International Brotherhood v. T & H ServicesInternational Brotherhood v. T & H Services
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.
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,
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
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
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
The Davis-Bacon Act governs federally funded contracts for construction. See
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;
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,
Violations of the Davis-Bacon Act can result in withheld payments, contract termination, and debarment. See
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
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; see
The Service Contract Act operates similarly to the Davis-Bacon Act. The Act applies to certain government contracts that “ha[ve] as [their] principal purpose the furnishing of services in the United States through the use of service employees.”
II. DISCUSSION
We review de novo the district court‘s decision on arbitrability. See Loc. 5-857 Paper, Allied-Indus., Chem. & Energy Workers Int‘l Union v. Conoco, Inc., 320 F.3d 1123, 1125 (10th Cir. 2003). “[W]hether parties have agreed to submit a particular dispute to arbitration is typically an issue for judicial determination.” Granite Rock Co. v. Int‘l Brotherhood of Teamsters, 561 U.S. 287, 296 (2010) (original brackets and internal quotation marks omitted); see id. at 301 (ordinarily, “it is the court‘s duty to interpret the agreement and to determine whether the parties intended to arbitrate grievances concerning a particular matter” (internal quotation marks omitted)). “[A] court may order arbitration of a particular dispute only where the court is satisfied that the parties agreed to arbitrate that dispute.” Id. at 297. There is a presumption in favor of arbitrability, see id. at 300, but a court “appl[ies] the presumption . . . only where a validly formed and enforceable arbitration agreement is ambiguous about whether it covers the dispute at hand; and . . . [the court] adher[es] to the presumption and order[s] arbitration only where the presumption is not rebutted,” id. at 301. Thus, “the presumption favoring arbitration” applies “in FAA and in labor cases, only where it reflects, and derives its legitimacy from, a judicial conclusion that arbitration of a particular dispute is what the parties intended because their express agreement to arbitrate . . . [is] best construed to encompass the dispute.” Id. at 303. This framework vindicates “the first principle that underscores all [the Supreme Court‘s] arbitration decisions: Arbitration is strictly a matter of consent.” Id. at 299 (internal quotation marks omitted).
Turning to the dispute before us, the CBA sets forth the following dispute-resolution procedure:
ARTICLE 22: GRIEVANCE PROCEDURE
Section 1. A grievance is a dispute, claim or complaint arising by and between the parties during the term of this Agreement. Grievances are limited to matters of interpretation or application of express provisions of this contract.
. . . .
ARTICLE 23: ARBITRATION
Section 1. If either party desires Arbitration concerning any grievance or dispute, it shall make a request for a panel of arbitrators for Arbitration with the Federal Mediation and Conciliation Service . . . .
Aplt. App. at 29–30.15 The Union argues primarily that the dispute concerns the
agreed-upon rates of pay for work performed by various classifications of T&H employees at Fort Carson, including general maintenance workers and roofers. Article 28 concerns Davis-Bacon work:
ARTICLE 28: SPECIAL ASSIGNMENTS
Davis Bacon Work The parties agree that the Company has the prerogative to perform the Davis-Bacon work as it deems appropriate as modified under the provisions below:
Provision 1 – Work Day and Work Week. Effective each contract option year following authorization from the government, the Davis-Bacon rates, as provided by the Contracting Officer at Fort Carson, will be in effect until new Davis-Bacon wage rates are provided and will be paid to employees doing Davis-Bacon work. In addition, employees that perform a combination of Service Contract Act and Davis-Bacon work will be paid at the appropriate rate for the hours worked under each classification of work. Any Davis Bacon that is worked as overtime, in accordance with all overtime provisions provided in this agreement, will be paid at 1 ½ times the appropriate rate for the hours worked under each classification of work.
Id. at 33 (emphasis added).
The Union also relies in part on two other provisions, while acknowledging that they do not “specifically address” the grievance, Aplt. Br. at 23: (1) the preamble to the CBA, which states, “[I]t is the intent and purpose of the Company and the Union to set forth herein the entire Agreement with respect to wages, hours and working conditions as it relates to operation and maintenance activities . . . and to facilitate peaceful adjustment of grievances,” Aplt. App. at 18; and (2) Article 30 of the CBA, which says, “This Agreement . . . shall be deemed to define the wages, hours, rate of pay and conditions of employment of the employees covered,” id. at 33.
The Union‘s reliance on the above provisions of the CBA is misplaced. The natural reading of the language of Article 28—“the Davis-Bacon rates, as provided by the Contracting Officer at Fort Carson, will be in effect until new Davis-Bacon wage rates
Nor should we be surprised that the CBA declines to provide for arbitration of disputes regarding Davis-Bacon categorizations. As previously described, the task of categorizing jobs on federal construction projects under the Davis-Bacon Act is a highly developed process under the guidance and ultimate control of the DOL. See
Arbitration of Davis-Bacon classification disputes would be even more problematic. The advantages of uniform, reliable determinations would be completely undermined by leaving the decisions to the idiosyncrasies of a multitude of arbitrators. See Oil, Chem. & Atomic Workers Int‘l Union, AFL-CIO Loc. 2-652 v. EG & G Idaho, Inc., 769 P.2d 548, 552 (Idaho 1989) (“[R]eview of [agency] Davis-Bacon determinations in [an] arbitration proceeding . . . would undermine the administrative review process provided in federal law.“); cf. Universities Rsch. Ass‘n, 450 U.S. at 783 (discussing how “[t]he implication of private right of action [in the Davis-Bacon Act] . . . would undercut . . . the [Act‘s] elaborate administrative scheme . . . [and how] [t]he uniformity fostered by [that scheme] would be short-lived if courts were free to make postcontract coverage rulings“). And contractors would need to adjust their bids even higher since the arbitration process, which would not involve the DOL, could provide no mechanism for compensation to the contractor if it loses a classification dispute. Cf.
Further support for our conclusion can be found in cases declaring that the primary-jurisdiction doctrine prevents a federal court from resolving Davis-Bacon classification disputes in litigation under the False Claims Act, even though a worker does have the right to bring such litigation. The primary-jurisdiction doctrine provides in very limited circumstances that a court may refer a matter before it for initial resolution by an agency when such
United States ex rel. Krol v. Arch Ins. Co., 46 F. Supp. 3d 347, 354 (S.D.N.Y. 2014) (citations omitted).18[P]ermitting [an employee‘s] claim [under the Davis-Bacon Act for payment on the employer‘s performance bond] to go forward absent an administrative determination [by the DOL that the employer had failed to pay prevailing wages] would raise the risk of inconsistent rulings by the DOL and the Court about whether a violation has occurred. This risk is especially heightened in a case like this one, where the principal dispute concerns the classification of labor, an issue on which the DOL has particular expertise. Indeed, many courts have gone so far as to rule that, in light of the complexity of the classification system, the primary jurisdiction doctrine gives the DOL sole jurisdiction to determine whether a laborer was properly classified.
The parties have not pointed to any court decision ordering, or even permitting, arbitration of Davis-Bacon categorizations. The only relevant opinion we have found is to the contrary. See Oil, Chem. & Atomic Workers Int‘l Union, AFL-CIO Loc. 2-652, 769 P.2d at 551 (“Davis-Bacon determinations are clearly the province of [the contracting agency] under federal law . . . [and] [b]ecause neither [party] has any authority to make Davis-Bacon determinations,
(Richman, Arb.) (declining to arbitrate whether work performed by grievants was Davis-Bacon work entitled to higher rate of pay).
The Union cites Bell v. Se. Pennsylvania Transp. Auth., 733 F.3d 490 (3d Cir. 2013), for the proposition that “wage disputes are arbitrable.” Aplt. Reply Br. at 6. But the work at issue in that case was not construction work and, unsurprisingly, the opinion makes no mention of the Davis-Bacon Act. (Also, the court held that the dispute was not arbitrable. See Bell, 733 F.3d at 491.) The other cases cited by the Union in support of arbitrability are likewise inapposite. The courts compelled arbitration of grievances arising under a CBA that had nothing to do with classification of work under the Davis-Bacon Act. See, e.g., United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574, 575, 585 (1960) (ordering arbitration of dispute over the employer‘s decision to lay off employees in favor of outsourcing maintenance work); Harris Structural Steel Co. v. United Steelworkers of Am., AFL-CIO, Loc. 3682, 298 F.2d 363, 363–65 (3d Cir. 1962) (ordering arbitration of dispute over reduction in Christmas bonus paid by employer to employees); Suncor Energy (U.S.A.), Inc. v. United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int‘l Union, AFL-CIO, CLC, 474 F. App‘x 729, 730 (10th Cir. 2012) (unpublished) (ordering arbitration of grievance that an employee had been discriminated against when the employer denied his request for a special assignment); United Food & Com. Workers, Loc. 23 v. Mountaineer Park, Inc., 408 F. App‘x 709, 710–11 (4th Cir. 2011) (unpublished) (ordering arbitration of grievance over whether employees who had voluntarily moved into lower-grade positions were to be paid as new hires or as more senior employees, given their previous experience at the company).
In addition, we are not persuaded by these cases insofar as they are cited for the proposition that a dispute is arbitrable “[u]nless a specific CBA provision takes th[e] grievance out of the scope of arbitration.” Aplt. Br. at 15; see Warrior & Gulf, 363 U.S. at 584–85 (“In the absence of any express provision excluding a particular grievance from arbitration, we think only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail, particularly where . . . the exclusion clause is vague and the arbitration clause quite broad.“); Harris Structural, 298 F.2d at 365 (ordering arbitration where, among other things, “the issue of bonus payments is not specifically excluded from the grievance provisions of the collective bargaining agreement“). To begin with, the dispute-resolution clause in the CBA significantly constrains what disputes are covered: “Grievances are limited to matters of interpretation or application of express provisions of this contract.” Aplt. App. at 29. Yet the only “express provision” that can be said to encompass Davis-Bacon classifications implicitly assumes that the matter is left to the federal agency. As pointed out earlier in this opinion, when T&H exercises its “prerogative to perform the Davis-Bacon work,” Article 28 of the CBA provides that “the Davis-Bacon rates” for such work will be “provided by the Contracting Officer at Fort Carson.” Id. at 33. Particularly in light of the strong policy reflected in the Davis-Bacon
We conclude that the dispute is not arbitrable.19
III. CONCLUSION
We AFFIRM the order of the district court.
HARTZ
Circuit Judge
Notes
Selco Air Conditioning, Inc., ARB Case No. 14-078, 2016 WL 4258213, at *5 (July 27, 2016).Occasionally a class of laborers or mechanics is required on a construction project that is not found in the wage determination. In such instances, Wage and Hour is authorized to add an additional job classification and wage rate after the award of the construction contract through a process known as a conformance. The conformance procedure is designed to be a simple, expedited process for adding wage rates needed for job classifications not found in the wage determination. To protect the integrity of the competitive bidding system, the requirements for the addition of a conformed classification and wage rate are narrowly limited, and a conformed classification will be recognized only if it meets the following three-part test: (1) The work to be performed by the classification is not performed by a classification in the wage determination; (2) The classification is used in the area by the construction industry; and (3) The proposed wage rate, including any bona fide fringe benefits, bears a reasonable relationship to the wage rates contained in the wage determination.
The Administrator may issue a wage determination after contract award or after the beginning of construction if the agency has failed to incorporate a wage determination in a contract required to contain prevailing wage rates determined in accordance with the Davis-Bacon Act, or has used a wage determination which by its terms or the provisions of this part clearly does not apply to the contract. Further, the Administrator may issue a wage determination which shall be applicable to a contract after contract award or after the beginning of construction when it is found that the wrong wage determination has been incorporated in the contract because of an inaccurate description of the project or its location in the agency‘s request for the wage determination. Under any of the above circumstances, the agency shall either terminate and resolicit the contract with the valid wage determination, or incorporate the valid wage determination retroactive to the beginning of construction through supplemental agreement or through change order, Provided That the contractor is compensated for any increases in wages resulting from such change. The method of incorporation of the valid wage determination, and adjustment in contract price, where appropriate, should be in accordance with applicable procurement law.
Aplt. App. at 29–30.ARTICLE 22: GRIEVANCE PROCEDURE
Section 1. A grievance is a dispute, claim or complaint arising by and between the parties during the term of this Agreement. Grievances are limited to matters of interpretation or application of express provisions of this contract.
Section 2. Grievances shall be handled in the following manner:
Step 1 – An employee having a grievance under the terms of this Agreement shall within five (5) working days after the occurrence from which the grievance arose, discuss the grievance with the Steward and the immediate Supervisor designated by the Company.
Step 2 – If the parties fail to resolve the grievance in Step 1, the grievance shall be reduced to writing and discussed between a Business Representative of the Union and the Project Manager or his designated representative. This meeting shall take place within Seven (7) working days of the Step 1 meeting. If the matter is not satisfactorily resolved within Seven (7) working days, it may be submitted to arbitration in accordance with the procedures hereafter.
Section 3. Grievances involving discharges may be processed at any step of the grievance procedure in order to facilitate their handling. Any employee who is discharged shall leave the premises immediately.
ARTICLE 23: ARBITRATION
Section 1. If either party desires Arbitration concerning any grievance or dispute, it shall make a request for a panel of arbitrators for Arbitration with the Federal Mediation and Conciliation Service (FMCS) within ten (10) working days of the conclusion of Step two (2) of the grievance procedure. Once the panel is received, the parties will have ten (10) working days to make a selection. The parties will jointly share the cost of the panel of arbitrators and will strike from this panel to select the arbitrator to hear the case (the last arbitrator remaining will be selected). FMCS will be notified and will contact the arbitrator.
Section 2. The arbitrator shall have jurisdiction and authority to interpret and apply the provisions of this Agreement insofar as shall be necessary to the determination of the grievance, but he/she shall have no power or authority to add to, change, or modify any of the terms of this Agreement or any supplementary agreements.
Section 3. The cost of the arbitration process (other than counsel fees and witness fees which shall be borne by the respective party incurring them) shall be borne by the losing party.
Section 4. The decision of the arbitrator within the purview of this authority is final and binding on the Company, the Union and the Grievant.
Disputes arising out of the labor standards provisions of this contract shall not be subject to the general disputes clause of this contract. Such disputes shall be resolved in accordance with the procedures of the Department of Labor set forth in 29 CFR parts 5, 6, and 7. Disputes within the meaning of this clause include disputes between the contractor (or any of its subcontractors) and the contracting agency, the U.S. Department of Labor, or the employees or their representatives.