USDOL/OALJ Reporter: ARB Decision Caselist - August 2013

WHERE FEDERAL CONTRACT REQUIRED CERTAIN PRELIMINARY TRAINING OF SECURITY GUARDS PRIOR TO COMMENCEMENT OF CONTRACT, THE GOVERNMENT CONTRACTOR IS REQUIRED TO COMPENSATE PROSPECTIVE GUARDS FOR TRAINING TIME

In Administrator, Wage and Hour Div., USDOL v. Ares Group, Inc. , ARB No. 12-023, ALJ No. 2010-SCA-6 (ARB Aug. 30, 2013), the Wage and Hour Division (WHD) filed a complaint alleging that ARES Group, Inc., a federal government contractor, failed to pay proper wages and benefits in violation of the McNamara-O'Hara Service Contract Act and the Contract Work Hours and Safety Standards Act, in regard to a contract to provide professional security services at federal buildings in Florida. The contract and Blanket Purchase Agreement specified certain preliminary training requirements for security guards and uniformed supervisors working under the BPA. The Respondent notified guards who had been employed by the predecessor contractors that it would provide free preliminary training, but would not compensate the security guards for such training prior to commencement of work on the contract, and that completing the training was not a guarantee of employment. Several guards contacted the WHD, and following an investigation, WHD determined that the Respondent was liable for compensation for the preliminary training and for certain other wage errors. A complaint was filed by the WHD, and the ALJ granted the WHD Administrator's motion for summary decision. On appeal the Respondent argued that the SCA did not require compensation to the security guards for preliminary training that was undertaken prior to commencement of the contract. The ARB rejected this contention, finding that it was undisputed that the underlying federal contract and the BPA required preliminary training for security guards, and that based on the clear regulatory language of 29 C.F.R. § 4.146, "prospective security guards that attended the training before the commencement of performance of the Contract as well as the security guards hired by ARES are 'service employees' under the Act and were rightfully entitled to compensation for training time as well as fringe benefits and the prevailing wages provided for under the Act." USDOL/OALJ Reporter at 5 (quoting ALJ's D. & O.).

DEBARMENT; RESPONDENT FAILED TO MEET THREE PART TEST OF 29 C.F.R. § 4.188(b) FOR RELIEF FROM DEBARMENT

In Administrator, Wage and Hour Div., USDOL v. Ares Group, Inc. , ARB No. 12-023, ALJ No. 2010-SCA-6 (ARB Aug. 30, 2013), the Respondent failed to pay proper wages and benefits in violation of the McNamara-O'Hara Service Contract Act and the Contract Work Hours and Safety Standards Act, and the Wage and Hour Division sought debarment under SCA Section 5(a). The federal contract and Blanket Purchase Agreement for professional security services at federal buildings in Florida specified certain preliminary training requirements for Security Guards and uniformed supervisors working under the BPA. The Respondent had failed to compensate prospective guards for such training time prior to commencement of the contract. The ALJ had granted summary decision in favor of the WHD Administrator on the question of debarment. The ARB applied the three part test found in 29 C.F.R. § 4.188(b), for determining when relief from debarment is appropriate, and affirmed the grant of summary decision. The ARB found that the record showed that the Respondent willingly ignored guidance WHD provided that the SCA applied to the Contract's preliminary training requirements, and that the company was required to compensate the security guards for expenses they incurred for the preliminary training. The ARB stated that because the Respondent failed to meet its burden of proof under the first part of the three-part test, it need not consider any further mitigating factors.

Nonetheless, the ARB found that the Respondent failed to meet the second part of the regulatory test, which require that the contractor demonstrate a good compliance history, cooperation in the investigation, repayment of the moneys due, and sufficient assurances of future compliance. The ARB found that the Respondent had taken several months to provide requested records and documents to WHD during the course of the investigation, and did not pay the back wages owed until ten months after WHD held its final conference with the company. Moreover, WHD's investigation on this Contract determined that the Respondent failed to pay certain security guards for the Columbus Day holiday and to fully compensate some employees for health and welfare benefits at the proper rate. In addition, the ARB found that there had been two subsequent investigations concerning violations the Respondent on the same Contract.

Finally, the ARB found that given the Respondent's history of non-compliance in the Contract in dispute in this case, as well as evidence of noncompliance on other federal contracts, it failed to satisfy the third part of the "unusual circumstances" test.

One member of the ARB wrote a concurring opinion, finding that some of the matters considered by the majority could not be resolved on summary decision, but that some of the Respondent's behavior prevented it from establishing "unusual circumstances" as a matter of law.

PUNITIVE DAMAGES IN NTSSA WHISTLEBLOWER CASE DENIED WHERE RESPONDENT�S CONDUCT DID NOT AMOUNT TO RECKLESS OR CALLOUS DISREGARD FOR THE COMPLAINANT�S RIGHTS OR INTENTION VIOLATION OF FEDERAL LAW

In Graves v. MV Transportation, Inc. , ARB No. 12-066, ALJ No. 2011-NTS-4 (ARB Aug. 30, 2013), the Complainant appealed the ALJ's denial of punitive damages in a National Transit Systems Security Act whistleblower case. The ARB affirmed the denial, finding that substantial evidence supported the ALJ's determination. The Complainant had refused to back his bus into a parking spot without a spotter. The Complainant was told to leave his bus in the yard until grievance proceedings were resolved. The union grievance process resulted in a settlement in which the Respondent agreed to expunge the Complainant's record and to provide spotters. A day or two later, the Complainant was again instructed by the yard supervisor to back his bus into a parking spot without a spotter. The Complainant refused and left his bus in the yard. A few days later, a company-wide memo was distributed instructing drivers on the night shift to leave their buses in the yard without parking them. The Respondent did not discipline the Complainant prior to issuance of this memo. The ARB held that the Respondent's actions did not rise to the level of establishing grounds for awarding punitive damages to the Complainant. The ARB chose not to disturb the ALJ's finding that under the facts of the case, the harassment by the yard supervisor did not amount to reckless or callous disregard for the Complainant's rights, or intentional violations of federal law.

CONTRACT FOR LEGAL SERVICES; WHETHER CONTRACTOR IS SUBJECT TO THE EO LAWS AND THEREFORE AN OFFCP COMPLIANCE REVIEW IS DEPENDENT ON WHETHER THE CONTRACT AT ISSUE WAS FOR "NONPERSONAL SERVICES"; FEDERAL ACQUISITION REGULATION DEFINITION MAY BE USED FOR THIS DETERMINATION; KEY QUESTION IS THE NATURE OF THE GOVERNMENT�S SUPERVISION AND CONTROL OVER THE CONTRACTOR�S EMPLOYEES

In OFCCP v. O'Melveny & Myers LLP , ARB No. 12-014, ALJ No. 2011-OFC-7 (ARB Aug. 30, 2013), the Defendant, a law firm, entered into a contract with the U.S. Department of Energy (DOE) under which it agreed to provide legal advice and assistance, including legal representation in administrative proceedings, in connection with the DOE's divestiture of a naval petroleum reserve. OFCCP sent a scheduling letter to the Defendant initiating a compliance review under the EO Laws, and requesting a copy of the Defendant's Affirmative Action Plan and other specified supporting documentation. After several unsuccessful attempts to secure the Defendant's compliance with its request for documents, OFCCP filed an administrative complaint with the Office of Administrative Law Judges. The ALJ granted summary decision in favor of OFCCP, and ordered that the Defendant comply with OFCCP's request for documents and inspection. The Defendant appealed.

Whether the contract for services constituted a �Government contract� within the meaning of OFCCP's regulations

The central issue before the ARB was whether the contract for services constituted a �Government contract� within the meaning of 41 C.F.R. §§ 60-1.3, 60-741.2(i), and 60-250.2(i). The ARB observed:

For O�Melveny to be subject to OFCCP's jurisdiction under the EO Laws, the contract with DOE must constitute a "Government contract" within the meaning of the EO Laws� implementing regulations, which define "Government contract" in pertinent part as:

any agreement or modification thereof between any contracting agency and any person for the purchase, sale or use of personal property or nonpersonal services. . . . The term �nonpersonal services� as used in this section includes, but is not limited to, the following services: Utilities, construction, transportation, research, insurance, and fund depository. The term Government contract does not include: (1) Agreements in which the parties stand in the relationship of employer and employee; and (2) Federally assisted construction contracts.

41 C.F.R. § 60-1.3. See also 41 C.F.R. §§ 60-741.2(i), 60-250.2(i) (setting forth same definition).

USDOL/OALJ Reporter at 8. The ARB noted that neither the EO Laws nor the OFCCP regulations define the term "nonpersonal services," and agreed with the ALJ's decision to use the Federal Acquisition Regulation definition at 48 C.F.R. § 37.104 to determine whether the contract at issue was a "nonpersonal services" contract. The FAR regulations identify six indicia of a personal services contract:

(1) Performance on site.
(2) Principal tools and equipment furnished by the Government.
(3) Services are applied directly to the integral effort of agencies or an organizational subpart in furtherance of assigned function or mission.
(4) Comparable services, meeting comparable needs, are performed in the same or similar agencies using civil service personnel.
(5) The need for the type of service provided can reasonably be expected to last beyond one year.
(6) The inherent nature of the service, or the manner in which it is provided reasonably requires directly or indirectly, Government direction or supervision of contractor employees in order to �

(i) Adequately protect the Government's interest;
(ii) Retain control of the function involved; or
(iii) Retain full personal responsibility for the function supported in a duly authorized Federal officer or employee.

48 C.F.R. § 37.104(d). The FAR regulations emphasize that "the overarching and �key question� for assessing whether a government contract is for personal services is: �Will the Government exercise relatively continuous supervision and control over the contractor personnel performing the contract?� 48 C.F.R. § 37.104(c)(2)." USDOL/OALJ Reporter at 9-10 (footnote omitted). Moreover, the FAR regulations dictate that in "determining whether a government contract is for personal or nonpersonal services, � �[e]ach contract arrangement must be judged in the light of its own facts and circumstances.� [48 C.F.R. § 37.104(c)(2).] " USDOL/OALJ Reporter at 10 (footnote omitted).

In the instant case, the parties stipulated to the facts on their cross motions for summary decision before the ALJ. The ARB, however, found that those stipulated facts were insufficient to reach a decision. Specifically, the ARB found that four of the six factors of the FAR guidance appeared to cut equally for and against the conclusion that the services at issue were of either a personal or nonpersonal nature, and that in regard to the remaining two factors, the factual record presented by the parties was insufficient to reach a conclusion one way or the other in resolving the issue of whether the contract was a qualifying "Government contract" under the EO laws.

In regard to the fourth element of the FAR guidance -- whether comparable services, meeting comparable needs, are performed in the same or similar agencies using civil service personnel � the Defendant pointed only to a contract clause that stated that it "was to provide "professional legal assistance to the Office of the General Counsel." The ARB found that this contract clause was not sufficient to determine the question.

In regard to the key question of the nature of the Government's supervision and control over the contractor's employees (the sixth element of the FAR guidance), the ARB found that the affidavits presented by the Defendant stating that there was no close government supervision were not relevant, because the focus is not on whether supervision occurs, but whether it should occur. The ARB stated: "It must be demonstrated that the supervision is necessary to assure that the Government's interests are protected, that control of the contractually-provided services is maintained, or that a duly authorized government official or employee retains full personal responsibility for the provided services." USDOL/OALJ Reporter at 12. The ARB stated the contract's terms were of little assistance in addressing the question, and instead turned to the manner of the DOE's contract administration. Both parties had focused in their stipulations on a period of time under the contract when the Defendant was representing DOE in administrative proceedings, and disregarded almost six years of legal services provided under the contract, worth almost three million dollars in legal services. The total payment for the entire duration of the contract was $3,415,340.00. The ARB found this record "woefully inadequate for drawing any meaningful conclusion regarding the supervision and control DOE exercised over O�Melveny's attorneys during the entire ten-year period the DOE contract covered." USDOL/OALJ Reporter at 14. The ARB also found that even if it was justifiable to focus only on part of the contract services, "still the evidence of record does not afford a sufficient basis upon which any meaningful conclusion can be reached regarding the nature and extent of DOE's supervision and control of O�Melveny's attorneys for this four-year period. There was very little detail of the work O�Melveny actually performed to determine whether it was directly connected to an �integral� DOE function or mission or whether it was work that federal civil service employees could not perform." USDOL/OALJ Reporter at 14 (citation omitted). The ARB therefore remanded the case to the ALJ for further proceedings.

One member of the Board would have affirmed the ALJ's finding that the contract was a nonpersonal services contract, noting that the regulation at 48 C.F.R. § 37.104(b) states that "[a]gencies shall not award personal services contracts unless specifically authorized by statute (e.g., 5 U.S.C. 3109) to do so." This member noted that there was not explicit statutory authority for the contract at issue, and stated that given the presumption of agency regularity, and no suggestion that the contract was unlawful, the contract was necessarily one for nonpersonal services. This member acknowledged that the OFCCP and FAR regulation should be construed consistently, but argued for abolishment of any distinction between a personal and nonpersonal service contract for purposes of the OFCCP regulations and enforcement of the EO laws because such a distinction is no longer relevant to the operation of the Federal government, which has been increasingly privatized and reliant on service contracts of all varieties.

Whether Defendant Contractually Obligated Itself to Compliance with the EO Laws

The ARB also addressed another challenge by the Defendant regarding the ALJ's conclusion that the Defendant contractually obligated itself to comply with the EO Laws. The ARB rejected the ALJ's conclusion, writing:

Given the sparse record before us, we agree with O�Melveny's understanding of the Contract's incorporation language: the fact that the laws or their implementing regulations are incorporated into the DOE contract by reference merely signifies that should any of the cited laws or regulations be applicable, the parties agree to their adherence. To interpret the incorporated references in any other manner would render a number of the references in the DOE contract nonsensical, as for example the incorporation by reference of 48 C.F.R. § 52.229-5 (cited by O�Melveny), which refers to taxes on contracts performed in U.S. Possessions or Puerto Rico, or reference to 48 C.F.R. § 52.249-4, which requires the use of U.S.-flag air carriers for government-financed international air transportation of personnel. Consequently, in the specific circumstances of this case, we agree with O�Melveny that the incorporated references to various FAR pertaining to the EO Laws are applicable to O�Melveny only if its contract with DOE constitutes a "Government contract" within the meaning of those laws and their implementing regulations.

USDOL/OALJ Reporter at 7 (footnote omitted).

Approval of settlement agreement.

[Nuclear and Environmental Digest XIII B 8]
REFUSAL TO HIRE CASE; SUMMARY DECISION WARRANTED WHERE UNDISPUTED EVIDENCE SHOWED THAT THE COMPANY HAD DETERMINED THAT IT WOULD INTERVIEW STUDENTS WHO HAD PARTICIPATED IN A COMMUNITY COLLEGE PROGRAM BEFORE INTERVIEWING OTHER EXTERNAL CANDIDATES

In Saporito v. Exelon Generation Co., LLC , ARB No. 12-034, ALJ No. 2010-ERA-12 (ARB Aug. 22, 2013), the Complainant alleged that the Respondent's failed to hire him for a position in retaliation for past whistleblower activities in violation of the employee protection provision of the ERA. The ALJ granted summary decision in favor of the Respondent. The ARB affirmed the ALJ's summary decision. The ARB noted the elements of a "refusal to hire" case:

   In refusal to hire cases, such as this, Saporito's proof of an adverse action is based on showing that: (1) he applied and was qualified for an available job; (2) he was rejected despite his qualifications; and (3) after his rejection, the position remained open and/or the employer continued to seek applicants of similar qualifications. Saporito v. Progress Energy Serv. Co. , ARB No. 11-040, ALJ No. 2011-ERA-006, slip op. at 6-7 (ARB Nov. 17, 2011), citing Hasan v. U.S. Dep't of Labor , 298 F.2d 914, 917 n.3 (10th Cir. 2002).

USDOL/OALJ Reporter at 5. The ARB also noted that in Hasan v. U.S. Dep't of Labor , the court of appeals held that a complainant can prove this third prong by showing that the employer filled the position, or left the position open, and continued to seek applicants with complainant's qualifications. 298 F.2d at 917 n.3.

The ARB found undisputed evidence in the instant case established that the Complainant was qualified for the advertised position, and that he was rejected despite his qualifications, but that the Respondent filed the position at issue before the Complainant was rejected and there was no evidence that other applicants were solicited after the Complainant's rejection. Because the Complainant did not establish the existence of a genuine issue of material fact regarding the third element of the refusal to hire case, a grant of summary decision was warranted.

The ARB also affirmed the ALJ's finding that protected activity was not a contributing factor in the Respondent's decision not to hire the Complainant for the position at issue. The Complainant had presented a statement from an employment expert that the Complainant was the most qualified for the position and that the company's failure to hire him raises an inference that protected activity contributed to the not-to-hire decision. The undisputed facts, however, were that the company had decided before advertising the position to first interview only qualified students from an educational/career-path partnership the company had with a community college before interviewing any other external candidates.

The ARB also affirmed the ALJ's finding that there was "clear and convincing evidence that the Respondent company would have taken the same unfavorable personnel action" in the absence of the protected activity because the undisputed evidence showed that the company's hiring priority for filling the external, entry-level position was to extend that employment opportunity to a student from the community college program.

One member of the Board dissented on the ground that the inherently complex issue of causation could not be summarily resolved in this case without the context provided by direct testimony and cross-examination, citing the Board's recent decision in Franchini v. Argonne Nat�l Lab. , ARB No. 11-006, ALJ No. 2009-ERA-14 (ARB Sept. 26, 2012). The member also criticized the majority for too narrowly defining the third prong of a "refusal-to-hire" case: "If a complainant's refusal to hire claim fails because he was rejected after a position was filled, then every employer can simply escape liability for such claims by filling a job before rejecting applicants, as Saporito alleges ExGen did here. The majority seems to confuse the requirement that there be a final, adverse action (the job was either filled or a rejection occurred) with the general requirement for facts that support an inference of discrimination." USDOL/OALJ Reporter at 13.

[Nuclear & Environmental Whistleblower Digest III C 2]
TIMELINESS OF BLACKLISTING COMPLAINT; FILING OF COMPLAINT SEVEN YEARS AFTER COMPLAINANT STOPPED FILING APPLICATIONS UNTIMELY AS A MATTER OF LAW

In Hasan v. Enercon Services, Inc. , ARB No. 12-063, ALJ No. 2012-ERA-3 (ARB Aug. 20, 2013), the Complainant applied for jobs with the Respondent several times between 2002 and 2004. Three related ERA whistleblower complaints were ultimately dismissed. In 2011, the Complainant filed his fourth complaint alleging that the Respondent discriminated against him when it failed to hire him. The Complainant contended that he stopped submitting applications for employment in October 2004 because the Respondent blacklisted him and further applications would have been futile. The Respondent had informed the Complainant on several occasions that his resume would be kept on file and/or reviewed against company needs. The ALJ dismissed the complaint on the grounds that it was untimely and duplicative. On appeal, the Complainant argued that because the Respondent never informed him that it was blacklisting him, the limitations period was never triggered. The ARB rejected this argument, finding that even viewing the facts in the light most favorable to the Complainant, filing the action seven years after the Complainant stopped applying for jobs was untimely as a matter of law.

Dismissal of appeal for failure to prosecute.

Order granting Principal Deputy Administrator's withdrawal of WHD's petition for review of ALJ decision.

[Nuclear and Environmental Digest VIII B 1 b]
TIMELINESS OF REQUEST FOR ARB REVIEW; EXTRAORDINARY CIRCUMSTANCES GROUND FOR EQUITABLE TOLLING NOT MET WHERE COMPLAINANT FAILED TO PROVIDE A TIMELINE SHOWING HOW HE WAS PRECLUDED FROM TIMELY FILING THE PETITION AND FAILED TO SHOW DUE DILIGENCE ONCE HE LEARNED THAT HE HAD MISSED THE FILING DEADLINE

In Kelly v. United States Enrichment Corp. , ARB No. 13-063, ALJ No. 2012-ERA-15 (ARB Aug. 9, 2013), the Complainant sought equitable tolling of the time period for requesting ARB review of a ALJ's ERA whistleblower decision based on the circumstance that "two family members were battling a serious condition; that he had a recent health problem with minor surgery; that he had been traveling back and forth to Columbus, Ohio, a 250-mile round trip, to care for a family member; and that sometimes he stayed in Columbus." In addition, the Complainant stated that he did not receive the OSHA determination "letter" timely because he was out of town and that he submitted the petition as soon as he could within 10 days of when he received it. The ARB found that the Complainant "failed to provide a timeline of his alleged extraordinary circumstances, specifically explaining how and when they might have precluded him from timely filing the petition. Thus, although we are, of course, sympathetic to the serious health challenges his family has faced, Kelly has failed to carry his burden of establishing that he was precluded by extraordinary circumstances from filing the petition." The ARB also found that the Complainant failed to establish due diligence because he waited eight days after he became aware of the decision to submit a 4-sentence petition for review, without any explanation for why he did not act more diligently once he realized that he had missed the filing date.

ATTORNEY FEE PETITION FOR WORK BEFORE ALJ MUST BE PRESENTED TO ALJ RATHER THAN THE ARB

In Nagle v. United Turbines, Inc. , ARB No. 13-010, ALJ No. 2009-AIR-24 (ARB Aug. 8, 2013), the Complainant filed a petition for attorney's fees with the ARB. The ARB noted that the fee petition included requests for the payment of legal fees for services performed and costs incurred before the ALJ. The ARB declined "to address the payment requests for the services and costs incurred in litigation before the ALJ because the ARB does not have jurisdiction to entertain those requests." USDOL/OALJ Reporter at 3 (footnote omitted).

THE EMPLOYEE PROTECTIONS IN SECTION 1804 OF THE ENERGY POLICY ACT OF 1992 APPLY TO DECONTAMINATION AND DECOMMISSIONING WORK AT ALL DOE URANIUM ENRICHMENT FACILITIES

In Y-12 National Security Complex , ARB No. 11-083 (ARB Aug. 8, 2013), the Building and Construction Trades Department, AFL-CIO (BCTD) asked the Department of Labor to find that, pursuant to "Employee Provisions" (Section 1804) of the Energy Policy Act 1992 (EPACT 92), the Davis-Bacon Act (DBA) applied to decontamination and decommissioning (D&D) projects at the Y-12 National Security Complex (Y-12) in Oak Ridge, Tennessee. The Acting Administrator found that the DBA did not apply to wages for D&D at Y-12. On appeal, the ARB reversed, finding that �the employee protections in Section 1804 of the Energy Policy Act of 1992 apply to D&D work at all DOE uranium enrichment facilities and, therefore, the D&D work at Y-12 is covered by the DBA.� USDOL/OALJ Reporter at 13.