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United Government Security Officers of America, Local No. 52 v. Chertoff

November 24, 2008

UNITED GOVERNMENT SECURITY OFFICERS OF AMERICA, LOCAL NO. 52, ET AL., PLAINTIFFS,
v.
MICHAEL CHERTOFF, SECRETARY, UNITED STATES DEPARTMENT OF HOMELAND SECURITY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

This is an action for mandamus and declaratory relief. Plaintiffs United Government Security Officers of America Local No. 52 and United Government Security Officers of America International Union (collectively, "UGSOA") are the bargaining representatives for approximately 140 security officers employed by USProtect Corporation ("USProtect") at various federal facilities in California. USProtect has a contract for security services with Federal Protective Services, an agency operating within the Department of Homeland Security ("DHS").

On March 7, 2006, UGSOA obtained a Decision and Order from Administrative Law Judge ("ALJ") Paul A. Mapes, who found that the wages and fringe benefits paid to these UGSOA employees were substantially less than the prevailing rates for other security workers in the same geographic areas. ALJ Mapes ordered the Department of Labor ("DOL") to issue a new wage determination to increase the employees' wages and fringe benefits in accordance with his decision. Pursuant to that Order, DOL sent a new wage determination to DHS on or around August 16, 2006. The seminal question in this case is whether Defendants must comply with ALJ Mapes's Decision and Order and DOL's new wage determination by incorporating the increased wage and benefit rates into the service contract with USProtect.

UGSOA has brought suit against Michael Chertoff, in his official capacity as Secretary of DHS, and Paul Durette, in his official capacity as Acting Director of the Federal Protective Service (collectively, "Defendants"). UGSOA's Amended Complaint seeks (1) a writ of mandamus requiring Defendants to comply with and implement ALJ Mapes's Decision and Order and (2) a declaratory judgment that ALJ Mapes's Decision and Order was a lawful, final decision, and DOL's interpretation of that Decision and Order is final and binding on DHS.

Currently pending before the Court is Defendants' [15] Motion to Dismiss UGSOA's Amended Complaint, in which Defendants argue that they have no legal obligation to incorporate the new wage and benefit rates into the service contract with USProtect. After UGSOA filed its Opposition to that motion, however, Defendants notified the Court that they had decided to incorporate the new rates for some, but not all, of the employees covered by ALJ Mapes's Decision and Order. Defendants supported their representation by attaching an exhibit to their Reply that identified the modification they had made to the service contract with USProtect.

Because Defendants presented matters to the Court that are outside the pleadings, and the Court has decided not to exclude them from consideration, the Court shall convert Defendants' Motion to Dismiss into one for Summary Judgment.*fn1 See Fed. R. Civ. P. 12(d). Having thoroughly considered the parties' submissions, including the attachments thereto, applicable case law, statutory authority, and the record of the case as a whole, the Court shall DENY Defendants' [15] Motion to Dismiss, converted to a Motion for Summary Judgment, for the reasons that follow.*fn2

I. BACKGROUND

A. Statutory and Regulatory Background

This case concerns the McNamara-O'Hara Service Contract Act of 1965, 41 U.S.C. §§ 351-38 (the "SCA"), an act establishing labor standards for contracts providing services to the federal government (i.e., service contracts). The SCA requires every federal government service contract in excess of $2,500 to specify the minimum hourly and fringe benefits that are to be paid to the employees working under the contract. Id. §§ 351(a)(1), (a)(2). The wages and benefits are predetermined by the Secretary of the Department of Labor ("DOL") (or his or her authorized representative), based on the prevailing rates for employees working in the same locality or, where a Collective-Bargaining Agreement ("CBA") covers such employees, the rates for the employees specified in the CBA. Id.

The SCA authorizes the Secretary to hold hearings to determine whether the wages for employees operating under a CBA are substantially at variance with those prevailing for similar services in the locality.*fn3 Id. § 353(c). Pursuant to the provisions of 29 C.F.R. § 4.10, such hearings may be requested by the contracting company or its employees (or other interested persons) by sending information to the Administrator of the Wage and Hour Division, Employment Standards Administration, of DOL (the "Administrator"). 29 C.F.R. § 4.10(b). If the Administrator determines that a substantial variance may exist, the Administrator is authorized to refer the matter to the Chief Administrative Law Judge, for designation to an ALJ, who renders a decision as to whether there is, in fact, a substantial variance:

[the ALJ] conduct[s] such a fact finding hearing as may be necessary to render a decision solely on the issue of whether the wages and/or fringe benefits contained in the collective bargaining agreement which was the basis for the wage determination at issue are substantially at variance with those which prevail for services of a character similar in the locality.

Id. § 4.10(c). A party who decides to appeal an ALJ's decision must file a petition for review by the Administrative Review Board within 10 days of the decision. Id. § 6.57.

If an ALJ determines, as a result of a hearing, that some or all of the wages or fringe benefits specified in a CBA are substantially at variance with the wages or fringe benefits prevailing in the locality (and assuming no appeal is taken within ten days), two consequences follow that are central to the present litigation. First, a new wage determination must be issued by DOL. See 29 C.F.R. § 4.163 ("the Administrator will cause a new wage determination to be issued in accordance with the decision of the Administrative Law Judge or the Administrative Review Board, as appropriate") (emphasis added); id. § 6.56 ("the Administrator shall promptly issue any wage determination which may be required as a result of the decision") (emphasis added); 48 C.F.R. § 52.222-41(f) ("the Department will issue a new or revised wage determination setting forth the applicable wage rates and fringe benefits"). Second, after DOL issues its new wage determination, the contracting agency must amend its service contract to specify the new wage and fringe benefit rates for the affected employees. See 29 C.F.R. § 4.163 ("the solicitation, or the contract if already awarded, must be amended to incorporate the newly issued wage determination") (emphasis added); 48 C.F.R. 52.222-41(f) ("[s]uch determination shall be made part of the contract or subcontract, in accordance with the decision of the Administrator, the Administrative Law Judge, or the Administrative Review Board, as the case may be, irrespective of whether such issuance occurs prior to or after the award of a contract or subcontract").

After the contracting agency incorporates the new rates for wages and fringe benefits, the contracting company may request an increase in the payment for its services to offset any increase that may be imposed by the increased wage and fringe benefit rates. Id. § 48.222-42(d)-(f).

B. Factual Background

Since September 2003, USProtect employees have provided security services at federal facilities in the California counties of Imperial, Riverside, San Bernardino, and San Diego. See Defs.' Mot., Ex. B at 1 (8/16/06 Letter from W. Gross to K. Schreiber). UGSOA filed a petition for a hearing to determine whether the wages and benefits paid to these employees pursuant to a CBA were at variance with those wages prevailing for similar services in the same localities. Id., Ex. A, at 1 (3/7/06 Decision and Order of ALJ Mapes) (hereinafter "ALJ Decision"). UGSOA's request was thereafter transferred to ALJ Mapes. Id.

On or about February 8, 2006, UGSOA appeared at a pre-hearing conference and argued that the wages for its members employed by USProtect should be increased from $18.50 to $21.54 per hour and that their fringe benefit payments should be increased from $2.56 to $2.86 per hour. Id. DHS elected not to participate in these proceedings, indicating that it would not "intervene in labor disputes between agency contractors and their unions." Id. at 2 n.1. USProtect similarly declined to participate but gave no reason for its decision. Id.

Although ALJ Mapes could have granted UGSOA's request for increased wages and fringe benefits solely based on the lack of opposition to the request, see 29 C.F.R. § 6.7(b) (authorizing the ALJ to "find the facts as alleged in the complaint" if "no party appears for the opposing side"), he nevertheless held an evidentiary hearing to consider UGSOA's request on its merits. See ALJ Decision at 3. After hearing the evidence presented, ALJ Mapes held that UGSOA had established the existence of a substantial variance:

UGSOA has made the necessary 'clear showing' that the compensation being paid to members of Local 52 for providing services covered by the current procurement contract with [USProtect] for the San Diego vicinity must be immediately increased . . .

Id. at 4. ALJ Mapes's holding was based on several findings. He found that "UGSOA's request [was] well supported by the testimony of three witnesses who described the similarities between the work performed by members of Local 52 and the work performed by other workers who are classified as Security Guard II and Court Security Officers." Id. at 3. He found that "the prevailing wage suggested by the UGSOA is consistent with the results of Department of Labor surveys showing the wages prevailing for security workers in the vicinity of San Diego." Id. at 4. Finally, he found that ...


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