Federal Food Service, Inc. v. Donovan, No. 80-1019

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtBefore TAMM and MIKVA; NICHOLS
Citation658 F.2d 830
Parties24 Wage & Hour Cas. (BN 1255, 212 U.S.App.D.C. 82, 91 Lab.Cas. P 33,999, 28 Cont.Cas.Fed. (CCH) 81,232 FEDERAL FOOD SERVICE, INC., Harold E. Gelber, Appellants, v. The Honorable Raymond J. DONOVAN, Secretary of Labor, et al.
Decision Date20 March 1981
Docket NumberNo. 80-1019

Page 830

658 F.2d 830
24 Wage & Hour Cas. (BN 1255, 212 U.S.App.D.C. 82,
91 Lab.Cas. P 33,999,
28 Cont.Cas.Fed. (CCH) 81,232
FEDERAL FOOD SERVICE, INC., Harold E. Gelber, Appellants,
v.
The Honorable Raymond J. DONOVAN, Secretary of Labor, et al.
No. 80-1019.
United States Court of Appeals,
District of Columbia Circuit.
Argued Dec. 15, 1980.
Decided March 20, 1981.

John S. Pachter, Washington, D. C., for appellants.

Thomas C. Hill, Asst. U. S. Atty., Washington, D. C., with whom Charles F. C. Ruff, U. S. Atty., John A. Terry, Michael W. Farrell and Kenneth M. Raisler, Asst. U. S. Attys., Washington, D. C., were on the brief, for appellees.

Before TAMM and MIKVA, Circuit Judges, and PHILIP NICHOLS, Jr., * Judge, United States Court of Claims.

Opinion for the court filed by Judge NICHOLS.

NICHOLS, Judge.

The issue presented in this appeal is whether the district court erred in upholding the Secretary of Labor's decision that appellants were in violation of federal law by underpaying certain employees and that there were no "unusual circumstances" present that justified removal of appellants' names from the list of those ineligible to bid on government contracts. Although we agree that the Secretary's finding of the existence of violations is supported by a preponderance of the evidence, we disagree on his application of the "unusual circumstances" standard and therefore reverse.

This is an appeal from two orders of Judge Penn. On August 1, 1979, Federal Food Service and its president, Harold E. Gelber (appellants) brought this action for preliminary injunction and declaratory judgment against the Secretary of Labor and the Comptroller General (appellees). On December 11, 1979, Judge Penn denied appellants' Motion for Preliminary Injunction. On December 18, 1979, he sua sponte granted summary judgment for appellees. Appellants seek review of these two decisions.

Appellants are in the business of furnishing mess attendant services and this case involves contracts awarded to appellants to provide such services at various and widely scattered military installations from July 1, 1973, through June 30, 1975. These contracts were subject to the Service Contract Act of 1965 (Act), as amended, 41 U.S.C. §§ 351 et seq. Early in 1974, appellee conducted an investigation into the performance of appellants' contract at a facility in Charleston, South Carolina. As a result, appellants paid back wages of $418 to seven employees for hours worked but not recompensed. Additional investigations thereupon

Page 832

were launched into other contracts of appellants and additional violations of the Act were discovered. An administrative complaint was filed in November 1976 charging appellants with violations of the minimum wage and fringe benefit requirements of the Act. Appellants denied the charges and also asserted the presence of "unusual circumstances" if violations were found.

After formal hearings, the Administrative Law Judge (ALJ) filed his decision on November 22, 1977, and found that appellants had failed to pay proper amounts of holiday pay at five locations, had failed to pay vacation pay at three locations, and owed back pay at one location. Out of a total alleged deficiency of $8,095.10, the ALJ found appellants responsible for $3,128.33. These underpayments of employes violated the Act, and under § 354 violators are ineligible for award of government contracts for a 3-year period unless the Secretary of Labor recommends otherwise because of the presence of unusual circumstances. There is no provision for any milder sanction. It is the executioner's ax or nothing. The ALJ recommended against unusual circumstances because he found that appellants' past history reflected violations of the Act during several years, and that there were culpable violations which proper management would have precluded.

Appellants appealed to the Administrator of the Wage and Hour Division who affirmed the ALJ and who recommended to the Secretary that appellants be debarred from receiving government contracts under § 354. Appellants filed an application for relief from debarment pursuant to 29 C.F.R. § 612, but the Secretary concurred with the ALJ's decision, and appellants were debarred. The debarment is now in effect and in view of the nature of appellants' business, must have a catastrophic impact upon it.

Appellants thereupon filed their suit for a preliminary injunction and declaratory judgment. After determining that the Secretary's decision was not precluded from judicial review, the district court denied appellants' motions, holding that the Secretary's determination that appellants' names should not be removed from the list of ineligible bidders was not arbitrary nor an abuse of discretion. Appellants bring this appeal requesting a reversal of the district court. The appellees argue that a debarment determination by the Secretary is precluded from judicial review, but if the decision is reviewable, then it was not arbitrary or capricious and was otherwise in accordance with law.

The two issues before this court are whether judicial review is foreclosed, and if there...

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10 practice notes
  • Dantran, Inc. v. U.S. Dept. of Labor, No. 98-1830
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • January 7, 1999
    ...is such a case--after all, debarment proceedings under the Act are all-or-nothing propositions, see Federal Food Serv., Inc. v. Donovan, 658 F.2d 830, 834 (D.C.Cir.1981); no intermediate penalties are available, so if debarment is not in order, no practical necessity exists for resurrecting......
  • Tri-County Contractors, Inc. v. Perez, Civil Action No. 13-1406 (RDM)
    • United States
    • U.S. District Court — District of Columbia
    • February 23, 2016
    ...not resolved the standard of review that applies to findings of fact made pursuant to Title 41. See Federal Food Serv., Inc. v. Donovan , 658 F.2d 830, 833 (D.C.Cir.1981) (simply noting that “the Secretary's findings of fact must be supported by a preponderance of the evidence.”).Although t......
  • Summitt Investigative Service, Inc. v. Herman, No. Civ.A. 97-01008 (CKK).
    • United States
    • United States District Courts. United States District Court (Columbia)
    • September 30, 1998
    ...insignificant or minor because "debarment against innocent and petty violations was not intended." Federal Food Serv., Inc. v. Donovan, 658 F.2d 830, 834 (D.C.Cir.1981). Stated more bluntly, a court from this jurisdiction has observed that the unusual circumstances exception is "not intende......
  • Vigilantes, Inc. v. ADMINISTRATOR, WAGE & HOUR DIV., Civ. No. 88-1821 (JAF).
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • July 16, 1991
    ...shall be conclusive in any court of the United States." 41 U.S.C. § 39; see 769 F. Supp. 61 Federal Food Service Inc. v. Donovan, 658 F.2d 830, 833 (D.C.Cir.1981); Midwest Maintenance & Constr. Co. v. Vela, 621 F.2d 1046, 1048 (10th Cir.1980). As one court has stated, "the district court's ......
  • Request a trial to view additional results
10 cases
  • Dantran, Inc. v. U.S. Dept. of Labor, No. 98-1830
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • January 7, 1999
    ...is such a case--after all, debarment proceedings under the Act are all-or-nothing propositions, see Federal Food Serv., Inc. v. Donovan, 658 F.2d 830, 834 (D.C.Cir.1981); no intermediate penalties are available, so if debarment is not in order, no practical necessity exists for resurrecting......
  • Tri-County Contractors, Inc. v. Perez, Civil Action No. 13-1406 (RDM)
    • United States
    • U.S. District Court — District of Columbia
    • February 23, 2016
    ...not resolved the standard of review that applies to findings of fact made pursuant to Title 41. See Federal Food Serv., Inc. v. Donovan , 658 F.2d 830, 833 (D.C.Cir.1981) (simply noting that “the Secretary's findings of fact must be supported by a preponderance of the evidence.”).Although t......
  • Summitt Investigative Service, Inc. v. Herman, No. Civ.A. 97-01008 (CKK).
    • United States
    • United States District Courts. United States District Court (Columbia)
    • September 30, 1998
    ...insignificant or minor because "debarment against innocent and petty violations was not intended." Federal Food Serv., Inc. v. Donovan, 658 F.2d 830, 834 (D.C.Cir.1981). Stated more bluntly, a court from this jurisdiction has observed that the unusual circumstances exception is "not intende......
  • Vigilantes, Inc. v. ADMINISTRATOR, WAGE & HOUR DIV., Civ. No. 88-1821 (JAF).
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • July 16, 1991
    ...shall be conclusive in any court of the United States." 41 U.S.C. § 39; see 769 F. Supp. 61 Federal Food Service Inc. v. Donovan, 658 F.2d 830, 833 (D.C.Cir.1981); Midwest Maintenance & Constr. Co. v. Vela, 621 F.2d 1046, 1048 (10th Cir.1980). As one court has stated, "the district court's ......
  • Request a trial to view additional results

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