The Construction Counselor

This is the second post in a series that explores the reasoning and practical impact of the recent federal court decision that blocked certain provisions in the U.S. Department of Labor’s (DOL) new Davis-Bacon Act (DBA) rule. In this post, I discuss the DOL’s attempt to extend DBA to delivery truck drivers, the reasoning behind the court’s decision to block that effort, and what the court decision means for contractors and subcontractors today.

Background

Last fall, I wrote a 3-part series on the DOL’s overhaul of DBA regulations. On November 7, 2023, two weeks after the Final DBA Rule went into effect, a group of plaintiffs led by Associated General Contractors of America (AGC) filed a lawsuit challenging three specific aspects of the Final DBA Rule (the AGC case).

On June 24, 2024, a federal court in Texas issued a nationwide preliminary injunction blocking three key provisions in the Final DBA Rule that expanded DBA coverage, including extension of DBA to (1) delivery truck drivers and (2) material suppliers, and (3) implementation of DBA requirements by “operation of law” (together the Blocked Rules). The court decision reverts DBA requirements related to the Blocked Rules back to the prior requirements — for now.

In my first post, I introduced five key things to understand about the recent decision. My third post explores the practical impacts for material suppliers and my fourth post discusses the blocked operation of law provision.

Delivery Truck Drivers – Not Covered by DBA

DOL Tried To Extend DBA to Truck Drivers

The Final DBA Rule extended DBA requirements to truck drivers for all onsite driving time related to offsite delivery (such as hauling materials from one part of the site to the other), for time spent transporting “significant portions” of public works to and from secondary construction sites, for any time spent transporting materials to or from adjacent or virtually adjacent dedicated support sites, and for any onsite time related to offsite delivery if that time is not de minimus. The Final DBA Rule further noted that if truck drivers spend a significant portion of their week or day onsite, those short times could be combined to find that the driver time onsite is not de minimus and DBA wages are due.

Court Blocked Application of DBA to Delivery Truck Drivers

Focusing on the specific language of the DBA itself, the court noted that by its terms, DBA applies only to “laborers and mechanics” and only when they are “employed directly on the site of work.” Therefore, DBA applies based on the function a worker performs and where they perform it.

Material delivery drivers do not perform the function of “laborers” or “mechanics.” Material delivery truck drivers who come onto the site of the work merely to drop off construction materials are not covered by DBA even if they are employed by the government contractor.

Transportation was not included in the DBA itself and has consistently been excluded from DBA by courts finding that DBA does not apply to laborers and mechanics that work offsite.

The court stated that the DOL lacked authority to extend DBA to truck drivers because it was a fundamental change to DBA that added transportation as a category of work and including truck drivers not engaged in de minimus work onsite conflicted with DBA statutory language.

As a practical matter, the court noted that the trucking provision was arbitrary and capricious, and likely to cause irreparable harm because it puts companies in an untenable situation by making them choose between (1) treating all onsite time as DBA time and complying with certified payrolls, which increases costs and could result in uncompetitive bid prices; or (2) figure out what de minimus time means (which the DOL has not defined) and apply DBA to that time only. The court reasoned that the impact of this absurd choice on bid prices in an industry with such thin profit margins could be the difference between winning and losing a project.

Current Requirement

DBA requirements do not apply to the transportation activities of delivery truck drivers.

Published DBA regulations include the definition of construction, prosecution, completion, or repair in 29 CFR 5.2, and extend DBA to transportation by delivery truck drivers in 29 CFR 5.2(iv)(D). Even though you will still see the following language in the new regulations, it has been blocked for now:

(D) “Onsite activities essential or incidental to offsite transportation,” defined as activities conducted by a truck driver or truck driver’s assistant on the site of the work that are essential or incidental to the transportation of materials or supplies to or from the site of the work, such as loading, unloading, or waiting for materials to be loaded or unloaded, but only where the driver or driver’s assistant’s time spent on the site of the work is not de minimis; and

Conclusion

The Government Contracts & Grants Group and the Construction Law Group at Fredrikson is closely monitoring the DBA rules and guidance. We welcome the opportunity to help you understand the impact of the new DBA rules and court challenges on your business.

Our team regularly helps prime contractors, general contractors, subcontractors, and material suppliers pursue, negotiate, comply with, and resolve disputes related to government-funded infrastructure projects.