United States v. Powers Building Maintenance Company, Civ. No. 71-467.

• Decision Date: 13 January 1972
• Docket Number: Civ. No. 71-467.
• Parties: UNITED STATES of America, Plaintiff, v. POWERS BUILDING MAINTENANCE COMPANY, a corporation, and United States Fidelity and Guaranty Company, a corporation, Defendants.
• Court: U.S. District Court — Western District of Oklahoma

336 F. Supp. 819

UNITED STATES of America, Plaintiff, v. POWERS BUILDING MAINTENANCE COMPANY, a corporation, and United States Fidelity and Guaranty Company, a corporation, Defendants.

Civ. No. 71-467.

United States District Court, W. D. Oklahoma, Civil Division.

January 13, 1972.

William R. Burkett, Jerry Cord Wilson, Oklahoma City, Okl., for plaintiff.

Ralph W. Newcombe, Lawton, Okl., for defendants.

MEMORANDUM OPINION

DAUGHERTY, District Judge.

The Plaintiff, United States of America, sues to recover judgment against the Defendant Powers Maintenance Company (Powers), for the amount it failed to pay as minimum monetary wages to its employees as required by the McNamara-O'Hara Service Contract Act of 1965, 79 Stat. 1034, 41 U.S.C.A. § 351 et seq. and the Government contracts as such amount has been determined by a Hearing Examiner and the Administrator of the Wage and Hour and Public Contracts Division of the Department of Labor. Judgment is also sought against the Defendant United States Fidelity and Guaranty Company (USF & G), Powers' surety, for the same amount. The Plaintiff has moved for summary judgment. In support of this Motion the Plaintiff has attached as an exhibit the record of the Hearing Examiner and the Administrator of the Wage and Hour and Public Contracts Division of the Department of Labor. The said Motion has been fully briefed by the parties.

The Plaintiff entered into two contracts with Defendant Powers for building maintenance services at Ft. Hood, Texas, during the period July 1, 1966 to June 30, 1967 and July 1, 1967 through June 30, 1968, respectively. These contracts contained the clause required by the Service Contract Act of 1965 (41 U. S.C.A. § 351) providing for the payment of minimum monetary wages. Defendant USF & G, as surety, with Defendant Powers as principal, executed performance bonds binding themselves to the United States of America for payment if the latter should fail to perform and fulfill all the terms and conditions of the two afore-mentioned contracts.

A hearing authorized by 41 U.S.C.A. § 39 and applicable here by 41 U.S.C.A. § 353(a) was held on August 27, 1969, before a Hearing Examiner of the United States Department of Labor. Based upon the evidence presented to him, the Hearing Examiner entered findings of fact, conclusions of law and an Order on December 18, 1969 wherein he had held that Defendant Powers had failed to pay its employees the minimum monetary wages required by the Act and its Government contracts.¹

Under the provisions of 29 C.F.R. § 6.11 the Defendant Powers filed exceptions to the decision of the Hearing Examiner and transmitted these to the Chief Hearing Examiner who in turn sent the record of the proceedings to the Administrator of the Wage and Hour and Public Contracts Division of the Department of Labor for review. The Administrator affirmed the decision of the Hearing Examiner on December 18, 1970. It is not shown that an appeal was taken from this affirmance. It is therefore assumed that the findings, conclusions and Order of the Hearing Examiner are final.

41 U.S.C.A. § 39 provides in part as follows:

"* * * the Secretary of Labor, or an impartial representative designated by him, shall have the power to hold hearings and to issue orders requiring the attendance and testimony of witnesses and the production of evidence under oath. * * * and shall make findings of fact after notice and hearing, which findings shall be conclusive upon all agencies of the United States, and if supported by the preponderance of the evidence, shall be conclusive in any court of the United States; * * *"

In view of this statutory enactment, it is well settled under the Walsh-Healey Public Contracts Act of June 30, 1936 (49 Stat. 2036), 41 U.S.C.A. §§ 35-45, that findings of fact made by a Hearing Examiner in administrative proceedings conducted pursuant to such Act are conclusive in any court of the United States if supported by the preponderance of the evidence. Harp v. United States, 173 F.2d 761 (Tenth Cir. 1949), cert. den. 338 U.S. 816, 70 S.Ct. 56, 94 L.Ed. 494. The above Statute is applicable to findings of fact issued by a Hearing Examiner in administrative proceedings conducted pursuant to the McNamara-O'Hara Service Contract Act by virtue of 41 U.S.C.A. § 353(a) and Defendants are not entitled to a trial de novo. United States v. Southland Manufacturing Corporation, 264 F.Supp. 174 (D.C. P.R.1967). Rather, in an action for a judgment based on such findings, Defendants are entitled to a determination as to whether the findings of fact, conclusions of law and decision or Order of the Hearing Examiner, as affirmed by the Administrator, are supported by the preponderance of the evidence. United States v. Southland Manufacturing Corporation, supra; Harp v. United States, supra.

Authority for the Plaintiff to institute this action for judgment is found in 41 U.S.C.A. § 354(b), which provides for enforcement of the provisions of the Service Contract Act of 1965 by the United States bringing an action against the contractor or any sureties in any court of competent jurisdiction. In such an action administrative findings are presumptively correct, and the burden is on the Defendant to show that these findings are not supported by the preponderance of the evidence. United States v. Southland Manufacturing Corporation, supra, United States v. Sweet Briar, 92 F.Supp. 777 (D.C.S.C.1950).

From a review of the record herein the Court concludes that the findings of the Hearing Examiner are sustained by the preponderance of the evidence. On the question of uncompensated hours of work considerable testimony came from Defendant Powers' employees. They testified that they worked many additional hours without pay. Defendant Powers' records did not show such extra hours of work. Defendant Powers presented witnesses who denied that the employees put in uncompensated hours of work as claimed. The Hearing Examiner was required to choose between conflicting versions of the true situation. The credibility of witnesses relied upon by the Hearing Examiner in arriving at his findings is his exclusive function and his findings can be overruled only where, on the basis of the record, they were clearly incorrect. United States v. Southland Manufacturing Corporation, supra; National Labor Relations Board v. Dinion Coil Co., 201 F.2d 484 (Second Cir. 1952). There was also evidence of Powers' use of an arbitrary formula for determining in advance hours to be worked which was based on total square footage and types of buildings assigned and serviced rather than actual hours worked. The Hearing Examiner allowed a conservative portion of the uncompensated hours to which Defendant Powers' employees testified in computing the amounts of underpayment. It is believed that there was sufficient evidence before the Hearing Examiner to show the amount and extent of uncompensated work as a matter of just and reasonable inference. Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946). Defendants have failed to sustain their burden of showing that the factual findings of the Hearing Examiner are not supported by the preponderance of the evidence before him. The Court finds from a review of the record that the same are supported by the preponderance of the evidence.

The Service Contract Act of 1965 makes no provision for allowance of interest on amounts recovered as underpayments of wages. The question of the right to interest in this situation is a question of federal law. Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 65 S.Ct. 895, 89 L.Ed. 1296 (1945). Neither the Supreme Court nor our Circuit has...