EE Black, Ltd. v. Marshall, Civ. No. 79-0132.

• Decision Date: 05 September 1980
• Docket Number: Civ. No. 79-0132.
• Citation: 497 F. Supp. 1088
• Parties: E. E. BLACK, LTD., General Contractors Association of Hawaii, and Hawaii Employers Council, Plaintiffs, v. F. Ray MARSHALL, Secretary of the United States Department of Labor; Donald E. Elisburg, Assistant Secretary for Employment Standards of the Department of Labor; Weldon J. Rougeau, Deputy Assistant Secretary and Director, Office of Federal Contract Compliance Programs; and Carin A. Clauss, Solicitor of Labor, United States Department of Labor, Defendants.
• Court: U.S. District Court — District of Hawaii

497 F. Supp. 1088

E. E. BLACK, LTD., General Contractors Association of Hawaii, and Hawaii Employers Council, Plaintiffs, v. F. Ray MARSHALL, Secretary of the United States Department of Labor; Donald E. Elisburg, Assistant Secretary for Employment Standards of the Department of Labor; Weldon J. Rougeau, Deputy Assistant Secretary and Director, Office of Federal Contract Compliance Programs; and Carin A. Clauss, Solicitor of Labor, United States Department of Labor, Defendants.

Civ. No. 79-0132.

United States District Court, D. Hawaii.

September 5, 1980.

COPYRIGHT MATERIAL OMITTED

Jared H. Jossem, Barry W. Marr, Howard A. Matsuura,^* Honolulu, Hawaii, for plaintiffs.

Melvin K. Soong, Asst. U. S. Atty., Walter M. Heen, U. S. Atty., Honolulu, Hawaii, Maimon Schwarzschild,^** U. S. Dept. of Justice, Civil Rights Div., Washington, D. C., for defendants.

DECISION AND ORDER

SAMUEL P. KING, Chief Judge.

I. FACTS

This case of first impression involves the construction and interpretation of several sections of the Rehabilitation Act of 1973, 29 U.S.C. § 701 et seq. (1976 & Supp. III 1979), and appurtenant regulations. Section 503 of the Act, 29 U.S.C. § 793 (Supp. III 1979) (as amended) reads in pertinent part:

Any contract in excess of $2,500 entered into by any Federal department or agency for the procurement of personal property and non-personal services (including construction) for the United States shall contain a provision requiring that, in employing persons to carry out such contract the party contracting with the United States shall take affirmative action to employ and advance in employment qualified handicapped individuals as defined in section 706(7) of this title.

29 U.S.C. § 706(7) (Supp. III 1979) reads in pertinent part:

(A) Except as otherwise provided in subparagraph (B), the term "handicapped individual" means any individual who (i) has a physical or mental disability which for such individual constitutes or results in a substantial handicap to employment and (ii) can reasonably be expected to benefit in terms of employability from vocational rehabilitation services . ..

(B) The term "handicapped individual" means . . . any person who (i) has a physical or mental impairment which substantially limits one or more of such person's major life activities, (ii) has a record of such an impairment, or (iii) is regarded as having such an impairment.

Pursuant to the Act, and Executive Order No. 11558, the Secretary of Labor issued regulations governing procedures for enforcing the Act, and also supplementing and defining certain of the terms contained in the Act. 41 C.F.R. § 60-741.2 defines a handicapped individual as any person who:

(1) has a physical or mental impairment which substantially limits one or more of such person's major life activities, (2) has a record of such impairment, or (3) is regarded as having such an impairment. For purposes of this Part, a handicapped individual is "substantially limited" if he or she is likely to experience difficulty in securing, retaining or advancing in employment because of a handicap.

Appendix A to 41 C.F.R. § 60-741 includes employment in its definition of "major life activities." That Appendix also provides:

The phrase "substantially limits" means the degree that the impairment affects employability. A handicapped individual who is likely to experience difficulty in securing, retaining or advancing in employment would be considered substantially limited.

. . . . .

"Is regarded as having such an impairment" refers to those individuals who are perceived as having a handicap, whether an impairment exists or not, but who, because of attitudes or for any other reason, are regarded as handicapped by employers, or supervisors who have an effect on the individual securing, retaining or advancing in employment.

George Crosby is a thirty-one year old man who entered the apprenticeship program of the United Brotherhood of Carpenters in Honolulu in September 1973. The program involved on-the-job training and schooling designed to teach the basic carpentry skills necessary to become a journeyman. The job of carpenter's apprentice requires frequent bending, twisting and heavy lifting. The apprenticeship program required 8,000 hours of work in the field. Prior to starting the program, Mr. Crosby had worked packing and moving furniture and had also worked in the carpenter's union summer program. In high school Mr. Crosby had been active in basketball, cross-country and varsity football. He also played football for the University of Hawaii, and after college tried out for several professional football teams.

As an apprentice carpenter, Mr. Crosby worked for several construction contractors between September 1973 and May 1976. By May 1976, he had accumulated over 3600 hours of on-the-job training. During this time he had suffered two back-related problems. In March 1974 he strained his back while attempting to carry a load of lumber. The pain occurred in his lower left back around the beltline. He was treated for this injury for several months and collected $400 in workers' compensation benefits. In 1975, while attempting to put a concrete form in place, Mr. Crosby "felt a little discomfort" in his back. When he reported the incident he was sent to a doctor who examined and X-rayed his back, but could find nothing wrong. Mr. Crosby returned to work the same day.

On May 20, 1976, Mr. Crosby and several other apprentice carpenters were referred by the union to defendant E. E. Black, Ltd. (Black), a general construction contractor. Black required all apprentice carpenter applicants to take pre-employment physical examinations. Mr. Crosby had X-rays taken of his back, and Dr. George Henry, who read the X-rays, detected a congenital back anomaly, a partially sacralized transitional vertebra (also referred to as an "anomalous joint" or a "lumbosacral anomalous joint"). Dr. Henry told Black that because of this condition Mr. Crosby was a poor risk for heavy labor. Black denied Mr. Crosby employment on the basis of his pre-employment physical.

On June 4, 1976, Mr. Crosby was examined by Dr. Masao Takai, an orthopedist, who took X-rays, and found in addition to the anomaly mentioned above, a spina bifida occulta and a mild rotoscoliosis.¹ Dr. Takai concluded, after the examination, that Mr. Crosby's condition did not prevent him from performing the job of apprentice carpenter, and wrote a letter addressed "to whom it may concern" stating that if Mr. Crosby kept his back and abdominal muscles in good tone, "he should be able to perform whatever he prefers." Though Mr. Crosby showed the letter to Black, he was never recalled for an apprentice carpenter position.

Mr. Crosby testified at a hearing before an Administrative Law Judge that after the Black incident, the union would not refer him to any jobs that had pre-employment physicals. During the period between 1976 and 1978 Mr. Crosby worked at several construction jobs. He testified before the Administrative Law Judge that because of the incident with Black he had had great difficulty obtaining employment as a carpenter's apprentice, and had been unable to get the on-the-job training hours required to become a journeyman.

In July 1976, Mr. Crosby filed a complaint with the State of Hawaii Department of Labor, which complaint was referred to the defendant United States Department of Labor. Mr. Crosby alleged that he had been refused employment as an apprentice carpenter by Black because of a congenital abnormality in his back.

41 C.F.R. § 60-741.5 requires government contractors holding a contract of over $50,000 with the federal government, and having 50 or more employees, to adopt an affirmative action program. There is no dispute that Black at all relevant times had at least one contract with the federal government of over $50,000 and had more than 50 employees. 41 C.F.R. § 60-714.4 sets forth the affirmative action clause that must be included in all covered contracts, and 41 C.F.R. § 60-741.3 discusses covered contracts and waivers from the affirmative action requirements. That section exempts from coverage all contracts under $2500. There is no dispute that the contract in connection with which Crosby was rejected had a value of over $2500. 41 C.F.R. § 60-741.3 makes it clear that even if a particular contract has no connection with any of the contractor's federal contracts, it is a covered contract (if over $2500) unless there is a specific waiver. Here, there was no waiver. Thus, the contract in connection with which Crosby was rejected was a covered contract.

It could be argued that by the terms of § 503, 29 U.S.C. § 793, only contracts related to federal contracts should be covered by the Act. Even if § 503 had to be read that way, the Secretary would still have to come up with a method of exempting unrelated contracts. He was certainly free to adopt a method that included all contracts initially, and required a contractor (with affirmative action obligations) to go through an affirmative waiver procedure to exempt unrelated contracts. The provision adopted in this regard, 41 C.F.R. § 60-741.3(5), provides:

Facilities not connected with contracts. The Director may waive the requirements of the affirmative action clause with respect to any of a prime contractor's or subcontractor's facilities which he or she finds to be in all respects separate and distinct from activities of the prime contractor or subcontractor related to the performance of the contract or subcontract, provided that he or she also finds that such a waiver will not interfere with or impede the effectuation of the Act. Such waivers shall be considered only upon the request of the contractor or subcontractor.

Such a provision is certainly valid. And while a contractor might have a right to quarrel with a particular determination of the Director, he cannot quarrel with a determination that he never requested.

The contract provision...