Findings Of Fact Tholy Construction, Inc., applied for minority business enterprise status with the State of Florida in three basic areas, minority consulting, grassing and trucking. Tholy Construction, Inc., was founded in May, 1983, by Thomas L. Hawthorne and his wife, Lynette Hawthorne. Mr. & Mrs. Hawthorne own 100 percent of the capital stock of Tholy Construction, Inc. Mr. Hawthorne serves as the President and Chief Operating Officer, and Mrs. Hawthorne serves as Vice- President and Office Manager. Both Mr. & Mrs. Hawthorne are Black. Thomas L. Hawthorne is a graduate of Florida A & M University with a major in Business Administration and Accounting After graduation in 1972, Mr. Hawthorne went to work for the Department of Transportation as a Right-of-Way Agent. At the Department of Transportation, Mr. Hawthorne's basic assignment was the acquisition of property for road building projects. In 1973, Mr. Hawthorne moved to Dothan, Alabama, and became an employee of Pike Building Company. This was not an administrative position, but was a construction worker position. Mr. Hawthorne worked there for ten months and then took a position at Couch Construction Company in Dothan as a personal trainee in the area of equal employment opportunity. Couch Construction is a large construction company engaged in road building and airport construction. Mr. Hawthorne was employed at Couch Construction Company from 1974 to 1983, having responsibility for compliance with minority requirements of the Federal Government, setting up programs to attract and secure minorities, assisting minorities in proposing bids for subcontracts, and decision making relative to the cost of bidding projects. Lynette Hawthorne has worked full time at Tholy Construction Company since December, 1983. Her major areas of responsibility are the financial and bookkeeping procedures of the company. Previously, she worked in banking for six years, and her education consists of two and a half years of business administration at Florida A & M University. Mrs. Hawthorne is being trained by her husband to prepare bids and bid proposals, and is in training to inspect job sites of projects to make sure that they are completed in accordance with specifications. Tholy Construction, Inc., is incorporated under the laws of the State of Alabama. The offices are located at 1701 Reed Street, Suite 105, in Dothan. There are presently two full time persons working in the office. Thomas Hawthorne and his wife, Lynette Hawthorne. Tholy Construction, Inc., is certified as a minority business enterprise in both the States of Alabama and Georgia. Mr. & Mrs. Hawthorne give all the orders as far as work is concerned, they prepare their own income tax returns, file their quarterly statements with the Federal Government, and make out the payroll. They are the only ones authorized to sign checks and entered into lease agreements, and the business pays 100 percent of their salary. In the states where the company is certified under the minority enterprise program, bids are regularly submitted on behalf of the Tholy Construction, Inc. Through December, 1983, Tholy Construction, Inc. grossed $200,320.39. Mr. Hawthorne has been successful in gaining several contracts for minority consulting work, one with his former employer which includes monitoring of the ? ? programs. In addition, Tholy Construction ? ? ? ? contracts with at least one other small construction company to provides technical business assistance and payroll services. This is with Salter Construction Company which is a 100 percent minority-owned corporation, employing about 20 persons. In the area of grassing, there are several projects that Tholy Construction Company has completed or is involved in, including Lowe Field in Alabama and the grassing project on Interstate 10. Mr. Hawthorne is familiar with grassing projects, including the need for flat bed trucks to pick up and haul the grass, mulching machines, the 888 fertilizers, and the different types of grass, Osora, Bermuda and Bahia. In each case, according to specifications of the grassing projects, Tholy Construction leases the area where the grass comes from, supplies the necessary fertilizer, and puts the grass in place on the particular project. In the area of trucking services, Tholy Construction, Inc., regularly bids on trucking and hauling projects in the states where it is certified as a minority business enterprise. However, the company has not purchased any equipment, and its basic method of operation is to subcontract with companies in the area to do the work. The company has two full time employees, Thomas Hawthorne and Lynette Hawthorne. On work at the Army's Lowe Airfield, there was a contract requirement that a certified payroll be maintained so the Army could monitor the wages paid individuals doing the work. In leasing the earthmoving equipment for site preparation on this project, Tholy Construction agreed to carry the equipment operators on its payroll to satisfy the contract requirement for a certified payroll. The company has subcontracted with other companies to perform different items of work on this project, and basically all other construction type work has been subcontracted by Tholy Construction. During 1983, 70 percent of the contract income of $181,310.39 shown by Tholy Construction was with Couch Construction Company, and 90 percent of the consulting income of $19,200 was with Couch. Also, Tholy rents equipment and purchases material from Couch, which is the largest construction company in the Dothan area. The MBE Rule requires firms to have adequate resources such as equipment and personnel to do the work, and does not allow brokers to become part of the MBE program. A broker does not own equipment or have its own personnel, but subcontracts the work to another company. If a firm subcontracts, it must perform at least 51 percent of the work with its own personnel and equipment to meet the requirements for certification. The firm must have in-house resources, necessary personnel, expertise and experience to do the work.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Tholy Construction, Inc., be DENIED certification as a Minority Business Enterprise in the area of trucking, and GRANTED certification as a Minority Business Enterprise in the area of minority consulting and grassing. THIS RECOMMENDED ORDER entered this 9th day of August, 1984, in Tallahassee, Florida. WILLIAM B. THOMAS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of August 1984. COPIES FURNISHED: Luther C. Smith, Esquire 219 E. Virginia Street Tallahassee, Florida 32301 Vernon L. Whittier, Jr. Esquire Haydon Burns Building, MS 58 Tallahassee, FL 32301
The Issue The issue is whether the Petitioner meets the criteria for certification as a minority business enterprise by the Office of Minority Economic and Business Development, Department of Labor.
Findings Of Fact The applicant corporation, B. C. Mechanical Contractors, Inc. (BC), is owned by Benjamin Clark, Darlena Clark, his wife, and Florida Mechanical Systems, Inc. (FMS). BC is a Florida corporation incorporated on March 17, 1995. Mr. And Mrs. Clark supplied $5,000 each and FMS supplied $5,000, for a total capitalization of $15,000 for B.C. Mr. and Mrs. Clark each own 33 1/3% of the outstanding shares or a total of 66 2/3% of the outstanding shares, and FMS owns 33 1/3% of the outstanding shares of B.C. Both Mr. and Mrs. Clark are minorities. At the time Mr. Clark formed BC Mechanical Contractor, Inc., he entered into an agreement giving him the option to buy-out the shares of stock owned by FMS for $5,000.00 plus 10% interest per annum. Mr. Clark holds a mechanical contractor's license with the State of Florida. FMS is not owned by minorities. FMS lists its "General Nature of Business" as "Heating and Cooling" with Florida's Secretary of State, Division of Corporations. However, FMS no longer participates in the business of mechanical contracting. It is now provides equipment and real estate leasing together with personnel services to contractors. Mr. W. W. Gay owns a major interest in FMS. Mr. Clark worked for W. W. Gay Mechanical Contractor, Inc. (W. W. Gay, Inc.), from September 1975 to September 1997. Mr. W. W. Gay owns a major interest in W. W. Gay, Inc. Messrs. W. W. Gay, Roger Painter, and Robert Gay are all non-minorities and all are officers or directors of FMS. Mr. W. W. Gay is the licensed qualifier for W. W. Gay Mechanical Contractor, Inc. Mr. W. W. Gay qualifies the corporation as a mechanical contractor. Roger Painter is the corporate secretary of BC, and is authorized to sign checks on its accounts. Uncontroverted testimony was received that Painter has never signed a check on BC’s accounts and is authorized to sign checks as an emergency measure in case Benjamin Clark should become incapacitated. FMS has minority ownership interests in six to seven companies, some of which are in the contracting business. FMS has a net worth exceeding $10 million. FMS does not engage in the same business as the applicant. The financial statements of BC, Exhibit BC 3, and its tax returns, BC Exhibits 4 and 5, demonstrate that BC is a business that generates less than $100,000.00 a year. The net worth of BC is significantly less than $3 million. Ben Clark is the only director of BC. Although Roger W. Painter is corporate secretary for BC, Mr. Painter has no control over the corporation. Roger Painter is President of FMS. Mr. Clark and his wife control BC. Mr. Clark demonstrated that BC is a small business concern. BC is not an "affiliate" of FMS because FMS must have control over the affiliated entity.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is, RECOMMENDED: That the application of Petitioner for certification as a minority business be approved. DONE AND ENTERED this 13th day of April, 1998, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 13th day of April, 1998. COPIES FURNISHED: Joseph L. Shields, Esquire Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189 John R. Stiefel, Jr., Esquire Holbrook, Akel, Cold, Stiefel and Ray, P.A. One Independent Drive, Suite 2301 Jacksonville, Florida 32202-5059 Douglas L. Jamerson, Secretary Department of Labor and Employment Security 303 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Edward A. Dion, Esquire Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189
Findings Of Fact The Petitioner, Parson & Associates, Inc., d/b/a Overhead Door Company of Tampa Bay (Parsons & Associates), is a Florida corporation, having been incorporated under the laws of the State of Florida in March, 1992. The principal place of business for Parsons & Associates is 5134 W. Idlewild, Tampa, Florida. The Petitioner corporation engages in the business of the sale, installation, and repair of overhead doors, both residential and commercial. The corporation has ten (10) full-time employees and one (1) part-time employee. The only stockholders of the Petitioner corporation are: Gail Parsons, the minority owner; and her son-in-law, Robert Briesacher. Gail Parsons owns eighty (80 percent) of the stock of Parsons & Associates. Robert Briesacher, who is not a minority, owns the remaining twenty (20 percent) of the Petitioner corporation. Gail Parsons was the incorporator of Parsons & Associates when it was initially incorporated. She also is its President. Robert Briesacher is the Vice-President. Prior to the incorporation of Parsons & Associates, Gail Parsons, who has a Bachelor of Business Administration degree, worked for the Better Business Bureau. Robert Briesacher had previous experience in the overhead door business, having worked for Overhead Door Company of Clearwater. Briesacher, who at the time was engaged to marry Parsons's daughter, learned from Overhead Door Corporation (the manufacturer) that the manufacturer intended to establish a distributorship in Tampa. Briesacher told Parsons about it. While Briesacher had the knowledge and experience to successfully sell, install, and repair both residential and commercial overhead doors, he had no money to invest in the business opportunity and had no experience running his own business. Thinking that she might be able to help her daughter and future/present son-in-law, and herself, by combining her capital and business and financial skills with his knowledge and technical skill in the automatic door business, Parsons suggested to Briesacher that they go into business together. He readily agreed, and the pursued the opportunity with the manufacturer. Parsons incorporated the business, registered the fictitious name, compiled the business plan, developed the cash flow projections (with Briesacher's help), found the office/warehouse space (which the manufacturer had to approve), and negotiated, executed, and personally guaranteed the lease agreement and negotiated the Distributorship Agreement with the manufacturer. Briesacher provided none of the initial start-up monies for the Petitioner. Gail Parsons is the financial interest holder in the corporation, having made all the initial contributions to capital ($38,000), as well as making all the personal loans to the corporation thereby accepting all the financial risk. Parsons personally guaranteed the promissory note, the credit agreement, contracts required to be personally guaranteed and the warehouse lease. The Distributorship Agreement is a standard Overhead Door Corporation agreement common to all distributors nationwide. It is customary for a manufacturer like Overhead Door Corporation to offer a distributor incentives-- like yellow page advertisement, signage, and telephone numbers--in order to gain market penetration. In the case of Parsons & Associates, Overhead Door supplied a telephone number (the number Overhead Door previously had bought from the prior distributor in Tampa), a year's worth (about $10,000) of yellow page advertising, and some signage. The total fair market value of the incentives to Parsons & Associates was approximately $31,000, but the marginal cost to the manufacturer was less. In the initial months of operation of the business, Gail Parsons had to rely on Briesacher and the first employee they hired, Charles Martin, who worked under Briesacher at Overhead Door of Clearwater, to teach her what she had to know about the technical aspects of the business. She had to learn about the Overhead Door products and the basics of how to install them. This knowledge, which she quickly acquired, soon enabled her to take service orders, schedule the orders, supervise the day-to-day activities, perform trouble-shooting over the telephone and handle all of the sales calls. Meanwhile, Robert Briesacher was in the field with Martin installing and servicing Overhead Doors. Briesacher currently corresponds with the factories on product orders, schedules and supervises the installers, and takes the physical inventory. Commercial bidding is only one portion of the total corporate sales, which includes residential new construction, residential service and residential retrofit. Over ninety-five (95 percent) percent of the business of Parsons and Associates is handled over the telephone from the office where Parsons spends virtually one hundred (100 percent) percent of her time. Parsons is personally responsible for the majority of the residential sales, including negotiating and contracting with contractors, and negotiating and entering into the agreement to provide installation services for Home Depot door sales. Business from negotiating, estimating, and bidding on contracts in the field is a relatively small portion of the company's overall revenues. Gail Parson is involved in the interviewing of prospective employees, including Martin and Charles Jarvis. She confers with Briesacher, but she alone controls hiring and firing. She possesses the knowledge to evaluate employee performance and has demonstrated her supervisory authority and evaluation skills in exercising her authority to fire an employee. Actually, it is not difficult to evaluate the performance of installers: service calls on warranty work and customer complaints generally tell her all she needs to know. The Petitioner/corporation has both commercial and residential outside sales persons who prepare bids for the Petitioner. The minority owner, Gail Parsons, establishes the geographic and profit margin parameters, which ultimately control the bidding process. She inspects all bids prior to executing the contracts, thereby further controlling who, where and under what terms the Petitioner corporation does business. In fact, Parsons recently rejected an accepted bid and cancelled the job because it was too far from Tampa. While both Gail Parsons and Robert Briesacher are authorized to sign checks for Parsons & Associates, Briesacher has signed less than five checks, out of the thousands of checks written. Parsons and Briesacher draw the same salary. However, their salaries are commensurate with the work they perform for the company. Parsons has chosen the salary levels; Briesacher does not even know what Parsons's salary is. Parsons also is entitled to an 80/20 split of any future distributions as a result of the operation of the company. Briesacher has the use of a company truck, while Parsons does not. However, Briesacher is a part-time installer and service man, while Parsons is not. All installers/service technicians at Parsons and Associates have the use of company trucks, not just Briesacher. Currently, in addition to controlling the entire corporation and making all of the business decisions, Gail Parsons sets inventory parameters, purchases the inventory, sells doors in the showroom, knows the purchased products, is responsible for accounts receivable, handles the payroll, and assists in the scheduling and supervising of the installers.
Recommendation On the basis of the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Management Services enter a final order granting Petitioner's application for certification as a minority business enterprise (MBE). RECOMMENDED this 14th day of July, 1994, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of July, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-1268 To comply with the requirements of Section 120.59(2), Fla. Stat. (1991), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1.-3. Accepted and incorporated. First sentence, rejected as contrary to facts found; the rest is accepted and incorporated. Second sentence, rejected to the extent that it implies that Briesacher has no financial interest. Otherwise, accepted and incorporated. Accepted and incorporated. Rejected, as contrary to facts found, to the extent that it implies Parsons knew it all from the start and that Parsons "supervised" Briesacher and Martin installing and servicing doors; in fact, there was a learning curve. Otherwise, accepted and incorporated. 8.-11. Accepted and incorporated. Respondent's Proposed Findings of Fact. 1.-2. Accepted and incorporated to the extent not subordinate or unnecessary. 3.-4. Accepted and incorporated to the extent not subordinate or unnecessary. Last sentence, rejected in part as contrary to facts found and as contrary to the greater weight of the evidence. (She makes sales and trouble- shoots, and is no longer just learning those aspects of the business.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Accepted and incorporated to the extent not subordinate or unnecessary. However, except for actually installing and servicing doors, Parsons also does the same jobs as Briesacher to some extent, and some of Briesacher's functions are ministerial in light of Parsons's management decisions. Penultimate sentence, rejected as contrary to facts found and as contrary to the greater weight of the evidence; he proposed "piece-work" but Parsons participated in the final decision. (Since it is standard in Florida, it was not a difficult or controversial decision.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. (However, "joint responsibility" should not be construed to mean "equal authority." Parsons has the final say.) Accepted and incorporated to the extent not subordinate or unnecessary. However, while Parsons's knowledge and skill does not exceed the others' in the area of installing and servicing doors, she has enough knowledge to control the business. The characterization "very broad" in the last sentence is rejected as contrary to facts found and as contrary to the greater weight of the evidence. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. However, again, while Parsons's knowledge and skill does not exceed the others' in the area of installing and servicing doors, and while she does not personally install and service doors, she has enough knowledge to control the business. 10.-14. Accepted and incorporated to the extent not subordinate or unnecessary. Again, while Parsons and Briesacher, and other employees, share responsibilities, Parsons has the knowledge necessary to control the business and has dominant control over the business. COPIES FURNISHED: Jonathan D. Kaplan, Esquire 6617 Memorial Highway Tampa, Florida 33615 Wayne H. Mitchell, Esquire Department of Management Services Office of the General Counsel Suite 312, Ninth Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 William H. Lindner, Secretary Department of Management Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Paul A. Rowell, General Counsel Department of Management Services Knight Building, Suite 312 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
The Issue The issues to be resolved in this proceeding concern whether the Petitioner was discriminated against based upon his age when he was not selected for promotion by the Respondent Corporation, and when he was ultimately terminated.
Findings Of Fact The Petitioner, Harlan Hamer, has many years of experience working in the trucking industry, particularly in management capacities. He has been engaged in managing safety, finance and administrative operations of large motor carriers, as well as operational aspects of a 350- truck unit motor carrier corporation. He has an extensive knowledge of the various aspects of regulation and operations pertaining to the trucking industry. He is also a licensed commercial, Class A driver, qualifying him to operate commercial vehicles such as large, over-the-road trucks. The Respondent is a dry-freight trucking company which, at the height of its operations in 2006-2007, operated 260 to 300 trucks. Apparently most of these were owned by the Respondent Shoreline. It employed the requisite number of drivers to keep this approximate number of trucks operating, as well as a significant number of office and terminal administrative, operations, management, and maintenance personnel. In early 2007, the Petitioner interviewed with Shoreline concerning an employment position. He interviewed with Randa Shipp, who was a recruiter for Shoreline at that time. Ultimately, Mr. Hamer was not selected for that job and secured alternative employment as a driver for Mineola Water Company. Soon thereafter, however, he received a call from Shoreline offering him a position as a "night dispatcher." He accepted that position and began working for Shoreline on May 14, 2007, at a weekly salary of $750. He completed an application at that time in which he revealed his age. The Respondent thus became well aware of his age at the time it hired him. His resume also describes his birth year as being 1947. The Shoreline form which documents his hiring, signed by the safety director at that time, Cheryl Allender, also reflects that birth date. His age of 60 or 61 years, at times pertinent to this case, was well known by the Respondent and had been since he was hired. The Petitioner had been a truck driver early in his career and later managed drivers. He was a manager for Pucket Oil Company; Santee Carriers, Inc; and Transwood, Inc. In some of these capacities he had been responsible for U.S. Department of Transportation mandated compliance with government regulations applicable to the trucking industry, as well as Equal Opportunity (EEO) compliance. When the Petitioner was hired as a night dispatcher he was given approximately three nights of training. Greg Bruce, testifying for the Petitioner, was also a night dispatcher and the Petitioner's counterpart. For the first three months of his employment in 2006, however, Greg Bruce had worked with the dayshift team as a Fleet Manager, in which he performed dispatching duties, while managing a group of drivers. Beginning in October 2006, Bruce had worked as a night dispatcher. He testified that the Petitioner responded well to training and, as far as he knew, performed his duties well after commencing his employment. Bruce however, did not observe the Petitioner performing his duties after the training period ended because they worked at different times. He did establish that the Petitioner consistently arrived early for his shift and communicated regularly with the day shift team, before they departed at the end of their shift. He established that the Petitioner had a good attendance record, and was seldom or never absent, because he never had to "cover" the Petitioner's duties, which he would have done if the Petitioner had missed work. The night dispatcher for Shoreline functioned alone while on shift, had to answer four telephone lines and respond to text messages from drivers, concerning any issues arising during the night. The night dispatcher was also required to communicate with customers and to generate new loads. The night dispatcher had responsibility for resolving equipment break-down issues for Shoreline as well as Shoreline Transportation of Alabama, a related trucking company under the same ownership. The night dispatcher's duties were essentially the same as those performed during the day by fleet managers, as well as load data entry personnel and customer service personnel. The testimony of the Petitioner and Bruce, together, establishes that the Petitioner was generally adequately qualified to perform the duties of Night Dispatcher. Mistakes were made by the night dispatchers, including the Petitioner, as well as by day-shift personnel. Day-shift personnel would sometimes omit a correct "pick-up number" so that the night dispatchers would have to search the office to locate a particular bill of lading to determine load/delivery information. Because of the large number of trucks on the road at any given time, resolving such issues could take a considerable period of time. Both the night dispatchers, including the Petitioner as well as the day-shift personnel, made mistakes such as entering incorrect numbers in the company record system concerning trucks, drivers and loads. The totality of the testimony and evidence shows, however, that, after training, and after gradually improving on the job the Petitioner was adequately qualified for the night dispatcher job at the time of his termination. Sometime in August 2007, the Petitioner learned that the company would be hiring an Operations Manager to assist Clayton Gremillion in his operations management duties. The Petitioner therefore approached Clayton Gremillion (his supervisor) about his interest in being considered for that new position. Clayton Gremillion acknowledged in his testimony that the Petitioner had informed him of his interest in moving into a management position, and had informed him about his qualifications. Clayton Gremillion further acknowledged that the company was creating such a management position and that he told the Petitioner that he would "keep him in mind" for that position. The position was not posted or advertised and there was no actual opportunity to make a formal application. In any event, the Petitioner was never interviewed for that position nor was it ever discussed with him, after the initial conversation he had with Clayton Gremillion. Clayton Gremillion, and his father, Don Gremillion, the owner, interviewed and then hired Justin Allen for the new position, on January 21, 2008. He was hired as an Operations Manager, at a weekly salary of $1,346.15. Allen was much younger than the Petitioner, being born in 1979. Mr. Bruce testified that he had more than 20 years experience in trucking management and he would have been qualified and wished to have been considered for the job. He testified that he considered the Petitioner even more qualified because of his longer experience in management with trucking companies with similar operations. Justin Allen had much less experience in the trucking business than either the Petitioner or Greg Bruce. He did have a few years of experience working for J.B. Hunt Trucking Company, but he lacked significant management experience. Justin Allen was hired, however, because it was believed that he had business connections which would be of significant assistance in generating new revenue and accounts for the company, chiefly accounts with Lowe's and Wal-Mart. This was the primary reason for Shoreline to hire Allen, as well as the fact that it was considered important to obtain help for Clayton Gremillion in managing the company's operations. The evidence is not clear as to how much new revenue Allen may have generated for Shoreline. Allen also performed some human resource duties, as well as helping Clayton Gremillion in operations management. In 2007, as well as into 2008, Shoreline was adversely impacted by an economy entering a severe recession, with a particularly severe financial strain caused by escalating diesel fuel prices. Indeed, Shoreline lost $1.7 million in 2007 and lost over $2 million in the first six months of 2008, which resulted in its closure, effective July 1, 2008. On that date, the company operations ceased and all assets and equipment were leased to Evergreen Transportation Corporation. During the period leading up to this company closure, economic adversity caused Shoreline to take some 40 trucks out of service, in approximately early February of 2008. This resulted in the layoff of numerous drivers and some office personnel. In early 2008, the New Orleans office of Shoreline was closed, due largely to economic conditions. An employee, Mike Hill, who had been staffing the New Orleans office, was transferred to the main office in Cantonment, Florida. Mike Hill had been initially hired by Shoreline on August 30, 2004. He had worked in the trucking industry prior to that time as a driver and also had approximately ten months experience in dispatching before being hired by Shoreline. In 2007 and early 2008, Hill was being paid a $1,000 weekly salary plus a $300 car allowance. While working for Shoreline in the New Orleans area he serviced the Gulf States Coca-Cola Company account, at its facility in New Orleans, as one of Shoreline's most important customers. Hill is a substantially younger person than the petitioner, being born in 1971. Apparently, Mr. Hill had communication difficulties, or disputes, with Coca-Cola's representative, Shawn Blazer. While that may have affected the decision to remove him from the Louisiana office and return him to the Florida office, the evidence shows that Shoreline kept the Coca-Cola account and had it serviced by Hill, and later Norman Macintosh and ultimately by Greg Bruce. Bruce testified that because of his efforts Shoreline regained business that Hill had lost with Coca-Cola. Be that as it may, the evidence shows that the primary reason that Mike Hill was transferred back to the Cantonment office was due to the economic downturn and the Respondent's closure of the New Orleans area office or terminal. Mike Hill had worked for Shoreline since 2004 and had worked in the night dispatching and breakdown clerk position before Mr. Hamer ever joined the company. Consequently, due to his seniority and due to his relevant experience, Hill was moved back from New Orleans and given the position held by the Petitioner. The Petitioner was therefore informed by Cheryl Allender, on or about February 6, 2008, that Clayton Gremillion had decided to terminate the Petitioner's employment because the position would be filled by Mike Hill. The Petitioner was told it was necessary to lay him off due to the need to reduce forces as a result of economic conditions. The financially-driven reduction of Shoreline's forces in New Orleans and the decision to retain Mike Hill who was an employee with seniority, according to the Respondent, led to the Petitioner's layoff. In addition to the Petitioner, six other office personnel were laid off within thirty days of the Petitioner's layoff. Clayton Gremillion testified that there were certain performance deficiencies displayed in the Petitioner's work as a night dispatcher. These involved tardy or incorrect input of data into the computerized load/truck/customer tracking and records system, and some delays in arranging for the repair of truck break-downs and for alternative means of delivery or pick-up of the relevant loads. The primary reason for the layoff, however, was as a result of the reduction of forces in the New Orleans operation and the decision to transfer employee, Mike Hill, with his seniority, and experience in dispatch work, to replace the Petitioner in his position. It is true that Shoreline hired some other personnel after the Petitioner's layoff, and in the face of the economic downturn. However, none of these personnel were hired to fill the Night Dispatch/Break-Down Clerk position that the Petitioner had occupied. Lloyd Randall was hired after the Petitioner was laid off. Lloyd Randall, born in 1954, was approximately seven years younger than the Petitioner. He was hired to work as a fleet manager on the recommendation of a mutual acquaintance to Clayton Gremillion. In fact, as Clayton Gremillion conceded, he hired him "as a favor to a friend." He hired him at a salary rate of approximately $475 per week. On the day of his hire, Mr. Randall decided he would not stay, whereupon Clayton Gremillion offered him $565 per week for the position. Mr. Randall, however, determined that it was not the type of work he desired and left after being employed for approximately one day. Mike Hill, who had been hired in the position from which the Petitioner was terminated, left the company fairly soon, on March 31, 2008. The position which had been occupied by the Petitioner, and then Mike Hill, was next filled by Norman Macintosh, who is over 50 years of age and had worked with Shoreline since the 1980's. Shoreline employed people in all age ranges. This included several over the age of 40, some over the age of 50, and some over the age of 60. In February 2008, for example, when the Petitioner was laid off, numerous drivers were employed over the age of 50 and Norman Macintosh and Jerry Adkins, longtime company employees, respectively in the dispatcher positions and maintenance supervisor positions, were over the age of 50. Mr. Adkins was over 60 years of age at the time. Shoreline continued to run ads seeking to fill certain positions, including office positions, after the Petitioner's layoff. These were not ads seeking employees for the night dispatcher/break-down clerk position that the Petitioner had held, however. Although Shoreline hired some additional personnel after the Petitioner's layoff, none of them were hired to fill his position. In any event, the Petitioner noticed the ads and called Jerry Adkins to find out "what was going on." The fact is, however, that in response to the ads the Petitioner never contacted anyone else at Shoreline in an effort to either get his former job back, or to seek some other position with the company, such as those referenced in the ads. Mr. Adkins, the Maintenance Supervisor for Shoreline, was over 60 years of age. The Petitioner contends that he is a biased witness because he was a long- time company employee and, even after the cessation of company operations, still had a company-supplied vehicle. It is not found that this fact, together with any facts elicited on cross-examination of Mr. Adkins, or otherwise, has established him to be lacking in credibility, however. Mr. Adkins did not believe that the Petitioner's layoff was associated with his age. Instead, he stated that it was to accommodate bringing the more senior employee, Mike Hill, back to the company headquarters location from the closed New Orleans location and operation. His testimony is accepted as credible. When the Petitioner learned that his former position with Shoreline was being advertised, in March 2008, he did not apply for it. He had an application pending with another trucking company at the time which he anticipated would be a better employment opportunity. Moreover, he did not apply for other employment positions which he maintains were filled with younger people. There is no evidence to show that in instances when substantially younger people were hired for positions with the company, before and after the Petitioner's layoff, that it was at the expense of persons more in the Petitioner's age range, who sought the positions also and were rejected. That was simply not shown, in addition to the fact that the Petitioner did not apply for other positions. In fact, these positions have fairly low pay levels. It thus may be that these positions, or some of them, were filled by significantly younger people because older, more experienced applicants would not be attracted by the relatively low pay levels. In any event, had the Petitioner made an inquiry concerning being re-hired by the Respondent for any position, it would not likely have occurred. This is because of performance problems described by the testimony of daytime dispatcher Chip Wasdin, as well as by Clayton Gremillion. The Petitioner made mistakes and had difficulty ensuring that data was entered correctly into the company's computer system. The Petitioner acknowledged making mistakes in this regard, even after his first few months in his position. In summary, it has not been demonstrated that the Petitioner was terminated, nor that he failed to receive the promotion to the management position, because of his age. The Respondent has established the above-referenced legitimate business reasons for the hiring of Justin Allen and Mike Hill. Other substantially younger people hired for positions, even if their tenure was very short in those positions in late 2007, or the spring of 2008, were not shown to be hired at the expense of the Petitioner or any other applicants in the Petitioner's age range. In fact, the Petitioner applied for no such positions. Given the overall tenor of Clayton Gremillion's testimony, it may even be the case that, in one or more of the hiring situations, the hiring related at least somewhat to cronyism. Clayton Gremillion admitted hiring Lloyd Randell as a favor to a friend, and the same may be true in terms of a friend's recommendation with regard to Justin Allen. In any event, however, there was no showing of any intent to discriminate, based upon age, by the hiring of significantly younger people than the Petitioner, or in the failure to promote or the termination of the Petitioner. Finally, the lack of intent to discriminate based upon age is borne out by the fact that the Respondent was fully aware of the Petitioner's age in the spring of 2007, when it chose to hire him.
Recommendation Having considered the foregoing findings of fact, conclusions of law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties it is, therefore, RECOMMENDED that a Final Order be entered by the Florida Commission on Human Relations finding that no discriminatory employment actions based upon the Petitioner's age occurred and dismissing the Petition in its entirety. DONE AND ENTERED this 16th day of June, 2009, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of June, 2009. COPIES FURNISHED: Heather F. Lindsay, Esquire Lindsay & Andrews, P.A. 5218 Willing Street Milton, Florida 32570 Michael W. Kehoe, Esquire Fuller, Johnson, Kehoe, Horky and Rettig, LLC 3298 Summit Boulevard, Suite 11 Pensacola Florida 32503 Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Larry Kranert, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301
Findings Of Fact General Contractors & Construction Management, Inc. (Petitioner), is a Florida corporation engaged in the business of general contracting and construction (construction and renovation of commercial and residential buildings), including subcontracting, since 1985. Petitioner's President is Ms. Akram Niroomand-Rad and its Vice-President is Mr. Kamran Ghovanloo, Ms. Niroomand-Rad's husband. Petitioner is a small business concern as defined by Subsection 288.703(1), Florida Statutes. Prior to April 1990, Ms. Niroomand-Rad owned 50 percent of Petitioner's stock. In April 1990, she acquired 100 percent of the stock and became the Petitioner's sole owner. Ms. Niroomand-Rad is a minority person as defined by Subsection 288.703(3), Florida Statutes. According to Petitioner's articles of incorporation and by-laws, its corporate business is conducted by a majority of the board of directors. Petitioner has two directors, Ms. Niroomand-Rad and Mr. Ghovanloo, 1/ and as such, the minority owner does not control the board of directors. Also, according to Petitioner's by-laws, Petitioner's President manages its business and affairs subject to the direction of the board of directors. Petitioner's licensed contractor is Mr. Ghovanloo who is a certified general contractor. Ms. Niroomand-Rad is not a licensed contractor although she is taking course work to become a licensed contractor. Mr. Ghovanloo is Petitioner's qualifier, and, as its qualifier, brings his expertise and license to the business. Further, as qualifier, he is also responsible for the finances of Petitioner and for pulling the necessary permits in order for Petitioner to perform the contractual work. Additionally, Mr. Ghovanloo performs Petitioner's estimating, handles quality inspection of job sites, assists in the evaluation and preparation of bids, and attends some of the pre-bid meetings on projects. Ms. Niroomand-Rad has been involved in soliciting bids, reviewing bids and estimates, negotiating contracts, visiting clients, responding to correspondence, overseeing financial activities, hiring and firing, and visiting job sites. However, Ms. Niroomand-Rad relies heavily upon Mr. Ghovanloo's technical expertise, expert opinions, and judgment and upon others for guidance and for handling the technical aspects of the business. Further, Ms. Niroomand-Rad relies heavily on Mr. Ghovanloo, and others to a lesser degree, regarding the purchasing of goods, equipment, or inventory, and services needed for the day-to-day operation of the business, including evaluating and retaining subcontractors. Mr. Ghovanloo is authorized to sign checks without restriction. Ms. Niroomand-Rad was reared in a construction environment. Also, she has completed a construction management course offered by the City of Miami and is a licensed real estate broker. Petitioner has been certified as an MBE by Dade County and the Dade County School Board.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission on Minority Economic and Business Development enter a final order denying General Contractors & Construction Management, Inc., certification as a Minority Business Enterprise. DONE AND ENTERED this 24th day of July, 1995, in Tallahassee, Leon County, Florida. ERROL H. POWELL Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of July, 1995.
The Issue This issue in this case is whether the Petitioner's application for certification as a Minority Business Enterprise should be approved.
Findings Of Fact On or about November 17, 1994, Northwest Engineering, Inc., (Petitioner) submitted an application for certification as a Minority Business Enterprise (MBE) to the Florida Commission on Minority Economic & Business Development (Respondent). The application was signed by the Petitioner's president, Gerald Silva. According to the application, the Petitioner is of Portuguese heritage. The Petitioner's mother was born in the Azores. By letter of April 5, 1995, the Respondent advised the Petitioner that it was not eligible for MBE certification. The letter stated that the Azores were not within the geographical restrictions set forth by Florida Statutes. Official notice is taken that the Azores are a group of Portuguese islands lying in the Atlantic Ocean approximately 740 miles west of southern Portugal. The Azores are not part of Mexico, South America, Central America, or the Caribbean. Accordingly, persons with origins in the Azores do not fall within the statutory definition of Hispanic Americans for purposes of certification as a Minority Business Enterprise. The evidence fails to establish that the Petitioner is entitled to certification as a Minority Business Enterprise.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Florida Commission on Minority Economic & Business Development enter a Final Order denying the application of Northwest Engineering, Inc., for certification as a Minority Business Enterprise. DONE and ORDERED this 8th day of September, 1995, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of September, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-2056 To comply with the requirements of Section 120.59(2), Florida Statutes, the following constitute rulings on proposed findings of facts submitted by the parties. Respondent The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 3,5. Rejected, immaterial. COPIES FURNISHED: Crandall Jones, Executive Administrator Collins Bldg., Suite 201 107 West Gaines St. Tallahassee, FL 32399-2005 Gerald Silva 8409 Sunstate Street Tampa, Florida 33634 Joseph L. Shields, Esquire 107 West Gaines Street, Suite 201 Tallahassee, Florida 32399-2005
The Issue The issue to be considered in this matter is whether Petitioner meets the requisite qualifications for certification as a minority business enterprise (MBE).
Findings Of Fact Otto A. Lawrenz, a Native American, is the sole owner of Petitioner, Mechanical Air Products (MAP), located in Jacksonville, Florida. Petitioner was certified from December 12, 1992, through December 12, 1993, as a minority business enterprise (MBE). Recertification for Petitioner as an MBE for the period December 12, 1993 through December 12, 1994, occurred without incident following application by Petitioner. Petitioner is a business which specializes in provision of heating, ventilation and air conditioning equipment to its customers. Following application in December, 1994, Respondent denied Petitioner's request for recertification as an MBE by letter dated January 6, 1995. Respondent's denial of Petitioner's recertification resulted from amendments to Respondent's definition of "[r]egular dealer" as set forth in Rule 60A-2.001(10), Florida Administrative Code, and Respondent's determination that Petitioner did not meet that definition. Petitioner does not own, operate or maintain a store, warehouse or other establishment. As stated by Otto A. Lawrenz in correspondence to Respondent and reaffirmed by him at the final hearing, Petitioner is: manufacturer representative type of business that buys directly from various suppliers and factories I [Lawrenz] repre- sent. The products are purchased from this company and shipped direct to customers ship to address. I [Lawrenz] do not stock these products for inventory. Petitioner is presently provided some storage space free of charge by another, unaffiliated business, for storage of some products.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered denying the application for certification as an MBE. DONE and ENTERED in Tallahassee, Florida, this 14th day of August, 1995. DON W. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of August, 1995. APPENDIX In accordance with provisions of Section 120.59, Florida Statutes, the following rulings are made on the proposed findings of fact submitted on behalf of the parties. Petitioner's Proposed Findings Petitioner's post-hearing submittal consisted of documentation, not provided at the final hearing, dealing with Petitioner's heritage, and his arguments of the law relative to this case. Consequently, those matters are addressed as not relevant and argumentative for purposes of this proceeding. Petitioner may attack the rules applied to his case in a separate rule challenge proceeding. Respondent's Proposed Findings 1.-4. Accepted, but not verbatim. COPIES FURNISHED: Otto A. Lawrenz Mechanical Air Products P O Box 17746 Jacksonville, FL 32245 Joseph L. Shields, Esq. Commission On Minority Economic And Business Development 107 W Gaines St., 201 Collins Bldg. Tallahassee, FL 32399-2005 Crandall Jones Executive Administrator Commission on Minority Economic and Business Development 107 W. Gaines St., 201 Collins Bldg. Tallahassee, FL 32399-2005
The Issue Are Rules 60A-2.001(10) and 60A-2.005(7), Florida Administrative Code, valid exercises of delegated legislative authority?
Findings Of Fact On December 22, 1991, the Respondents made amendments to Rules 60A- 2.001 and 60A-2.005, Florida Administrative Code, related to the certification of a "minority business enterprise" to engage in business with the State of Florida. With the amendments, a definition for the term "regular dealer" was created, which states in pertinent part: 60A-2.001 Definitions. . . . (10) 'Regular dealer' means a firm that owns, operates or maintains a store, warehouse, or other establishment in which the material or supplies required for the performance of the contract are bought, kept in stock, and regularly sold to the public in the usual course of business. To be a regular dealer, the firm must engage in, as its principal business and in its own name, the purchase and sale of products. . . . The amendments included other requirements that a "minority business enterprise", as defined at Section 288.703(2), Florida Statutes, must meet to be certified to participate in the Respondents' Minority Business Program. (The definition of "minority business enterprise" was changed by Section 288.703(2), Florida Statutes (1994 Supp.). The change does not effect the outcome in the case.) As promulgated December 22, 1991, Rule 60A-2.005(7), Florida Administrative Code states in pertinent part: The applicant business shall establish that it is currently performing a useful business function in each specialty area requested by the applicant. For purposes of this rule, "currently" means as of the date of the office's receipt of the application for certification. The applicant business is considered to be per- forming a useful business function when it is responsible for the execution of a distinct element of the work of a contract and carrying out its responsibilities in actually performing, managing, and supervising the work involved. The useful business function of an applicant business shall be determined in reference to the products or services for which the applicant business requested certification on Form PUR 7500. When the applicant business is required by law to hold a license, other than an occupational license in order to undertake its business activity, the applicant business shall not be considered to be performing a useful business function unless it has the required license(s). In determining if an applicant business is acting as a regular dealer and that it is not acting as a conduit to transfer funds to a non- minority business, the Office shall consider the applicant's business role as agent or negotiator between buyer and seller or contractor. Though an applicant business may sell products through a variety of means, the Office shall consider the customary and usual method by which the majority of sales are made in its analysis of the applicability of the regular dealer require- ments. Sales shall be made regularly from stock on a recurring basis constituting the usual operations of the applicant business. The proportions of sales from stock and the amount of stock to be maintained by the applicant business in order to satisfy these rule requirements will depend on the business' gross receipts, the types of commodities sold, and the nature of the business's operations. The stock maintained shall be a true inventory from which sales are made, rather than by a stock of sample, display, or surplus goods remaining from prior orders or by a stock main- tained primarily for the purpose of token compliance with this rule. Consideration shall be given to the applicant's provision of dispensable services or pass-through operations which do not add economic value, except where characterized as common industry practice or customary marketing procedures for a given product. An applicant business acting as broker or packager shall not be regarded as a regular dealer absent a showing that brokering or packaging is the normal practice in the applicant business industry. Manufacturer's representatives, sales representatives and non-stocking distributors shall not be considered regular dealers for purposes of these rules. In passing the rules amendments, the Respondents relied upon authority set forth in Sections 287.0943(5) and 287.0945(3), Florida Statutes. Those statutory sections are now found at Sections 287.0943(7) and 287.0945(6), Florida Statutes (1994 Supp.). Those provisions create the general and specific authority for the Minority Business Advocacy and Assistance Office to effectuate the purposes set forth in Section 287.0943, Florida Statutes, by engaging in rule promulgation. As it relates to this case, the law implemented by the challenged rules is set forth at Section 287.0943(1)(e)3, Florida Statutes (1994 Supp.), which establishes criteria for certification of minority business enterprises who wish to participate in the Minority Business Program contemplated by Chapter 287, Florida Statutes. That provision on certification was formerly Section 287.0943(1), Florida Statutes. In assessing a minority business enterprise application for certification, the Respondents, through that statutory provision: [R]equire that prospective certified minority business enterprises be currently performing a useful business function. A 'useful business function' is defined as a business function which results in the provision of materials, supplies, equipment, or services to customers other than state or local government. Acting as a conduit to transfer funds to a non-minority business does not constitute a useful business function unless it is done so in a normal industry practice. Petitioners, Expertech and Mechanical, had been certified to participate in the Respondents' Minority Business Program, but were denied re- certification through the application of Rules 60A-2.001(10) and 60A-2.005(7), Florida Administrative Code. Marsha Nims is the Director of Certification for the Commission on Minority Economic and Business Development, Minority Business Advocacy and Assistance Office. In her position, she develops policy on minority business enterprise certification. As such, she was principally responsible for developing the subject rules. In particular, as Ms. Nims describes, the purpose in developing the rules was to address the meaning of a "conduit" set forth at Section 287.0943(1), Florida Statutes, in an attempt to insure that improper advantage was not taken by persons using certified minority businesses to enter into contractual opportunities with the State of Florida. In promulgating the rule, the Respondents spoke to representatives who were involved with unrelated minority business enterprise certification programs. One person from whom the Respondents had obtained ideas was Hershel Jackson, who processed certifications for the Small Business Administration in its Jacksonville, Florida office. This individual indicated that the Small Business Administration had developed a "regular dealer rule" that required individuals who sought minority certification from the Small Business Administration to make sales from existing inventory. This conversation led to the utilization of federal law as a guide to establishing the rules in question. At 41 CFR 50-201.101(a)(2), the term "regular dealer" is defined as: A regular dealer is a person who owns, operates, or maintains a store, warehouse, or other estab- lishment in which the materials, supplies, articles, or equipment of the general character described by the specifications and required under the contract are bought, kept in stock, and sold to the public in the usual course of business. It can be seen that the definition of "regular dealer" set forth in Rule 60A-2.001(10), Florida Administrative Code, is very similar to the federal definition. In addition, the Respondents used the Walsh Healey Public Contracts Act Interpretations at 41 CFR 50-206 for guidance. The provision within the Walsh Healey Public Contracts Act that was utilized was 41 CFR 50-206.53(a). It states: Regular Dealer. A bidder may qualify as a regular dealer under 40 CFR, 50-201.101(b), if it owns, operates, or maintains a store, warehouse, or other estab- lishment in which the commodities or goods of the general character described by the specifi- cations and required under the contract are bought, kept in stock, and sold to the public in the usual course of business. . . . The Petitioners presented witnesses who established the manner in which their respective industries carried out normal industry practices involving fund transfers to non-minority businesses from minority and non- minority businesses. Joseph H. Anderson is the President of Suntec Paint, Inc. (Suntec), which does business in Florida. Suntec is a non-minority corporation. It manufactures architectural coatings (house paints). Suntec sells and distributes its paint products through its own stores, through other dealers who have stores, and through sales agents. The sales agents would also be considered as manufacturers' representatives. Suntec's relationship with its manufacturer's representatives is one in which Suntec has an agreement with the representatives to sell the paint products to the representatives at negotiated prices which may be discounted based upon volume of sales. The representatives then sell the products to end users at a price that may be higher than the price between Suntec and the representatives. The representatives are responsible for marketing the product to customers. The products manufactured by Suntec are inventoried for distribution, or in some instances, made to order for distribution. The maintenance of inventory is principally for the benefit of the retail outlets controlled by Suntec. Suntec prefers not to maintain inventory because it ties up raw materials, warehousing space, and requires personnel to be engaged in the management and shipment of those products. If the product is "picked up" more than once in the process, it costs more money. Therefore, Suntec distributes inventory through the representatives by direct shipping from the manufacturer to the end user. Suntec's arrangement with its representatives is one in which the customer pays the representative for the product and the representative then pays Suntec. The representatives for Suntec do not ordinarily maintain inventory of the paint products, because this avoids having the representatives handle the product and then reship the product to the end user. By the representative handling the product, it would add expense to the transaction. Suntec, in selling its products through representatives and shipping directly from the manufacturer to the end user, is pursuing a practice which is normal in its industry. Suntec's arrangement with dealers unaffiliated with Suntec who have stores, provides the independent dealers with inventory. Nonetheless, there are occasions in which the independent dealer will place a large order with Suntec; and Suntec will ship the product directly to the end user. That practice is a frequent practice and one that is standard in the industry. Suntec has two minority businesses who serve as manufacturers' representatives and other manufacturers' representatives who are non-minorities. The minority representatives are Expertech, located in Gainesville, Florida, and All In One Paint and Supply, Inc. (All In One), also located in Gainesville. The two minority representatives for Suntec maintain some stock of paint. The inventory amount which All In One maintains was not identified. Within a few months before the hearing, Expertech had purchased 60 gallons of paint from Suntec. It was not clear what the intended disposition was for the paint. Thomas Rollie Steele, the Branch Manager for Bearings and Drives, serves as Sales Manager for that company in its Florida operations. Bearings and Drives has its corporate offices in Macon, Georgia. The company has thirty locations throughout the southern United States, with five different divisions. It specializes in industrial maintenance products and some services. Bearings and Drives is a non-minority firm. In its business Bearings and Drives has manufacturing arrangements or agreements to represent other manufacturers. As representative for other companies who manufacture the products which Bearings and Drives markets, Bearings and Drives is expected to solicit sales. The agreements with the manufacturers which Bearings and Drives has, establish price structures, terms and conditions, and shipping arrangements. Bearings and Drives serves as representatives for the manufacturers in a distinct service area. Bearings and Drives buys products from the manufacturers and resells the products to Bearings and Drives' customers. Bearings and Drives derives compensation by selling to customers at a price higher than the product was sold to them. The price at which products are resold by Bearings and Drives is controlled by market conditions. Bearings and Drives maintains some product inventory; however, in excess of 50 percent of the products sold are shipped directly from the manufacturer to the customer. The direct shipment improves the profit margin for Bearings and Drives by not maintaining an inventory and saving on additional freight expenses, taxes paid on existing inventory and labor costs to be paid warehouse personnel. Bearings and Drives uses a direct delivery system to its customers that is scheduled around the time at which the customer would need the product sold by Bearings and Drives. This arrangement is a standard industry practice. Aileen Schumacher is the founder, President, and sole owner of Expertech. This Petitioner had been certified through the Minority Business Program prior to the rule amendments in December, 1991. When the Petitioner, Expertech sought to be re-certified, it was denied certification in some business areas for failure to maintain sufficient levels of inventory. Expertech sells and distributes technical supplies, such as pollution- control equipment, laboratory equipment, hand tools, and other technical supplies. It specializes in the sale and distribution of safety equipment. Expertech does not provide services. The areas in which Expertech has been denied re-certification relate to the sale of laboratory supplies, paint, and pollution-control equipment. In marketing products Expertech buys directly from manufacturers, except in the instance where they cannot access the manufacturer directly and must operate through a distributor. Expertech tries to maintain as little inventory as possible and to have the commodities it sells shipped directly from the manufacturer to the end user. In addition to ordinary sales, Expertech takes custom orders for products not maintained in inventory by the manufacturer, which are directly shipped from the manufacturer to the customer. In Expertech's business dealings as a manufacturer's representative, wherein it arranges for direct shipments, it is performing in a manner which is standard in the industries in which it is engaged. Otto Lawrenz is the sole proprietor of Mechanical. Prior to the rules changes in December, 1991, Mechanical had been certified as a minority business enterprise. The attempt to re-certify was denied based upon the fact that Mechanical did not stock products and was serving as a manufacturer's representative in selling heating and ventilation equipment. Mechanical sells to mechanical contractors and sheet-metal contractors as a representative for the manufacturer. Mechanical bids on construction jobs and "takes off" the amount of equipment needed in setting its price quotes. If the submission of the price quotation is successful, Mechanical receives a purchasing order from the contractor, as approved by the project engineer. The equipment is then ordered by Mechanical, and delivered by the manufacturer to the job site or the contractor's home office. Mechanical does not maintain a warehouse or a store. The end user pays Mechanical within 30-60 days from the time that the equipment is delivered to the end user. Mechanical then pays the original manufacturer an agreed upon price. Generally, Mechanical sells special-order equipment. This type of equipment would be difficult to inventory since it is being custom-ordered and the units that are ordered are large in size. In addition, the variety of parts involved in these projects makes it difficult to stock them.
The Issue The issues in this case concern the question of whether the Petitioners are entitled to certification as a Minority Business enterprise within the meaning of Chapter 288, Florida Statutes and Rule 13-8.005, Florida Administrative Code. The basic question is whether Bonnie M. Mobley, who is the minority person in Council Enterprises, Inc., and majority stockholder controls the management and daily operations of that corporation.
Findings Of Fact On July 1, 1984 council Enterprises, Inc. was incorporated as a Florida corporation. From that date until the Fall of 1985 the corporation was engaged in the business of plumbing and mechanical services in Florida. At the inception Luther E. Council, Jr., who is also known as "Snipes" Council, was the president, a director and stockholder within the corporation. His mother Bonnie M. Mobley, a minority person, was the majority stockholder and a director in the corporation. At the commencement of the corporation, Bonnie Mobley was secretary/treasurer. Her percentage of stock ownership was 51 percent and the other 49 percent was held by the son. The money which was used to capitalize the corporation in its inception was provided by the mother in the amount of $50,000. On June 14, 1985 by action of the Board of Directors, namely the mother and son, Luther E. Council, Jr. submitted his resignation as president. As the minutes of that meeting state, he did this having secured jobs for employees of Council Enterprises, Inc. with a firm known as Hays Heating and Plumbing Company. Council took a job with that company as manager. On the same date of the Board of Directors meeting, Bonnie M. Mobley was appointed as president, secretary and treasurer, in furtherance of a concern that each of these corporate officers be installed during the life of this corporation. When Luther E. Council, Jr. left Council Enterprises, Inc. to go and work with Hays he was no longer a director. It was further recommended by the son that his mother secure a Leon County Mechanical Contractor's License and serve as a qualifying agent and gain registration with the State of Florida. Other recommendations pursuant to Article II of the Articles of Incorporation were that she consider brokering mechanical equipment as a livelihood and secure a wholesaler's license as well. The events that took place by the corporation was in recognition of the fact that the corporation had concluded its business of offering plumbing and mechanical services. In fact, Bonnie Mobley had gone to work with Hays Heating and Plumbing Company on February 1, 1985 and would remain in her position as office manager at that company until January 9, 1987. During that time she was responsible for secretarial and bookkeeping responsibilities for Hays. During part of that time, as an aside, through Council Enterprises, Inc., she sold supplies to Hays for its use in projects. She tried to gain other contracts for supplies from companies other than Hays, without success. Luther E. Council, Jr., while working at Hays as a manager, was his mother's supervisor. He stayed with Hays from February 1, 1985 until June 19, 1987. As a consequence of leaving Council Enterprises, Inc. to go and work with Hays, Luther D. Council, Jr. transferred his stock in Council Enterprises, Inc. to his mother and she continues to hold all the stock in that company. In August, 1987 and to the present, Bonnie Mobley and her son Luther E. Council, Jr. reconstituted Council Enterprises, Inc. for purposes of offering services in plumbing, mechanical, fire protection, underground utilities, pollutant storage and as builders. They opened an office at 110 Perkins Street, Tallahassee, Florida, which continues to be their business location. Following the August, 1987 restructuring of the business Bonnie Mobley made her son vice-president and named him a director. This meant from that point forward, that there were two directors, Ms. Mobley and her son, Luther E. Council, Jr. In the past, Ms. Mobley had some familiarity with the heating, ventilation and air conditioning and plumbing business which her ex-husband, father of Luther E. Council, Jr. began in 1959. This business was Council Brothers, a company which her former husband and his brothers had started. Her awareness of that business corresponded to about an 11 year period in which at times she was involved to some extent in doing "take offs", cost estimating on jobs for her husband's company. Her principal occupation during the course of this period related to working in the Lewis State Bank as a secretary, receptionist and in the personnel department associated with payroll. She had also done some bookkeeping work for a small business which her ex-husband had relating to an air conditioning and heating service. Ms. Mobley has a license with Council Enterprises, Inc. related to Leon County in the mechanical field. As such, she is the qualifying agent for the corporation. Her son, by contrast, holds certified licenses with the State of Florida, Department of Professional Regulation, in the fields of plumbing contracting, mechanical contracting, building contracting, underground utility contracting, and pollutant storage contracting. In order to gain these licenses he had to have requisite experience in these fields and pass an examination. He also holds a First Class Fire Protection Contractor's License, and a Florida LP Underground Gas License issued by the State of Florida, Department of Insurance. Since the corporation returned to the active contracting business in August, 1987 Ms. Mobley's duties include giving instructions to an office secretary, Laverne Taylor, as needed, and generally keeping things running in the office. She is involved with final decisions about business choices to include an awareness of Dodge reports which advertise contract job opportunities and looking at the local newspaper to see about available work. She is involved in the purchase of equipment and has a say in those choices. She is involved with answering the phone at the office, paying bills, and taking care of the payroll. She sometimes goes to jobsites and stays a number of hours or even may stay all day. Luther E. Council, Jr. describes his position with the company as one of doing whatever needs to be done from running equipment, writing letters, raking and shoveling at jobs and doing job estimating. The mother and son and their field foreman, John W. Edwards, III, all involve themselves in bidding jobs which the company is interested in. The arrangement for hiring employees in the company is one in which a number of the employees who work for the company were associated with Hays and came to work at Council Enterprises, Inc. when Luther E. Council, Jr. returned from Hays to Council Enterprises, Inc. Mr. Edwards was an individual whom Luther E. Council, Jr. knew through their interest in law enforcement. Edwards as field manager is responsible for obtaining additional employees as needed in the field, subject to the approval of Ms. Mobley. Ms. Mobley has on occasion fired a couple of foremen with the company. This was against the recommendation of the field foreman Edwards. Another example of hiring relates to Laverne Taylor whom Ms. Mobley hired. The basic arrangement for hiring and firing in the company is premised upon consultation among Ms. Mobley, her son and the field foreman Edwards. Although 95 percent of the checks in the bank account by the company have been signed by Ms. Mobley, her son has signed the other 5 percent of the checks and has the authority to sign checks on the company's single signature accounts. In the bidding process which has been alluded to, all three persons, namely Ms. Mobley, Mr. Edwards and her son, Luther E. Council, Jr. are involved. Edwards is not as experienced as the son and neither is Ms. Mobley. Luther E. Council, Jr. has a better grounding in the business and in the more complicated issues that may arise in the bidding process. Ms. Mobley has been involved in the financial end of the corporation's activities and is well-grounded in that aspect of the business, to include major purchases, heavy equipment, the payment of routine items such as phone bills, and other account activities. Ms. Mobley, Luther E. Council, Jr. and Mr. Edwards are full-time employees for Council Enterprises, Inc. In obtaining recent loans in the amounts of $60,000 and $22,500, the initial amount being for cash flow on accounts receivable and the second amount having to do with a line of credit, it was necessary for Ms. Mobley and her son Luther E. Council, Jr. to guarantee the loans. In a related matter in the purchase of major pieces of equipment, both Ms. Mobley and her son signed the financial agreements involving the lease purchase of equipment. Bonding for the company in its projects include references to the resume's of both Ms. Mobley and her son. Approximately 80 percent of the work of Council Enterprises, Inc. involves underground utility installation and 20 percent is related to plumbing. In this process, Luther E. Council, Jr. is an indispensable person in deciding the direction which the company will pursue in its business activities, most especially related to understanding of the technical aspects of this company's business and the necessity to rely upon his licensing credentials in order to pursue its business functions. For thin's reason, Bonnie Mobley is not in a position to independently control the corporation's affairs and, in fact, has not controlled it, independent of her son a non-minority person. In this connection, Article II, Section 1 of the By Laws of the corporation, Council Enterprises, Inc., speaks in terms' of the business of that corporation being managed and its corporate powers being reposed in its Board of Directors. Further, Article II, Section 6 of those By Laws requires that the majority of the directors shall be necessary as participants at a meeting to constitute a quorum and that it is the act of the majority of those directors present at the meeting where there is a quorum that constitutes the actions of the Board of Directors. Given this circumstance, there are only two directors and Luther E. Council, Jr. has as much authority as Ms. Mobley in his capacity as director. As a result, he necessarily shares in the management of the company. Against this background information concerning Council Enterprises, Inc. it had sought to gain certification as a Minority Business Enterprise by the State of Florida, Department of General Services. It was denied that opportunity by action of the Department on April 8, 1988 and sought a formal hearing under Section 120.57(1), Florida Statutes, to resolve the question of its entitlement to such certification. The basis of denial was briefly described in the issue statement to this recommended order and will be more specifically referred to in the Conclusions of Law section of the recommended order which follows.
Recommendation Based upon consideration of the findings of fact and conclusions of law reached, it is, RECOMMENDED: That a Final Order be entered which denies the application of Council Enterprises, Inc. to be certified as a Minority Business Enterprise. DONE and ENTERED this 6th day of March, 1989, in Tallahassee, Leon County, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of March, 1989. APPENDIX The following disposition is made of the proposed fact finding of the parties: Petitioner's Facts The Petitioner's facts are subordinate to the fact found in the recommended order. Respondent's Facts 1.-6. Subordinate to facts found. Subordinate to facts found with the exception of the next to the last sentence which is not necessary to resolution of the dispute. Subordinate to facts found with the exception of the first sentence which is contrary to facts found. First sentence is contrary to facts found. The balance of the sentences within that paragraph are subordinate to facts found with the exception of the discussion of use of Luther E. Council, Jr.'s licenses as qualifying to allow the company to conduct certain business in the contracting field. Although it may be customary to use someone else's license as a qualifier for the benefit of the company, under the present circumstances the person who is the qualifying agent is a director who must be appeased before the corporation can conduct its affairs and who by the facts of thin case, is the dominant figure in the pursuit of the business of the corporation. Contrary to facts found. COPIES FURNISHED: Donald S. Modesitt, Esquire 320 West Park Avenue Tallahassee, Florida 32301 Sandra E. Allen, Esquire Office of General Counsel Department of General Services Room 452 Larson Building 200 E. Gaines Street Tallahassee, Florida 32399-0955 Ronald W. Thomas Executive Director Department of General Services 133 Larson Building Tallahassee, Florida 32399-0955
Recommendation Based on the foregoing, it is RECOMMENDED: That petitioner's application for certification as a Women Business Enterprise be denied. DONE and ORDERED this 29th day of June, 1984, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of June, 1984. COPIES FURNISHED: Diann Criss Atkinson, Qualified Representative Shurly Contracting, Inc. P. O. Box 15267 West Palm Beach, Florida 33406 Vernon L. Whittier, Jr., Esquire Department of Transportation 605 Suwannee Street Tallahassee, Florida 32301 Paul A Pappas, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
