Harold Williams, D/B/A Williams Moving Company v. United States Department of Labor and Secretary of Labor, United States Department of Labor

Citations: 697 F.2d 842; 25 Wage & Hour Cas. (BNA) 1164; 1983 U.S. App. LEXIS 31244Docket: 82-1292

Court: Court of Appeals for the Eighth Circuit; January 19, 1983; Federal Appellate Court

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Harold Williams, operating as Williams Moving Company, appealed a district court decision affirming an administrative finding by the Department of Labor that he violated the Service Contract Act (41 U.S.C. Secs. 351-358) by failing to pay his employees prevailing wage rates. Williams, engaged in moving and storage with a principal office in Dexter, Missouri, held the necessary licenses for interstate and intrastate commerce and had contracts with the Department of Air Force for moving services in 1975 and 1976, known as "Pack and Crate Contracts."

The Secretary of Labor's administrative complaint alleged violations of the Service Contract Act, to which Williams claimed exemption under 41 U.S.C. Sec. 356(3), stating that his contracts were for the carriage of freight by truck where published tariff rates apply. An administrative law judge (ALJ) ruled that Williams had underpaid his employees by $22,154.66, concluding that the contracts were primarily for packing and unpacking services rather than for transporting freight.

Williams's exceptions to the ALJ's order were denied, and the district court upheld the findings, emphasizing that the contracts aimed to provide packing and crating services at Scott Air Force Base while the actual transportation was handled by other movers. The appeal raised two main issues: whether the district court erred in ruling that Williams was not exempt under section 356(3) and whether the wage determinations by the Secretary of Labor were appropriately tied to the work locations. The appellate court affirmed in part and reversed in part, remanding the case for further proceedings.

41 U.S.C. Sec. 351 mandates that contracts with the United States must stipulate minimum wage payments as determined by the Secretary based on local prevailing rates. An exception under 41 U.S.C. Sec. 356(3) applies to contracts for freight carriage by truck when published tariff rates are in effect. Williams argues this exception applies to his 1975 and 1976 contracts; however, the Administrative Law Judge (ALJ) ruled that, despite the presence of published tariff rates, the contracts were not for freight carriage. Exemptions from the Service Contract Act are to be interpreted narrowly against the party claiming them. Judicial review under 41 U.S.C. Sec. 353(a) dictates that factual findings are conclusive if supported by a preponderance of evidence. 

The ALJ assessed the contracts' legal status by considering the broader economic context rather than just technical aspects of the work performed by Williams. It was determined that the main responsibilities involved handling personal belongings rather than freight carriage. The ALJ found that Williams misrepresented his time spent on transportation, as many deliveries were consolidated, which reduced actual travel time. Furthermore, compensation was not based on distance but varied depending on shipment characteristics, suggesting the contracts were not primarily for freight carriage.

Consequently, the ALJ concluded that Williams did not qualify for the exemption under section 356(3) and was liable for wage underpayment under the Service Contract Act. Williams also contested the Secretary's wage determinations, claiming they were improperly based on the location of the Air Force base rather than where the work was conducted.

The government acknowledged that the rulings in *Descomp, Inc. v. Sampson* and *Southern Packing and Storage Co. v. United States* mandate wage determinations based on the locality where services are performed. Consequently, the government has stopped determining wages based on the location of its facilities. Only services starting or ending in counties specified in the wage determinations are affected, and it is confirmed that no work was performed in those counties in 1975. The government admitted that its liability finding for wage underpayment in 1975 was incorrect. There is ambiguity regarding the extent of services performed by Williams in the relevant localities in 1976, prompting a remand to the district court for a precise calculation of owed wages and to release previously withheld funds. The court affirmed part of the ruling, reversed another part, and directed further proceedings in line with these findings. Williams argued that published tariff rates were applicable under his contracts and that he complied with filing requirements. However, the Secretary contended that the contracts were not governed by these rates, a point the district court did not address. The amounts due for underpayments in 1975 and 1976 had been withheld from Williams' contract payments.