International Ass'n of Machinists and Aerospace Workers, AFL-CIO v. Hodgson, AFL-CI
| Decision Date | 26 June 1975 |
| Docket Number | No. 74-1165,A,AFL-CI,74-1165 |
| Citation | 515 F.2d 373,169 U.S.App.D.C. 142 |
| Parties | 22 Wage & Hour Cas. (BN 336, 169 U.S.App.D.C. 142, 77 Lab.Cas. P 33,260 INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS,ppellants, v. James D. HODGSON, Secretary of Labor, et al. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Bernard Dunau, Washington, D. C., with whom Plato E. Papps and Mozart G. Ratner, Washington, D. C., were on the brief for appellants.
Nicholas Gilman, Asst. U. S. Atty., with whom Earl J. Silbert, U. S. Atty., John A. Terry and Robert M. Werdig, Asst. U. S. Attys., were on the brief for appellee Hodgson.
Peter W. Tredick, Washington, D. C., with whom John J. Ross and Patrick M. Raher, Washington, D. C., were on the brief for appellee Boeing Co.
Before McGOWAN and MacKINNON, Circuit Judges, and VAN PELT, * Senior District Judge for the District of Nebraska.
Appellant International Association of Machinists & Aerospace Workers, AFL-CIO, (hereinafter Union) challenges the decision of the Secretary of Labor not to issue a pervasive wage determination pursuant to the Service Contract Act, 41 U.S.C. § 351 et seq. (1965) for the Kennedy Space Center and contests the validity of a service contract awarded to the Boeing Company by the National Aeronautics and Space Administration (hereinafter NASA) which was bid and negotiated without the benefit of such a wage determination. The Union seeks damages from the Boeing Company based upon a retroactive application of a subsequent wage determination. Ruling on cross-motions for summary judgment, the district court found for defendants 1 and the Union appealed. We affirm.
The Service Contract Act of 1965, as originally enacted, controls this appeal. The purpose of the Act is to insure that service employees working on government contracts are not paid wages below the prevailing wages being paid in the locality by non-government contractors. To carry out this purpose the Act provides that:
"Sec. 2. (a) Every contract (and any bid specification therefor) entered into by the United States or the District of Columbia in excess of $2,500, except as provided in section 7 of this Act, whether negotiated or advertised, the principal purpose of which is to furnish services in the United States through the use of service employees, as defined herein, shall contain the following:
(1) A provision specifying the minimum monetary wages to be paid the various classes of service employees in the performance of the contract or any subcontract thereunder, as determined by the Secretary, or his authorized representative, in accordance with prevailing rates for such employees in the locality, which in no case shall be lower than the minimum specified in subsection (b).
(2) A provision specifying the fringe benefits to be furnished the various classes of service employees, engaged in the performance of the contract or any subcontract thereunder, as determined by the Secretary or his authorized representative to be prevailing for such employees in the locality. Such fringe benefits shall include medical or hospital care, pensions on retirement or death, compensation for injuries or illness resulting from occupational activity, or insurance to provide any of the foregoing, unemployment benefits, life insurance, disability and sickness insurance, accident insurance, vacation and holiday pay, costs of apprenticeship or other similar programs and other bona fide fringe benefits not otherwise required by Federal, State, or local law to be provided by the contractor or subcontractor. The obligation under this subparagraph may be discharged by furnishing any equivalent combinations of fringe benefits or by making equivalent or differential payments in cash under rules and regulations established by the Secretary." 41 U.S.C. § 351(a) (1) and (2) (1965)
Section 4(b) of the Act, at the time the facts in this case arose, provided that:
"The Secretary may provide such reasonable limitations and may make such rules and regulations allowing reasonable variations, tolerances, and exemptions to and from any or all provisions of this Act as he may find necessary and proper in the public interest or to avoid serious impairment of the conduct of Government business." 41 U.S.C. § 353(b) (1965)
The Act is triggered with respect to a particular service contract by the submission from the contracting agency to the Department of Labor of a "Notice of Intention to Make a Service Contract." Such a "Notice" is required not less than thirty days prior to issuance of invitations for bids. In the "Notice" the contracting agency informs the Department of Labor as to the nature of the contract the approximate number of employees involved, and also provides any wage data readily available to the agency. The Department of Labor then makes a wage determination, which is based upon a comprehensive wage survey of the locality by the Bureau of Labor Statistics, unless the Department determines no determination is to be made. If a wage determination is issued, no service contract can be made based on a lower pay scale than that so determined.
In 1967 the Department of Labor decided not to issue a wage determination for Brevard County, Florida, where three federal facilities operate, to-wit: Kennedy Space Center (KSC), Kennedy Air Force Station, and Patrick Air Force Base. In March of 1967 a survey was made in the area following an on-site visit in February, 1967, to obtain information about wages generally paid in the locality (J.A. p. 21). It revealed that NASA and Air Force service contractors were generally paying wages equal to or higher than those prevailing in the private sector in Brevard County. However, janitors, porters, and cleaners, who were not organized as were the contract service personnel at KSC, did appear to be receiving less pay as compared to the private sector and a limited wage determination was issued covering those jobs.
In May, 1970, NASA sent the Department of Labor a "Notice of Intention to Make a Service Contract." On June 2, 1970, the Department responded that the prior wage determination of 1967 was applicable. No wage determination was issued except for janitors, porters, and cleaners.
On November 23, 1970, NASA selected from among seven bids submitted the Boeing Company's bid for performance of support services at KSC. Trans World Airlines, Inc. (TWA), had been performing these services pursuant to a cost-plus-award-fee contract, which was to expire on March 31, 1971. The employees of TWA were represented in collective bargaining by the appellant Union, and the terms of their employment were governed by a national collective bargaining agreement between TWA and the Union. The Boeing Company had also provided services at KSC on certain "hardware contract" work involving missile assembly. Members of the Union were performing this work for the Boeing Company and were being paid in accordance with a national collective bargaining agreement between Boeing and the Union. The Boeing-Union agreement set a wage scale below that of the TWA-Union agreement. Boeing's bid, involved in this case, was based on the wage rates and fringe benefits as provided in the Boeing-Union hardware contract. The Boeing Company thus was able to and did underbid TWA on the basis of labor costs.
TWA protested the selection of the Boeing bid and the Union concluded to seek legal recourse by means of this case and thereby avoid the reduction in the existing wage scale it enjoyed with TWA. The Union also sought observance of the Union-TWA agreement by the Boeing Company as a successor contractor. 2 The Union also filed unfair labor practice charges against Boeing. 3 The Union protested to NASA, but NASA refused to revise the wage rates and opposed the Union's suggestions that Boeing adopt the TWA rates. TWA filed a protest with the Comptroller General of the contract award to Boeing. The Comptroller General rejected the protest on February 26, 1971. The Union again protested to the Comptroller General and received another rejection on June 8, 1971. Meanwhile, on April 1, 1971, Boeing took over performance of the support service work at KSC. Boeing hired a number of incumbent TWA workers as new employees with zero seniority and at lower wages. Thus, some of the same workers who are members of the same Union who held the same jobs at the same place as the jobs they held with TWA were now being paid less money by Boeing for the same work and were without seniority. 4
Subsequent to Boeing's takeover on April 1, 1971, the Air Force in August or September of 1971 gave notice of intent to make a service contract for support services at the Eastern Test Range in Brevard County, Florida. 5 The Secretary of Labor at first adhered to the 1967 decision not to issue a wage determination. Later he reconsidered and ordered the Bureau of Labor Statistics to conduct a wage survey in Brevard County. The survey was conducted in October of 1971, and was completed by November 24, 1971. During this period the Boeing-Union national agreement expired and a new agreement providing for an increase in wages was entered into on December 13, 1971 effective for the period from November 16, 1971 to October 1, 1972.
The Secretary of Labor issued a wage determination on January 3, 1972 to become effective as of February 1, 1972 regarding support service contract work at Kennedy Space Center. This wage determination, as well as the new national agreement, controlled wages paid after February 1, 1972. Thus, the dispute before us centers only on the wages and benefits paid by the Boeing Company in the ten months period from April 1, 1971 to February 1, 1972. Admittedly the wages now paid are higher than those of Boeing's "hardware contract."
The Government argues that the Union has no standing...
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