Firestone Synthetic Rubber & Latex Co. v. Marshall, Civ. A. No. B-80-499-CA.
| Decision Date | 12 February 1981 |
| Docket Number | Civ. A. No. B-80-499-CA. |
| Citation | 507 F. Supp. 1330 |
| Parties | The FIRESTONE SYNTHETIC RUBBER & LATEX CO., a division of the Firestone Tire & Rubber Co., and Koppers Company, Inc., Intervenor, v. F. Ray MARSHALL, Secretary of Labor and Weldon J. Rougeau, Director, Office of Federal Contract Compliance Programs. |
| Court | U.S. District Court — Eastern District of Texas |
Robert K. Lewis, Jr., Akron, Ohio, for Firestone Tire & Rubber Co.
David A. Copus, C. Daniel Karnes, Linda E. Rosenzweig, Seyfarth, Shaw, Fairweather & Geraldson, Washington, D. C., James W. Hambright, Orgain, Bell & Tucker, Beaumont, Tex., for Firestone Synthetic Rubber & Latex Co.
Richard T. Sampson, Semmes, Bowen & Semmes, Baltimore, Md., Dewey J. Gonsoulin, Mehaffy, Weber, Keith & Gonsoulin, Beaumont, Tex., for Intervenor Koppers Co., Inc.
Carin A. Clauss, James D. Henry, Louis G. Ferrand, A. Penny Dash, U. S. Dept. of Labor, Washington, D. C., Drew S. Days, III, John H. Hannah, Jr., David L. Rose, Katherine P. Ransel, U. S. Dept. of Justice, Washington, D. C., for F. Ray Marshall, et al.
Firestone Synthetic Rubber & Latex Co. (Firestone) brought this suit to review a final order of the Secretary of Labor (Secretary) which found Firestone in violation of Executive Order 11246, 30 Fed.Reg. 12319. The action was filed pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201-02, and the Administrative Procedure Act, 5 U.S.C. §§ 551-59 and 701-06. The Secretary's Order of July 13, 1980, terminates Firestone's present contracts and subcontracts with the government until Firestone adopts an affirmative action plan which is acceptable to the Office of Federal Contract Compliance Programs (OFCCP), under their implementing rules and regulations. Judge Parker granted a temporary restraining order and preliminary injunction preventing Firestone's debarment pending a decision on the merits. The Secretary filed the administrative record on August 4, 1980, and the case is presently before the Court on cross motions for summary judgment.
The OFCCP filed an administrative complaint against Firestone on February 22, 1980, alleging that the 1978 affirmative action plan for Firestone's Orange, Texas, facility (1) failed to declare underutilization in various job groups as required by Executive Order 11246 and 41 C.F.R. §§ 60-2.10 and 60-2.11; (2) failed to establish goals and timetables where appropriate; and (3) failed to include adequate action-oriented programs to correct identified problem areas in job groups and organizational units as required by 41 C.F.R. §§ 60-2.13, 2.23 and 2.24. See Decision and Final Order of the Secretary of Labor at 3-4 (Secretary's Decision).
The regulations direct the contractor to analyze its workforce to determine the utilization of women and minorities. "Underutilization" is defined "as having fewer minorities or women in a particular job group than would reasonably be expected by their availability." 41 C.F.R. § 60-2.11(b). It is this definition, or rather the Secretary's interpretation of it, that is the essence of this dispute. The Secretary contends that by virtue of Technical Guidance Memo No. 1 (TGM No. 1), underutilization exists whenever there is a numerical disparity between availability and utilization. Firestone contends that it need not declare underutilization whenever there is any numerical disparity; rather, Firestone has only declared underutilization when the difference between availability and utilization meets or exceeds the five percent level of statistical significance.1
Section 201 of Executive Order 11246 gives the Secretary power to issue regulations to implement the Order. Enforcement of the Order has been delegated to the Director of the OFFCP. 41 C.F.R. § 60-1.2. The affirmative action requirements of Executive Order 11246 are stated in 41 C.F.R. § 60-1.40. "Each contractor who has 50 or more employees and ... has a contract of $50,000 or more ... shall develop a written affirmative action compliance program for each of its establishments." To implement this requirement, the Secretary promulgated Revised Order No. 4, effective May 15, 1974, 39 Fed.Reg. 13264 (1974), codified at 41 C.F.R. §§ 60-2.1 to 60-2.32. Revised Order No. 4 "details the review procedure and the results of a contractor's failure to develop and maintain an affirmative action program and then sets forth detailed guidelines to be used by contractors in developing and judging these programs as well as the good faith effort required to transform the programs from paper commitments to equal employment opportunity." 41 C.F.R. § 60-2.1(a). Revised Order No. 4 requires the government contractor to conduct a two-step "utilization analysis." The contractor must first analyze its workforce by listing each job classification, indicating the number of employees by race and sex. 41 C.F.R. § 60-2.11(a). Then, the contractor is directed to determine if women or minorities are underutilized in major job groups. 41 C.F.R. § 60-2.11(b). The regulations list eight factors the contractors must consider in determining whether women or minorities are underutilized.2
The consequence of declaring underutilization is that the contractor must develop "specific goals and timetables for the prompt and full achievement of equal opportunity." 41 C.F.R. §§ 60-1.40(a) and -2.12. Whether a contractor is in compliance with the Executive Order is not judged on whether it reaches its goals and meets its timetables. "Rather, each contractor's compliance posture shall be reviewed and determined by reviewing the contents of its program, extent of its adherence to this program, and its good faith efforts to make its program work toward the realization of the program's goals within the timetables set for completion." 41 C.F.R. § 60-2.14.
On February 22, 1974, the Secretary issued TGM No. 1 "which was intended to give specific guidance on the proper interpretation on certain selected issues regarding Revised Order No. 4." Defendants' Memorandum in Support of Motion for Summary Judgment (Defendants' Brief) at 5, quoting TGM No. 1. TGM No. 1 purports to interpret the definition of underutilization in 41 C.F.R. § 60-2.11(b). "The Director of OFCCP interprets that phrase to mean that underutilization exists whenever there is a numerical disparity between the availability of minorities or women for a job group and the number of such persons employed in the job group." Defendant's Brief at 6 n.5.
It is not disputed that Firestone is and has been at all times a government contractor subject to Executive Order 11246 and the regulations issued thereto, including Revised Order No. 4. Accordingly, in 1978, Firestone submitted an affirmative action plan for its Orange, Texas, facility. No underutilization was declared and no goals and timetables established where the difference between availability and utilization did not exceed the five percent level of statistical significance. Resolution of the dispute by informal means was unsuccessfully attempted. The OFCCP filed an administrative complaint against Firestone and a hearing before an administrative law judge (ALJ) was held in May, 1980.3 The ALJ issued his findings and conclusions on May 29, 1980, recommending that the complaint against Firestone be dismissed. The ALJ concluded that TGM No. 1 was not exempt from the notice and comment requirements of the Administrative Procedure Act (APA), 5 U.S.C. §§ 551-59 and §§ 701-06, and hence could not be used by the OFCCP to prove that Firestone was in violation of Executive Order 11246. As to the other allegations in the administrative complaint, the ALJ stated: "whether Defendant's AAPs affirmative action programs otherwise complied with the provisions of Section 60-2.11(b) has not been fully developed." He further stated "there can be little doubt that any other deficiencies in the AAPs in question, even if proved, would not warrant the injunctive relief and/or impositions of the drastic sanctions sought in this proceeding." ALJ Decision at 10. The ALJ also found that the OFCCP considered the major job groups to be those with 50 or more employees. Id. at 6.
On July 13, 1980, the Secretary of Labor issued his Decision and Final Order reversing the ALJ, concluding that Secretary's Decision at 9. The Secretary also concluded that "major job groups" were not limited to those with 50 or more employees; rather all groups listed in 41 C.F.R. § 60-2.11 were considered major regardless of size. All other job groups were to be judged by their size and other important attributes. Secretary's Decision at 11-13. Thirdly, the Secretary found that Firestone's failure to adopt an affirmative action plan with specific action-oriented programs to eliminate deficiencies in organizational units, as opposed to job groups, was an independent violation justifying the sanction of debarment. Id. at 14-15, 38.
The standards of review of the Decision and Final Order of the Secretary are established by the APA § 706. The Secretary's decision should be reversed if it is:
Both parties have moved for Summary Judgment on the basis that there are no genuine issues as to any material facts and that they are entitled to judgment as a matter of law. A voluminous administrative record was filed and considered by the Court, as well as memoranda filed by plaintiffs, defendants, amici...
To continue reading
Request your trial
-
American Trucking Ass'n, Inc. v. U.S.
...do not distinguish among these three exceptions for purposes of the substantial impact test, see Firestone Synthetic Rubber & Latex Co. v. Marshall, 507 F.Supp. 1330, 1335 n. 7 (E.D. Tx. 1981). There are significant theoretical difficulties in applying the substantial impact test, however, ......