Menlo Service Corporation, Daniel Sloan v. United States of America, William Brock , Secretary, Department of Labor, James B. Edward, Elmer B. Staats

Appellants challenge the district court’s affirmance of administrative decisions applying the Service Contract Act, 41 U.S.C. § 351 et seq., to appellants’ agreements to furnish technical employees to a research facility operated on behalf of the United States. We affirm.

BACKGROUND

Appellants Menlo Service Corp. and Daniel Sloan, Menlo’s president, executed purchase agreements with Lawrence Liver-more Laboratory, the purpose of which was to secure for the Laboratory necessary designers, draftsmen, and technicians. The purchase orders provided that, following a request from the Laboratory, Menlo would locate and refer desired personnel; hiring, however, remained the Laboratory’s prerogative.

Once a referral was accepted, appellants negotiated separate “Employment Agreements” with each individual, agreements in which Menlo was identified as employer. The purchase orders executed between Menlo and the Laboratory also characterized Menlo as employer, and provided that appellants would assume sole responsibility: for the setting of wage scales; payment of wages, fringe benefits, and employment taxes; processing of employee insurance; and payroll administration. Menlo was paid by…