Hadnott v. Laird

• Decision Date: 29 February 1972
• Docket Number: No. 24596.,24596.
• Parties: Isiah HADNOTT et al., Appellants, v. Melvin R. LAIRD, individually and in his capacity as Secretary of Defense of the United States, et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

463 F.2d 304 (1972)

Isiah HADNOTT et al., Appellants, v. Melvin R. LAIRD, individually and in his capacity as Secretary of Defense of the United States, et al.

No. 24596.

United States Court of Appeals, District of Columbia Circuit.

Argued November 3, 1971.

Decided February 29, 1972.

As Amended March 7, 1972.

Rehearing Denied September 12, 1972.

Mr. Richard B. Sobol, Washington, D.C., with whom Miss Elizabeth Molodovsky, and Messrs. Richard T. Seymour, Washington, D. C., George Cooper, and James M. Nabrit, III, New York City, were on the brief, for appellants.

Mr. Irwin Goldbloom, Atty., Department of Justice, with whom Messrs. Thomas A. Flannery, U. S. Atty. at the time the brief was filed, and Alan S. Rosenthal, Atty., Department of Justice, were on the brief, for federal appellees.

Mr. Roberts B. Owen, Washington, D. C., with whom Messrs. John Vanderstar, and Jerome Ackerman, Washington, D. C., were on the brief, for appellees American Can Company and Scott Paper Company.

Before ROBB and WILKEY, Circuit Judges, and FRANK M. JOHNSON, Jr.^* Chief Judge, U. S. District Court for the Middle District of Alabama.

WILKEY, Circuit Judge:

Plaintiffs appeal from an order of the District Court dismissing an action for injunctive and declaratory relief against the Secretary of Defense and the Administrator of the General Services Administration. Plaintiffs brought the action on their own behalf and "on behalf of all black employees, applicants for employment, and prospective applicants for employment at the southern facilities" of eleven paper product companies having supply contracts with Defense and GSA, alleging that the rights of plaintiffs (and the class they represent) had been violated under the due process clause of the Fifth Amendment by the failure of the Government to enforce the companies' contractual agreements for nondiscrimination. The action sought an injunction against the two government officials, preventing the award of any future contracts and requiring the termination of the existing ones until all alleged racially discriminatory employment practices should be eliminated. The District Court dismissed the action on two grounds, sovereign immunity and the failure of the plaintiffs to exhaust their administrative remedies. Without reaching the first, we affirm on the latter ground.

I.

The facts are stated fully in the published opinion¹ of the able trial judge. Executive Order 11246, last in the series of Presidential orders directed at eliminating discrimination, requires that every government contract include specific provisions binding the contractor not to discriminate against any employee or applicant because of race, color, creed, or national origin, and to take affirmative action to insure that nondiscrimination is a reality. The penalties for violating these contractual obligations include contract cancellation, termination, or suspension, and ineligibility for future government contracts.

The overall enforcement of these nondiscriminatory contract obligations is entrusted not to the specific contracting agencies themselves (although they have primary responsibility for obtaining compliance), but to the Secretary of Labor. Aside from the contracts with his own Department, he has no special interest in any particular contract or contractor, but independently has the specific duty to see that the nondiscriminatory provisions are enforced with all government contractors. To carry out his responsibility the Secretary has created the Office of Federal Contract Compliance and promulgated detailed regulations, which among other things, establish a complete procedure under which any employee or applicant for employment may complain of discriminatory practices by a government contractor.² Following a complaint the regulations require prompt investigation to determine if there has been a violation of the equal opportunity clause. In accord with the usual common sense principle of avoiding litigation where possible, if investigation indicates a violation, the preferred solution is for the offending contractor to take immediate corrective steps. If the contractor disputes the existence of violations, he is given a hearing, at which time the complainants or witnesses offered by them may be heard.³ If after hearing a violation is determined, the penalties authorized by the Executive Order may be imposed.⁴

At the time of oral argument, out of the eleven companies involved here, with three the Government had reached new affirmative action agreements correcting violations found by the investigation, compliance reviews had been conducted and were being analyzed to determine the existence of violation in four instances, and the remaining four companies were scheduled for compliance reviews in the near future.⁵

II.

Although administrative action under Executive Order 11246 has been and is taking place, yet nowhere in the record is it asserted that any specific one of the plaintiffs has filed a complaint against one of the named companies and invoked the procedure provided by Executive Order 11246 and the implementing regulations.⁶ There is thus no showing by plaintiffs that they have asserted before and been denied rights by the OFCC. Instead, plaintiffs argue, first, that it would be fruitless for them to do so and, second, that because they are asserting constitutional rights they cannot be required to do so before resorting to the federal court.

A.

As to the usefulness of plaintiffs resorting to the administrative procedure set up to achieve precisely the results which plaintiffs desire in this case, i. e., either strict compliance with equal employment opportunity requirements or the debarment of the offending companies from government contracts, we are of the opinion that plaintiffs will never know the result until they try.⁷ Plaintiffs have a variety of excuses as to why pursuing the prescribed administrative route instead of leaping into court with a constitutional claim would be a waste of their time.

1. Principally plaintiffs claim that in the instances where the investigation has been made and completed, and corrective action taken pursuant to a new, specific affirmative action agreement, the companies are still in violation. If this is true, there is nothing to preclude the plaintiffs from filing another complaint making such factual assertions as they think can be established, and calling for a hearing on such complaint in which the plaintiffs and witnesses offered by them may be allowed to participate.

2. Plaintiffs further assert that neither Executive Order 11246 nor the regulations provide an absolute right to the complainants or witnesses offered by them to participate in such hearings, but the regulations do provide that if there is a hearing the individual complainant may participate in the administrative hearing, if he can show he has an interest in the proceeding and may contribute materially to the proper disposition thereof.⁸ Rosado v. Wyman, 397 U.S. 397, 90 S.Ct. 1207, 25 L.Ed.2d 442 (1970), should not discourage plaintiffs. As the trial court pointed out:

There the Department of Health, Education and Welfare had "no procedures whereby welfare recipients may trigger and participate in the Department\'s review of state welfare programs." (397 U.S., at 406, 90 S.Ct. at 1215.) Such is not the case here.⁹

3. Plaintiffs further assert that in some (but not all) of the instances where revised contractual obligations have been put into effect following the compliance investigation triggered by the show-cause order, the new contracts have been refused to the plaintiffs on the grounds that these agreements are confidential. Whether this is true or not, we would assume that if a complaint were filed by the plaintiffs in regard to any one of these companies in this situation, the contract provisions would be a matter of relevant evidence at the hearing.

In the present posture of this case the plaintiffs came into the United States District Court without any administrative record whatsoever, for the apparent reason that plaintiffs had never pursued a complaint, if they had filed any in the first instance,¹⁰ under the administrative procedures provided under Executive Order 11246 and the regulations pursuant thereto.¹¹ Administrative action should be pursued in cases like this one in view of the comprehensive administrative remedies available to the plaintiffs. Finality would be obtained by plaintiffs themselves presenting and pursuing complaints with the OFCC at whatever stage of the compliance agreement process.¹² We cannot say with exactitude what will occur if the plaintiffs go to the Office of Federal Contract Compliance and file a complaint in each of the eleven instances which they cited to the District Court and now cite to this court. But we are assured that one of several things will happen: (1) the Office of Federal Contract Compliance may actually reject the complaint on the ground that the matter has already been investigated, compliance assured, and the matter closed; (2) the OFCC may accept the complaint, reopen the investigation, but deny plaintiffs any role in such investigation by offering testimony or otherwise; or (3), the OFCC may reopen the investigation, conduct an open hearing, in which plaintiffs are allowed to participate. In either eventuality, the plaintiffs will have definite administrative action to which to point when they then come into the United States District Court for review under the provisions of the Administrative Procedure Act.¹³

B.

Turning now to plaintiffs' second argument against the applicability of the exhaustion doctrine here, the plaintiffs contend that whether their resort to administrative remedies would be useless or useful, they are not relegated to administrative remedies, but can seek redress originally in the federal courts for alleged violation of their constitutional rights by government officials. However, the...