Amaya v. Power Design, Inc.

• Decision Date: 15 August 2016
• Docket Number: No. 15–1691,15–1691
• Parties: Jorge Amaya; Miguel Martinez; Carlos A. Real; Jaime Zubieta; Jose Sanabria; Donaciano Cruz; Carlos Jose Munoz Barillas; Amada M. Clemente; Dagoberto Trejo Guzman; Moises W. Portilla Huaman; Mario Antonio Siguenza Diaz; Roberto Carlos Bonilla Reyes; Joel Christian Guevara; Francisco Caballero; Raul D. Ampudia; Carlos Samuel Sanabria; Jose Manuel Cartagena; Mardin J. Moz Giron; Jacobo Medina Zelaya; Jeffrey O. Corea Montalvan; Juan Campos–Perez; Juan Pablo De Paz; Marcos Antonio Flores, Plaintiffs–Appellants, v. Power Design, Inc., Defendant–Appellee. Secretary of Labor, Amicus Supporting Appellant. Associated Builders and Contractors, Inc., Amicus Supporting Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

833 F.3d 440

Jorge Amaya; Miguel Martinez; Carlos A. Real; Jaime Zubieta; Jose Sanabria; Donaciano Cruz; Carlos Jose Munoz Barillas; Amada M. Clemente; Dagoberto Trejo Guzman; Moises W. Portilla Huaman; Mario Antonio Siguenza Diaz; Roberto Carlos Bonilla Reyes; Joel Christian Guevara; Francisco Caballero; Raul D. Ampudia; Carlos Samuel Sanabria; Jose Manuel Cartagena; Mardin J. Moz Giron; Jacobo Medina Zelaya; Jeffrey O. Corea Montalvan; Juan Campos–Perez; Juan Pablo De Paz; Marcos Antonio Flores, Plaintiffs–Appellants,

v. Power Design, Inc., Defendant–Appellee.Secretary of Labor, Amicus Supporting Appellant.Associated Builders and Contractors, Inc., Amicus Supporting Appellee.

No. 15–1691

United States Court of Appeals, Fourth Circuit.

Argued: May 10, 2016

Decided: August 15, 2016

ARGUED: Daniel Adlai Katz, The Law Offices of Gary M. Gilbert & Associates, P.C., Silver Spring, Maryland, for Appellants. Leslie A. Stout-Tabackman, Jackson Lewis P.C., Reston, Virginia, for Appellee. Erin Michelle Mohan, United States Department of Labor, Washington, D.C., for Amicus Secretary of Labor. ON BRIEF: Lucy Brierly Bansal, The Law Offices of Gary M. Gilbert & Associates, P.C., Silver Spring, Maryland; Virginia Rae Diamond, Ashcraft & Gerel, LLP, Alexandria, Virginia, for Appellants. Paul DeCamp, Jeremy S. Schneider, Jackson Lewis P.C., Reston, Virginia, for Appellee. M. Patricia Smith, Solicitor of Labor, Jennifer S. Brand, Associate Solicitor, William C. Lesser, Deputy Associate Solicitor, Paul L. Frieden, Counsel for Appellate Litigation, United States Department of Labor, Washington, D.C., for Amicus Secretary of Labor. Maurice Baskin, Littler Mendelson, P.C., Washington, D.C., for Amicus Associated Builders and Contractors, Inc.

Before DIAZ, FLOYD, and THACKER, Circuit Judges.

Vacated and remanded by published opinion. Judge Diaz wrote the opinion, in which Judge Floyd and Judge Thacker joined.

DIAZ, Circuit Judge:

Appellants, over twenty electrical construction workers, (the “Electrical Workers” or “Workers”) sought unpaid hourly and overtime wages from Appellee Power Design, Inc. for work completed under a federally funded subcontract between Walbridge/Brasfield Gorrie Joint Venture and Power Design.

As relevant to this appeal, the Electrical Workers brought suit under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., seeking unpaid minimum and overtime wages and liquidated damages. The district court granted summary judgment in favor of Power Design. For the reasons that follow, we vacate the court's judgment and remand for further proceedings.

I.

A.

In 2010, the U.S. Department of the Navy awarded Walbridge a federally funded prime contract to design and construct a facility at the National Naval Medical Center in Bethesda, Maryland. Walbridge entered into a subcontract with Power Design (the “NEX Contract”) for electrical work at the new naval facility. The subcontract expressly incorporated the Davis–Bacon Act (DBA), 40 U.S.C. § 3141 et seq., and the Contract Work Hours and Safety Standards Act (CWHSSA), 40 U.S.C. § 3701 et seq., but not the FLSA.

Power Design, in turn, hired RDZ Electric to complete electrical installation work at the new naval facility, and they agreed to be bound by the NEX Contract terms. Power Design later entered into an equivalent subcontract for electrical installation work with ES & R Construction.¹ The Electrical Workers worked for RDZ or ES & R, and their employment was governed by the relevant subcontract (and therefore also the NEX Contract).

B.

The Electrical Workers sued Power Design for violating the FLSA, but they did not bring claims under the DBA or the CWHSSA.² The Workers alleged that the subcontractor “routinely required” them both to work over forty hours each week and to arrive at the jobsite fifteen minutes early each day to prepare the site, but “did not permit [them] to sign-in on the sign-in sheet until” the work shift's “official” start time. J.A. A27. The Workers also alleged that although Power Design paid them (and provided some funds to cover the overtime hours), it did not compensate the Workers “all wages owed for each hour worked” and failed to pay them overtime at time-and-a-half their hourly rate, as required under the FLSA. J.A. A27–28.

Power Design moved for summary judgment, arguing that “no reasonable jury could possibly find that [it] violated the [FLSA]” because “there is no applicable independent cause of action for [the Workers'] overtime claims under the [DBA] ... and the [CWHSSA],” which governed the subcontract under which the Workers performed. J.A. A173, A181–85.

The district court granted the motion, finding that “the contract between [the Electrical Workers] and [Power Design] was a federal one to which the [DBA] and the [CWHSSA] appl[ied],” and that neither act “provide[d] a private right of action but [provided] only for enforcement of the standards they impose by the Department of Labor.” Amaya v. Power Design, Inc., No. JFM–14–446, 2015 U.S. Dist. LEXIS 69165, at *2 (D. Md. May 28, 2015). Accordingly, the Electrical Workers “c[ould ]not circumvent those statutes by bringing claims under the [FLSA].” Id.

This appeal followed.

II.

Because the district court dismissed the Electrical Workers' claim at summary judgment, we review that decision de novo to determine whether there is no genuine dispute of material fact and that Power Design is entitled to judgment as a matter of law. U.S. Dep't of Labor v. N.C. Growers Ass'n, 377 F.3d 345, 350 (4th Cir. 2004).

As we explain, we find nothing in the relevant statutes barring the Electrical Workers from pursuing an FLSA claim. We begin our analysis with a review of the relevant statutes and cases. Then we turn to the merits.

A.

1.

The DBA and CWHSSA apply to federal (or federally funded or assisted) construction contracts and subcontracts, though they regulate different aspects of the employment relationship. The DBA applies to federal construction contracts valued over $2,000, and it requires contractors and subcontractors to pay their employees a “prevailing” wage set by the Secretary of Labor that consists of a “basic hourly rate of pay” and fringe benefits.³ 40 U.S.C. §§ 3142(a) –(b), 3141(2). Although the DBA does not require overtime compensation, it specifies the calculation of overtime wages under “any federal law” to be based on the “regular or basic hourly rate” determined by the Secretary. § 3142(e) (citing § 3142(2)(A) ). The CWHSSA applies to “any” federally funded or assisted construction contracts and subcontracts for public works that are valued over $100,000, and requires contractors and subcontractors to pay their employees time and one-half their “basic rate of pay” for all hours worked over forty each week. §§ 3701, 3702(a).

Congress passed the DBA in 1931 to set an earnings floor for federal contract employees, to protect against substandard wages, and to promote the hiring of local labor. See Univs. Research Ass'n, Inc. v. Coutu, 450 U.S. 754, 771, 773–74, 101 S.Ct. 1451, 67 L.Ed.2d 662 (1981) ; S. Rep. No. 88–963, at 2 (1964), as reprinted in 1964 U.S.C.C.A.N. 2339, 2339–40. The CWHSSA has a complementary objective: to “bring order to the confusion which ... marks the application and enforcement of work standards legislation in employment that results from Federal Government contracts or employment.” S. Rep. No. 87–1722, at 1 (1962), as reprinted in 1962 U.S.C.C.A.N. 2121, 2121; see also Janik Paving & Constr., Inc. v. Brock, 828 F.2d 84, 89 (2d Cir. 1987) (discussing the act's purpose). Specifically, the CWHSSA seeks to make the eight-hour day, the forty-hour workweek, and corresponding overtime pay applicable uniformly to federal contract and subcontract work. S. Rep. No. 1722, at 2.

While the DBA and CWHSSA regulate different aspects of federal construction contracts, they have similar enforcement mechanisms, which are internal to the Department of Labor but reviewable under the Administrative Procedure Act, 5 U.S.C. § 702. See 40 U.S.C. §§ 3143 –44, 3703. In the case of a violation, both statutes provide for the withholding of contract funds by the Department of Labor (to pay under- or unpaid employees at the prevailing rate) and the possibility of an up to three-year ban on the award of federal contracts to the breaching contractor or subcontractor. §§ 3142(c)(3), 3144, 3703(b) ; see also 29 C.F.R. § 5.12. The CWHSSA also provides for daily assessed liquidated damages and, in some cases, criminal liability. 40 U.S.C. §§ 3703(b), 3708 ; 29 C.F.R. § 5.8.

Caselaw suggests that neither statute provides a private right of action. SeeCoutu, 450 U.S. at 768–69, 771–84, 101 S.Ct. 1451 (holding that the DBA “does not confer a private right of action for back wages under a contract that administratively has been determined not to call for Davis–Bacon work,” but declining to decide “whether the Act creates an implied private right of action to enforce a contract that contains specific [DBA] stipulations”); see also, e.g., Bane v. Radio Corp. of Am., 811 F.2d 1504, 1987 WL 35851, at *1 (4th Cir. 1987) (unpublished table decision) (“[T]here is no implied right of private action under the [DBA].”); United States ex rel. Glynn v. Capeletti Bros., Inc., 621 F.2d 1309, 1316–17 (5th Cir. 1980) (concluding the same); Koren v. Martin Marietta Servs., Inc., 997 F.Supp. 196, 217 & n.28 (D.P.R. 1998) (noting the lack of case law discussing a private right of action under the CWHSSA but concluding that, based on Supreme Court precedent and the act's regulatory scheme, an implied right of action likely does not exist).

2.

The FLSA, on the other hand, has both a broader purpose and a different means of enforcement. It was passed “to eliminate, as rapidly as practicable, substandard labor conditions throughout the nation” and “to raise living standards without substantially curtailing employment or earning power.” Powell v. U.S. Cartridge co., 339 U.S. 497, 509–10 & nn.11–12, 70 S.Ct. 755, 94...