Int'l Bhd. of Elec. Workers v. T & H Servs.

• Decision Date: 06 August 2021
• Docket Number: No. 20-1187,20-1187
• Citation: 8 F.4th 950
• Parties: INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 113, Plaintiff - Appellant, v. T & H SERVICES, a wholly owned subsidiary of Tlingit Haida Tribal Business Corporation, Defendant - Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

8 F.4th 950

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 113, Plaintiff - Appellant,

v.T & H SERVICES, a wholly owned subsidiary of Tlingit Haida Tribal Business Corporation, Defendant - Appellee.

No. 20-1187

United States Court of Appeals, Tenth Circuit.

FILED August 6, 2021

Terrence A. Johnson, Snyder, Colorado, for Appellant.

Todd A. Fredrickson (Micah D. Dawson with him on the brief), Fisher and Phillips, LLP, Denver, Colorado, for Appellee.

Before TYMKOVICH, Chief Judge, HARTZ, and PHILLIPS, Circuit Judges.

HARTZ, Circuit Judge.

T & H Services performed operation and maintenance services at Fort Carson Army base in Colorado Springs, Colorado, under a contract with the United States Army (the Army Contract) that was governed by several federal labor-standards statutes, including the Service Contract Act, 41 U.S.C. §§ 6701 – 07, and the Davis-Bacon Act, 40 U.S.C. §§ 3141 – 44, 3146 – 47. The International Brotherhood of Electrical Workers, Local 113 (the Union) represented some T&H employees under a collective-bargaining agreement (the CBA) that included a provision for binding arbitration of disputes "limited to matters of interpretation or application of express provisions of [the CBA]." Aplt. App. at 29.

Several Union members who repaired weather-damaged roofs at Fort Carson in the summer of 2018 were paid the hourly rate for general maintenance workers under Schedule A of the CBA. The Union, believing that the workers should have been classified as roofers under the Davis-Bacon Act and paid the corresponding hourly rate under the schedule, filed a grievance and sought arbitration of the dispute. When T&H refused, claiming that the dispute was not arbitrable under the CBA, the Union filed suit in the United States District Court for the District of Colorado to compel arbitration under § 4 of the Federal Arbitration Act (FAA), which allows a "party aggrieved by the ... refusal of another to arbitrate under a written agreement for arbitration [to] petition [a] court ... for an order directing that such arbitration proceed in the manner provided for in such agreement."¹ 9 U.S.C. § 4. The district court agreed with T&H that the dispute was not arbitrable and granted summary judgment to the company. The Union appeals. Exercising jurisdiction under 9 U.S.C. § 16 and 28 U.S.C. § 1291, we affirm.

The essence of the dispute is whether the workers who repaired the roof should have been classified as general maintenance workers or roofers for that labor; the hourly rate owed to workers under either classification is not in question. As we explain in greater depth below, when the CBA is read in the context of the Davis-Bacon Act, it is clear that the CBA does not govern the classification of workers under the Act. The United States Department of Labor (DOL) has a robust system authorized by the Davis-Bacon Act and DOL regulations promulgated thereunder for determining job classifications for Davis-Bacon work and resolving disputes over classifications. See 29 C.F.R. Parts 1, 5–7; Universities Rsch. Ass'n v. Coutu , 450 U.S. 754, 759–61, 101 S.Ct. 1451, 67 L.Ed.2d 662 (1981). The CBA recognizes this system, and the natural reading of that agreement is that Davis-Bacon job classifications are to be decided by the government, not by the parties to the CBA through negotiation, grievance proceedings, or otherwise. This reading of the CBA should not be surprising; what would be surprising is a CBA that provided for grieving and arbitrating Davis-Bacon job-classification disputes. Long-recognized policy reasons support not leaving Davis-Bacon job classifications to arbitration; and these policy reasons would likely dissuade those who negotiate collective-bargaining agreements from providing for arbitration of disputes over Davis-Bacon job classifications (and might well make such an arbitration agreement unenforceable).

I. BACKGROUND

Although most of the work under the Army Contract was apparently governed by the Service Contract Act, the Union contends that the roofing work in dispute was governed by the Davis-Bacon Act. The two acts are quite similar in operation, setting minimum wages for those who work on federal contracts. See 40 U.S.C. § 3142 ; 41 U.S.C. § 6703 ; Carpet, Linoleum & Resilient Tile Layers, Loc. Union No. 419, Brotherhood of Painters & Allied Trades, AFL-CIO v. Brown , 656 F.2d 564, 565 n.1 (10th Cir. 1981) ("The Davis-Bacon Act and the Service Contract Act ... direct the Secretary of Labor to ... write [a] wage standard as a minimum into the specifications of federal contracts."). But we will focus on the Davis-Bacon Act.

The Davis-Bacon Act governs federally funded contracts for construction. See 40 U.S.C. § 3142(a) ; Universities Rsch. Ass'n , 450 U.S. at 756, 101 S.Ct. 1451 (Davis-Bacon Act applies to "certain federal construction contracts"). The Act requires the contractor to pay each worker on the contract at least the prevailing wage in the locality for the type of work performed by the worker. See 40 U.S.C. § 3142 ; Universities Rsch. Ass'n , 450 U.S. at 756–57, 101 S.Ct. 1451. The DOL periodically determines the prevailing wage for each type of work in each locality.² Then the federal contracting officer for the contract determines the category for each of the types of work to be performed under the contract.³ This establishes the minimum wage, see 40 U.S.C. § 3142(a) – (b) ; 29 C.F.R. § 5.5(a), although the contractor may decide to pay higher wages.⁴

The category determinations and corresponding wage-rate calculations are made before the contract is awarded. See Universities Rsch. Ass'n , 450 U.S. at 760–61, 101 S.Ct. 1451 ; 29 C.F.R. § 1.6. Any potential contractor, worker, or union for the project can then challenge a determination by requesting reconsideration or ultimately appealing to the DOL's Administrative Review Board (ARB), formerly the Wage Appeals Board (WAB).^{5 ,6} Typically, challenges to wage determinations "must be made prior to contract award or prior to the start of construction if there is no award." ICA Const. Corp. v. Reich , 60 F.3d 1495, 1498–99 (11th Cir. 1995) (referring to long-standing rule of WAB). The WAB stated that this rule is "to ensure that contractors competing for federally-assisted construction contracts know their required labor costs in advance of bidding. Manifest injustice to bidders would result if the successful bidder on a project could challenge (the) contract's wage determination after all other competitors were excluded from participation." Modernization of the John F. Kennedy Fed. Bldg. , WAB Case No. 94-09, 1994 WL 574115, at *7 (Aug. 19, 1994) (internal quotation marks omitted); see Universities Rsch. Ass'n , 450 U.S. at 782, 101 S.Ct. 1451 (Congress provided for determination of wages before the letting of contracts so that the contractor may "know definitely in advance of submitting his bid what his approximate labor costs will be" (internal quotation marks omitted)).

There are exceptions to this rule for certain circumstances, however, such as when a contractor requests a "conformance" to add a new wage classification to a contract after the contract has been let, 29 C.F.R. § 5.5(a)(1)(ii) ; see Swanson's Glass , WAB Case No. 89-20, 1991 WL 494715, at *3 (Apr. 29, 1991) ("Once the contract is awarded," "the conformance procedure" allows "for establishing an additional classification and wage rate"),⁷ or when the DOL exercises its strictly limited authority under 29 C.F.R. § 1.6(f) to incorporate a new wage determination "retroactive to the beginning of construction."⁸ When the DOL incorporates a new wage rate into a contract, the contractor typically will be "compensated for any increases in wages resulting from such change." 29 C.F.R. § 1.6(f).⁹

Violations of the Davis-Bacon Act can result in withheld payments, contract termination, and debarment. See 40 U.S.C. §§ 3142 – 44 ; 29 C.F.R. §§ 5.9, 5.12 ; 48 C.F.R. §§ 22.406–9, 22.406–11. If withheld sums are insufficient to adequately compensate employees who have been underpaid, the Act also creates a limited right of action for employees to sue on the "payment bond" that government contractors must post for "the protection" of workers. Universities Rsch. Ass'n , 450 U.S. at 758, 101 S.Ct. 1451 ; see 40 U.S.C. § 3144(a)(2).

Enforcement of the Davis-Bacon Act is the responsibility of both the contracting agency and the DOL.¹⁰ Employees can submit complaints regarding alleged violations of the Davis-Bacon Act to the contracting officer,¹¹ who can investigate and take action against an offending contractor, and refer disputes to the DOL.¹² Complaints specifically regarding classification must be submitted to the DOL for resolution.¹³ The procedures by which the DOL resolves such disputes, which are set forth in 29 C.F.R. § 5.11, include notification of the affected parties by the Administrator of the DOL Wage and Hour Division, potential referral to an administrative law judge for factfinding, and eventual appeal of Administrator decisions to the ARB.¹⁴ See 29 C.F.R. § 7.9(a) ("Any party or aggrieved person" may seek review with the ARB "from any final decision in any agency action under" Part 5 of the DOL regulations); id. § 7.1(b) (ARB jurisdiction includes review of final decisions regarding debarment and the payment of prevailing wage rates or proper classifications).

Overall, this "elaborate administrative scheme" is meant to provide "consistency" and "uniformity" in "the administration and enforcement of the [Davis-Bacon] Act," and "balances the interests of contractors and their employees." Universities Rsch. Ass'n , 450 U.S. at 782–83, 101 S.Ct. 1451 ; see 5 U.S.C. App. 1 Reorg. Plan 14 (1950) (to "assure coordination of administration and consistency of enforcement," the "Secretary of Labor shall prescribe appropriate standards, regulations, and procedures" for the Davis-Bacon Act). Contractors know in advance of their bids what their approximate labor costs will be, and...