USDOL/OALJ Reporter: ARB Decision Caselist - April 2015

ARB summarily affirmed the Administrator's final ruling denying AGC-Maine's request for reconsideration and reissuing the applicable wage determination as ME120018, Modification 1, finding that the Administrator's ruling was consistent with the DBA and its implementing regulations, and was a reasonable exercise of the Administrator's delegated discretion.

Order approving joint motion for dismissal based on settlement.

Order approving unopposed motion to dismiss based on settlement.

DAVIS-BACON ACT; ARB FINDS IN SPLIT DECISION THAT A BALANCING OF BENEFITS TEST APPLIES TO DETERMINE WHETHER AN EMPLOYER IS OBLIGATED TO REIMBURSE EMPLOYEES FOR LODGING EXPENSES

DAVIS-BACON ACT; REIMBURSEMENT FOR LODGING EXPENSES SHOULD BE BASED ON ACTUAL EXPENSES WHERE EMPLOYER LEFT IT TO EMPLOYEES TO FEND FOR THEMSELVES; PER DIEM MAY BE CONSIDERED, HOWEVER, WHERE IT WAS A PARTIAL PAYMENT FOR SUBSISTENCE COSTS

In Weeks Marine, Inc. , ARB Nos. 12-093, -095, ALJ No. 2009-DBA-6 (ARB Apr. 29, 2015), the ALJ concluded that the Respondent violated the Davis-Bacon Act (DBA) by failing to reimburse certain of its employees who did not live within daily commuting distances, for lodging costs for the amount above the per diem during the dredging of the beach at Fire Island, New York. The ALJ, however, rejected WHD's assessment that the Respondent owed $21,831.35 in unreimbursed lodging costs to the employees based on their actual incurred lodging costs. Instead, the ALJ ordered the Respondent to pay a total of $9,058.84 to the employees based on the lowest lodging rate incurred by the employees, less credit for any CBA per diem received that was not previously credited against other violations pursuant to an earlier partial settlement. Both the Respondent and the WHD Administrator appealed to the ARB.

The ARB stated that "the primary issue before [it] � is whether an employer is obligated under 40 U.S.C.A. � 3142 of the Davis Bacon Act to reimburse lodging expenses incurred by employees who exclusively work for the employer at a job site beyond commuting distance from their home residence." USDOL/OALJ Reporter at 6. The ARB further stated that "[t]he question before us is thus whether, by requiring the Local 25 employees to pay their own lodging costs, Weeks Marine effectively shifted to the employees a cost that was the employer's obligation to bear; a cost that could not lawfully have been directly deducted from the employees� wages had Weeks Marine provided their lodging at company expense." Id . at 7.

Reviewing statutory and caselaw authorities, the ARB found that to determine whether the Respondent is obligated under the DBA to reimburse the employees their lodging costs, it must initially be determined "whether the employees� on-site, away-from-home lodging was primarily for the benefit and convenience of Weeks Marine or primarily benefited the Local 25 workers. If the substantial evidence of record supports the ALJ's finding that the lodging was primarily for Weeks Marine's benefit and convenience, the company is obligated to reimburse the employees, as the failure to do so would effectively constitute a de facto deduction in the employees� required prevailing wages. If, on the other hand, the lodging was primarily for the benefit of the employees, Weeks Marine is not obligated to reimburse the Local 25 employees, provided Weeks Marine establishes that it regularly furnishes such lodging to all of its employees or that the same or similar facilities are customarily furnished by other employers engaged in the dredging business." Id . at 11. The ARB remanded to the ALJ to make findings of fact on these questions.

The ARB rejected the Respondent's contention that a ruling requiring it to reimburse its employees� lodging costs constitutes an unlawful rule by adjudication and/or violates its due process rights. The ARB held that it rejected "both contentions to the extent that any final ruling eventually issued in this case is consistent with the �balancing of benefits� test, which relies on established legal principles. While KP&L , Lang , and Calculus may address different contexts in which the applicability of 40 U.S.C.A. � 3142(c)(1) was raised, the test in each instance, equally applicable in this case (as has been discussed) is whether or not the lodging at issue is for the primary benefit and convenience of the employer or the employees. Consequently, if the final decision reached in this case requires Weeks Marine to reimburse its employees� lodging costs, that decision constitutes neither rulemaking through adjudication nor a violation of Weeks Marine's due process rights." Id . at 14 (footnote omitted). The precise nature of the Respondent's argument is not set out in the ARB's decision, but it appears to have been centered on whether a Respondent is required to affirmatively reimburse employees for lodging costs, as opposed to refraining from deducting those costs from their pay.

The ARB reversed the ALJ's determination that employees were only entitled to a discounted lodging reimbursement. The ARB found that should the employees ultimately be found to prevail, they would be entitled to reimbursement of actual lodging costs because "40 U.S.C.A. � 3142(c)(1) requires the "unconditional" payment of the prevailing wage without deduction or rebate�." Id . at 14. The ARB, however, found that the per diem payment, which was effectively a partial reimbursement for subsistence costs, could be taken into consideration in calculating the amount of any reimbursement owed. The ARB found that the Respondent, by leaving it to the employees to find their own lodging, placed itself at risk for paying whatever lodging costs the employees were forced to assume. The ARB suggested that an employer subject to the DBA had options, such as providing reasonable lodging, or identifying reasonable lodging for which the employer would provide reimbursement.

One member of the ARB panel dissented:

   I would reverse the ALJ and, therefore, respectfully dissent for several reasons. I will simply list those reasons due to the age of this case and that we are remanding it for further consideration. The precise question I see in this unique case is whether federal law requires Weeks Marine to pay the relocation, lodging, and food expenses of a non-employee (new hire) who accepts new employment at a worksite disclosed in the job solicitation for employment under the facts of this case. In my view, none of the law cited by the Administrator (statutes, regulations, written guidance policy manual, cases) requires the payment of such extraordinary expenses for a new employee who chooses to work away from his home. After the bidding and contracting process ended in this case, nothing in the record shows that a payment of this extraordinary expense was required or that such payment was the prevailing practice in the industry. Weeks Marine hired individuals for a job at Fire Island, New York. Folks who took that job chose to go there. The record is unclear about the emergency work in Philadelphia and perhaps that needs to be clarified. To send this back to the ALJ to apply a "balancing test" assumes that there is a statute, regulation, or other binding law that would potentially obligate Weeks Marine for the expenses sought in this case. I believe the "benefit of the employer" rule does not apply to this case. In my view, Congress must pass this type of legislation.

Id . at 16.

CONTRIBUTORY FACTOR ELEMENT; REISSUANCE OF POWERS EN BANC DECISION WITH EXPANDED DISSENT

• CRITICISM OF MAJORITY FOR USURPING ALJ�S FACTFINDING ROLE, AND FOR ENGAGING IN FAULTY LOGIC AND ANALYSIS
• SUGGESTION THAT POWERS MAY BE OF LIMITED PRECEDENTIAL VALUE

On March 20, 2015, the ARB issued its en banc decision in Powers v. Union Pacific Railroad Co. , ARB No. 13-034, ALJ No. 2010-FRS-30, (ARB Mar. 20, 2015) (en banc). This decision was casenoted in the March ARB postings . When the March decision was issued, dissenting Judge Corchado, joined by Chief Judge Igasaki, offered a "snapshot" dissent due to the imminent departure of one of the Board members.

The Board reissued Powers on April 21, 2015 with the full dissent. Judge Corchado authored the expanded dissent, again joined by Judge Igasaki. Powers v. Union Pacific Railroad Co. , ARB No. 13-034, ALJ No. 2010-FRS-30, (ARB Apr. 21, 2015) (en banc) (reissue). Judge Corchado reiterated that while the majority professed to "fully adopt" Fordham it in fact rejected the clear-cut evidentiary rule created by the two-judge majority in that case. In this respect, the Powers panel was unanimous. Judge Corchado also stated that the panel was unanimous that 29 C.F.R. Part 18 grants ALJs the power to decide relevance questions.

The judge, however, disagreed with much of the rest of the majority decision. He observed that the majority had usurped the ALJ's fact finding role, searching the record to determine if it supported a finding of contributing factor rather than remanding to the ALJ. He noted that the Board's suggestion that an employer's "subjective" explanations should be rejected as "highly suspicious" ignored ARB precedent recognizing that such explanations can rebut a complainant's accusation of unlawful retaliation if the ALJ believes the employer's testimony.

Judge Corchado noted that the ALJ had found that the Complainant had been terminated because the Employer believed that the Complainant was dishonest. He faulted the majority's logic when it concluded that disproving the Complainant's dishonesty means that unlawful retaliation must have been a contributing factor to the termination of employment. Judge Corchado noted that the majority limited its holding to the specific facts of this case "and thereby limited the precedential impact of the decision�." USDOL/OALJ Reporter at 38.

Judge Corchado further noted that "it is unclear why an employee's circumstantial evidence of the employer's mental processes is generally better than the employer's own explanation of its actions. In any event, there is no statute, regulation, or binding case law that requires ALJs to disregard an employer's subjective explanations of its mental processes." Id . at 39. Judge Corchado noted that in several recent Board decisions, the ARB "rejected �contributing factor� due to the employer's explanations of its employment actions and without requiring application of the �clear and convincing� standard." Id . at 39, n. 32 (citations omitted). He proffered that "[t]hree judges in this case cannot overrule the precedent in these cases, among others." Id .

Judge Corchado expressed disagreement with the majority's contention that "'subjective� employer testimony should be excluded to avoid �confusion of the issues� because 'subjective employer motivation is not a required subset of complainant's showing of contribution.�" Id . at 40, quoting majority decision, slip op. at 27. Rather, Judge Corchado stated that "[t]o the contrary, the employer's reasons are the issue when deciding the question of 'contributing factor' (causation)." Id . (emphasis as in original).

TIMELINESS OF PETITION FOR ARB REVIEW; EQUITABLE TOLLING NOT ESTABLISHED WHERE EMPLOYER HAD CONDUCTED OTHER URGENT BUSINESS DURING LIMITATIONS PERIOD

In Vicuña v. Westfourth Architecture , ARB No. 15-034, ALJ No. 2012-LCA-23 (ARB Apr. 6, 2015), the ARB found that equitable tolling of the limitations period for filing a petition for ARB review of an ALJ's LCA decision was not established where the Respondents were conducting urgent business activities during the limitations period, but had decided that filing a petition for review, or even a motion for an enlargement of time to file the petition, was not an urgent business matter.