Howard v. Uniroyal, Inc., No. 82-7407

• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)
• Writing for the Court: Before JOHNSON and HENDERSON; JOHNSON
• Citation: 719 F.2d 1552
• Parties: 33 Fair Empl.Prac.Cas. 453, 32 Empl. Prac. Dec. P 33,927, 1 A.D. Cases 526 Joel T. HOWARD, Plaintiff-Appellant, v. UNIROYAL, INC., Defendant-Appellee.
• Docket Number: No. 82-7407
• Decision Date: 21 November 1983

Page 1552

719 F.2d 1552 33 Fair Empl.Prac.Cas. 453,
32 Empl. Prac. Dec. P 33,927, 1 A.D. Cases 526 Joel T. HOWARD, Plaintiff-Appellant,
v.
UNIROYAL, INC., Defendant-Appellee. No. 82-7407. United States Court of Appeals,
Eleventh Circuit. Nov. 21, 1983.

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Alvin T. Prestwood, Claude P. Rosser, Jr., Montgomery, Ala., for plaintiff-appellant.

Peyton Lacy, Jr., Birmingham, Ala., Harry N. Turk, Ben Fernandez, New York City, for defendant-appellee.

Appeal from the United States District Court for the Middle District of Alabama.

Before JOHNSON and HENDERSON, Circuit Judges, and ALLGOOD ^*, District Judge.

JOHNSON, Circuit Judge:

Section 503 of the Rehabilitation Act of 1973, as amended, requires every contract in excess of $2,500 with any federal department or agency to "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." 29 U.S.C.A. Sec. 793(a). ¹ Section 503 also provides that any handicapped individual

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who believes any contractor has failed or refuses to comply with this provision may file a complaint with the Department of Labor. 29 U.S.C.A. Sec. 793(b). The requirement of the affirmative action provision may be waived, in whole or in part, by the President. 29 U.S.C.A. Sec. 793(c). Pursuant to section 503, implementing regulations have been promulgated by the Department of Labor and its Office of Federal Contract Compliance Programs ("OFCCP") setting forth a uniform affirmative action clause and providing a detailed administrative enforcement mechanism for its breach. ²

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This appeal presents a single issue: does section 503 pre-empt a qualified handicapped individual's claim under state law as a third party beneficiary of the affirmative action clause contained in contracts between his employer and the federal government? Holding that it does, we affirm the district court's dismissal of plaintiff's third party beneficiary action for failure to state a claim upon which relief can be granted.

Plaintiff Joel T. Howard filed the complaint in this case on July 22, 1982, in the United States District Court for the Middle District of Alabama. Pertinent to this appeal, plaintiff's second cause of action ³ alleged a contract claim under Alabama law as a direct third party beneficiary of the section 503(a) affirmative action clause contained in contracts between Uniroyal and the federal government. Jurisdiction of this claim was predicated upon diversity of citizenship between plaintiff and Uniroyal under 28 U.S.C.A. Sec. 1332. ⁴ Plaintiff sought damages, specific performance and injunctive relief for breach of the affirmative action clause. The district court, 543 F.Supp. 490 (M.D.Ala.1981), dismissed plaintiff's second cause of action for failure to state a claim on the grounds that plaintiff's state law contract action was pre-empted by section 503. This appeal followed.

Accepting, as we must on appeal from a judgment of dismissal for failure to state a claim, the allegations of the plaintiff's complaint as true, we find that plaintiff is a qualified handicapped individual; that Uniroyal is a party to contracts in excess of $2,500 with the federal government and is thus contractually obligated to take affirmative action to employ and advance in employment qualified handicapped individuals; and that Uniroyal's demotion of plaintiff from a salaried position to a more physically strenuous hourly position breached this agreement. The fact of handicapped based discrimination, breaching the affirmative action clause required by section 503, does not, however, resolve the issue raised by this appeal. The further inquiry remains: did Congress intend the remedy provided in section 503(b) of administrative enforcement to pre-empt plaintiff's state law breach of contract action?

Initially we note that both parties acknowledge the well established principle that the touchstone of pre-emption analysis is Congressional intent, and accept the framework of pre-emption analysis set forth in Pennsylvania v. Nelson, 350 U.S. 497, 76 S.Ct. 477, 100 L.Ed. 640 (1956), and applied by the district court. Plaintiff contends, however, as he must, that an analysis of Congressional intent in section 503 to pre-empt state law is wholly independent and distinct from an analysis of whether Congress intended in section 503 to create a federal implied private cause of action. In Rogers v. Frito-Lay, Inc., 611 F.2d 1074 (5th Cir.1980), ⁵ the former Fifth Circuit extensively reviewed the available evidence of Congressional intent in section 503 and held that Congress did not intend to provide handicapped individuals with an implied private cause of action under section 503. We agree with plaintiff that pre-emption and implied private cause of action analyses are distinct modes of divining Congressional

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intent. Cf. Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), with Pennsylvania v. Nelson, 350 U.S. 497, 76 S.Ct. 477, 100 L.Ed. 640 (1956). We agree that Rogers is not controlling in the present case. ⁶ We hold, however, that the district court properly considered the Rogers court's findings concerning the legislative history, structure, purpose and scope of section 503 and its implementing regulations within the framework of pre-emption analysis. At a bare minimum, the focus of both the pre-emption and implied private cause of action analysis here is on the same evidence of the intent of Congress. Although Congress clearly could evidence an intent to permit third party beneficiary actions and to prohibit an implied cause of action in the same piece of legislation, we find that Congress' intent as to both coincides in section 503.

Mindful of the Supreme Court's admonition that its "prior cases on pre-emption are not precise guidelines ..., for each case turns on the peculiarities and special features of the federal regulatory scheme in question," City of Burbank v. Lockheed Air Terminal, Inc., 411 U.S. 624, 638, 93 S.Ct. 1854, 1862, 36 L.Ed.2d 547 (1973), we first examine the general principles for determining Congressional intent developed in the pre-emption context. The intent of Congress to pre-empt state law may be either express or implied, and "is compelled whether Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose." Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 1309, 51 L.Ed.2d 604 (1977). Explicit pre-emptive language may be found on the face of the statute itself, in its legislative history, or in regulations promulgated pursuant to the statute. See Fidelity Federal Savings & Loan Association v. de la Cuesta, --- U.S. ----, 102 S.Ct. 3014, 73 L.Ed.2d 664, 675 (1982) ("[f]ederal regulations have no less pre-emptive effect than federal statutes."). "Where Congress has not stated specifically whether a federal statute has occupied a field in which the states are otherwise free to legislate, different criteria have furnished touchstones for decision." Pennsylvania v. Nelson, 350 U.S. 497, 501-02, 76 S.Ct. 477, 479-80, 100 L.Ed. 640 (1956) (footnote omitted). The district court applied the three tests followed in Pennsylvania v. Nelson to determine if plaintiff's third party beneficiary action is pre-empted by section 503: 1) whether the scheme of federal regulation is so pervasive as to make reasonable the inference that Congress left no room for the states to supplement it; 2) whether the federal statute touches upon a field in which the federal interest is so dominant that the federal system is assumed to preclude enforcement of state laws on the same subject; and 3) whether the enforcement of the state law presents a serious danger of conflict with the administration of the federal program. Recently, in determining whether state real property law was pre-empted by a regulation of the Federal Home Loan Bank Board pursuant to the Home Owners' Loan Act of 1933, the Supreme Court reiterated these guidelines:

Absent explicit pre-emptive language, Congress' intent to supersede state law altogether may be inferred because '[t]he scheme of federal regulations may be so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it,' because 'the Act of Congress may touch a field in which the federal interest is so dominant that the federal system will be assumed

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to preclude enforcement of state laws on the same subject,' or because 'the object sought to be obtained by the federal law and the character of the obligations imposed by it may reveal the same purpose.' Fidelity Federal Savings & Loan Association v. de la Cuesta [--- U.S. ----, ----, 102 S.Ct. 3014, 3022], 73 L.Ed.2d 664, 675 (1982) (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 [67 S.Ct. 1146, 1152, 91 L.Ed. 1447] (1947)).

Congress' authority to supplant state law is no less because the state's power is exercised by the state judiciary through the common law rather than by the state legislature. Sperry v. Florida, 373 U.S. 379, 403, 83 S.Ct. 1322, 1335, 10 L.Ed.2d 428 (1963). Congress' implicit intent to supplant state law, however, must clearly manifest: "[i]t will not be presumed that a federal statute was intended to supersede the exercise of the power of the state unless there is a clear manifestation of intent to do so. The exercise of federal supremacy is not lightly presumed." Schwartz v. Texas, 344 U.S. 199, 203, 73 S.Ct. 232, 235, 97 L.Ed. 231 (1952).

In light of these principles for ascertaining Congress' intent, we begin our examination of section 503. Initially we seek an explicit declaration of Congress' intent to pre-empt state law. The face of section 503 does not expressly preclude state actions. However, we note that the provision of an administrative remedy in section 503(b)...