USDOL/OALJ Reporter: ARB Decision Caselist - June 2016

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[STAA Digest X A]
SETTLEMENT REACHED AFTER APPEAL TAKEN TO ARB; ARB DECLINES TO APPROVE TERM REQUESTING THAT ALJ’S DECISION BE VACATED

In Hopper v. Marten Transport, Ltd. , ARB No. 16-043, ALJ No. 2014-STA-69 (ARB June 29, 2016), shortly after the Respondent petitioned for ARB review of the ALJ’s Decision and Order concluding that the Respondent had violated the STAA’s employee protection provisions, the parties jointly moved for a remand to OALJ for mediation. The ARB granted the motion. Subsequently, the Respondent filed with the ARB an unopposed motion for approval of a settlement agreement. The ARB noted that one paragraph of the agreement requested that the ARB vacate the ALJ’s D. & O., but also provided that if the ARB refused to do so, it would not alter the parties’ obligations under the agreement. The ARB approved the settlement agreement, but declined to vacate the ALJ’s decision, writing: “It is not our practice to vacate underlying Administrative Law Judge decisions when considering whether to approve a settlement under the whistleblower acts, and we do not do so in this case.” Slip op. at 2 (footnote omitted).

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LITIGATION EXPENSES; CALCULATION WHERE PARTIAL SUCCESS; DISCOUNT RATE BASED ON PERCENTAGE OF TOTAL POTENTIAL RECOVERY

In ruling on a fee and costs petition where the Complainant had been partially successfully, the ALJ in Rudolph v. National Railroad Passenger Corp. (Amtrak) , ARB No. 14-080, ALJ No. 2009-FRS-15 (ARB June 28, 2016), determined the value of the potential recovery and then discounted that amount based on a successful recovery rate of 83.5 percent. Included within the ALJ’s determination on the potential recovery was a finding of $1.3 million in front pay in for reinstatement. The Respondent appealed the award, contending that the ALJ should have used a larger fee reduction because the value of reinstatement through retirement was conditioned on whether the Complainant would be found mentally fit for duty as a conductor. The Respondent also claimed that that the reinstatement value was actually zero, since the Complainant was reinstated in 2010.

The ARB first found that there was no evidence in the record before the ALJ of a reinstatement in 2010. The ARB also noted that that case had been previously appealed, and that the ALJ initially determined that reinstatement was inappropriate. Thus, the Complainant was not entitled to reinstatement until the ALJ ruled in his favor.

The ARB also found that the ALJ properly compared the actual potential value of full recovery with the actual result, noting that reinstatement was dependent on the Complainant’s mental ability to perform the duties of a conductor. The ARB further noted that while the Complainant “may not have received the full amount of the $1.3 million in front pay for reinstatement, he is now entitled to reinstatement dependent on his mental status and his compensatory and punitive damages were increased by 500 percent. Thus, he has now achieved ‘essentially full relief.’” USDOL/OALJ Reporter at 4-5 (footnote omitted).

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[STAA Digest IX D 4]
PUNITIVE DAMAGES; FACT THAT RESPONDENT DID NOT MEET ITS BURDEN TO SHOW BY CLEAR AND CONVINCING EVIDENCE THAT IT WOULD HAVE TAKEN THE ADVERSE EMPLOYMENT ACTION ABSENT THE PROTECTED ACTIVITY DOES NOT MANDATE PUNITIVE DAMAGES; RATHER, ARB AFFIRMED ALJ’S DENIAL OF PUNITIVE DAMAGES WHERE THERE WAS SUBSTANTIAL EVIDENCE SHOWING THAT RESPONDENT HAD AMPLE REASON TO HAVE SUBMITTED ADVERSE DAC REPORTS UNRELATED TO PROTECTED ACTIVITY

In Beatty v. Inman Trucking Management, Inc. , ARB Nos. 15-064, -067, ALJ Nos. 2008-STA-20, -21 (ARB June 27, 2016), the ARB affirmed the ALJ’s determination on remand that the Respondent failed to prove by clear and convincing evidence that it would have submitted adverse DAC reports about the Complainants absent their protected activity. The ALJ awarded the Complainants $14,256.00 in back pay plus interest, but determined that an award of punitive damages was not warranted. On appeal, the Complainants argued that the ALJ’s denial of their request for punitive damages was arbitrary, capricious, and an abuse of discretion. The ARB noted that when determining whether to impose punitive damages, the ALJ must determine whether the respondent acted with “reckless or callous disregard for the plaintiff’s rights” or intentionally violated federal law. The ARB reviews this determination applying a substantial evidence standard of review.

In the instant case, the ARB noted that the ALJ had explained that, while the Respondent did not prove by clear and convincing evidence that it would have submitted the adverse DAC reports absent the Complainants’ protected activity, it “nevertheless had ample reason to submit the reports because of the Beattys’ complaints about dirty trucks, for refusing to drive because a truck was too dirty, and for not completing three cross-country round trips per month as required by company policy.” USDOL/OALJ Reporter at 12 (footnote omitted). The ARB found that substantial evidence supported this determination and affirmed the denial of punitive damages.

[STAA Whistleblower Digest VII B 5 b]
IDENTIFICATION OF LIABLE CORPORATE RESPONDENT; WHERE RESPONDENT HAD NOT OBJECTED TO NAME USED IN CAPTION OF CASE, AND REFERRED TO ITSELF DURING THE PROCEEDINGS UNDER A VARIETY OF NAMES, ARB RULES THAT IT WILL TREAT ALL VERSIONS OF THE RESPONDENT’S NAMES AS ONE AND THE SAME FOR PURPOSES OF LIABILITY UNDER THE STAA WHISTLEBLOWER PROVISION

In Beatty v. Inman Trucking Management, Inc. , ARB Nos. 15-064, -067, ALJ Nos. 2008-STA-20, -21 (ARB June 27, 2016), the ARB affirmed the ALJ’s determination on remand that the Respondent failed to prove by clear and convincing evidence that it would have submitted adverse DAC reports about the Complainants absent their protected activity. On appeal, the Complainants requested an opportunity to address issues regarding proper identification of Respondent. The ARB noted that the Respondent had never objected to the case heading in the matter listing its corporate name as “Inman Trucking Management, Inc.,” and that it had referred to itself under a variety of names throughout the record, regardless of whether its corporate name was the one used in the heading or some other name. The ARB took “administrative notice of the fact that Inman Trucking, Inc., Inman Transportation, LLC, and Inman Management, Inc., are all registered with the North Carolina Secretary of State’s Office, all with similar, if not identical, underlying information as to registered agent, address, and corporate officers.” USDOL/OALJ Reporter at 13 n.59. The ARB thus pronounced that it “treats all versions of the names by which Respondent identifies itself as one and the same for purposes of liability under STAA as found by this Board and responsibility for the payment of the Beattys’ back pay and interest as ordered by the ALJ, and as affirmed by the Board in this decision.” Id .

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PROTECTED ACTIVITY; ARB RULES THAT RETALIATION FOR LATER NOTIFICATIONS OF THE SAME INJURY IN FELA LITIGATION IS JUST AS UNLAWFUL AS RETALIATION FOR THE INITIAL NOTICE; 8TH CIRCUIT, HOWEVER, CLARIFIES THAT FRSA PROTECTS A NOTICE OF INJURY MADE IN THE COURSE OF FELA LITIGATION BUT THAT FELA LITIGATION IS NOT PER SE PROTECTED BY FRSA

In Carter v. BNSF Railway Co. , ARB Nos. 14-089, 15-016, -022, ALJ No. 2013-FRS-82 (ARB June 21, 2016), the Complainant suffered a workplace injury that was reported to his supervisor. He later filed a FELA claim in state court. He was deposed in relation to the FELA claim. Later, the Respondent notified him that it would be conducting an investigatory hearing about inconsistencies between his deposition testimony and his employment application. In the interim, the Complainant failed to clock in when he was about five minutes late for work. The Respondent notified the Complainant that it would also conduct an investigatory hearing into dishonesty regarding the failure to clock in. Two internal hearings were conducted, and the Respondent sent discharge letters to the Complainant after each hearing. Thus, the Complainant was fired twice. The Complainant filed an FRSA retaliation complaint. After a hearing, the ALJ found that the Respondent violated the FRSA and unlawfully discriminated against the Complainant.

On appeal, the ARB affirmed the ALJ’s decision. The ARB observed that the ALJ seemingly relied on a strict “chain of events” type of analysis that it declined to endorse. The ARB found, however, that the ALJ had made sufficient findings on circumstantial evidence to support a finding of contributory causation.

One of the matters on which the ARB affirmed the ALJ was “that it is pure semantics to separate the ‘report of injury’ from the injury itself.” USDOL/OALJ Reporter at 4. After a hearing, the ALJ found in regard to contributing factor causation, at least implicitly, “that the FELA litigation, even if not protected itself, should not be isolated from the original injury or Carter’s report of injury: ‘Clearly Mr. Carter’s August 2007 injury, including his ‘report’ of that injury, was part of a chain of events that triggered the process which resulted in his FELA lawsuit, which in turn resulted in the Respondent’s discovery of the documentation it then used to fire him.’” USDOL/OALJ Reporter at 4. In a footnote to its appellate decision, the ARB observed that the ALJ did not determine whether the FELA claim was FRSA protected activity, and that prior to the ALJ’s decision the ARB had not addressed the question. The ARB noted that in the interim, it had, in LeDure v. BNSF Ry. Co. , ARB No. 13-044, ALJ No. 2012-FRS-020 (ARB June 2, 2015), affirmed an ALJ’s ruling that “because the filing and pursuit of a FELA claim effectively provides notification of a work-related injury, often in greater detail than an initial oral or written notice to an employee’s supervisor at the time of injury, a FELA claim constitutes protected activity under the FRSA’s whistleblower protection provisions.” Id . at 4, n.18.

The ARB wrote: “While apparently not alleged as protected activity in its own right, the FELA litigation undisputedly involved the 2007 injury and kept Carter’s protected report of injury fresh as the events in the case unfolded. As we stated in LeDure , we can see no logical reason why earlier ‘protected activity would lose its protected status when it is also discussed in a FELA case. Retaliation for later notifications of the same injury is just as unlawful as retaliation for the initial notice.’” Id . (footnote omitted). One member of the ARB pointed out in a concurring opinion that “the Board determined in LeDure that the FELA claim in that case was protected activity based on the evidence presented in that case. It left open for another day the question of whether FELA claims constitute protected activity as a matter of law.” Id . at 12 (footnote omitted).

The 8th Circuit Court of Appeals vacated the ARB’s decision sub nom. in BNSF Ry. Co. v. United States DOL Admin. Review Bd. , No. 16-3093 (8th Cir. Aug. 14, 2017) (2017 U.S. App. LEXIS 15020; 2017 WL 3469224). The court noted that the ARB had not endorsed the ALJ’s chain-of-events analysis, but found that the ARB grounded its affirmance on findings insufficient to support the ARB’s contributing factor and affirmative defense rulings.

The court also found that the ARB had misinterpreted its own decision in LeDure v. BNSF Ry. Co. , ARB No. 13-044, ALJ No. 2012-FRS-020, slip op. at 5 (ARB June 2, 2015), agreeing with the concurring ARB member in Carter v. BNSF Railway Co. , ARB Nos. 14-089, 15-016, 15-022, ALJ No. 2013-FRS-82 (ARB June 21, 2016) that “ LeDure held only that the FRSA protects a notice of injury made in the course of FELA litigation, not that FELA litigation is per se protected by the FRSA.”. The Court wrote:

    … By misstating the scope of its decision in LeDure , the ARB decided without discussion a significant issue that Carter failed even to allege and that has never been considered by this court or by our sister circuits. This was “such failure to explain administrative action as to frustrate effective judicial review.” Camp v. Pitts , 411 U.S. 138, 142 (1973). The ALJ found that Thompson, who initiated the first investigation in January 2012, knew of Carter’s injury “on the date it occurred or very soon thereafter,” so it is clear the FELA litigation did not notify Thompson of Carter’s injury. To base its decision on LeDure , the ARB needed a finding that Carter’s FELA lawsuit provided BNSF with “more specific notification” of his injury report, a fact question relevant to the temporal proximity between the protected activity and Carter’s termination.

   The ARB was unable to salvage an ALJ analysis built upon a flawed theory of causation because the ARB lacked critical fact findings needed to affirm the ALJ’s decision when applying the appropriate legal standard. To the extent the ARB filled in the missing findings, it exceeded its scope of review. See Stone & Webster Constr. v. U.S. Dep’t of Labor , 684 F.3d 1127, 1133 (11th Cir. 2012), construing 29 C.F.R. § 1982.110(b).

Slip op. at 9.

PUNITIVE DAMAGES; EIGHTH CIRCUIT REJECTS ARB’S RATIFICATION OF ALJ’S PUNITIVE DAMAGES AWARD; COURT APPLIES PRINCIPLE THAT A RESPONDENT MAY AVOID VICARIOUS PUNITIVE DAMAGES LIABILITY BY SHOWING THAT IT MADE GOOD FAITH EFFORTS TO COMPLY WITH THE FRSA, AND FINDS STRONG EVIDENCE OF RESPONDENT’S GOOD FAITH EFFORTS TO PREVENT RETALIATION BASED ON ITS CODE OF CONDUCT AND OTHER FACTORS

In Carter v. BNSF Railway Co. , ARB Nos. 14-089, 15-016, -022, ALJ No. 2013-FRS-82 (ARB June 21, 2016), the ARB affirmed the ALJ’s award of $50,000 in punitive damages. The ARB stated that “[i]f the ALJ finds that the employer had the requisite state of mind and that finding is supported by substantial evidence, on appeal, the ARB will uphold the ALJ’s determination that punitive damages are warranted.” USDOL/OALJ Reporter at 7 (footnote omitted). The respondent’s conduct need not be egregious, but rather, the “determinative factual question an ALJ must answer is whether the respondent acted with ‘reckless or callous disregard for the plaintiff’s rights’ or intentionally violated federal law.” Id . (footnote omitted). The ARB rejected the Respondent’s contention on appeal that it had not acted with reckless disregard for the Complainant’s rights under FRSA, the ARB citing several findings by the ALJ that were supported by substantial evidence. The ARB also rejected the Respondent’s argument that it had anti-retaliation policies showing “good faith” compliance with the FRSA and that the acting supervisors acted outside the scope of their employment when they engaged in misconduct. The ARB stated: “Written anti-retaliation policies, without more (as in efforts to implement and enforce these policies), do not insulate an employer from punitive damages liability.” Id . at 8 (footnote omitted). The ARB also cited the ALJ’s findings that the Respondent had ratified the supervisors’ actions, and endorsed them through conducting investigatory hearings with the supervisors acting as the Respondent’s agents.

On appeal the 8th Circuit Court of Appeals vacated the ARB’s decision sub nom. in BNSF Ry. Co. v. United States DOL Admin. Review Bd. , No. 16-3093 (8th Cir. Aug. 14, 2017) (2017 U.S. App. LEXIS 15020; 2017 WL 3469224). In regard to the punitive damages award, the court wrote:

Plaintiffs seeking punitive damages have a “formidable burden.” Sturgill v. United Parcel Serv., Inc. , 512 F.3d 1024, 1035 (8th Cir. 2008) (applying malice or reckless indifference standard in Kolstad v. Am. Dental Ass’n , 527 U.S. 526, 536 (1999), cited by the ARB in this case). Even if Carter can show unlawful retaliation, BNSF “may avoid vicarious punitive damages liability by showing that it made good faith efforts to comply with [the FRSA].” Id . Here, the ALJ acknowledged that BNSF “has a Code of Conduct that specifically prohibits retaliation, an Injury Reporting Policy prohibiting retaliation against employees who report injuries, a Mechanical Safety Rule expressly prohibiting retaliation, a hotline or website, and review of dismissals by its Labor Relations Department,” and that Heenan, “the person ultimately responsible for reviewing the file and making a recommendation, had never met Mr. Carter, and knew nothing about his injury or subsequent lawsuit.” This is strong evidence of BNSF’s good-faith efforts to prevent retaliation. See Bennett v. Riceland Foods, Inc. , 721 F.3d 546, 553 (8th Cir. 2013). As summarized by the ARB, the ALJ awarded punitive damages because BNSF fired Carter “not once, but twice,” and did not provide Carter with fair discovery and a continuance at his first on-property hearing. On this record, we would reverse the award of punitive damages.

Slip op. at 10.

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The Complainant filed a motion for reconsideration of the ARB’s dismissal of his appeal based on the Complainant’s failure to include a certificate of service on filings despite repeated warnings from the ARB that failure to do so would result in dismissal. The motion for reconsideration did not explain why he failed to file a certificate as ordered, and the ARB found that he had provided no grounds for reconsideration of the dismissal.

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CONTRIBUTING FACTOR CAUSATION; ARB TO REVISIT QUESTION OF EVIDENTIARY LIMITATIONS PREVIOUSLY CONSIDERED UNDER THE NOW VACATED EN BANC DECISION IN POWERS AND THE EARLIER PANEL DECISION IN FORDHAM

In Palmer v. Canadian National Railway , ARB No. 16-035, ALJ No. 2014-FRS-154 (ARB June 17, 2016), the ARB provided notice that it will review this appeal en banc. The Board stated the following for briefing:

The parties are requested to file supplemental briefs that should address the questions set forth below that were previously considered before a panel of the Board in Fordham v. Fannie Mae , ARB No. 12-061, ALJ No. 2010-SOX-051 (ARB Oct. 9, 2014) and before the Board en banc in Powers v. Union Pacific Railroad, Co. , ARB No. 13-034, ALJ No. 2010-FRS-030 (ARB Apr. 21, 2015, reissued with full dissent), which the Board vacated on May 23, 2016:

1) In deciding, after an evidentiary hearing, if a complainant has proven by a preponderance of the evidence that his protected activity was a “contributing factor” in the adverse action taken against him, is the Administrative Law Judge (ALJ) required to disregard the evidence, if any, the respondent offers to show that the protected activity did not contribute to the adverse action?

2) If the ALJ is not required to disregard all such evidence, are there any limitations on the types of evidence that the ALJ may consider?

Slip op. at 1-2.

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REMAND FOR WAGE AND HOUR DIVISION ADMINISTRATOR TO RECONSIDER WHETHER A LICENSE AGREEMENT IS A CONTRACT WITHIN THE MEANING THE DAVIS-BACON ACT IN LIGHT OF D.C. CIRCUIT’S DECISION IN CITYCENTERDC

In Space Exploration Technologies Corp. , ARB No. 14-001 (ARB June 16, 2016), the Petitioner Space Exploration Technologies Corp. (SpaceX) had appealed from a final ruling of the Wage and Hour Division Administrator holding that “the Davis-Bacon Act applied to a License Agreement by and between SpaceX and the United States Air Force for the construction, establishment, and maintenance of a space launch complex for the support of private commercial and, possibly, federal government space launches. ” Slip op. at 1. The primary issue raised on appeal was whether the License Agreement constitutes a contract for the construction of a public work within the meaning of the Davis-Bacon Act and its implementing regulations. While the appeal was pending, “the United States Court of Appeals for the District of Columbia Circuit issued a decision addressing Davis-Bacon Act coverage in District of Columbia and CCDC Office, LLC v. Dep’t of Labor , 819 F.3d 444 (D.C. Cir. 2016) ( CityCenterDC ) . The D.C. Circuit Court of Appeals affirmed a District Court decision, see District of Columbia v. U.S. Dep’t of Labor, 34 F. Supp. 3d 172 (D.D.C. Mar. 31, 2014), in which the lower court reversed the ARB’s decision finding DBA coverage in Application of the Davis-Bacon Act to Construction of the CityCenterDC Project in the District of Columbia , ARB Nos. 11-074, -078, -082 (ARB Apr. 30, 2013).” Id . The ARB asked for supplemental briefing in view of the CityCenterDC decision. In response, the Administrator requested a remand for reexamination of the matter in light of the DC Circuit court’s decision. The ARB granted the motion to remand over the objection of SpaceX and intervenor parties. One member of the ARB would have denied the motion to remand (at least in part) given significant factual differences between the instant case and the CityCenterDC case, and the age of the appeal.

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WHERE A CONTRACT IS SUBJECT TO DAVIS-BACON WAGE RATES, IT IS THE EMPLOYER’S OBLIGATION TO LEARN WHAT THOSE RATES ARE

In Administrator, Wage and Hour Div., USDOL v. Coleman Construction Co. , ARB No. 15-002, ALJ No. 2013-DBA-4 (ARB June 8, 2016), a subcontractor feigned ignorance of the applicability of Davis-Bacon Act wage rates to a construction project. The ARB found, however, abundant evidence that the subcontractor knew, or should have known that the subcontract was subject to the DBA requirements. For example, the subcontractor had worked on DBA governed contracts in past and had signed subcontracting documents for the instant project with numerous references to the DBA requirements. Evidence of record showed that the subcontractor knew the precise DBA rates. The subcontractor asserted that the relevant wage determination was unavailable on DOL’s website. The ARB found no evidence in the record of the alleged website omission, but stated even if there was such an omission, it would not suffice to excuse the subcontractor’s obligation to pay DBA prevailing wages. The ARB stated “The law is clear that, if a contract subject to Davis-Bacon lacks the wage determination, it is the employer’s obligation—here, Coleman Construction’s—to get it. So, even if Coleman Construction did not know what the correct Davis-Bacon prevailing wage rates were, it was its responsibility to figure it out.” USDOL/OALJ Reporter at 10 (footnote omitted).

FOREMAN’S COPIES OF HANDWRITTEN TIME RECORDS SUFFICIENT EVIDENCE TO RAISE INFERENCE OF AMOUNT AND EXTENT OF DAVIS BACON ACT GOVERNED WORK; NON-MALICIOUS DESTRUCTION OF RECORDS BY RESPONDENT, AND FOREMAN’S ALLEGED LACK OF AUTHORIZATION TO MAKE COPIES, WERE BOTH IRRELEVANT TO QUESTION OF RESPONDENT’S LIABILITY

In Administrator, Wage and Hour Div., USDOL v. Coleman Construction Co. , ARB No. 15-002, ALJ No. 2013-DBA-4 (ARB June 8, 2016), the testimony of one of the subcontractor’s foreman, accompanied by a detailed spreadsheet maintained by the foreman, was sufficient evidence to “show the amount and extent of [DBA-governed] work as a matter of just and reasonable inference” and to shift the burden of proof to the Respondents. USDOL/OALJ Reporter at 12, citing Mt. Clemens Pottery . In the instant case, the Respondents had no evidence to rebut the inference. The possibility that it may have not had malicious intent when it destroyed time sheet records was not relevant to the Respondent’s liability. Similarly, the claim that the foreman did not have authorization to copy the handwritten time records was not relevant to the Respondent’s liability. The ALJ found that the foreman’s evidence was credible, and that the Respondent had nothing to rebut that evidence. This was sufficient to affirm the ALJ’s finding that the Respondent had undercounted hours and the ALJ’s determination of the number of those undercounted hours.

DEBARMENT STANDARDS ARE DIFFERENT UNDER THE DAVIS-BACON ACT (DBA) AND THE DAVIS-BACON RELATED ACTS (DBRA); DBA STANDARD IS MERE DISREGARD WHERE AS DBRA STANDARD IS AGGRAVATED OR WILFUL; DBA STANDARD MANDATES A THREE-YEAR PERIOD OF DEBARMENT WHEREAS DBRA DEBARMENT IS “NOT TO EXCEED” THREE YEARS

In Administrator, Wage and Hour Div., USDOL v. Coleman Construction Co. , ARB No. 15-002, ALJ No. 2013-DBA-4 (ARB June 8, 2016), the ARB found that the ALJ had erred by conflating the standards for debarment under the Davis-Bacon Act, and the standard under the Davis-Bacon Related Acts. The ARB explained:

   The legal standards for debarment under the Davis-Bacon Act are different from the legal standards for debarment under Davis-Bacon Related Acts. Under the Davis-Bacon Act, the Comptroller General keeps “a list of the names of persons whom the Comptroller General has found to have disregarded their obligations to employees.” Davis-Bacon prohibits federal contracts from being awarded to such persons “until three years have elapsed from the date of publication of the list.”

   In contrast, the National Housing Act and Contract Work Hours and Safety Standards Act, the two Davis-Bacon Related Acts under which this case is being brought, do not include a debarment provision. Rather, it is the Department of Labor regulations, duly promulgated pursuant to Reorganization Plan No. 14 of 1950, that provide for debarment for violations of a Related Act. While similar to the Davis-Bacon Act language, the relevant regulatory language applicable to Related Acts is not identical. The relevant provision prohibits the awarding of federal contracts to those “found . . . to be in aggravated or willful violation ” of the labor standards provisions of a Davis-Bacon Related Act and imposes debarment “for a period not to exceed 3 years.” In other words, debarment under the Davis-Bacon Act differs from debarment under Related Acts in two substantive ways: First under Davis-Bacon, the standard for debarment is relatively low—a mere “disregard[ing]” of one’s obligations suffices—whereas under Related Acts such as at issue here, the standard for debarment is a tad more stringent—one has to have been in “aggravated or willful violation” of the relevant labor standards provisions. Second, the Davis-Bacon Act and implementing regulations mandate a three-year period of debarment, whereas under a Related Act, the regulations provide for a debarment period “not to exceed 3 years.”

USDOL/OALJ Reporter at 16-17 (footnotes omitted). In the instant case, the ALJ’s conflation of the two standards was harmless because the Respondent’s violations unequivocally were deliberate and intentional within the meaning of the regulatory “willful” standard. The ARB noted that its predecessor, the Wage Appeal Board, held that “once the Administrator shows that a violation is ‘aggravated or willful,’ debarment should be for the full three years except in ‘extraordinary circumstances.’” Id . at 80 (footnote omitted). In the instant case, the Respondent knowingly misclassified workers, and purposely destroyed time records in an attempt to shortchange workers of nearly $100,000 in wages. The ARB noted that this was precisely the type of behavior for which a three year debarment will be upheld. The ARB also debarred the subcontractor’s president.

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RETROACTIVE IMPOSITION OF ADDITIONAL DAVIS BACON ACT WAGE DETERMINATION; ADMINISTRATOR MUST CONSIDER EQUITABLE FACTORS OF DBA RULING LETTER 2004-01 WHEN CONSIDERING WHETHER TO IMPOSE THE ADDITIONAL WAGE DETERMINATION TO AN ALREADY COMPLETED PROJECT

In City of Ellsworth, Maine, Bayside Road Wastewater Treatment Facility , ARB No. 14-042 (ARB June 6, 2016), the ARB affirmed the Wage and Hour Division Administrator’s determination that a contract for a road wastewater treatment facility and pump station, partially funded by the Federal government and therefore subject to the Davis-Bacon Act and related acts, should have included a wage determination for building construction in addition to a heavy construction wage determination. The contracting city argued that it had relied in good faith on guidance received on different project the threshold found in AAM 130 and 131. The ARB found, however, that the Administrator correctly determined that the building component was substantial and required a separate wage determination, the component meeting both 20% of the total project and independent $1 million thresholds.

The city next argued that the WHD lacked authority under 29 C.F.R. 1.6(f) to impose the building wage post-bid and after contract commencement. The ARB, however, agreed with the Administrator that the WHD has the authority to require retroactive incorporation of a second building wage determination notwithstanding that the contract already had a valid wage determination. The ARB cited Central Energy Plant , ARB No. 01-057 (Sept. 30, 2003). The ARB, however, remanded the case to the Administrator to determine whether equitable grounds existed to decline to retroactively impose a wage determination to the already completed project. The ARB cited in this regard DBA Ruling Letter 2004-01 (June 3, 2004). The ARB found that the Administrator had only made generalized conclusions on the WHD’s discretion to impose the wage determination retroactively. The ARB stated: “Where the Administrator has failed to articulate the factual basis, equitable or otherwise, upon which the decision requiring retroactive application of the Building wage determination was reached, the Board cannot conclusively determine whether the Administrator’s determination in this case is reasonable, or, instead, an unexplained departure from past determinations.” USDOL/OALJ Reporter at 16.

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REQUIRED MONTHLY PRO-RATA SALARY PAYMENT; FACT THAT H-1B WORKERS WERE PAID A TOTAL WAGE GREATER THAN THE RESPONDENT’S ANNUALIZED LCA OBLIGATION DID NOT EXCUSE FAILURE TO MAKE PRO-RATA MONTHLY PAYMENTS; BONUSES THAT WERE CONTINGENT ON COMPANY REVENUE DID NOT MEET EXCEPTION FOUND IN 20 C.F.R. § 655.731(c)(4)

In Administrator, Wage and Hour Div. v. Aleutian Capital Partners, LLC , ARB No. 14-082, ALJ No. 2014-LCA-5 (ARB June 1, 2016), the ARB affirmed the ALJ’s grant of summary decision in favor of the Administrator, Wage and Hour Division, based on the ALJ’s finding of undisputed facts showing that the Respondent failed to meet its obligation to make monthly pro-rata salary payments to two H-1B non-immigrant workers. The ALJ rejected the Respondent’s argument that it could rely on bonuses paid to the immigrant worker who filed a LCA complaint with the WHD to meet its monthly pro rata salary payment obligation.

The Respondent employed the non-immigrant worker who filed the complaint as a salaried financial analyst at $65,000 per year, and a second non-immigrant worker as a salaried market research analysis at $42,453 per year, under H-1B Labor Condition Applications (LCA) approved by DOL. In regard to the first worker, the Respondent paid wages monthly, and these wages included base pay and occasional bonuses calculated at three percent of monthly revenue that the Respondent earned and received. For tax year 2012, the Respondent paid this worker a dollar amount that exceeded the compensation required to be paid him that year. However, the monthly salary payments did not always meet the monthly pro rata salary amount. Regarding the second worker, the Respondent paid her in December 2012 less than the monthly pro rata salary amount.

The Respondent argued before the ALJ that it was undisputed that it paid the worker “a dollar amount over the 12 months preceding the filing of the complaint that exceeded the amount the Administrator calculated as due and owing for that time period or for 2012, establishing that the required compensation was pa Id .” USDOL/OALJ Reporter at 3. The ARB was not convinced by this argument. The ARB began by citing the applicable regulatory requirements:

   An H-1B nonimmigrant worker must be paid the “required wage,” which is the higher of the actual wage or the prevailing wage for the occupation in which the H-1B worker is employed. 20 C.F.R. § 655.731(a)(1). An H-1B worker must be paid, at least monthly, one-twelfth of his or her annual required rate. Specifically, the “required wage must be paid to the employee, cash in hand, free and clear, when due . . . .” 20 C.F.R. § 655.731(c)(1). For salaried employees, such as Gangjee and Horn, “wages will be due in prorated installments . . . paid no less often than monthly . . . .” 20 C.F.R. § 655.731(c)(4). See also Requirements for Employers Using Non-immigrants on H-1B Visas, 59 Fed. Reg. 65,646; 65,653 (Dec. 20, 1994)(“The wages of [H-1B] salaried employees are due in pro-rata installments . . . .”)

Id . at 4. The ARB noted that the case was in the stance of a review of the ALJ’s rulings on cross motions for summary decision. This stage of the hearing reflects whether the opposing party established a genuine issue of material fact—here, neither party had challenged the ALJ’s findings of undisputed facts. The ARB found that those undisputed facts were dispositive: On appeal, Respondent does not dispute that it did not pay this monthly pro rata salary obligation for every month that it employed Gangjee and Horn. Based upon the ALJ’s undisputed facts, that are not challenged on appeal, we conclude that Respondent has failed to show that there exists an issue as to any material fact on the issue of this monthly salary obligation. Nor has Respondent set forth specific facts or presented evidence sufficient to raise a genuine issue with respect to any possible exceptions to the monthly pro rata wage requirements. We therefore affirm the ALJ’s order that the Administrator is entitled to summary decision as a matter of law.

Id . at 5 (footnote omitted). The ARB noted that the Respondent had claimed that its bonus plan was nondiscretionary but had not produced a contract to support this claim. In addition, as the ALJ explained, even if the bonuses were assured, they were contingent on company revenue. The ARB stated: “The regulations permit employers to pay less than the monthly required rate only if the employer provides certain guaranteed bonuses and documentation thereof. The employer must show both, (1) that the bonus is guaranteed, and (2) that the guaranteed bonus, once paid, will meet the wage obligation ‘for each current or future pay period.’ 20 C.F.R. § 655.731(c)(4).” Id . at 5, n.6.

On appeal, the District Court for the Southern District of New York agreed with the ARB that the Respondent was not excused from paying the complaining H-1B worker in monthly prorated installments because the Respondent failed to document its commitment to pay the 3% bonus. Aleutian Capital Partners, LLC v. Hugler , No. 16-cv-5149 (S.D. N.Y. Sept. 28, 2017) (2017 U.S. Dist. LEXIS 162965; 2017 WL 4358767). The court also deferred to the ARB’s interpretation of § 655.731(c)(4) that even a nondiscretionary payment must be guaranteed and non-contingent. The court found it is was undisputed that the Respondent’s bonus structure was contingent, and not guaranteed. The court also gave Auer deference to the ARB’s holding in a prior decision that “each pay period must be viewed separately, and that no credit can be given for overpayments in certain months. See Adm’r v. Wings Digital Corp. , 2005 WL 774014, at *11 (DOL Off. Adm. App. Mar. 21, 2005), appeal dismissed on other grounds , 2005 WL 1745152, at *3 (DOL Adm. Rev. Bd. July 22, 2005).” Slip op. at 14 (footnote omitted).

SCOPE OF INVESTIGATION INITIATED BY SINGLE AGGRIEVED PARTY COMPLAINT; SCOPE OF INVESTIGATION FOR BACK WAGES; ARB DECLINES TO ACQUIESCE IN EIGHTH’S CIRCUIT’S DECISION IN MISSOURI MED. PRO-CARE PROVIDERS, INC. ; S.D.N.Y. ALSO DISAGREES WITH THE EIGHTH CIRCUIT

In Administrator, Wage and Hour Div. v. Aleutian Capital Partners, LLC , ARB No. 14-082, ALJ No. 2014-LCA-5 (ARB June 1, 2016), the ARB affirmed the ALJ’s grant of summary decision in favor of the Administrator, Wage and Hour Division, based on the ALJ’s finding of undisputed facts showing that the Respondent failed to meet its obligation to make monthly pro-rata salary payments to two H-1B non-immigrant workers. The ALJ rejected the Respondent’s argument that the Administrator exceeded his investigative authority by investigating the pay of an immigrant who had not filed a complaint, and that—because there was no wage violation in the 12-month period prior to the complaint’s filing—the Administrator was without the authority to investigate any time period prior.

While the matter was pending before the ARB on appeal, the Eighth Circuit issued its decision in Greater Missouri Med. Pro-Care Providers, Inc. v. Perez , 812 F.3d 1132 (8th Cir. 2015), in which the court held that under 8 U.S.C.A. § 1182(n)(2)(A), reasonable cause to investigate a single allegation of LCA violations in an aggrieved-party complaint does not establish reasonable cause to conduct a comprehensive investigation of an employer. The ARB, noting that the instant case arose in the Second Circuit, declined to acquiesce in the Greater Missouri Med. Pro-Care Providers decision, and instead stated that it would “continue to adhere to the opinion expressed by this Board in the majority decision in Greater Missouri Med. Pro-Care Providers, Inc. , ARB No. 12-015 (ARB Jan. 29, 2014).” USDOL/OALJ Reporter at 6.

The ARB’s holding that the WHD Administrator has the discretion to expand an investigation beyond the four corners of a complaint was reviewed by the District Court for the S.D. N.Y., which disagreed with the Eighth Circuit. See Aleutian Capital Partners, LLC v. Hugler , No. 16-cv-5149 (S.D. N.Y. Sept. 28, 2017) (2017 U.S. Dist. LEXIS 162965; 2017 WL 4358767). The district court also rejected the Respondent’s argument that the WHD investigation was improperly extended in time. The court stated: “Once a complaint is timely filed, the Administrator may assess back wages for a period “prior to one year before the filing of a complaint.” 20 C.F.R. § 655.806(a)(5). The twelve months requirement is only a jurisdictional limitation, and does not impact the scope of remedies available to the Administrator. Id .

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ARB AFFIRMS ALJ’S FINDING THAT COMPLAINANT DID NOT ESTABLISH CONTRIBUTING FACTOR CAUSATION

In Johnson v. BNSF Railway Co. , ARB No. 14-083, ALJ No. 2013-FRS-59 (ARB June 1, 2016), the two-judge majority of the ARB found that substantial evidence supported the ALJ’s determination that a chain of events in which the Complainant failed to comply with the terms of a substance abuse program, and prior disciplinary incidents, were the cause of his removal rather than protected activity. One member of the ARB dissented on the ground that had the ALJ properly analyzed the question of protected activity to find that the Respondent had delayed the Complainant’s medical treatment, (a question not addressed by the majority), controlling precedent would mandate, at a minimum, that contributing factor causation be presumed. The dissenting member also found that key findings of fact by the ALJ relating to the reason the Complainant was referred to the substance abuse program were not supported by substantial evidence.