North Georgia Bldg. and Const. Trades Council v. Goldschmidt
| Decision Date | 15 July 1980 |
| Docket Number | No. 77-1581,77-1581 |
| Citation | 53 A.L.R. Fed. 248,621 F.2d 697 |
| Parties | 24 Wage & Hour Cas. (BN 911, 53 A.L.R.Fed. 248, 89 Lab.Cas. P 33,932, 27 Cont.Cas.Fed. (CCH) 80,567 NORTH GEORGIA BUILDING AND CONSTRUCTION TRADES COUNCIL, Plaintiff-Appellant, v. Neil Edward GOLDSCHMIDT et al., Defendants, Maynard Jackson, etc., et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Joseph Jacobs, James T. Langford, Harris Jacobs, Atlanta, Ga., Terry R. Yellig, Washington, D. C., for plaintiff-appellant.
Ferrin Y. Mathews, Atlanta, Ga., Murray F. Bahm, Bernard R. Thomas, Atlanta, Ga., for City of Atlanta defendants.
John D. Sours, Robt. O. Fleming, Jr., Atlanta, Ga., for Associate General Contractors of America, etc. & Georgia Highway Contractors Association.
Carin A. Clauss, Sol. of Labor, Alvin Bramow, Act. Associate Sol., Bobbye D. Spears, Regional Sol., Gail V. Coleman, Atty., Dept. of Labor, Washington, D. C., William L. Harper, U. S. Atty., Atlanta, Ga., Barbara A. Harris, Asst. U. S. Atty., Atlanta, Ga., for United States.
Thomas X. Dunn, Terry R. Yellig, Washington, D. C., for Building and Construction Trades Dept., AFL-CIO.
Appeal from the United States District Court for the Northern District of Georgia.
Before COLEMAN, Chief Judge, and RONEY and FAY, Circuit Judges.
In this case involving procedures for the determination of prevailing local wage rates under the Davis-Bacon Act, 40 U.S.C.A. §§ 276a 276a-5 for federally funded projects, we make three significant decisions. First, the Davis-Bacon Act and its regulations apply to a project which federal agencies and the builder anticipate will receive federal funding, even though federal funds have been neither formally applied for nor authorized at the time of bid opening. Second, under Davis-Bacon Act regulation 29 C.F.R. § 1.7(b)(1) (1979), which governs the procedure for modification of project wage determinations, telephone notice by a Department of Labor official of a decision to modify a determination is insufficient to constitute receipt of the modification. Third, once an objection has been raised to a federal contracting agency's decision to apply a particular general wage determination category to a project covered by the Davis-Bacon Act, the regulations, 29 C.F.R. § 5.12 (1979), require that the controversy be submitted to the Secretary of Labor.
The Davis-Bacon Act requires that laborers on federal Government construction projects be paid, at a minimum, the wages prevailing on similar local projects. 1 Contending that bid specifications for construction projects at the Hartsfield-Atlanta International Airport included improperly determined wage rates, plaintiff North Georgia Building and Construction Trades Council, an organization of labor unions, brought suit to enjoin the City of Atlanta from receiving bids or awarding contracts based on those specifications. 2 The district court denied North Georgia's motion for a preliminary injunction and subsequently granted summary judgment in favor of defendants. We affirm in part and reverse and remand in part.
The facts of this case are best revealed against the backdrop of the procedures prescribed by regulation for implementation of the Davis-Bacon Act. Following a careful delineation of these procedures, the facts will be recounted and the legal issues discussed.
The purposes of the Davis-Bacon Act are to protect the employees of Government contractors from substandard wages and to promote the hiring of local labor rather than cheap labor from distant sources. 3 The Airport and Airway Development Act of 1970, 49 U.S.C.A. §§ 1701-1727, which authorizes federal funding assistance for local airport projects, requires the application of the Davis-Bacon Act to contracts for the construction of projects so assisted. 4
The Secretary of Labor is empowered to determine prevailing local wage rates, and to promulgate reasonable regulations to implement the Act. 5 There are two distinct procedures for determining the wage rates applicable to a particular project. First, a "general wage determination" may be issued and published in the Federal Register for use in a locality in which wage rates are well settled and a large volume of Government contracting is anticipated. 6 The general determination for a particular locality specifies wage rates for particular trades by category of construction project. The Secretary classifies projects into four categories: "building," "residential," "heavy" and "highway." 7 The classification system, though not mandated by either the Act or accompanying regulations, is an administrative convenience based on historical patterns in the construction industry. 8 Once published, a general determination has no expiration date, but must be kept current by timely modification. 9
The federal contracting agency, rather than the Department of Labor, may initially decide which category is applicable to a project, and incorporate the appropriate set of rates into its bid proposal. 10 If no question is raised as to the agency's classification, bidding and contracting proceed.
On the other hand, a "project wage determination," specifying the set of wage rates applicable to a particular project, will be issued by the Department of Labor at the request of the contracting agency. 11 The Department, in making a project determination, may select a category of general determination rates already set by publication in the Federal Register, or, if no appropriate rates have been published, may make a fresh determination of prevailing wages for each job on the project. Project determinations are effective for 120 days after issuance, unless that period is extended under certain conditions. 12 Bidding and contracting follow the issuance of a project determination.
The procedure for and effectiveness of modifications by the Department of Labor to existing general determinations and project determinations are governed by regulation. Modifications of a general determination are applicable to a project unless "published in the Federal Register later than 10 days before the opening of bids." 13 If publication occurs during that period, the modifications are effective only when the contracting agency "finds that there is a reasonable time in which to notify bidders of the modification." 14
Similarly, modifications of a project determination prior to the award of the contract are applicable unless received by the contracting agency "later than 10 days before the opening of bids." 15 In that event, the modifications are likewise effective only if the contracting agency "finds that there is a reasonable time in which to notify bidders of the modification." 16
Any question arising as to the contracting agency's classification of a construction project, or as to the Department of Labor's project determination, must be submitted to the Secretary of Labor for interpretation or a ruling. 17 The Secretary's decisions are "authoritative," and may be relied upon by parties involved. 18 If the decision results in a modification of a prior determination, the above-discussed 10-day rule, if applicable, controls the effectiveness of that modification.
The Secretary's decisions may be appealed to the Wage Appeals Board, a body created by regulation and authorized to act with finality on behalf of the Secretary of Labor. 19 The Board has jurisdiction, inter alia, over wage determinations and "controversies concerning the payment of prevailing wage rates or proper classifications which involve significant sums of money, large groups of employees, or novel or unusual situations." 20 A wage determination may be appealed by any "interested person," including a contractor or labor organization, who has unsuccessfully sought reconsideration of the contested decision. 21 Other controversies may be presented to the Board by "(a)ny party or aggrieved person." 22
The Wage Appeals Board operates as an appellate agency and does not hear matters de novo except on a showing of extraordinary circumstances. 23 The Board's decision is based on the record submitted and such oral argument as may be permitted. 24 The regulations do not provide for appeals of the Board's decisions. Reviewability in federal court under the Administrative Procedure Act, 5 U.S.C.A. §§ 701-706, is addressed later in this opinion. 25
Planning by the City of Atlanta for construction of a new Central Passenger Terminal Complex at the Hartsfield-Atlanta International Airport had been underway for a substantial period of time when the events in controversy began to unfold in October 1976. Four construction contracts were to be awarded: T-1, for the terminal building and four concourse buildings; M-1, for the spine and quarter-point enclosures of underground passageways; M-2, for aprons around the concourses and related paving, grading and drainage; and M-3, for temporary access roads and security fences. The wage rate determination for T-1 is not involved in this case; those for the remaining three contracts are at issue.
General wage determinations for the Atlanta area had been issued for "building," "residential," and "highway" projects. Wage rates were highest in the "building" category and lowest in the "highway" category. 26 Although no general determination for "heavy" rates had been issued, those rates would generally be higher than "highway" rates and lower than "building" and "residential" rates.
In late October or early November 1976, the Federal Aviation Administration (FAA), as contracting agency, concluded that "highway" rates were appropriate for contracts M-2 and M-3, and furnished the pertinent general wage determination from the Federal Register to the City of Atlanta for inclusion in its bid specifications. The Department of Labor did not participate in the determination of the applicable category.
The wage determination for contract M-1, however, was...
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