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.
Nos. 83-1118, 83-1157
229 U.S. App. D.C. 297; 712 F.2d 611; 1983 U.S. App. LEXIS
26135; 98 Lab. Cas. (CCH) P34,403; 26 Wage & Hour Cas. (BNA) 404; 31 Cont.
Cas. Fed. (CCH) P71,368
COUNSEL:
J. Paul McGrath, Assistant Attorney General, Stanley S. Harris, United States
Attorney, Carolyn B. Kuhl, Deputy Assistant Attorney General, Robert E. Kopp,
Anthony J. Steinmeyer, Frank A. Rosenfeld, Department of Justice, and Karen I.
Ward, Associate Solicitor, Department of Labor, for Appellants/Cross-Appellees.
Lawrence Gold and Terry R. Yellig, Lawrence J. Cohen and Robert J.
Connerton, for Appellees/Cross-Appellants. Linda Lipsett also entered an
appearance for Appellee in 83-1118.
Thomas S. Martin 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
were on the brief for Associated General Contractors of America, Inc., Amicus
Curiae urging reversal in 83-1118 and affirmance in 83-1157.
JUDGES: Edwards, Circuit Judge, and McGowan and
MacKinnon, Senior Circuit Judges. Opinion for the Court filed by Senior Judge
McGowan.
OPINIONBY: McGOWAN
OPINION: [*613]
MCGOWAN, Senior Circuit Judge:
This appeal brings before us on an
expedited basis five provisions of certain final [**2] rules issued
by the Secretary of Labor ("the Secretary") under the Davis-Bacon Act,
40
U.S.C. § 276a (1976), and the Copeland Anti-Kickback Act,
40
U.S.C. § 276c (1976). These statutes, essentially unchanged since their
enactment or amendment in the 1930's, guarantee to workers on federal
construction projects a minimum wage based on locally prevailing wage rates.
Three of the new regulatory provisions 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 semiskilled helpers on projects than has
previously been permitted. The Secretary asserts that this expanded use of
helpers would better reflect the practice on private projects. 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 [**3] 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 implementation of the new regulations and a declaration that the rules
are contrary to law. No claims of procedural irregularity 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 Congress, except for (1) the provision
simplifying submissions of wage data to the government, which we find to be
inconsistent with the language and purpose of the statutory command that the
submissions contain wage data as to "each employee," and (2) part of the
expanded permission to use helpers, which part we find similarly contrary to
statutory language and purpose.
I
As noted, the Davis-Bacon Act
was enacted during the Great Depression to ensure that workers on federal
construction projects would be paid the wages prevailing in the area of
construction. The evil sought to be remedied was [**4] 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.
See
generally S. REP. NO. 332, 74th Cong., 1st Sess. pt. 2, at 4 (1935)
("variations between bids submitted by competing contractors are due most
frequently to different estimates of [*614] 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 reasons. First, and
apparently most important, it tended to undercut one of the purposes of the
massive federal building program of the times, which was to distribute
employment and federal money equally throughout the country. S. REP. 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.
Id. at 2;
see also 74 CONG. REC. 6510
(1931) (remarks [**5] 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 administrative 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 economical
and orderly granting of Government contracts." S.REP. NO. 332,
supra,
pt. 2, at 8;
see also 74 CONG. 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 not insist on contractors paying the prevailing wage
because of the statutory requirement that federal contracts go to the lowest
bidder.
10
Comp. Gen. 294, 301 (1931) [**6] (prevailing wage requirement
would "remove[] from competitive bidding on the project an important element of
cost and tend[] to defeat the purpose 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' determinations were to be referred to the Secretary for
conclusive determination. Davis-Bacon Act, ch. 411, 41 Stat. 1494 (1931).
Dissatisfaction with this arrangement surfaced quickly, however, as widespread
violations and abuses were discovered. An attempt to provide for
predetermination of the prevailing wage by the Secretary and penalties for
failure to pay that rate was vetoed by President Hoover in 1932 as "obscure and
complex and . . . impracticable of administration," 75 CONG. REC. 14,589 (1932)
(veto message);
see id. at 14,590 ("The whole design of the new . . .
proposal requires an expansion of bureaucratic control over activities which now
function effectively with the minimum of interference by the Government and that
only when dispute arises. [**7] ").
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 federal 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
prevailing for the corresponding classes of laborers and
mechanics employed on projects of a character similar 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 [*615] compliance with the
minimum wage [**8] requirements.
Id.
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
directs

the Secretary to
make reasonable regulations for federal contractors, "including a provision that
each contractor and subcontractor shall furnish weekly a statement 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 [**9] paid to a thirty-percent
plurality of local workers; (2) combining data from adjacent rural counties but
excluding any nearby urban counties when wage data in a given rural county is
insufficient to determine a locally prevailing wage; (3) excluding from the
prevailing-wage calculation 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 classification in areas where it is only an "identifiable" practice
rather than a "prevailing" one and eliminating the requirement that helpers may
do only tasks distinct from those undertaken by other classes of workers; and
(5) allowing contractors to submit a weekly statement certifying compliance with
Davis-Bacon wage requirements, instead of requiring the submission of the actual
weekly payrolls.
See 47
Fed. Reg. 23,643, 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 injunctive relief. After a hearing on a
[**10] motion for interim relief and cross-motions for summary
judgment, the District Court on July 22, 1982, five days before the new
regulations' scheduled effective date, granted a preliminary injunction 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
plaintiffs 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 elimination of the thirty-percent
rule in the formula for calculating 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."
Id.
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
[**11] relied heavily on contemporaneous and consistent
administrative practice as a clue to Congress's intent. The court relied most
heavily -- almost exclusively -- on this contrary administrative practice 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 [*616] 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
maintained "only [**12] 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" classification 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 majority of workers, any wage paid
to at least thirty percent 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 [**13] 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 inflationary.
Id
. 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 Secretary's policy of setting
the prevailing wage at the rate paid the greatest number of workers indicates
that Congress 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 [**14] 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 legislative 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 Secretary 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 Secretary [**15] to adopt
"regulations with legislative effect,"
Batterton
v. Francis, 432 U.S. 416, 425, 53 L. Ed. 2d 448, 97 S. Ct. 2399 (1977)
(interpreting statute providing that term "unemployment" is to be "determined in
accordance 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."
Id.
at 428. The Secretary's new definition of "prevailing" as, first, the
majority [*617] rate, and, second, a weighted average, is within a
common and reasonable reading of the term.
Cf. 75 CONG. REC. 12,365
(1932) (remarks of Rep. Connery, 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 [**16] 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)). The target of the unions' attack in this case is the final
proviso regarding exclusion of urban counties from rural wage determinations, n1
which the unions assert is a departure 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
regulation, some discussion of it is warranted.
- - - - - - - - -
- - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -
n1 Since
there is usually enough similar construction in metropolitan areas to provide
data necessary to make a wage determination, the proviso would generally affect
wage determinations only in rural areas, where there tends to be less
construction.
- - - - - - - - - - - - - - - - -End Footnotes- - -
- - - - - - - - - - - - - - [**17]

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 character similar 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). Although on its face this language would appear to
refer the Secretary only to projects in the same civil subdivision 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 prevailing wage.
See,
e.g., Labor Department Regulation No. 503 § 7(2) (1935),
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 nearest similar construction may be considered"); 21 Fed. Reg. 5801, 5802
(1956) [**18] (same). Further, as noted, neither the parties nor the
amici here seriously dispute that construction.
Most important, the
legislative history of the statute suggests that Congress contemplated that the
Secretary's authority to determine prevailing wages extended to finding the best
way to do so. The Davis-Bacon Act itself and the 1935 amendments passed through
both houses of Congress with no discussion of the problem of how the prevailing
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 working 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
[**19] that. Generally there is a town near enough to ascertain
the prevailing [*618] 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." n2
MR. CONNERY. As a practical matter, they have
had no trouble in that regard in connection with the Davis-Bacon bill.
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 12,377 (remarks 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 prevailing wage scale of those two
cities.").
- - - - - - - - - - - - - - - - - -Footnotes- - - - -
- - - - - - - - - - - - -
n2 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).
- - - - - - - - - - - -
- - - - -End Footnotes- - - - - - - - - - - - - - - - - [**20]
This passage, while not crystal clear, suggests that Congress did not
view the language in the statute as foreclosing the Secretary from implementing
the Act in the way necessary to achieve its purposes. Clearly, if a prevailing
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 predetermination 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, 20 L. Ed. 2d 312, 88 S. Ct. 1344
(1968) ("we are, in the absence of compelling evidence that such was
Congress' intention, unwilling to prohibit administrative action imperative for
the achievement 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 [**21] authority that we discussed above with regard
to the formula for deriving a prevailing wage from the data collected,
see
supra p. 9. We thus do not think, as the unions appear to argue, that
Congress intended to bind the Secretary to the method suggested by
Representative Connery -- adopting for rural areas the prevailing 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 intended
merely to show that some method of determining a wage would be found. Moreover,
no language was inserted into the statute that would implement the suggestion,
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 between urban and rural wages, using demographically dissimilar
counties for such determinations is unreliable.
46
Fed. Reg. 41,443, 42,445 (1981) [**22] (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 project 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 generally true the wage scales for the
surrounding [*619] rural counties would reflect that.
Id.
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 locality 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
allegation of that fact cannot overturn the Secretary's informed exercise of
authority in an area in which he has considerable expertise [**23]
and discretion.
The District Court relied exclusively or almost
exclusively on what it saw as a longstanding and consistent administrative
practice contrary to the proposed regulations in striking down the rural-urban
wage determination provision and the exclusion of federal projects from wage
determinations,
see infra pp. 16-21.
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 "generally, 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
[**24] metropolitan 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 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
consistent interpretation of one of its enabling statutes is reliable evidence
of what Congress intended.
Compare CBS
v. FCC, 147 U.S. App. D.C. 175, 454 F.2d 1018, 1026 (D.C. Cir. 1971)
[**25] (decision under discretionary "public interest" standard),
and Greater
Boston Television Corp. v. FCC, 143 U.S. App. D.C. 383, 444 F.2d 841, 852
(D.C. Cir. 1970) (same),
cert. denied,
403
U.S. 923, 29 L. Ed. 2d 701, 91 S. Ct. 2233 (1971), with United
States v. Leslie Salt Co., 350 U.S. 383, 395-97, 100 L. Ed. 441, 76 S. Ct.
416 (1956) (interpreting statutory terms "debenture" and "certificate of
indebtedness").
C.
Exclusion of Federal Projects from Wage
Determinations The new regulations make a more dramatic break with
the past in excluding from the prevailing-wage calculation 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 considered
in wage determinations for building and residential 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 [**26]
nonfederal construction. n3
- - - - - - - - - - - - - - - - -
-Footnotes- - - - - - - - - - - - - - - - - -
n3 The Manual of
Operations for Issuance of Wage Determinations Under the Davis-Bacon and Related
Acts defines "residential construction" 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.
- - - - - - - - - - - - - - - - -End Footnotes- - - - - -
- - - - - - - - - - -
[*620] The Secretary's rationale for
the provision is that including 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 [**27] 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 mechanics 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 character 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 suggests 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
[**28] constructing, altering, or repairing any public building of
the United States . . . to pay their employees the prevailing wage rates when
such wage rates have been established by
private industry." 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 industry was reiterated. 74 CONG. REC.
6505 (1931) (remarks 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 offhand 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 contractor might
[**29] be able to attain. Because federal projects were required by
statute to be awarded to the lowest bidder, 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 distribution 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
departments involved [*621] from requiring successful bidders to
pay wages to their employees comparable to the wages paid for similar labor by
private industry [**30] in the vicinity of the building projects
under construction.
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. 614, at 8 (reviewing legislative history of
the Act) (the problem 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., 1st Sess. 15 (1932) (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 buildings 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) ("In river and harbor
work . . . I will guarantee [that] our company and all the private companies are
paying higher wages [**31] to the dredge men than the Government is"
when it acts as its own contractor.).
See generally supra pp. 613-614
(discussion of purposes of Act).
With this as the Act's premise, it
would make no sense to
require the Secretary, when setting prevailing
wages, to include federal projects in his survey. Since the problem 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 was very little private construction from which to derive a
private prevailing wage.
543
F. Supp. at 1286. Therefore, what the unions must argue is that Congress, in
its refusal in the 1935 amendments to bar the Secretary from using federal data,
not only acquiesced in such use but affirmatively [**32] 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 employed 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 developed that craftsmen in some
industries were paid more than employees performing the same craft in other
industries. 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 [**33]
on
S. 3847 and H.R. 11,865 Before the House Comm. on Labor, 72d Cong., 1st
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 federal construction work wages should
parallel the construction work wages prevailing in the area, and not the
shipbuilding wages, Congress added the language that the unions cite. The
committee reports explain:
[*622] 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 employed
on projects of a character similar to the contract work."
H.R.REP. NO. 1756, 74th Cong., 1st Sess. 3 (1935);
accord S.REP.
NO. 1155, 74th Cong., 1st Sess. 3 (1935).
It was thus no part of
Congress's intent to require the Secretary to include federal projects in his
wage [**34] 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
achievement 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
between federal and private wages -- Congress was seeking to avoid. The fact
that no Secretary has previously abandoned the practice does not take away from
the current Secretary's power to fine tune his exercise of discretion.
D.
Expanded Use of Helpers Under current practice, the
Secretary recognizes five classes of employees covered by the Act: skilled
journeymen; 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, [**35] and
often defined by whether the 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 recognized
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 journeyman 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. 78-3, at 2 (Wage Appeals Bd. May 14, 1979),
reprinted in
Plaintiffs' Reply Memorandum of Points and Authorities in Support of Their
Motion for Summary Judgment, exhibit 2, Record at 14. n4
- - - -
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n4 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 eliminated 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) (Secretary 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 predetermined 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
identifiable 'classes of
laborers and mechanics."), but the
unions do not complain about this provision.
- - - - - - - - - -
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The new regulations would alter both of these limitations on the use of
helpers on federal construction jobs. First, they would allow some overlap
between the duties of helpers and those of journeymen. While some distinction
between skilled and semiskilled tasks would be retained, the essential
functional distinction would be not the nature of the task done but rather the
[*623] 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 journeyman. A helper may use tools of the trade at
and under the direction and supervision of the journeyman. The particular
duties performed by a helper vary according to area practice.
[**37]
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 performed by any existing classification, except as
to helpers.). 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.
Id. 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 number of helpers and journeymen could be helpers.
Id. 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
performed duties outside the definition provided in the regulations, or exceeded
the forty-percent limitation, the worker [**38] would have to be
paid the applicable wage for the work he or she actually did.
Id. n5
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- - - - - - -
n5 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.
Id. 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 journeymen.
See id. at
23,659.
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- - - - - - - - - - -
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.
Id. at 23,651. In addition, he stated,
the new [**39] rules would increase job opportunities for less
skilled workers, including young people, women, and minorities; encourage
training; increase productivity; and enable more contractors to compete for
government work.
Id.
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 contractors surveyed use helpers for various crafts); S.
SLICHTER, UNION POLICIES AND INDUSTRIAL MANAGEMENT 46 (1941) ("The building
trades . . . undertake to prevent 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
Professor of Industry), J.A. at 108 ("More efficient deployment of labor [such
as by allowing extensive [**40] use of helpers] is one reason why
open shop construction today controls 65 percent of all construction. . . .");
Affidavit of Robert A. Georgine (President, AFL-CIO [*624] Bldg.
& Constr. Trades Dept.), J.A. at 122-23 (collective bargaining agreements
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 president), J.A. at 114 ("[A] contractor who regularly uses helpers on
privately funded construction work must reclassify 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 deterred from performing federal or federally
assisted construction contracts."). n6
- - - - - - - - - - - - -
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n6 It is unclear
whether the Secretary, in finding that more contractors 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
instead 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 discourage apprenticeship and training programs because contractors would
find it easier simply to hire helpers to fulfill their need for semiskilled
labor rather than set up a formal program. Because helpers 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 craftsmen.
See, e.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.
- - - - -
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[**41]
We consider first the provision that a helper
classification need only be "identifiable" in an area to be used, and second the
enlarged definition of a helper's duties. n7
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n7 The
District Court enjoined the operation of all the new regulations 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 injunction);
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 include them in any reissued rules, we
will not be barred from considering them then.
- - - - - - - - -
- - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**42]
1. "
Identifiable" Classifications The provision
requiring that a helper 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, 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 community 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 construction industry in a certain city [**43] and
require that any worker using carpenters' tools be a journeyman carpenter or
apprentice. Nevertheless, [*625] suppose that one or two nonunion
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 intermediate classification," S.REP. NO. 332,
supra p. 614, 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: [**44] "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 fell within
the purview of one of the skilled crafts."
Id. pt. 2, at 5;
see
also id. at 2 (listing creation of "arbitrary classifications known as
semiskilled labor" as a method or device "to underpay labor" engaged on public
works programs). 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. 3, at 12.
Although the 1935 committee recommended
that the "classification" question "should be clarified by new legislation,"
id. pt. 2, at 5, it is not clear whether the statutory
[**45] language regarding "classes of
laborers and
mechanics" 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 references 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 Hearings 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 bill were in full force and
effect . . . [he] would not permit it. . . .").
What is clear is that
Congress regarded underclassification as contrary to the purposes, and most
probably to the terms, of the Act. We have concluded that the Secretary's
identifiable-classification [**46] regulation would virtually ensure
underclassification in union-dominated areas. At least where the Secretary has
not found the use of helpers as provided for in the new rules to be a nearly
universal 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."), n8 he is [*626]
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.
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n8 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 administrative convenience or because of a need to
further some other congressionally expressed policy,
e.g., National
Apprenticeship Act,
29
U.S.C. § 50 (1976) (Secretary is directed "to bring together employers and
labor for the formulation of programs of apprenticeship"), or for other reasons,
the Secretary could provide for classifications that do not prevail in a certain
area. No such reason appears here. The propriety of eliminating the requirement
that classifications of journeymen and
laborers be prevailing
in an area is not before us.
See supra note 4.
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[**47]
2.
Definition of Helper Duties While
we thus think it clear that the provision allowing use of helpers wherever the
classification is "identifiable" must be struck down, whether the broadened
definition of a helper's duties may stand is a far closer question. The issue is
essentially this: if it is the prevailing practice in a community to allow lower
paid but supervised helpers to undertake tasks that overlap with those of higher
paid journeymen or
laborers, may the Secretary allow that
practice to be followed on federal projects in 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
employee does, but rather in large part by whether he or she is acting under the
supervision of a journeyman.
See 553
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. . . ."). n9
- - - - - - - - - - - - -
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n9 A more
fundamental objection to the Secretary's new regulations might be that the
Davis-Bacon Act does not contemplate any semiskilled 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 by Federal Emergency Relief Administration
officials to pay the prevailing wage on Public Works projects, and the
creation by such officials of arbitrary classifications known as semiskilled
labor specifically prohibited by the Federal Emergency Relief Administration
regulations.
S.REP. NO. 332,
supra p. 613,
pt. 2, at 2 (emphasis added).
There are, however, indications elsewhere
in the legislative history that Congress used the term
"
laborers and mechanics" to mean all manual workers on
construction sites, and not to exclude semiskilled 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 intermediate
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 be
covered by the Act, it appears that the committee thought the term "mechanics
and
laborers" included some intermediate classifications other
than skilled and unskilled labor. (The language "skilled, unskilled, and
intermediate labor" was replaced by the phrase "
laborers 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 contradictory.) 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, contractors, and representatives of
various Government departments) was received") (emphasis added).
In
addition, it appears that the Federal Emergency Relief Administration (FERA)
regulations referred to in the Senate report themselves recognized semiskilled
labor classifications, the wage rates for which were to "depend upon local
custom." Federal Civil Works Administration Rules and Regulations No. 10 at 2
(1933),
reprinted 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 "creation" 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 Secretary'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 permitted 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
challenged regulations,
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 unequivocally
stated in their memoranda filed in the District Court: "We 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' Reply Memorandum of Points and Authorities in
Support of Their Motion for Summary Judgment at 10, 11, Record at 14 (emphasis
in original).)
While we think the argument that any helper
classification was barred by the statute is at least colorable, the long-held
view of the Secretary and the legislative 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.
- - - - - - - - - - - - - - - - -End
Footnotes- - - - - - - - - - - - - - - - - [**48]
[*627] 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 "underclassification." For example, the 1935 Senate
committee considering the operation of the Act described the problem of
contractors assigning to common
laborers "
tasks which
fell within the purview of the skilled crafts,"
see supra p. 625
(emphasis added), and referred to the "rough saw and hammer men" category 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. 614, 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" classification 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 [**49] 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 mandate the union
classification scheme. The only otherwise 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
nothing 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 . .
. prevailing for work of a similar nature," it might conceivably 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. n10
- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - -
- - - - - - -
n10 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 Secretary 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
"various grades of mechanics and laborers," clearly
indicating that the rate is to be determined not only for the different
trades, as bricklayers 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 workers 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 expressed
prior to the 1935 amendments,
see Hearings on S. 3847, supra p. 621, at
109 (testimony of shipbuilding trade representative) ("in the shipyards the line
between the mechanic and the helper and the semiskilled man has been very
largely broken down"), suggesting that the change from "grades" to "classes" was
not intended to take into account new information on underclassification.
- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - -
- - - - - - - [**50]
[*628] Further evidence
that Congress did not intend to mandate 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
prevailing 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. [**51] 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
scales as the conclusive basis for the Secretary's predetermination of wages
suggests that it similarly favored locally prevailing practices over the union
classification scheme.
At bottom, we are unwilling to read the fairly
ambiguous 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., 1st Sess. 2 (1932) ("This bill will in no way interfere with the
natural increase or decrease of prevailing wage scales. . . ."); H.R. REP. NO.
1756,
supra p. 622, at 1 [**52] (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.REP. NO. 308, 88th Cong., 1st 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 federal 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 [*629] Donahue,
The
Davis-Bacon Act and the Walsh-Healey Public Contracts Act: A Comparison of
Coverage and Minimum Wage Provisions, 29 LAW & CONTEMP. PROBS. 488, 508
(1964) (written by Labor Dep't Solicitor) ("The 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 [**53] 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 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 distinguishable from
those of
laborers and mechanics."