City of New York v. Diamond

• Decision Date: 31 July 1974
• Docket Number: No. 73 Civ. 5293.,73 Civ. 5293.
• Citation: 379 F. Supp. 503
• Parties: The CITY OF NEW YORK et al., Plaintiffs, v. Henry L. DIAMOND, Individually and in his official capacity as Commissioner of the New York State Department of Environmental Conservation, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

379 F. Supp. 503

The CITY OF NEW YORK et al., Plaintiffs, v. Henry L. DIAMOND, Individually and in his official capacity as Commissioner of the New York State Department of Environmental Conservation, et al., Defendants.

No. 73 Civ. 5293.

United States District Court, S. D. New York.

July 24, 1974.

As Amended July 31, 1974.

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Adrian P. Burke, Corp. Counsel, New York City, for plaintiffs; Beverly Gross, Asst. Corp. Counsel, New York City, of counsel.

Louis J. Lefkowitz, Atty. Gen., New York City, for State defendants; Lloyd Milliken, Asst. Atty. Gen., of counsel.

Paul J. Curran, U. S. Atty., New York City, for Federal defendants; Steven J. Glassman, Asst. U. S. Atty., of counsel.

OPINION

LASKER, District Judge.

This case raises a question of major import to members of minority groups interested in finding employment in the construction industry in New York City. In its simplest terms, the issue is what affirmative efforts to employ minority workers the City can require of construction contractors engaged on City projects funded by the City, state and federal governments. The factual context in which the question arises involves the City's application for federal and state grants for the construction of two sewage treatment plants at Red Hook, Brooklyn, and Oakwood Beach, Staten Island.

The City has applied to the United States Environmental Protection Agency ("U.S.E.P.A.") for federal funding for the construction of sewage treatment facilities at Red Hook and Oakwood Beach. These projects are necessary to comply with the standards for effluent wastes contained in the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq. Subchapter II of the Act authorizes the assumption by the federal government of seventy-five percent of construction costs of approved water pollution control facilities. 33 U.S.C. § 1281 et seq. However, the U.S.E.P.A. may not approve a grant for a project unless it has been certified as entitled to priority over other state projects by the appropriate state agency, in this case the New York State Department of Environmental Conservation ("State Department of Environmental Conservation"). § 204(a)(3), 33 U.S.C. § 1284(a)(3). Certification has been granted for Red Hook and Oakwood Beach. In March, 1973, the City and the U.S.E.P.A. executed agreements for the funding of the initial phases of the construction of these projects. Contracts for the latter have already been put out for bidding; contracts for the former are ready to be put out.

Under the regulations of the U.S.E. P.A., an applicant for federal funds must state that it is in compliance with federal Executive Order No. 11246, which requires it to include in its contracts a provision that the contractor will not discriminate against any employee or applicant for employment on the basis of race, color, religion, sex or national origin and will take affirmative action to ensure the existence of nondiscriminatory hiring and employment practices. Executive Order No. 11246, § 202(1).

Until January, 1973, the affirmative action plan required by the City of its contractors was the "New York Plan," a federally approved agreement entered into in December, 1970, by New York City, New York State and the New York Building and Construction Industry Board of Urban Affairs Fund ("Board of Urban Affairs"), an industry group representing construction contractors and building trades unions. The City withdrew from the New York Plan in January, 1973, and the following July promulgated its own plan, which has come to be known as the "Mayor's Plan." This plan, which the City seeks to impose on contractors employed on its projects, makes minority hiring demands of contractors which exceed those found in the New York Plan.

The City submitted its new plan to the State Department of Environmental Conservation as an amendment to its plans and specifications for the Red Hook project, for approval and transmission to the U.S.E.P.A. Both the State Department of Environmental Conservation and the U.S.E.P.A. notified the City that its new plan was not acceptable, and that the specifications for Red Hook and any other project containing the Mayor's Plan would not be approved. Both agencies indicated that approval was withheld because in their view, the City could not incorporate in its federally and state funded contracts requirements which exceeded the demands of the federally approved New York Plan. The source of this position is a memorandum issued on July 19, 1973, by the United States Secretary of Labor, Peter J. Brennan, which prohibits local governments from imposing any equal employment opportunity requirements which have not been approved by the United States Department of Labor on federally funded construction projects. The policy laid down by the Brennan Memorandum was subsequently adopted by the New York State Department of Labor ("State Department of Labor"), by letter dated June 29, 1973.

Shortly thereafter, the City of New York and various City officials (collectively "the City") filed suit seeking declaratory and injunctive relief against federal and state disapproval of City applications for federal assistance solely because its affirmative action program includes the Mayor's Plan.¹ Defendants are the state Commissioners of Environmental Conservation and Labor, the Administrator of the U.S.E.P.A. and the Administration of its New York City Regional Office and the United States Secretary of Labor.

All the defendants move to dismiss. In the alternative, the federal defendants seek a stay of this proceeding and the state defendants move for summary judgment. The City originally sought a preliminary injunction, but it has been agreed between the parties and the court that their motion may be treated as one for summary judgment.

I.

Executive Order No. 11246 is the source of the equal employment obligations of federal and federally-assisted contractors. Part I of the order requires that federally-funded contracts include the provision that:

"The contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. 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. Such action shall include, but not be limited to the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship." Id. at § 202.

Furthermore, the contractor must undertake to "comply with all provisions of Executive Order No. 11246 . . . and of the rules, regulations, and relevant orders of the Secretary of Labor." Id.

The Secretary of Labor is charged with the responsibility for administering the compliance provisions of the order, contained in Parts II and III. Id. at § 201. The Director of the Office of Federal Contract Compliance is authorized to implement the equal employment policies of the Secretary of Labor. Order No. 15-68 of the Secretary of Labor, 33 Fed.Reg. 2600 (Sept. 4, 1968). The two methods by which compliance with the order has been obtained entail use of either an "imposed plan" or a "hometown plan". An "imposed plan," as the name indicates, is a plan which is imposed by the Secretary of Labor, establishing yearly minority employment goals on a trade-by-trade basis, with increasing participation each year. The "hometown plan" approach involves local contractors and contractors associations, building trades unions and minority organizations in the formulation of a plan for voluntary compliance with the order. Under a hometown plan, minority participation obligations fall on the trade as a whole rather than on any individual contractor, and can be satisfied by minority employment on any work performed by the trade, whether federally-funded or private. A hometown plan must be submitted to the Office of Federal Contract Compliance for approval and, if approved, is incorporated by reference in Part I of the Federal Bid Conditions. For trades which decline to participate in a hometown plan, mandatory affirmative action requirements are set forth in Part II of the Federal Bid Conditions. Responsibility for compliance with these requirements is imposed directly on the individual contractor, as to his work force, rather than on the non-participating trade as a whole.

The federally-approved hometown plan in New York State is the New York Plan referred to earlier. It was submitted to the federal government for approval in 1970 by the Board of Urban Affairs, mentioned above, which is a creation of the Building & Construction Trades Council, representing labor organizations, and two contractor associations, the Building Trades Employers Association and the General Contractors Association. The U.S. Department of Labor declined to approve it in April of that year. Following negotiations between the Board of Urban Affairs and the City and State of New York an agreement was signed adopting the New York Plan, which is substantially identical to the Board's original plan. Approval was implemented by executive orders of the Mayor (Executive Order No. 31) and the Governor (Executive Order No. 43) in January, 1971. The following August the Office of Federal Contract Compliance announced its approval of the New York Plan. Following a number of extensions, approval of the Plan is scheduled to expire on August 1, 1974.

The New York Plan (Complaint, Exhibit E) originally provided for on-the-job training for a maximum of 800 minority workers (id., Art. IV, § 2), with goals established on a craft-by-craft basis, with qualified graduates of the program to be recommended to the appropriate union "for consideration for membership" (id., Art. II, § 2)....