Opinion ID: 886000
Heading Depth: 1
Heading Rank: 6

Heading: The Davis-Bacon Act

Text: ¶ 13 The Davis-Bacon Act, 40 U.S.C. § 276(a), et seq., was passed in 1931 during the Depression to protect workers on federal construction projects. Under the Act, the Secretary of Labor sets minimum wages for various job classifications that reflect prevailing wages in the area of the project. The Act mandates that no contractor may pay less than these prevailing wages to their employees working on any construction project over $2,000 to which the United States is a party. This prevents companies from competing for federal contracts using bids based on importing laborers from distant areas who would work for lower wages than local laborers. See 40 U.S.C. § 276a(a). See also, Vulcan Arbor Hill Corp. v. Reich (D.C.Cir.1996), 81 F.3d 1110, 1111 (citation omitted). Numerous courts have held that the Act was designed specifically to protect the interests of laborers. See, U.S. v. Binghamton Construction Co. (1954), 347 U.S. 171, 177 and 178, 74 S.Ct. 438, 441 and 442, 98 L.Ed. 594, 599 and 600; Thompkins v. Fuller (1983), 205 Mont. 168, 667 P.2d 944; Building and Const. Trades Dept., AFL-CIO v. Reich (D.C.Cir.1994), 40 F.3d 1275. ¶ 14 After the Davis-Bacon Act was passed into law, the Department of Labor promulgated detailed regulations for its implementation. 29 C.F.R. §§ 5, 6, and 7. In addition to the regulations defining how the Secretary of Labor will establish prevailing wage rates, the regulations also dictate specific contract provisions that must be included in federal construction contracts, provide debarment procedures for contractors who violate the Davis-Bacon Act, and identify those entities who may initiate a proceeding in the event of a wage dispute. 29 C.F.R. §§ 5.5, 5.12 and 5.11 respectively. ¶ 15 The state court held that Workers cannot sue ARC and Baer in state court but rather they must avail themselves of the administrative remedies set out in the DOL's regulations. The court stated that Workers must obtain a DOL determination that wages are due, then seek recovery under the Miller Act. Workers claim they have utilized the administrative procedure extensively, without remedy. The facts set forth below support the Workers' claim. ¶ 16 Baer and ARC entered into their contract in March 1998. At some time between March 1998 and November 1998, Workers complained to Baer that they were performing skilled labor, as defined by the DOL job classifications applicable to the construction project, but were being paid unskilled laborer wages. Baer fired them. In November 1998, Workers met with representatives of ARC, the Montana Labor Management Alliance (MLMA) and Baer. They complained that Baer was breaching its contract with ARC by not paying contractually-agreed upon wages to its skilled laborers and that Baer had fired them for complaining about it. The MLMA representative suggested that ARC submit a request to DOL for new job classification and wages rates for jobs performed by the Workers. He said he would inform the meeting attendees of the DOL's determination and they could accept it or appeal it at that time. ARC submitted the classification/wage request to DOL in December 1998. No USAF or DOL response to this request was provided to this Court. ¶ 17 By early April 1999, the USAF Contracting Officer had received notice of the complaints. She responded by sending a letter dated April 9, 1999, to ARC in which she notified ARC that, as general contractor, it was ARC's responsibility to insure that its subcontractors complied with the Davis-Bacon Act. She noted that ARC was responsible for reviewing the payrolls for discrepancies and having those discrepancies corrected prior to submitting them to the USAF. The Contracting Officer noted that, [a]ccording to the Department of Labor, the work being performed by the complaining Baer laborers fell within specific job classifications with prescribed wages. She determined that Workers and other laborers had been underpaid by Baer. She included in her letter to ARC a list of Baer employees, which included Workers, who had been underpaid. She classified them within the correct DOL job classification and calculated the amount of unpaid wages each of these employees was owed by Baer. ¶ 18 Also on April 9, 1999, ARC sent a letter to Baer informing Baer that it had received a determination from the MLMA that Baer had underpaid the complaining laborers. ARC notified Baer that failure to pay wages in accordance with the Davis-Bacon Act was a direct breach of their contract. It instructed Baer to fully compensate the underpaid employees in accordance with the MLMA's directive. ¶ 19 In May and June 1999, ARC submitted several other requests for new job classifications to the DOL. On the DOL request form, ARC recommended hourly wage rates for these new job classifications. The Contracting Officer, after conferring with DOL, notified ARC that each of its requests was denied because job classifications for the job descriptions included in the requests were not new but already existed and were part of the project Contract. The new job classifications ARC sought were for work performed by the Workers, as well as other laborers. The hourly wage rate recommended by ARC in its requests was lower than the hourly wage rates assigned under the Davis-Bacon Act to the existing job classifications. ARC did not challenge or seek further DOL review of the USAF and DOL's denial of its job classification and wage rate requests. ¶ 20 Immediately thereafter, on July 9, 1999, ARC sent a letter to Baer attaching the Contracting Officer's April 9, 1999 letter and instructing Baer to pay the listed employees in accordance with the USAF letter. Baer refused to do so. Also in July 1999, ARC notified the Contracting Officer that it was processing an equitable amount to be paid to the parties concerned and that a settlement was being negotiated. Subsequently, ARC withheld some funds due to Baer and paid these funds to Workers. These funds, however, were insufficient to pay Workers the amount of money owed to them according to the Contracting Officer. No settlement was ever reached.