Gould v. Wis. Dept. of Industry, Labor & H. Rel.
| Decision Date | 20 December 1983 |
| Docket Number | No. 83-C-104-C.,83-C-104-C. |
| Citation | 576 F. Supp. 1290 |
| Parties | GOULD, INC., a Delaware Corporation, with its principal place of business in Illinois, Plaintiff, v. WISCONSIN DEPARTMENT OF INDUSTRY, LABOR AND HUMAN RELATIONS, and Wisconsin Department of Administration, State Bureau of Procurement, and James Gosling, Secretary, Wisconsin Department of Industry, Labor and Human Relations, John K. Driscoll, Director, State Bureau of Procurement, Wisconsin Department of Administration, Jan Richardson, State Bureau of Procurement, Wisconsin Department of Administration and Gary C. Shealy, Chief, Labor Standards Bureau, Wisconsin Department of Industry, Labor, and Human Relations, Equal Rights Division, Defendants. |
| Court | U.S. District Court — Western District of Wisconsin |
Zel S. Rice II, Sparta, Wis., for plaintiff.
Jonathan P. Siner, Asst. Atty. Gen., Madison, Wis., for defendants.
In this civil action, plaintiff Gould, Inc., seeks injunctive and declaratory relief with respect to defendants' continued enforcement of Wis.Stats. §§ 101.245 and 16.75(8) (1981), which bar an employer from doing business with the State of Wisconsin or its agencies if the employer has had three or more National Labor Relations Board findings which have been affirmed by a federal court of appeals. Plaintiff asserts that the statutes are unconstitutional in that they (1) violate the supremacy clause of Article VI of the United States Constitution; and (2) violate plaintiff's rights under the due process and equal protection clauses of the Fourteenth Amendment.
In an order dated February 18, 1983, I issued a preliminary injunction ordering defendants to honor Gould's existing contracts with the state, to entertain future procurement contract bids from Gould, and to affirmatively revoke all notices to state agencies and state vendors that Gould is barred from doing business with the state.
Plaintiff and defendants have now moved for summary judgment, contending they are entitled to judgment as a matter of law. From the parties' stipulation of fact, I find there are no genuine issues as to the following facts.
Plaintiff is a Delaware corporation with its principal place of business in the state of Illinois. Plaintiff has approximately twenty separate and autonomous divisions, each engaged in the development, manufacture, and sale of distinct and often unrelated products at separate locations throughout the United States and certain foreign countries. Each division has a separate budget and profit and loss statement, as well as separate personnel and facilities. Each division is responsible for the conduct of its own labor relations.
Defendants, Wisconsin Department of Industry, Labor and Human Relations, Wisconsin Department of Administration, and the State Bureau of Procurement, are all administrative agencies of the State of Wisconsin. The four individual defendants are heads of, or employees within, these agencies. James Gosling is the Secretary of the Department of Industry, Labor and Human Relations; John K. Driscoll is the Director of the Bureau of Procurement; Gary C. Shealy is the chief of the Labor Standards Bureau within the Department of Industry, Labor and Human Relations; and Jan Richardson is an employee within the Bureau of Procurement.
On May 21, 1980, Wis.Stats. §§ 101.245 and 16.75(8) (1981) became effective. These statutes are commonly referred to as the Labor Law Violators List statutes. They require the Department of Industry, Labor and Human Relations to maintain a list of employers who have had three or more adverse findings by the National Labor Relations Board affirmed by a federal court of appeals within the preceding five years. Once an employer is put on the list, it is barred from selling products in the State of Wisconsin for three years.1
Prior to the effective date of these statutes, various divisions of plaintiff were found guilty by the National Labor Relations Board of four separate violations of the National Labor Relations Act. Each Board determination was appealed before May 21, 1980, and three of the four determinations were affirmed by federal courts of appeal before May 21, 1980.2 All four cases involved the refusal of one of plaintiff's divisions to comply with a determination of the Board. In three of the four cases, the Board initiated the appeal after the relevant division had refused to comply. In the fourth case, both parties cross-appealed to the court of appeals. As of August 25, 1982, none of the divisions involved in these National Labor Relations Act proceedings was still owned by plaintiff.
By letter dated August 25, 1982, plaintiff was notified of its inclusion on the labor law violators list and its debarment until July 1, 1985. As of the date of the letter, plaintiff's Medical Products Division and its Instruments Division were doing business with the State of Wisconsin in amounts in excess of $10,000, and had outstanding bids submitted to the State of Wisconsin in excess of $10,000. These divisions, as well as all of plaintiff's divisions, are proscribed under Wisconsin's Labor Law Violators List statutes from further bidding for state procurement contracts until July 1, 1985. Prior to this court's entry of a preliminary injunction against them, defendants notified all current and potential state vendors that they could not sell products to the State of Wisconsin which contain Gould-produced components. Finally, absent the preliminary injunction, all outstanding Gould contracts with the State of Wisconsin would have been cancelled as soon as the state could have done so without penalty.
OPINIONJurisdiction is present. 28 U.S.C. § 1331 and 1343(3).
The three non-individual defendants, the Department of Industry, Labor and Human Relations, the Department of Administration, and the Bureau of Procurement, have moved for dismissal of this suit against them for lack of subject matter jurisdiction. The law is clear that under the Eleventh Amendment to the United States Constitution, state governments and their administrative agencies are immune from federal suits for monetary damages, Edelman v. Jordan, 415 U.S. 651, 663, 94 S.Ct. 1347, 1355, 39 L.Ed.2d 662 (1974), and for prospective injunctive relief, Alabama v. Pugh, 438 U.S. 781, 782, 98 S.Ct. 3057, 3058, 57 L.Ed.2d 1114 (1978). Therefore, this suit will be dismissed with respect to the three non-individual defendants.
However, plaintiff's suit against the four employees and departmental heads presents a different issue. The Eleventh Amendment immunity doctrine does not preclude a federal court from enjoining state officials sued in their individual capacity from enforcing any state law found to be repugnant to the United States Constitution. Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908); see Edelman v. Jordan, 415 U.S. at 664, 94 S.Ct. at 1356. Such prospective equitable relief may be granted by a federal court even though such an injunction might have ancillary effects on the state treasury. Quern v. Jordan, 440 U.S. 332, 337, 99 S.Ct. 1139, 1143, 59 L.Ed.2d 358 (1979).
Plaintiff's suit to enjoin the individual defendants' continued enforcement of Wis. Stats. §§ 101.245 and 16.75(8) (1981) does state a valid cause of action over which this court may exercise jurisdiction.3
The proper analytical approach to the doctrine of federal labor law preemption is not easy to discern from the case law. See, e.g., Amalgamated Ass'n of Street, Electric Railway & Motor Coach Employees v. Lockridge, 403 U.S. 274, 285, 91 S.Ct. 1909, 1917, 29 L.Ed.2d 473 (1971); Cox, Recent Developments in Federal Labor Law Preemption, 41 Ohio St. L.J. 277, 300 (1980). The United States Supreme Court discussed the doctrine in New York Telephone Co. v. New York State Department of Labor, 440 U.S. 519, 99 S.Ct. 1328, 59 L.Ed.2d 553 (1979), but the plurality of opinions in that case left many unanswered questions. Nonetheless, I believe a logical approach can be derived from the New York Telephone opinion and from the line of cases preceding it.
The United States Supreme Court has identified two tests for federal labor preemption. The first is the "arguably protected/arguably prohibited" test set out in San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959). Under this test, the initial inquiry is whether the activity purported to be regulated by the state action is either protected under § 7 of the National Labor Relations Act, 29 U.S.C. § 157 or prohibited under § 8 of that Act, 29 U.S.C. § 158, or arguably so protected or prohibited. Garmon, 359 U.S. at 245, 79 S.Ct. at 779. The second inquiry under Garmon is whether the regulated activity is "merely a peripheral concern of the Labor Management Relations Act ... or touches interests so deeply rooted in local feeling and responsibility that, in the absence of compelling congressional direction," it cannot be inferred that Congress has deprived the states of the power to act. Farmer v. Carpenters, 430 U.S. 290, 296-97, 97 S.Ct. 1056, 1061, 51 L.Ed.2d 338 (1977) (quoting Garmon, 359 U.S. at 243-44, 79 S.Ct. at 778-79).
In Farmer, the Supreme Court emphasized that the Garmon analysis is not to be applied mechanically. Rather, application of the second inquiry is to be by a case-by-case balancing test under which a court must determine whether an exception to the general presumption of federal preemption is warranted. A state's legitimate nonlabor interests in regulating the activity in question must be balanced against the federal government's interests in uniform labor regulation and the likely degree to which the state regulation will interfere with those federal interests. Farmer, 430 U.S. at 297-301, 97 S.Ct. at 1061-1064. If the activity subject to state regulation is merely a peripheral concern of the National Labor Relations Act...
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Gould, Inc. v. Wisconsin Dept. of Industry, Labor and Human Relations
...parties dispute only the district court's legal conclusions set out in the opinion below, Gould, Inc. v. Wisconsin Department of Industry, Labor and Human Relations, 576 F.Supp. 1290 (W.D.Wis.1983). Section 101.245 of the Wisconsin Statutes (1) The [Department of Industry, Labor and Human R......
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