Hospital Ass'n v. Commonwealth, Department of Public Welfare

433 A.2d 450, 495 Pa. 225, 1981 Pa. LEXIS 929
CourtSupreme Court of Pennsylvania
DecidedJuly 2, 1981
Docket80-2-254
StatusPublished
Cited by19 cases

This text of 433 A.2d 450 (Hospital Ass'n v. Commonwealth, Department of Public Welfare) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hospital Ass'n v. Commonwealth, Department of Public Welfare, 433 A.2d 450, 495 Pa. 225, 1981 Pa. LEXIS 929 (Pa. 1981).

Opinion

OPINION OF THE COURT

ROBERTS, Justice.

This is an appeal from a decree of the Commonwealth Court granting a preliminary injunction in favor of appellees, the Hospital Association of Pennsylvania and 175 hospitals, and against appellant, the Commonwealth’s Department of Public Welfare. The decree prohibits the Department from including certain provisions of a “non-discrimination clause” in its written agreements for inpatient hospital-care reimbursement with the hospitals. Since the entry of the preliminary injunction, all but two of the 175 hospitals have agreed that the injunction should be dissolved.

We are of the view that the preliminary injunction was improperly issued. Hence we vacate the decree and dismiss the motion for preliminary relief.

I

The Department’s inclusion of a non-discrimination clause (reproduced at Appendix) is mandated by the “Contract Compliance Regulations” of the Pennsylvania Human Relations Commission. These regulations had their genesis in 1973 when, pursuant to Executive Order 1972-1 (December 6, 1972) and section 7(d) of the Pennsylvania Human Relations Act, Act of October 27, 1955, P.L. 744, 43 P.S. § 957(d) (1964), the Commission gave notice of proposed rulemaking. 3 Pa.Bull. 2432 (October 20, 1973). After review of public comments, the Commission prepared and proposed a revised set of rules. 3 Pa.Bull. 2966 (December 29, 1973). A first set of rules was adopted by the Commission in February of 1974 and made effective as of that March. 4 Pa.Bull. 409 (March 9, 1974). That same year the Commission proposed amendments, 4 Pa.Bull. 2534 (December 14, 1974), and adopted them, 5 Pa.Bull. 434 (March 8, 1975). The present rules, effective March 8, 1975, reflect those amendments.

*228 The “Policy and Purpose” section of the Contract Compliance Regulations provides:

“Nondiscrimination and equal opportunity are the policy of the Commonwealth and the Commission in all its decisions, programs and activities. The purpose of this Chapter is to achieve the aims of the United States and Pennsylvania Constitutions, Executive Order 1972-1, the Pennsylvania Human Relations Act (43 P.S. § 951 et seq.), and 43 P.S. § 153, by assuring that all persons are accorded equal employment opportunity without regard to race, color, national origin, ancestry, religious creed, age or sex. This Chapter applies to the contracting agencies of this Commonwealth and to contractors who perform under state contracts.”

Accordingly, pursuant to 16 Pa.Code § 49.101(a),

“[e]very state contract .. . shall contain a nondiscrimination clause barring discrimination in employment because of race, color, religious creed, national origin, ancestry, sex or age.”

“State contract” is defined as

“any agreement, purchase order or arrangement or modification thereof between the Commonwealth or any State contracting agency, and any person to be paid in whole or in part, directly or indirectly, by public funds or in kind contributions from the Commonwealth.”

16 Pa.Code § 49.2(d) (as reported at 5 Pa.Bull. 434 (March 8, 1975)). Here, “medical assistance payments ... in behalf of eligible persons” are made to hospitals which are

“qualified to participate under Title XIX of the Federal Social Security Act [(42 U.S.C. § 1396 et seq.)] and have entered into a written agreement with the [Department of Public Welfare] regarding matters designated by the secretary as necessary to efficient administration, such as hospital utilization, maintenance of proper cost accounting records and access to patients’ records.”

Public Welfare Code, Act of June 13, 1967, P.L. 31, § 443.1, 62 P.S. § 443.1 (Supp.1981), added by Act of July 31, 1968, P.L. 904, § 5.

*229 The Human Relations Commission’s regulations also specify the contents of the mandatory non-discrimination clause. 16 Pa.Code § 49.101(d). The clause covers the matters of applicants for employment, advertisements or requests for employment, collective bargaining agreements, delegation of employment practices, recruitment practices resulting in exclusion of “minority group persons,” contractor compliance with the contract compliance regulations, and the scope of contractor obligations.

Also included in the mandatory non-discrimination clause, and the subject of the preliminary injunction here, are the following four provisions:

“(7) Contractor shall furnish all necessary employment documents and records to, and permit access to its books, records and accounts by, the contracting agency and the Human Relations Commission, for purposes of investigation to ascertain compliance with the provisions of the Contract Compliance Regulations, pursuant to § 49.35 of these Regulations. If Contractor does not possess documents or records reflecting the necessary information requested, it shall furnish such information on reporting forms supplied by the contracting agency or the Commission.
(8) Contractor shall actively recruit minority subcontractors or subcontractors with substantial minority representation among their employes.
(9) Contractor shall include the provisions of this non-discrimination clause in every subcontract, so that such provisions will be binding upon each subcontractor.
(10) The terms used in this non-discrimination clause shall have the same meaning as in the Contract Compliance Regulations issued by the Pennsylvania Human Relations Commission, 16 Pa.Code Ch. 49.”

Although by statute the Department’s agreements with appellee hospitals are to be reduced to writing, see Public Welfare Code, § 443.1, supra, no independent requirement of a writing is contained in the Contract Compliance Regulations.

*230 The regulations place responsibility to impose sanctions upon both the contracting agency and the Human Relations Commission. 16 Pa.Code § 49.71(a). Permissible sanctions include: (1) publication of the names of contractors or unions which have failed to comply; (2) recommendation to the Attorney General that appropriate enforcement proceedings be commenced; (3) recommendation to law enforcement officials that criminal proceedings be brought for the willful furnishing of false information; (4) fixed-period suspension of remaining obligations under the contract pending compliance; and (5) disqualification of the violating party from entering into other contracts with state agencies.

II

Agreements for inpatient hospital care between the Department of Public Welfare and appellee hospitals became effective on July 1, 1977. The hospitals agreed to

“[c]ertify that in the performance of this agreement there will be no discrimination against any employee or other person on account of race, color, sex, religious creed, ancestry, age or national origin and that the Commonwealth upon receipt of proof of such discrimination shall have the right to cancel this Agreement.”

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Bluebook (online)
433 A.2d 450, 495 Pa. 225, 1981 Pa. LEXIS 929, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hospital-assn-v-commonwealth-department-of-public-welfare-pa-1981.