American Federation of Government Employees, Local 1668 v. Dunn

• Citation: 561 F.2d 1310
• Decision Date: 28 September 1977
• Docket Number: No. 75-3804,75-3804
• Parties: 23 Wage & Hour Cas. (BN 552, 82 Lab.Cas. P 33,590, 24 Cont.Cas.Fed. (CCH) 81,803 AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, LOCAL 1668, and Mildred Crank, William Slater, Tyrone E. Davis, and Ola Mae Mitchell, for themselves individually and on behalf of all other civil service employees of the United States Air Force at Elmendorf Air Force Base and other Air Force stations in Alaska who are similarly situated, Plaintiffs-Appellants, v. James B. DUNN, Commander, Elmendorf Air Force Base (Colonel, USAF), James Hill, Commander, Alaska Air Command (Lieutenant General, USAF), John C. Stetson, Secretary of the Air Force, and Ray Marshall, Secretary of Labor, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1310

561 F.2d 1310

23 Wage & Hour Cas. (BN 552, 82 Lab.Cas. P 33,590,

24 Cont.Cas.Fed. (CCH) 81,803

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, LOCAL 1668, and Mildred Crank, William Slater, Tyrone E. Davis, and Ola Mae Mitchell, for themselves individually and on behalf of all other civil service employees of the United States Air Force at Elmendorf Air Force Base and other Air Force stations in Alaska who are similarly situated, Plaintiffs-Appellants, v. James B. DUNN, Commander, Elmendorf Air Force Base (Colonel USAF), James Hill, Commander, Alaska Air Command (Lieutenant General, USAF), John C. Stetson, Secretary of the Air Force and Ray Marshall, Secretary of Labor, Defendants-Appellees.

No. 75-3804.

United States Court of Appeals Ninth Circuit.

Sept. 28, 1977.

Robert M. Goldberg, Anchorage, Alaska, argued, for plaintiffs-appellants.

William Kanter, App. Section, Civ. Div., Dept. of Justice, Washington, D. C., argued, for defendants-appellees.

Appeal from the United States District Court for the District of Alaska.

Before WRIGHT, CHOY and ANDERSON, Circuit Judges.

J. BLAINE ANDERSON, Circuit Judge:

Appellants, former civilian employees of the Air Force, and their labor union, brought suit seeking declaratory and injunctive relief in an effort to require the United States Air Force to set aside certain contractual agreements and to reinstate appellants to their former jobs. The district court dismissed the action and this appeal followed. We affirm.

Appellants were all federal civil service employees classified as mess attendants, who performed custodial kitchen work at the Air Force mess halls located in Alaska. Pursuant to the Office of Management and Budget's Revised Circular A-76, the Air Force, in September, 1974, undertook a study to determine whether it should continue in-house food service operations at its various bases. By letter the Air Force notified all major commands, including the Alaskan Air Command, that cost comparison studies should be developed to determine the relative cost of retaining civil service mess attendants as opposed to employing an outside contractor to provide the food service attendants.

Invitations for bids were sent out for the food service attendant function for Elmendorf Air Force Base, Alaska, Eilson Air Force Base, Alaska, and various remote sites in Alaska. Southeastern Services, Inc. was the lowest responsive bidder. The Air Force then compared Southeastern's bid with the cost of retaining civil service employees and found that Southeastern's bid was less than the cost of retaining the civil service employees and, accordingly, awarded a contract to Southeastern. Appellants then filed this action.

Appellants attack the Air Force's actions from four fronts. Initially, appellants contend that the determination of the minimum wage that could be paid to the food service employees under a private contract, made by the Secretary of Labor under the Service Contract Act, 41 U.S.C. § 351, et seq., was erroneous. Secondly, appellants contend that the reduction in force violated the Veterans Preference Act, 5 U.S.C. § 1302, et. seq., in that preference eligible civil service employees were replaced by private sector employees. Appellants' third contention is that the contracts with Southeastern are personal service contracts violative of the "Pellerzi standards" in that civil service personnel will be directly supervising the contractor's employees. Lastly, appellants contend that the cost comparison studies undertaken by the Air Force were erroneous. As stated earlier, the district court, for various reasons which will be discussed hereinafter, did not accept appellants' contentions and dismissed the action.

MINIMUM WAGE DETERMINATION

The district court held that appellants lacked standing to contest the wage rate determination of the Secretary of Labor. The court applied the standing test set forth in Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972) and Barlow v. Collins, 397 U.S. 159, 90 S.Ct. 832, 25 L.Ed.2d 192 (1970), which requires that a plaintiff must establish an " injury in fact" ¹ and also that he must show that he falls "arguably within the zone of interests to be protected or regulated" by the statute upon which he relies. In the present case, the district court found that appellants had established an injury in fact, but denied standing because appellants were not within the zone of interests to be protected by the Service Contract Act, 41 U.S.C. § 351, et seq.

A basic understanding of the Service Contract Act is essential to our disposition of this case. Basically, the Service Contract Act provides that every contract in excess of $2,500.00 must contain a provision specifying the minimum wage to be paid contract employees. This minimum wage rate is determined by the Secretary of Labor after analyzing the prevailing wage rates in the locality paid to comparable employees. Bids are then invited and the private contractor utilizing the minimum wage rate submits his bid. The bid is then compared with the cost of retaining civil service employees to determine the most economical alternative. The Act also provides sanctions in the event any of the contractor's employees are underpaid.

The legislative history reveals that the Service Contract Act was passed in reaction to Congress' finding that a depressed wage level prevailed in private service employment. These service employees were not covered, in many instances, by the Fair Labor Standards Act or by state minimum wage rates, resulting in a situation where contractors paying the lowest wage would secure most government jobs. Congress, feeling that in this way "the Government is in effect subsidizing subminimum wages" (1965 U.S.Code Cong. & Admin.News, p. 3739), passed the Service Contract Act to insure "that the Federal Government shall not be a party to the depressing of labor standards in any area of the nation." (111 Cong.Rec. 24387, 1965, Cong. O'Hara, co-author of the Act.) The purpose statement of the Service Contract Act states:

"The purpose of this bill is to provide labor standards for the protection of employees of contractors and subcontractors furnishing services to or performing maintenance service for Federal agencies."

1965 U.S.Code Cong. & Admin.News, p. 3737.

Although clearly not the primary beneficiary of the Act, the question remains whether the terminated federal service employees are within the zone of interests to be protected.

In support of their position that they have standing, appellants cite Lodge 1858, American Federation of Gov. Emp. v. Paine, 141 U.S.App.D.C. 152, 436 F.2d 882 (1970). In Lodge 1858, six civil service employees and their union sued the Administrator of the National Aeronautical and Space Administration (NASA), contending that NASA had violated congressional enactments in procuring, through its service support contracts, outside manpower to perform tasks assigned by law to civil service employees only. The Court of Appeals found that the employees had standing to contest NASA's employment of contractor employees. However, this holding must be limited to its facts because it is clear that the court focused on the NASA legislation in order to bring the employees within the zone of interests test. That legislation required all NASA positions to be filled in accordance with the civil services laws except for 425 scientific, engineering or administrative personnel. 42 U.S.C. § 2473(b)(2) (1970). In the present case there is no similar statute or regulation that requires that the food service function be performed by civil service employees.

Appellants also rely upon Descomp, Inc. v. Sampson, 377 F.Supp. 254 (D.Del.1974) and Merriam v. Kunzig, 476 F.2d 1233 (3rd Cir.), cert. denied, 414 U.S. 911, 94 S.Ct. 233, 38 L.Ed.2d 149 (1973), cases in which disappointed bidders were found to have standing to contest the wage rate determination under the Service Contract Act (Descomp, supra) and the leasing authority of the General Services Administration under their procurement statute, 41 U.S.C. § 253 (Merriam, supra). However, these cases are also inapposite because a disappointed bidder stands in a position quite different from that asserted by appellants. By virtue of the various bidding and procurement statutes, the government invites bidders to respond and, accordingly, not only is the government's interest protected, but also the interests of those who respond to the government's invitation. Thus, bidders who are found to have standing attain their interest by virtue of their relationship to the government. This relationship was fully described by the court in Merriam, supra:

"When the Government solicits proposals to which bidders in good faith take the trouble to respond, the actual relationship between solicitor and bidder is not the same as before. The bidder has placed in the hands of the representatives of the Government the power to bind him to a contract. It is not too much to find a correlative obligation of fair dealing within the terms of the solicitation; an obligation sufficient to confer standing to enforce that obligation."

476 F.2d at 1242, n. 7.

Appellants have failed to convince us that their interests are within the zone of interests to be protected by the Service Contract Act. That Act was passed for the benefit and protection of employees of contractors and subcontractors performing services for the government.

Nor are appellants aided by resort to recent Supreme Court pronouncements that allow, in certain circumstances, a plaintiff to assert the rights of third parties. Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976) and Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). The rights sought to be asserted here are those of the private employees whose interests, as found by the district court, are antithetical to the federal...