Cca of Tenn., LLC v. Perez
| Decision Date | 18 December 2015 |
| Docket Number | No. 15-cv-3164 (KM)(MAH),15-cv-3164 (KM)(MAH) |
| Parties | CCA OF TENNESSEE, LLC, Plaintiff, v. THOMAS E. PEREZ, SECRETARY, UNITED STATES DEPARTMENT OF LABOR, DAVID WEIL, ADMINISTRATOR, WAGE AND HOUR DIVISION, UNITED STATES DEPARTMENT OF LABOR, AND UNITED GOVERNMENT SECURITY OFFICERS OF AMERICA, LOCAL 315, Defendants. |
| Court | U.S. District Court — District of New Jersey |
:
CCA of Tennessee, LLC ("CCA"), commenced this action to enjoin a Department of Labor ("DOL") Administrative Law Judge ("ALJ") from holding a hearing. The stated purpose of the hearing is to determine whether the wage rate collectively bargained for and agreed to between CCA and the United Government Security Officers of America, Local 315 ("UGSOA") substantially varies from prevailing wages in the locality. CCA alleges in its complaint (ECF No. 1) that the hearing is not authorized by the Service Contract Act ("SCA"), 41 U.S.C. §§ 6701-6707, and thus would be ultra vires. The defendants, in addition to UGSOA, are Thomas E. Perez, DOL Secretary, and David Weil, Administrator of DOL's Wage and Hour Division of the DOL. (Herein, the designation "DOL" shall include the Department, Perez, and Weil.) After filing the complaint, CCA immediately moved for summary judgment. (ECF No. 4) Perez and Weil opposed summary judgment and cross-moved to dismiss CCA's complaint under Fed. R. Civ. P. 12(b)(1) and 12(b)(6) or in the alternative for summary judgment in their favor. (ECF Nos. 26, 27).1 Now before the court are that motion to dismiss and the cross-motions for summary judgment.
The question presents itself as a dispute over wages and benefits. It narrows down, however, to the question of whether a district court may intervene in that dispute—in particular, whether this court has jurisdiction to enjoin an administrative hearing. I conclude that, whatever the merits of the underlying hourly wage issue, this Court lacks jurisdiction to enjoin the DOL from hearing the dispute. CCA's contentions, whether right or wrong, should be asserted in the administrative proceedings and on appeal from any adverse final agency action.
For the reasons set forth below, the motion of the DOL to dismiss the complaint is GRANTED. The parties' motions for summary judgment are therefore DISMISSED as moot.
CCA is a federal government contractor that provides detention services for Immigration and Customs Enforcement ("ICE") at a detention center in Elizabeth, New Jersey. (Compl. ¶1)
Perez is the Secretary of Labor, and is being sued in his official capacity. (Id. ¶2) David Weil is the Administrator of the Wage and Hour Division of the DOL. (Id. ¶3) (Perez and Weil are sued in their official capacities and, as noted above, I will for convenience include them in the designation "DOL".)
UGSOA is the labor organization certified to bargain as an agent for the Elizabeth detention center's officers. (Id. ¶4) UGSOA was elected to represent the detention officers in February 2012, after they decertified their previous representative. (Id. ¶21)
In 2013, UGSOA and CCA negotiated a new collective bargaining agreement increasing detention officer wage rates from $20.00 per hour under the predecessor agreement to $20.40 in 2013, $20.71 in 2014, and $21.02 in 2015. (Id. ¶¶20-22) That new agreement provided for wage reopeners in 2014 and 2015, permitting renegotiation of the wages for those years. (Pl. Statementof Undisputed Facts ("PSUF") ¶11 (ECF No. 4-3); Def. Resp. to PSUF and Statement of Undisputed Facts ("DSUF") ¶11 (ECF No. 26-3))
In September 2014, UGSOA requested a substantial variance hearing from the Wage and Hour Division pursuant to the SCA. In that request, UGSOA represented that the federal prevailing wage for the area was $30.97. (McGurkin Decl. Ex. 5 at 3; DSUF ¶17)
Weil agreed with UGSOA that there was evidence warranting submission to an ALJ and signed an "Order of Reference" authorizing a substantial variance hearing by an ALJ under the SCA, 41 U.S.C. § 6707(c). (Compl. ¶24; see McGurkin Decl. Ex. 6 (Order of Reference (Feb. 3, 2015))). Plaintiff moved before the ALJ to dismiss the Order of Reference, arguing that the SCA does not permit a substantial variance hearing under these circumstances. (Compl. ¶25) Then, as here, CCA principally relied on Gracey v. Int'l Bhd. of Elec. Workers, 868 F.2d 671, 672 (4th Cir. 1989). (See McGurkin Decl. Ex. 7 (ALJ Order Denying Motion to Dismiss (April 21, 2015))) The ALJ dismissed the motion because it was "bound by the [Administrative Review Board]'s decision" to limit the application of the holding in Gracey to its Circuit of origin, the Fourth Circuit. (Id. at 2 ())
On May 5, 2015, CCA filed this action for a declaratory judgment, injunction, or mandamus to stop the substantial variance hearing from taking place. (Compl. Counts 1-3) In essence, CCA urges that the SCA does not authorize a substantial variance hearing under the circumstances present here.
The Service Contract Act (SCA), 41 U.S.C. §§ 6701-6707,3 first enacted in 1965, covers employees of certain entities contracting with federal agencies. The Senate's stated purpose for enacting the SCA was "to provide labor standards for the protection of employees of contractors and subcontractors furnishing services to or performing maintenance service for Federal agencies.... the only remaining category of Federal contracts to which no labor standards protection applies." S. Rep. No. 89-798, at 1 (1965), reprinted in 1965 U.S.C.C.A.N. 3737, 3737. The SCA provides, inter alia, that contracts to which it applies must specify the minimum wage (and fringe benefits) to be paid to each class of service employee. 41 U.S.C. §§ 6703-6704. As enacted in 1965, the SCA required that the minimum wage rates be set in accordance with prevailing rates in the locality. See Curtiss-Wright Corp. v. McLucas, 364 F. Supp. 750, 768 (D.N.J. 1973).
Much of the language at issue in this case, however, was the product of 1972 amendments to the SCA. Legislative history states, and it is readily inferable from the statute itself, that those amendments were intended to balance "the dual objectives of protecting the service worker and safeguarding other legitimate interests of the federal government." S. Rep. No. 92-1131, at 3 (1972), reprinted in 1972 U.S.C.C.A.N. 3534, 3537-38. To put it more bluntly,Congress wanted to protect workers and respect collective bargaining, but on the other hand did not want the government to overpay for services.
Those 1972 amendments included (1) the addition of a collective bargaining option to the minimum wage and fringe benefit specification requirements; (2) a predecessor-contract wage floor; and (3) a substantial variance exception. See Pub. L. No. 92-473, 86 Stat. 789 (1972).4
Number 1, the collective bargaining option, was appended to the minimum wage provision. That provision, as currently worded, now comprises two options: it requires a wage rate (a) "in accordance with prevailing rates in the locality" as determined by the Secretary of Labor, or (b) in accordance with a collective bargaining agreement arrived at "as a result of arm's length negotiations."5 41 U.S.C. § 6703(1) (current codification); see 86 Stat. at 789.
Numbers 2 and 3, the predecessor-contract wage floor and the substantial variance exception provisions, likewise remain in the SCA today. They are currently codified at 41 U.S.C. § 6707:
41 U.S.C. § 6707(c).
Section 6707(c)(1) thus creates a "wage floor." It requires that new contracts pay no less than the wages and benefits that the employees were due to receive under a predecessor contract. See Gracey, 868 F.2d at 674; Hart, 1999 WL 33839612 at *2.
Section 6707(c)(2) is titled "Exception." It provides that "this subsection" (i.e., § 6707(c)) does not apply if the Secretary of Labor, after a hearing held in accordance with regulations, determines that the wage rates under the predecessor contract are "substantially at variance" with wages and benefits prevailing in the locality.6
The dispute here is over the scope of the Secretary's authorization to hold a substantial variance hearing under § 6707(c)(2), and the power of the Court to enjoin a hearing challenged as ultra vires.
CCA begins with section 6707(c)(1), which states the general rule that a successor contract cannot set a wage rate that is below the rate in its predecessor contract. Fine, says CCA; these contracts do not do that. Wages escalate each year, from $20.00 per hour before the new...
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