Lodge 1858, American Federation of Government Employees v. Webb

580 F.2d 496, 188 U.S. App. D.C. 233, 1978 U.S. App. LEXIS 12103
CourtCourt of Appeals for the D.C. Circuit
DecidedMarch 20, 1978
DocketNos. 76-1821, 76-1934
StatusPublished
Cited by21 cases

This text of 580 F.2d 496 (Lodge 1858, American Federation of Government Employees v. Webb) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lodge 1858, American Federation of Government Employees v. Webb, 580 F.2d 496, 188 U.S. App. D.C. 233, 1978 U.S. App. LEXIS 12103 (D.C. Cir. 1978).

Opinion

Opinion for the Court filed by Circuit Judge MacKINNON.

MacKINNON, Circuit Judge:

A reduction-in-force (RIF) was announced at the Marshall Space Flight Center in Huntsville, Alabama (Marshall and MSFC), on December 6, 1967.1 764 federal government employees were originally affected, though this was later reduced to only 166. The RIF procedure2 requires that employees be laid off only if they cannot be placed in alternative available positions for which they are qualified at Marshall. NASA utilized the services of both government employees and independent technical service contractors who in turn hired their own employees (contractor employees).3

Appellants here are several former individual employees of Marshall, who have been displaced by the RIF, and the union.4 Their complaint, in its most essential terms, [236]*236is that NASA was employing many technical service workers at Marshall supposedly as independent contractors, but actually with a degree of control by NASA and with other characteristics that made them functionally employees of the' United States. It is alleged that such an arrangement would violate the Civil Service laws,5 and that if they were actually employees of the United States, the arrangement would allegedly also violate NASA’s own statute,6 and its collective bargaining agreement. If the contracts- with the independent technical services contractors which are here in question, were, for these reasons, illegal, appellants contend that they should then be set aside and that civil service employees, rather than being terminated by the RIF, should be permitted to take over the positions filled under the agreements with the contractors.

I

The case has a long litigational history. The complaint was filed in 1967, and dismissed by the district court on April 24, 1968 for failure to exhaust administrative remedies. We vacated the dismissal and remanded the case on April 21, 1970.7 On November 30,1973, the district court granted partial summary judgment in the remanded cause, ruling that if any of the workers employed pursuant to the independent contracts were functionally employees, the plaintiffs would have relief. In an exercise of the discretionary doctrine of primary jurisdiction, the district court held the proceedings in abeyance for 60 days, during which the

matter [was] . . . referred to the United States Civil Service Commission with directions to apply the “Pellerzi Standards” and determine whether the relationship of “employer-employee” existed on December 6, 1967, and exists at the present time between National Aeronautics and Space Administration and the contractor non-civil service employees involved in this case .

(J.A. 409).

The “Pellerzi Standards,” referenced in the trial judge’s order, figure importantly in this appeal. In October of 1967, General Counsel Pellerzi of the U.S. Civil Service Commission issued an opinion concerning the legality of certain contracts at the Goddard Space Flight Center.8 That opinion set forth six specific criteria for determining whether the individuals furnished by the independent contractors were employees of the contractors or of the United States.9 If all six criteria were present, an [237]*237arrangement that had been considered an independent contract should instead, in the Commission’s view, be treated as employment.

On December 21, 1973, the district court clarified its order to the Civil Service Commission. At issue was a supplement to the Pellerzi opinion that had been prepared by the successor General Counsel Mondello of the U.S. Civil Service Commission (J.A. 1512). The court instructed that “the Mondello Supplement . . . did not add any new or different standards or cancel or delete any of the ‘Pellerzi Standards’ but reaffirmed them and supplied the classification thereof” (J.A. 442).

The U.S. Attorney had submitted instructions to the United States Civil Service Commission as to the correct standard to use, but the district court in an order of April 2, 1974 refused to approve those instructions. On May 30, 1974, the Civil Service Commission issued its report on the Marshall contracts.

The Commission’s report was thorough and exhaustive.10 It reached the conclusion that none of the contracts involved in this ease were impermissible. The district court, after reviewing the Commission’s report, disagreed. Thirty-two contracts are involved in this case; the court held that twenty-two of them were invalid, two more were partially invalid, and eight were permissible (J.A. 434-35). The Administrator of NASA and the intervenor National Council of Technical Service Industries brought this appeal.

II

Appellants reiterate their objections to plaintiffs’ standing, but these matters have already been settled on previous appeal.11 In brief recapitulation, the plaintiffs here, and their union, would benefit from a voiding of the allegedly impermissible contracts. There would be substantial retroactive benefits and substantial future benefits except in the rare case that NASA immediately abolished all of the jobs the contractors were filling, or immediately provided for legitimate contracts to cover them. These possibilities are not so likely of realization, however, as to make the relief sought by plaintiffs purely speculative within the meaning of Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976). Furthermore, the statutes and regulations protecting rights of federal civil service employees constitute a “pervasive legislative scheme governing the relationship between the plaintiff class and the defendant class in a particular regard” within the meaning of Cort v. Ash, 422 U.S. 66, 82, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). And permitting a private cause of action to prevent abuses of that legislative scheme would not interfere with the statutory purpose or with concerns of federalism. Cort v. Ash, 422 U.S. at 78, 95 S.Ct. 2080.

Ill

Accordingly, we turn to the merits of the appeal. The basic question presented is whether the support service contracts in effect at the Marshall Space Flight Center violate the personnel procurement restrictions of the NASA enabling act as set forth in 42 U.S.C. § 2473(b)(2) or whether they fall within the range of the broad contracting authority granted to NASA by 42 U.S.C. § 2437(b)(5).

Subsection (b)(2) of the act provides as follows:

(b) In the performance of its functions the Administration is authorized—
******
(2) to appoint and fix the compensation of such officers and employees as may be necessary to carry out such functions [listed in subsection (a)]. Such officers [238]*238and employees shall be

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Bluebook (online)
580 F.2d 496, 188 U.S. App. D.C. 233, 1978 U.S. App. LEXIS 12103, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lodge-1858-american-federation-of-government-employees-v-webb-cadc-1978.