Davis-Bacon act: Who's not covered?

By: Cordell Parvin

The latest case on this subject was decided Dec. 3, 1996 by the 6th U.S. Circuit Court of Appeals. In L.P. Cavett Co. v. U.S. Department of Labor, 95-3902, Cavett appealed a summary judgment in favor of the U.S. Department of Labor's (DOL) determination that Cavett and its subcontractor violated the Davis-Bacon Act on a federally funded highway construction project.

On appeal, Cavett argued that the prevailing wage requirements of the Davis-Bacon Act were not intended to apply to truck drivers hauling asphalt from an off-site temporary batch plant to a highway construction project. The 6th Circuit agreed and also ruled that the Federal-Aid Highways Act did not require Cavett to pay the truck drivers prevailing wages.

On June 10, 1985, the Indiana Department of Highways awarded a contract to Cavett to resurface approximately 10.8 miles of highway. Cavett set its batch plant approximately three miles from the midpoint of the highway and subcontracted the trucking to George St. John's Trucking.

In 1988, the DOL initiated an investigation, which ultimately led to a ruling that the truck drivers hauling asphalt from the batch plant to the construction site should have been paid Davis-Bacon wage rates, based on the determination that the batch plant was part of the "site of the work" as defined in the DOL regulations because (1) the batch plant was established after the contract was awarded, (2) the batch plant was only three to five miles from the construction site, and (3) the asphalt produced at the batch plant was used exclusively for the project. The trial court upheld the DOL's interpretation and thus, affirmed the decision. Cavett appealed.

Which interpretation?

The 6th Circuit Court of Appeals began its decision by noting that the Davis-Bacon Act, passed in 1931, was designed to give local laborers and contractors fair opportunity to compete for federally funded contracts and to protect local wage standards by preventing contractors from basing their bids on wages lower than those prevailing in the area. The language in the Davis-Bacon Act made the prevailing wages applicable to all "mechanics and laborers employed directly at the site of the work." The court noted that it first needed to determine if Congress had directly spoken on the coverage issue. If the statute was silent or ambiguous, then the court would need to determine whether DOL's interpretation is permitted.

The trial court judge had found the phrase "directly upon the site of the work" in the Davis-Bacon statute ambiguous because in constructing highways it is necessary that work spill over into areas beyond the actual highway under construction. The judge then found the definition of "site of the work" in the DOL regulations was a permissible interpretation of the Davis-Bacon statute. In reversing the trial court decision, the 6th Circuit Court of Appeals found the language in the statute was not ambiguous.

Ruling of the court

In reaching its conclusion, the court relied on the reasoning employed by the D.C. Circuit Court of Appeals in Ball, Ball and Brosamer Inc. v. Reich, 24 F.3d 1447 (D.C. Cir. 1994) and Building and Construction Trades Dep't AFL-CIO v. United States Dep't of Labor Wage Appeals Bd., 932 F.2d 985 (D.C. Cir. 1991) (the "Midway case"). Using the reasoning of those cases, the court decided that the phrase "employed directly upon the site of the work" means that only employees working directly on the physical site of the construction work have to be paid prevailing wage rates. The court stated that if the geographic proximity of the Davis-Bacon Act were expanded in the manner advocated by the DOL, it would create the difficult problem of determining which off-site workers were indeed closely enough "related" to the public work site to justify inclusion under the act. In Ball, Ball & Brosamer, the D.C. Circuit Court found the DOL had attempted to expand the phrase "directly upon the site of the work" to include workers two miles away in one case, 24 miles away in another case and 3,000 miles away in a third case.

That interpretation simply does not fit the specific wording of the statute.

The 6th Circuit Court of Appeals also rejected the DOL's argument that the truck drivers were covered by language in the Federal-Aid Highways Act. The court noted that the Federal-Aid Highways Act specifically states that the prevailing wage determinations shall be in accordance with the Davis-Bacon Act. In the court's view, by that language Congress had incorporated the Davis-Bacon Act's method of determining prevailing wage rates and its method of determining coverage.

Hopefully, this decision will put to rest the coverage question involving truck drivers who merely drop off or pick up materials at the site. If Congress had intended those drivers to be covered, it could have chosen language broader than "directly upon the site of the work."

Editor's Note: 1997 marks the 12th year that Cordell Parvin has been providing his legal column to ROADS & BRIDGES readers. Now, the full collection of "Law: The Contractor's Side" is available at http://www.transcon.net/parvinlaw/.

Parvin is a shareholder in the law firm of Leonard, Hurt & Parvin, P.C., which has offices in Austin, Texas; Dallas; Houston; Richmond, Va.; and Washington, D.C.