Contractors Ass'n of Eastern Pa. v. Secretary of Labor

311 F. Supp. 1002, 2 Fair Empl. Prac. Cas. (BNA) 472, 1970 U.S. Dist. LEXIS 12529, 2 Empl. Prac. Dec. (CCH) 10,192
CourtDistrict Court, E.D. Pennsylvania
DecidedMarch 13, 1970
DocketCiv. A. 70-18
StatusPublished
Cited by13 cases

This text of 311 F. Supp. 1002 (Contractors Ass'n of Eastern Pa. v. Secretary of Labor) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Contractors Ass'n of Eastern Pa. v. Secretary of Labor, 311 F. Supp. 1002, 2 Fair Empl. Prac. Cas. (BNA) 472, 1970 U.S. Dist. LEXIS 12529, 2 Empl. Prac. Dec. (CCH) 10,192 (E.D. Pa. 1970).

Opinion

MEMORANDUM OPINION AND ORDER

WEINER, District Judge.

The Contractors Association of Eastern Pennsylvania consisting of a group of contractors, engaging in heavy highway and utility construction and intervening contractors have sued various Federal officials and the General State Authority of the Commonwealth of Pennsylvania in an effort to strike down a regulation issued by the Department of Labor which is entitled the “Revised Philadelphia Plan”. The Plan covers six construction trades 1 and geographically applies to Bucks, Chester, Delaware, Montgomery and Philadelphia Counties in Pennsylvania. The Philadelphia Plan became effective on September 29, 1969. It was issued on June 27, 1969, in implementation of the authority of the Secretary under Executive Order 11246 of September 24, 1965 as amended, 30 F.R. 12319, 32 F.R. 14303, 34 F.R. 12985 *1005 which required that Federal contracts and federally assisted construction contracts contain specified language obligating the contractor and his subcontractors not to discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. The Executive Order further required the contractors and subcontractors to “take affirmative action to insure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex or national origin”. Executive Order 11246, § 202 (1). Failure to comply with the required contractual commitments imposes various sanctions on the contractors which include the cancellation, suspension or termination of contracts and the debarment of a contractor from further Government contracts. However, no sanction may be imposed unless efforts at voluntary resolution have failed nor without affording the contractor an opportunity for a hearing. Thus the seeds of the Philadelphia Plan were planted. Two separate orders were* issued by the Department of Labor, the first on June 27 and the second on September 23, 1969. In substance, the Plan required that with respect to construction contracts in the Philadelphia area which are subject to Executive Order 11246 and where the estimated total cost of the construction project exceeds $500,000, each bidder must, in the affirmative action submitted with his bid, “set specific goals of minority manpower utilization which meet the definite standard” included in the invitation for bids. The bidder could also meet this requirement by agreeing to participate in a multi-employer affirmative action program approved by the Office of Federal Contract Compliance.

The Department of Labor order of June 27th was based on the department’s finding that although the overall minority groups representation in the construction industry in the five-county Philadelphia area was thirty (30) percent, in the six trades involved, minority representation was approximately one (1) percent. The Department of Labor concluded that the contributing factors to the small number of minority representation in these trades were due to the following:

(a) Contractors hire a new employee complement for each construction job on the basis of referral by the construction craft unions;

(b) The refusal of certain of these unions to admit Negroes to membership or apprenticeship programs;

(e) A preference in work referrals to union members and to persons who had work experience under union contracts. This resulted in a departmental finding that “special measures” were necessary to provide equal employment opportunity in these six trades for federally involved construction.

Predicated upon public hearings held in Philadelphia on August 26, 27 and 28, 1969, the September 23rd Order issued. This order established the ranges within which the contractor’s minority group employment goals should be set. It provided that in the first year, employment “ranges” vary between four (4) and nine (9) percent; in the second year between nine (9) and fifteen (15) percent; in the third year between fourteen (14) and twenty (20) percent; arid in the fourth and last year between nineteen (19) and twenty-six (26) percent. The mathematical formula was based on findings as to the availability of minority group persons for employment and the impact of the program on the existing labor force and a determination that a contractor could commit himself to the employment goals “without adverse impact on the existing labor force” which goals may be met through the employment by the contractor of journeymen, trainees or apprentices.

Safeguards are provided by the Plan. The obligation to meet, the goals is not absolute. If the contractor meets the goals he will be presumed to be in compliance with the requirements of the Executive Order. The regulation also states: “In the event of failure to meet *1006 the goals, the contractor shall be given an opportunity to demonstrate that he made every good faith effort to meet his commitment. In any proceeding in which such good faith performance is in issue, the contractor’s entire compliance posture shall be reviewed and evaluated in the process of considering the imposition of sanctions”. Executive Order 11246 § 8(a). Under the Plan, for the purpose of determining whether the contractor is in compliance, it is “no excuse” that the union with which he has a collective bargaining agreement fails to refer minority employees.

Since the Philadelphia Plan went into effect, we have been advised that six contracts have been let involving a total cost of approximately $37 million, with Federal assistance totaling approximately $11 million. The present action is before us in connection with a grant from the Department of Agriculture to the Commonwealth of Pennsylvania in connection with the Brandywine water conservation project, involving a cost of approximately $4 million, of which approximately $1.1 million of which represents Federal assistance. Invitation for bids including the requirements of the Philadelphia Plan were issued by the General State Authority of Pennsylvania. No contracts have as yet been awarded on this project.

This law suit is bottomed upon the plaintiffs’ allegation that the Philadelphia Plan violates the Constitution and laws of the United States and the laws of the Commonwealth of Pennsylvania. In conjunction with its complaint the plaintiffs have filed a motion for a preliminary injunction and have moved for summary judgment. The defendants have countered with a motion to dismiss the complaint or in the alternative, for summary judgment.

We will first consider the defendants’ attack upon the standing of the plaintiffs to maintain this action. Defendants argue that the plaintiffs lack standing to challenge the validity of the Philadelphia Plan. They place their reliance upon the decision of the Supreme Court in Perkins v. Lukens Steel Co., 310 U.S. 113, 60 S.Ct. 869, 84 L.Ed. 1108 (1940). In Perkins, the Secretary of Labor fixed minimum wages which government contractors were required to pay their employees. The suit of the plaintiffs, iron and steel manufacturers, who bid on government contracts, for declaratory and injunctive relief was dismissed on the ground that the plaintiffs lacked standing to challenge the validity of the Secretary’s directive.

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311 F. Supp. 1002, 2 Fair Empl. Prac. Cas. (BNA) 472, 1970 U.S. Dist. LEXIS 12529, 2 Empl. Prac. Dec. (CCH) 10,192, Counsel Stack Legal Research, https://law.counselstack.com/opinion/contractors-assn-of-eastern-pa-v-secretary-of-labor-paed-1970.