442 F.2d 159 (3rd Cir. 1971), 19027, Contractors Ass'n of Eastern Pa. v. Secretary of Labor

Docket Nº:19027.
Citation:442 F.2d 159
Party Name:The CONTRACTORS ASSOCIATION OF EASTERN PENNSYLVANIA v. The SECRETARY OF LABOR, George P. Shultz, the Assistant Secretary of Labor, Arthur A. Fletcher, the Director, Office of Federal Contract Compliance, John L. Wilks, the Secretary of Agriculture, Clifford M. Hardin, and the General State Authority of the Commonwealth of Pennsylvania. James D. Mor
Case Date:April 22, 1971
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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442 F.2d 159 (3rd Cir. 1971)

The CONTRACTORS ASSOCIATION OF EASTERN PENNSYLVANIA

v.

The SECRETARY OF LABOR, George P. Shultz, the Assistant Secretary of Labor, Arthur A. Fletcher, the Director, Office of Federal Contract Compliance, John L. Wilks, the Secretary of Agriculture, Clifford M. Hardin, and the General State Authority of the Commonwealth of Pennsylvania.

James D. Morrissey, Inc., the Conduit & Foundation Corp., Glasgow, Inc., Buckley & Company, the Nyleve Company, Erb Engineering & Constr. Co., Perkins, Kanak, Foster, Inc., and Lansdowne Constructors, Inc. (Intervening Plaintiffs in D.C.).

The Contractors Association of Eastern Pennsylvania, James D. Morrissey, Inc., the Conduit & Foundation Corp., Glasgow, Inc., Buckley & Company, the Nyleve Company, Erb Engineering & Constr. Co., Perkins, Kanak, Foster, Inc., and Lansdowne Constructors, Inc., Appellants.

No. 19027.

United States Court of Appeals, Third Circuit.

April 22, 1971

Argued March 1, 1971.

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[Copyrighted Material Omitted]

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John J. McAleese, Jr., Synnestvedt & Lechner, Robert J. Bray, Jr., Philadelphia, Pa., for plaintiff and intervening plaintiffs-appellants.

David L. Rose, Civil Right Division, Planning and Special Appeals Section, Department of Justice, Washington, D.c.,

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Peter Nash, Solicitor of Labor, Gerald L. Paley, Associate Solicitor of Labor, Jerris Leonard, Asst. Atty. Gen., David L. Norman, Deputy Asst. Atty. Gen., Louis C. Bechtle, U.S. Atty., Bernard H. Shapiro, Joseph B. Scott, Attys., U.S. Department of Justice, Washington, D.C., for federal appellee.

Theodore R. Mann and Barry E. Ungar, Philadelphia, Pa., amicus curiae, for appellees; Goodis, Greenfield, Narin & Mann, Philadelphia, Pa., of counsel.

Winthrop A. Johns, Lawrence T. Zimmerman, Washington, D.C., for Associated General Contractors of America; Reilly, Johns & Zimmerman, Washington, D.C., of counsel.

Nathaniel R. Jones, General Counsel, Paul J. Spiegelman, New York City, Russell Specter, Washington, D.C., William D. Wells, amici curiae, for NAACP; Robert J. Reinstein, Philadelphia, Pa., of counsel.

Sherman, Dunn & Cohen, Louis Sherman, Washington, D.C., Meranze Katz, Spear & Bielitsky, Bernard N. Katz, Philadelphia, Pa., amici curiae, for Building and Construction Trades Department, AFL-CIO and Building and Construction Trades Council of Philadelphia and Vicinity, AFL-CIO.

John D. Day, Asst. City Sol., Matthew W. Bullock, Jr., First Deputy City Sol., Levy Anderson, City Sol., Philadelphia, Pa., amici curiae, for City of Philadelphia.

Ralph B. Powell, Jr., Philadelphia, Pa., amicus curiae, for General Building Contractors Ass'n, Inc.

Guy Farmer, Patterson, Belknap, Farmer & Shibley, Washington, D.C., amici curiae, for National Electrical Contractors Ass'n.

Before HASTIE, Chief Judge, and McLAUGHLIN and GIBBONS, Circuit judges.

OPINION

GIBBONS, Circuit Judge.

The original plaintiff, the Contractors Association of Eastern Pennsylvania (the Association) and the intervening plaintiffs, 1 construction contractors doing business in the Philadelphia area (the Contractors), appeal from an order of the district court which denied their motion for summary judgment, granted the motion of the the federal defendants 2 to dismiss the Association complaint for lack of standing, and granted the crossmotion of the federal defendants for summary judgment. 3 When deciding these motions, the district court had before it the Association's verified complaint, a substantially identical complaint of the Contractors, the affidavits of Vincent G. Macaluso and Ward McCreedy on behalf of the federal defendants which identified certain relevant documents, a stipulation by the parties as to certain facts, and two affidavits of Howard G. Minckler on behalf of the plaintiffs.

The complaint challenges the validity of the Philadelphia Plan, promulgated by the federal defendants under the authority of Executive Order No. 11246. 4 That Plan is embodied in two orders issued by officials of the United States Department of Labor, dated June 27, 1969 and September 23, 1969, respectively. Copies of these orders were annexed

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to the verified complaint as exhibits 1 and 2, respectively, and to the Macaluso affidavit as appendices B and C respectively. In summary, they require that bidders on any federal or federally assisted construction contracts for projects in a five-county area around Philadelphia, 5 the estimated total cost of which exceeds $500,000, shall submit an acceptable affirmative action program which includes specific goals for the utilization of minority manpower in six skilled crafts: ironworkers, plumbers and pipefitters, steamfitters, sheetmetal workers, electrical workers, and elevator construction workers.

Executive Order No. 11246 requires all applicants for federal assistance to include in their construction contracts specific provisions respecting fair employment practices, including the provision:

'The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex or national origin.' 6

The Executive Order empowers the Secretary of Labor to issue rules and regulations necessary and appropriate to achieve its purpose. On June 27, 1969 Assistant Secretary of Labor Fletcher issued an order implementing the Executive Order in the five-county Philadelphia area. The order required bidders, prior to the award of contracts, to submit 'acceptable affirmative action' programs 'which shall include specific goals of minority manpower utilization.' The order contained a finding that enforcement of the 'affirmative action' requirement of Executive Order No. 11246 had posed special problems in the construction trades. 7 Contractors and subcontractors must hire a new employee complement for each job, and they rely on craft unions as their prime or sole source for labor. The craft unions operate hiring halls. 'Because of the exclusionary practices of labor organizations,' the order finds 'there traditionally has been only a small number of Negroes employed in these seven trades.' 8 The June 27, 1969 order provided that the Area Coordinator of the Office of Federal Contract Compliance, in conjunction with the federal contracting and administering agencies in the Philadelphia area, would determine definite standards for specific goals in a contractor's affirmative action program. After such standards were determined, each bidder would be required to commit itself to specific goals for minority manpower utilization. The order set forth factors to be considered in determining definite standards, including:

'1) The current extent of minority group participation in the trade.

2) The availability of minority group persons for employment in such trade.

3) The need for training programs in the area and/or the need to

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assure demand for those in or from existing training programs.

4) The impact of the program upon the existing labor force.'

Acting pursuant to the June 29, 1969 order, representatives of the Department of Labor held public hearings in Philadelphia on August 26, 27 and 28, 1969. On September 23, 1969, Assistant Secretary Fletcher made findings with respect to each of the listed factors and ordered that the following ranges be established as the standards for minority manpower utilization for each of the designated trades in the Philadelphia area for the following four years:

Identification of Trade Range of Until12/31/70 Minority for1971 Group for 1972 Employment for1973
Ironworkers 5%-9% 11%-15% 16%-20% 22%-26%
Plumbers & Pipefitters 5%-8% 10%-14% 15%-19% 20%-24%
Steamfitters 5%-8% 11%-15% 15%-19% 20%-24%
Sheetmetal workers 4%-8% 9%-13% 14%-18% 19%-23%
Electrical workers 4%-8% 9%-13% 14%-18% 19%-23%
Elevator construction workers 4%-8% 9%-13% 14%-18% 19%-23%
The order of September 23, 1969 specified that on each invitation to bid each bidder would be required to submit an affirmative action program. The order further provided:

'4. No bidder will be awarded a contract unless his affirmative action program contains goals falling within the range set forth * * * above. * * *6. The purpose of the contractor's commitment to specific goals as to minority manpower utilization is to meet his affirmative action obligations under the equal opportunity clause of the contract. This commitment is not intended and shall not be used to discriminate against any qualified applicant or employee. Whenever it comes to the bidder's attention that the goals are being used in a discriminatory manner, he must report it to the Area Coordinator of the Office of Federal Contract Compliance of the U.S. Department of Labor in order that appropriate sanction proceedings may be instituted. 8. The bidder agrees to keep such records and file such reports relating to the provisions of this order as shall be required by the contracting or administering agency.'

In November, 1969, the General State Authority of the Commonwealth of Pennsylvania issued invitations to bid for the construction of an earth dam on Marsh Creek in Chester County, Pennsylvania. Although this dam is a Commonwealth project, part of the construction cost, estimated at over $3,000,000 is to be funded by federal monies under a program administered by...

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