Lodge 1858, Am. Federation of Government Emp. v. Webb
| Decision Date | 19 April 1978 |
| Docket Number | Nos. 76-1821,76-1934,s. 76-1821 |
| Citation | 188 U.S.App.D.C. 233,580 F.2d 496 |
| Parties | , 24 Cont.Cas.Fed. (CCH) 82,219 LODGE 1858, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, et al. v. James E. WEBB, Administrator, National Aeronautics and Space Administration, et al., Appellants. LODGE 1858, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, et al. v. James E. WEBB, Administrator, National Aeronautics and Space Administration, et al. Appeal of NATIONAL COUNCIL OF TECHNICAL SERVICE INDUSTRIES. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Appeals from the United States District Court for the District of Columbia (Civil Action No. 3261-67).
Gil Zimmerman, Special Atty., Dept. of Justice, Washington, D.C., for appellants in No. 76-1821.
Rex E. Lee, Asst. Atty. Gen., and Irving Jaffe, Deputy Asst. Atty. Gen., Washington, D.C., were on the brief for appellants in No. 76-1821.
Ronald R. Glancz and Harry R. Silver, Attys., Dept. of Justice, Washington, D.C., also entered appearances for appellants in No. 76-1821.
James F. Fitzpatrick, Washington, D.C., with whom Stephen M. Sacks, Washington, D.C., was on the brief, for appellant in No. 76-1934, also entered appearances for appellee, National Council of Technical Service Industries in No. 76-1821.
Edward L. Merrigan, Washington, D.C., for appellees.
Before Mr. Justice CLARK, * of the Supreme Court of the United States, and MacKINNON and ROBB, Circuit Judges.
Opinion for the Court filed by Circuit Judge MacKINNON.
A reduction-in-force (RIF) was announced at the Marshall Space Flight Center in Huntsville, Alabama (Marshall and MSFC), on December 6, 1967. 1 764 federal government employees were originally affected, though this was later reduced to only 166. The RIF procedure 2 requires that employees be laid off only if they cannot be placed in alternative available positions for which they are qualified at Marshall. NASA utilized the services of both government employees and independent technical service contractors who in turn hired their own employees (contractor employees). 3
Appellants here are several former individual employees of Marshall, who have been displaced by the RIF, and the union. 4 Their complaint, in its most essential terms,
is that NASA was employing many technical service workers at Marshall supposedly as independent contractors, but actually with a degree of control by NASA and with other characteristics that made them functionally employees of the United States. It is alleged that such an arrangement would violate the Civil Service laws, 5 and that if they were actually employees of the United States, the arrangement would allegedly also violate NASA's own statute, 6 and its collective bargaining agreement. If the contracts with the independent technical services contractors which are here in question, were, for these reasons, illegal, appellants contend that they should then be set aside and that civil service employees, rather than being terminated by the RIF, should be permitted to take over the positions filled under the agreements with the contractors.
The case has a long litigational history. The complaint was filed in 1967, and dismissed by the district court on April 24, 1968 for failure to exhaust administrative remedies. We vacated the dismissal and remanded the case on April 21, 1970. 7 On November 30, 1973, the district court granted partial summary judgment in the remanded cause, ruling that if any of the workers employed pursuant to the independent contracts were functionally employees, the plaintiffs would have relief. In an exercise of the discretionary doctrine of primary jurisdiction, the district court held the proceedings in abeyance for 60 days, during which the
matter (was) . . . referred to the United States Civil Service Commission with directions to apply the "Pellerzi Standards" and determine whether the relationship of "employer-employee" existed on December 6, 1967, and exists at the present time between National Aeronautics and Space Administration and the contractor non-civil service employees involved in this case . . .
(J.A. 409).
The "Pellerzi Standards," referenced in the trial judge's order, figure importantly in this appeal. In October of 1967, General Counsel Pellerzi of the U.S. Civil Service Commission issued an opinion concerning the legality of certain contracts at the Goddard Space Flight Center. 8 That opinion set forth six specific criteria for determining whether the individuals furnished by the independent contractors were employees of the contractors or of the United States. 9 If all six criteria were present, an On December 21, 1973, the district court clarified its order to the Civil Service Commission. At issue was a supplement to the Pellerzi opinion that had been prepared by the successor General Counsel Mondello of the U.S. Civil Service Commission (J.A. 1512). The court instructed that "the Mondello Supplement . . . did not add any new or different standards or cancel or delete any of the 'Pellerzi Standards' but reaffirmed them and supplied the classification thereof" (J.A. 442).
arrangement that had been considered an independent contract should instead, in the Commission's view, be treated as employment.
The U.S. Attorney had submitted instructions to the United States Civil Service Commission as to the correct standard to use, but the district court in an order of April 2, 1974 refused to approve those instructions. On May 30, 1974, the Civil Service Commission issued its report on the Marshall contracts.
The Commission's report was thorough and exhaustive. 10 It reached the conclusion that none of the contracts involved in this case were impermissible. The district court, after reviewing the Commission's report, disagreed. Thirty-two contracts are involved in this case; the court held that twenty-two of them were invalid, two more were partially invalid, and eight were permissible (J.A. 434-35). The Administrator of NASA and the intervenor National Council of Technical Service Industries brought this appeal.
Appellants reiterate their objections to plaintiffs' standing, but these matters have already been settled on previous appeal. 11 In brief recapitulation, the plaintiffs here, and their union, would benefit from a voiding of the allegedly impermissible contracts. There would be substantial retroactive benefits and substantial future benefits except in the rare case that NASA immediately abolished all of the jobs the contractors were filling, or immediately provided for legitimate contracts to cover them. These possibilities are not so likely of realization, however, as to make the relief sought by plaintiffs purely speculative within the meaning of Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976). Furthermore, the statutes and regulations protecting rights of federal civil service employees constitute a "pervasive legislative scheme governing the relationship between the plaintiff class and the defendant class in a particular regard" within the meaning of Cort v. Ash, 422 U.S. 66, 82, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). And permitting a private cause of action to prevent abuses of that legislative scheme would not interfere with the statutory purpose or with concerns of federalism. Cort v. Ash, 422 U.S. at 78, 95 S.Ct. 2080.
Accordingly, we turn to the merits of the appeal. The basic question presented is whether the support service contracts in effect at the Marshall Space Flight Center violate the personnel procurement restrictions of the NASA enabling act as set forth in 42 U.S.C. § 2473(b)(2) or whether they fall within the range of the broad contracting authority granted to NASA by 42 U.S.C. § 2437(b)(5).
Subsection (b)(2) of the act provides as follows:
(b) In the performance of its functions the Administration is authorized
(2) To appoint and fix the compensation of such officers and Employees as may be necessary to carry out such functions (listed in subsection (a)). Such officers (Emphasis added). This section states only that NASA's employees shall be covered by the civil service and compensation laws, except that 425 NASA Employees can be appointed without regard to those laws. The exception was intended to enable NASA to recruit qualified scientists, engineers, and other personnel on a prompt basis without regard to civil service limitations. 12
and Employees shall be Appointed in accordance with the civil service laws and their compensation fixed in accordance with chapter 51 and subchapter III of chapter 53 of Title 5, Except that (A) to the extent the Administrator deems such action necessary to the discharge of his responsibilities, he may appoint not more than four hundred and twenty-five of the scientific, engineering, and administrative personnel of the Administration without regard to such laws . . .
Subsection (b)(5) specifically concerns support service contracting, which is the focus of appellee's challenge. That section provides:
In the performance of its functions (under the National Space Program) the Administrator (NASA) is authorized
(5) without regard to section 529 of Title 31, to enter into and perform such Contracts, leases, cooperative agreements, or Other transactions as may be necessary in the conduct of its work and on such terms as it may deem appropriate, with any agency or instrumentality of the United States, or with any State, Territory, or possession, or with any political subdivision thereof, or with Any person, firm, association, corporation, or educational institution. To the maximum extent practicable and consistent with the accomplishment of the purpose of this chapter, such contracts, leases, agreements, and other transactions shall be allocated by the Administrator in a manner which will enable small-business concerns to participate equitably and...
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