Associated Gen. Contractors of Mass., Inc. v. Altshuler

• Decision Date: 30 November 1973
• Docket Number: No. 73-1250.,73-1250.
• Citation: 490 F.2d 9
• Parties: ASSOCIATED GENERAL CONTRACTORS OF MASSACHUSETTS, INC., et al., Plaintiffs-Appellants. v. Alan ALTSHULER et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — First Circuit

490 F.2d 9 (1973)

ASSOCIATED GENERAL CONTRACTORS OF MASSACHUSETTS, INC., et al., Plaintiffs-Appellants. v. Alan ALTSHULER et al., Defendants-Appellees.

No. 73-1250.

United States Court of Appeals, First Circuit.

Heard October 2, 1973.

Decided November 30, 1973.

Certiorari Denied April 22, 1974.

COPYRIGHT MATERIAL OMITTED

James J. O'Leary, Boston, Mass., with whom Joseph P. Rooney, Ansel B. Chaplin, Gaston, Snow, Motley & Holt, Boston, Mass., and James E. Flynn, Jr., Cambridge, Mass., were on brief, for plaintiffs-appellants.

Dennis L. Ditelberg, Asst. Atty. Gen., and Gershon M. Ratner, Boston, Mass., with whom Robert H. Quinn, Atty. Gen., John F. Houton, Asst. Atty. Gen., Michael J. Hoare, Sp. Asst. Atty. Gen., Benjamin Jones, and Robert City, Boston, Mass., were on brief, for defendants-appellees.

Robert T. Moore, Atty., Dept. of Justice, with whom William J. Kilberg, Sol. of Labor, J. Stanley Pottinger, Asst. Atty. Gen., James N. Gabriel, U. S. Atty., and David L. Rose, Atty., Dept. of Justice, were on brief, for The Secretary of Labor of The United States, amicus curiae.

Jerry Cohen, Morris Shubow, John Henn, John Reinstein, Matthew Feinberg, Charles A. Levin, Mark A. Michelson, and Stephen R. Moore on brief for Civil Liberties Union and American Jewish Congress, New England Region, amici curiae.

Before COFFIN, Chief Judge, MOORE^* and McENTEE, Circuit Judges.

Certiorari Denied April 22, 1974. See 94 S.Ct. 1971.

COFFIN, Chief Judge.

This is an appeal from a judgment sustaining, as constitutional and in accord with state law, certain contract requirements imposed by the Commonwealth of Massachusetts upon contractors engaged in publicly funded construction work at Boston State College. Appellants are thirteen individual construction companies, now engaged in construction of public buildings for the Commonwealth, and a membership corporation comprised of one hundred forty-five general contracting firms which together perform approximately eighty per cent of all construction in the Commonwealth. Each of the appellants was a prospective bidder for the Boston State College contract.

In relevant part, § 1B of the contract requires that the contractor

". . . maintain on his project, which is located in an area in which there are high concentrations of minority group persons, a not less than twenty percent ratio of minority employee man hours to total employee man hours in each job category. . . ."

Section V, ¶ 3, of the contract provides, however, that the contractor must hire only "competent" workers. The Secretary of Transportation and Construction for the Commonwealth, who is charged with enforcing the contract provisions, interprets this to mean that § 1B requires the hiring of only "qualified" workers. The district court has interpreted the contract in the same way.

The contract also requires that the contractor engage in special referral procedures as well as traditional referral methods, cooperate with a Liaison Committee composed of various representatives from community groups, make weekly compliance reports to the Liaison Committee and the Massachusetts Commission Against Discrimination (M.C.A.D.), and permit the M.C.A.D. access to books, records, and accounts containing employment information.

The contract further stipulates that the M.C.A.D. will investigate any alleged non-compliance with the contract terms and notify the contractor of both its findings and recommendations as to how he might comply with the terms. If the contractor fails to accept the recommendations and in addition the M.C.A.D. determines that the contractor has not taken "every possible measure to achieve compliance", the M.C.A.D. will report its findings to the Bureau of Construction and recommend that specific sanctions be imposed. Before imposing any sanctions, however, pursuant to the Commonwealth's Administrative Procedures Act, M.G.L.A. c. 30A §§ 10, 11, and according to the Secretary of Transportation and Construction, the Bureau will provide the contractor with notice of the findings and a hearing in which he may challenge them.

Because the federal government pays a portion of the construction costs of the Boston State project, contractors are also required to accept federal bid conditions, promulgated by the United States Secretary of Labor pursuant to § 201 of Executive Order No. 11246 (30 F.R. 12319, as amended, 32 F.R. 14303; 34 F.R. 12985) and 41 C.F.R. 60. The specific contractual elements of the federal bid conditions are derived from the Boston Area Construction Program (the Boston Plan), a "hometown" equal employment opportunity plan prepared by the local construction industry in cooperation with the Department of Labor. Unlike the Commonwealth's § 1B, the federal Boston Plan sets area-wide percentage objectives for minority hiring within each trade, rather than percentage goals for each project. Under the Boston Plan the responsibility for fulfilling the objectives does not lie with the individual contractor; he merely agrees to hire whatever minority workers are referred to him by the trades unions in the course of the plan's operation. Moreover, while § 1B requires that contractors take "every possible measure" to comply with the contract terms, the Boston Plan necessitates merely a "good faith" effort by the contractor. A fourth point of difference between the two plans is that the Boston Plan places the burden of proving noncompliance upon the government agency, while § 1B places the burden of proving compliance, once non-compliance has been alleged, upon the contractor himself.

Appellants challenge the constitutionality of § 1B of the contract requirements imposed by the Commonwealth on three grounds: They contend, first, that § 1B varies so significantly from the federal bid conditions of the Boston Plan that it violates the Supremacy Clause of Article VI; second, that § 1B imposes a fixed racial hiring quota which violates the Equal Protection clause of the Fourteenth Amendment; and finally, that § 1B permits the imposition of sanctions without proper notice or an opportunity to be heard, in violation of the Due Process clause of the Fourteenth Amendment. Appellants also contend, pursuant to the pendent jurisdiction of this court, that § 1B involves the M.C.A.D. in activities which go beyond the scope of its enabling legislation.

In order to deal with appellants' first contention, that § 1B violates the Supremacy Clause because the federal Boston Plan must necessarily preempt § 1B, it is necessary to set out the context in which this case arises.

We note at the outset that the construction industry has been particularly slow, throughout the nation, to open itself to racial minorities.¹ For this reason, in 1967 the federal government launched pilot plans in several cities designed to increase minority employment on federally funded construction projects by way of "affirmative action" programs. Executive Order 11246,² under which the Secretary of Labor was authorized to promulgate such programs,³ required that contractors "take affirmative action to ensure that applicants are employed . . . without regard to race. . . ." Affirmative action itself was defined as "specific steps to guarantee equal employment opportunity keyed to the problems and needs of members of minority groups, including, when there are deficiencies, the development of specific goals and time tables. . . ."⁴

After several different affirmative action programs had been implemented, with varying degrees of success,⁵ in 1970 the government permitted particular communities to develop their own "hometown" affirmative action programs.⁶ If the Secretary of Labor approved the plans,⁷ the plans would receive federal funding, and local contractors who complied with them would thereby comply with the mandate of Executive Order 11246.⁸

The Boston Plan emerged from negotiations between representatives of buildings trades unions, contractors, and minority communities in the Boston area, and was approved by the Secretary of Labor in the fall of 1970. Although it fulfilled its first year goal of training and placing three hundred sixty minority workers, relationships with the minority community representatives deteriorated to the extent that the Department of Labor withheld second year funding until a revised plan could be negotiated. The new plan, beginning operations in January, 1972, did not have the participation of representatives of Boston's minority communities.⁹ In addition, although put into effect two years after the original Boston Plan had commenced, the revised plan retained the same minority employment goal as that of the original plan.

At about the same time as the revised Boston Plan was put into effect, the Commonwealth began an inquiry of its own into the need for a separate state affirmative action program. The inquiry revealed that despite the existence of the federal Boston Plan, minority membership in all of the nineteen participating unions amounted to less than four per cent of union membership, while minorities comprised approximately twenty-three per cent of the population of Boston. Since virtually all of the contractors who engage in state funded projects rely upon these predominantly white unions for workers, minority employment in the construction trades continued to be extremely low. The Commonwealth also determined that the Boston Plan had no provision for the collection of reliable data on the actual number of hours worked by minority workers placed on construction jobs. Finally, in the opinion of the Commonwealth's Office of Transportation and Construction, the Boston Plan lacked adequate enforcement machinery.¹⁰ On the basis of these findings the Commonwealth concluded that the federal Boston Plan had not gone far enough, and that a separate, state affirmative action program was required for construction projects in which state funds were committed.

The contract for the construction of Boston...