stipulations submitted. STATEMENT OF THE CASE The facts of the case are not in dispute. Kiewit-Shea contracted with WMATA to construct the Forest Glen Metro Station and Line in Silver Spring, Maryland. Kiewit-Shea excavated the construction site, piled the material on the edge of the site, then contracted with BHB Trucking Company to load, haul and dispose of the material away from the site. BHB Trucking sold the material to Brandywine Sand and Gravel Company and Eco-Rok, Inc., with the understanding that they would move the material. Brandywine and Eco-Rok in turn hired Maryland Equipment, Inc., a trucking company, to haul the rocks and gravel from the construction site to Eco-Rok and Brandywine facilities for crushing. The sole issue to be decided in this case is whether Maryland Equipment's employees - the drivers operating dump trucks which hauled the material - are covered by the Davis-Bacon Act (Act). The Department of Labor maintains that because Maryland Equipment operated as a subcontractor to BHB Trucking on the project, its employees are entitled to wages on the contract under the Davis- Bacon guidelines. BHB Trucking argues that the Davis-Bacon Act does not apply because Maryland Equipment was not a subcontractor but an independent trucker for materialmen. It argues as well that Maryland Equipment performed no construction activities and that its employees were not employed directly upon the "site of work." DISCUSSION Section 1609 of the Urban Mass Transit Act provides that laborers and mechanics employed by contractors or subcontractors performing construction work on contracts under UMTA shall receive the prevailing wages as determined by the Secretary of Labor in accordance with the Davis-Bacon Act. BHB maintains that Maryland's truck driver employees were not construction workers because they merely hauled the excavated material from the site to processing plants. It cites a number of court and administrative decisions which have held that the Act does not apply to independent trucking firms which merely transport materials for materialmen. In H.B. Zachary Co. v. U.S., 344 F.2d 352 (1965), the court considered the status of the employee of an independent trucking firm whose work was limited to the delivery of commercial building material to the site. The court utilized the definition of subcontractor stated in acEvoy Co. v. U.S., 322 U.S. 102, 109 (1944) that "a subcontractor is one who performs part of the labor or material requirements of [2] ~3 [3] the original contract, thus excluding ordinary laborers and materialmen." The court held that the truck drivers were not covered by the Act because the delivery of standard materials to the site was performed independently of the construction contract. The Wage Appeals Board has considered the nature of the contracted work in distinguishing between materialmen and subcontractors for coverage purposes under the Act. See, e.g., D. A. Collins Construction Co., Inc., WAB 81-04 (September 20, 1983). Although Eco-Rok and Brandywine generally engage in the supply of materials for various construction projects, their duties under the present contract called for hauling away material and not for its supply. As the Department of Labor demonstrates this situation differs from that of Midway Excavator[s], WAB 81-17 (December 13, 1983), where truck drivers hauling materials from bona[]fide materialmen to the job site were determined to be outside the Act's coverage. In the present situation, BHB Trucking contracted with Kiewit-Shea to haul and dispose of the excavated material. BHB's own employees, who are clearly covered by the Act, loaded the material into the dump trucks at the site. If BHB had not contracted for the sale of the material to Eco-Rok and Brandywine, its own Davis-Bacon covered employees would have remained responsible for disposal of the material. The regulations include in the definition of building or work "construction activity as distinguished from manufacturing, furnishing of materials or servicing or maintenance work. The terms include without limitation . . . blasting, excavating, clearing and landscaping." 20 C.F.R. [sec] 5.2(i). As Maryland Trucking performed a specific part of the original contract calling for the clearing and disposal of excavated material, I conclude that it operated as a subcontractor and not as a materialman, and therefore its employees are covered under the Act. Intertwined with the question of whether Maryland's employees were hauling solely for materialmen or not, is the argument that the employees' hauling activities were not conducted directly upon the site of work as required for coverage under the Act. The regulations limit the site of work for construction activities to the place where the construction will remain when work is completed and those nearby properties or facilities which are used for performance of the contract. 2[9] C.F.R. [sec] 5.2(l)(2). These facilities would include, for example, fabrication plants, batch plants, and borrow pits which are operated exclusively or nearly so for the performance of the contract. It was stipulated by both parties that the excavated material was piled about 15 feet from the excavated area. BHB argues, however, that the majority of the drivers' time was spent on the public roads going to the Brandywine and Eco-Rok crushing facilities. These facilities operated independently of the WMATA contract and were located approximately 20 to 25 miles away from [3] ~4 [4] the construction site. While the drivers appear to have spent much of their work time away from the construction site, acceptance of BHB's interpretation would exclude from coverage all truck drivers who haul material away from a construction site to a dumping area even though their activities were a specific part of the original contract covered by the Act. Such a result would defeat the purpose of the Act to protect the employees of government contractors from substandard earnings. ORDER Having determined that Maryland Equipment's truck driver employees are entitled to receive Davis-Bacon prevailing wages for all hours worked on the project, the Respondent is hereby ordered to pay those designated employees the dollar amounts which the parties have agreed to, as reflected as Exhibit C attachment to the stipulations filed with this office on April 15, 1985. FRANK J. MARCELLINO Administrative Law Judge Dated: 06 SEP 1985 Washington, D.C. FJM:SB:kat [4]