Applicability of the Service Contract Act to Volunteer Workers at the National Oceanic and Atmospheric Administration
| Decision Date | 31 July 1989 |
| Docket Number | 89-31 |
| Citation | 13 Op. O.L.C. 264 |
| Court | Opinions of the Office of Legal Counsel of the Department of Justice |
| Parties | Applicability of the Service Contract Act to Volunteer Workers at the National Oceanic and Atmospheric Administration |
Pursuant to 28 U.S.C. § 512, the Office of Legal Counsel has jurisdiction to resolve a legal dispute between the Departments of Commerce and Labor where the request for the opinion was made by the General Counsel of Commerce under authority delegated from the Secretary of Commerce.
The Service Contract Act prohibits contractors operating the National Oceanic and Atmospheric Administration library from using voluntary, uncompensated employees. Commerce may petition the Secretary of Labor for an exemption to permit the use of volunteer employees under the NOAA contract
MEMORANDUM OPINION FOR THE GENERAL COUNSEL DEPARTMENT OF COMMERCEThis letter responds to Robert H. Brumley's request of June 10, 1988 for the opinion of this Office as to the applicability of the Service Contract Act ("SCA" or "Act") to a contract to operate the National Oceanic and Atmospheric Administration ("NOAA") library in part by using voluntary, uncompensated help to perform tasks that fall within the type of services otherwise covered by the Act. For the reasons set forth below, we conclude that the Act applies to such contracts and that the contractor or subcontractor may not use volunteer employees to perform tasks associated with operating the library.
Congress enacted the Service Contract Act in 1965 "to provide labor standards for the protection of employees of contractors and subconr-tactors [sic] furnishing services to or performing maintenance service for Federal agencies." S. Rep. No. 798, 89th Cong., 1st Sess. 1 (1965). The Act, as codified at 41 U.S.C. §§ 351-358, implements this goal by requiring contractors and subcontractors on contracts greater than $2, 500 to pay workers at least the minimum wage. Section 351(a)(1) provides:
Section 351(b) mandates that in no circumstances shall wage levels fall below the national statutory minimum wage:
No contractor who enters into any contract with the Federal Government the principal purpose of which is to furnish services through the use of service employees and no subcontractor thereunder shall pay any of his employees engaged in performing work on such contracts less than the minimum wage specified under section 206(a)(1) of title 29.
Id. § 351(b)(1) (emphasis added). "Service employee" is defined in the Act as "any person engaged in the performance of a contract entered into by the United States and not exempted under section 356 of this title, whether negotiated or advertised, the principal purpose of which is to furnish services in the United States ... and ... include[s] all such persons regardless of any contractual relationship that may be alleged to exist between a contractor or subcontractor and such persons." Id. § 357(b) (emphasis added).[1] The Act prescribes penalties for noncompliance ranging from payment of compensation due underpaid employees to cancellation of the contract. 41 U.S.C. § 352(a).
The rationale for this unqualified approach to fair labor standards under the SCA was that service contracts represented "the only remaining category of Federal contracts to which no labor standards protections [ 266] appl[ied]." H.R. Rep. No. 948, 89th Cong., 1st Sess. 1 (1965). Congress was concerned with preventing contractors from undercutting their competitors for government service contracts by reducing labor costs. As the House Report explained:
The Federal Government has added responsibility in this area because of the legal requirement that contracts be awarded to the lowest responsible bidder. Since labor costs are the predominant factor in most service contracts, the odds on making a successful low bid for a contract are heavily stacked in favor of the contractor paying the lowest wage. Contractors who wish to maintain an enlightened wage policy may find it almost impossible to compete for Government service contracts with those who pay wages to their employees at or below the subsistence level. When a Government contract is awarded to a service contractor with low wage standards the Government is in effect subsidizing subminimum wages.
The current disagreement between the Department of Commerce ("Commerce") and the Department of Labor ("Labor") arose when Commerce received a contractor's proposal to use voluntary, uncompensated employees to perform tasks covered by the Service Contract Act in operating the NOAA library. Commerce initially determined that the Act did not apply to such a contract.[2] Labor then advised Commerce by letter that the Act covered such contracts.[3] In reply, Commerce advised Labor that it had complied with Labor's interpretation of the SCA in awarding the NOAA contract. Commerce added, however that its compliance required it to pay an additional $140, 164 in the contract price, and that it intended to raise the issue with the Department of Justice.[4] On June 10, 1988, Commerce requested an opinion from this Office, stating that it believes Labor's position on this issue to be in error and that "it is likely that this question will arise on other procurements or in the course of recompetition of [the NOAA library contract]."[5] [ 267]
The authority of the Attorney General to resolve this dispute between the Departments of Commerce and Labor is well-established. By law, "[t]he head of an executive department may require the opinion of the Attorney General on questions of law arising in the administration of his department." 28 U.S.C. § 512.[6] Here, there is no doubt that the question presented — whether Commerce, consistent with the SCA, can enter into a contract for the operation of the NOAA library that provides for the use of voluntary services — "aris[es] in the administration of [the Commerce] department." See, e.g., Applicability of the Davis-Bacon Act to the Veterans Administration's Lease of Medical Facilities, 12 Op. O.L.C. 89, 91 n.4 (1988) ("[Interpretation of statute that will affect contracts entered into by department is a legal question 'arising in the administration of the department' within meaning of ... 28 U.S.C. 512.").[7]
The Solicitor of Labor challenges our jurisdiction to entertain Commerce's request for an opinion under 28 U.S.C. § 512 on the grounds that, inter alia, Commerce's request was not made by the Secretary of Commerce and addressed to the Attorney General. Letter for John O. McGinnis, Deputy Assistant Attorney General, Office of Legal Counsel, from Monica Gallagher, Associate Solicitor, Fair Labor Standards Division, Department of Labor at 2-4 (July 14, 1989).[8] This argument, however, completely ignores the fact that agency heads execute many of their important functions through delegation. A written request addressed from the General Counsel of Commerce to the Assistant [ 268] Attorney General for the Office of Legal Counsel may be entertained under section 512.[9]
We believe that the SCA applies to the contract at issue here because, although the Act does not expressly advert to volunteer workers, the plain meaning of the Act's unqualified proscription of subminimum wages does not admit of any such exception.
The statutory command in the SCA is simple and direct: "No contractor ... shall pay any of his employees ... less than the minimum wage." 41 U.S.C. § 351(b)(1). The Senate Report accompanying the bill put the matter just as starkly: S. Rep. No. 798 at 2.[10]
Commerce contends that "the Act is not intended to apply to prohibit volunteer services" apparently because the Act is silent with respect to volunteer workers, and both the Act and its implementing regulations implicitly refer to the payment of classes of "wage earning employees." Letter for Charles J. Cooper, Assistant Attorney General, Office of Legal Counsel, from Robert H. Brumley, General Counsel, Department of Commerce at 1 (June 10, 1988). In our view, although the Act does not mention volunteer workers per se, the plain meaning of the statutory scheme that Congress has adopted does not permit such an exception.
The SCA clearly directs that, with respect to "any contract with the Federal Government the principal purpose of which is to furnish services through the use of service employees, " no contractor "shall pay any of his employees engaged in...
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