National Maritime Union of America v. US

• Decision Date: 16 June 1982
• Docket Number: No. 495-79C.,495-79C.
• Citation: 682 F.2d 944
• Parties: NATIONAL MARITIME UNION OF AMERICA, AFL-CIO, et al. v. The UNITED STATES.
• Court: U.S. Claims Court

682 F.2d 944

NATIONAL MARITIME UNION OF AMERICA, AFL-CIO, et al. v. The UNITED STATES.

No. 495-79C.

United States Court of Claims.

June 16, 1982.

COPYRIGHT MATERIAL OMITTED

Sidney H. Kalban, New York City, Atty. of record, for plaintiffs. Phillips & Cappiello, P. C., New York City, of counsel.

William D. White, Washington, D. C., with whom was Asst. Atty. Gen. J. Paul McGrath, Washington, D. C., for defendant. Robert Reutershan, Dept. of the Navy, Robert Gilliat, Dept. of Defense, and Eric Moll, Dept. of Commerce, Washington, D. C., of counsel.

Before COWEN, Senior Judge, and DAVIS and SMITH, Judges.

SMITH, Judge:

In this civilian pay case we are called upon to decide whether the executive branch, pursuant to its anti-inflation program, may limit pay increases of certain prevailing rate employees to the rates of increase imposed on other federal employees by statute. Specifically, we must decide whether the phrase "as nearly as is consistent with the public interest" in the statutory provision for prevailing rate mariners vests the mariners' employer agencies with the discretion to override the general purpose of the prevailing rate statute: providing parity of pay between the public and private sectors. On the parties' cross-motions for summary judgment, we conclude that the agencies do have such discretion and that it was properly exercised in this case.

Plaintiffs here are the National Maritime Union of America, AFL-CIO (NMU),¹ and 34 federal seamen, represented by NMU, who are employed by the National Oceanic and Atmospheric Administration (NOAA) of the Department of Commerce and the Military Sealift Command (MSC) of the Department of the Navy.

I.

The mariners in this case are employed by the Government on ships operated by NOAA and MSC. They are prevailing rate employees, which means that their wages are set generally in accordance with wages in comparable private industry jobs in the particular locality, rather than in accordance with a uniform nationwide system like the General Schedule.² The wages of plaintiff employees are governed by section 5348(a) of title 5.³

As implemented, prior to fiscal year 1979 (beginning October 1, 1978), the effect of section 5348(a) had been that the increases in federal pay equaled those paid by private industry under collective bargaining agreements with NMU. Beginning in fiscal 1979, however, Congress, concerned with the rising rate of inflation, imposed ceilings on the pay of Government employees. Congress enacted these ceilings for the fiscal years 1979,⁴ 1980,⁵ and 1981.⁶ Only the fiscal 1981 pay ceiling specifically referred to section 5348, which covers plaintiffs; the others referred only to employees covered by section 5343.

Nevertheless, in fiscal 1979 and 1980, the President directed the agencies to place a 5.5 percent ceiling on pay increases for, among others, the employees here concerned. The President's memorandum,⁷ in pertinent part, read:

The success of our anti-inflation effort is critical to the economic well-being of the nation. To achieve this success, it is vital that the Government in managing its own affairs, join with the rest of the nation in a positive commitment to reducing inflationary pressures. Accordingly, I have determined that it would be inconsistent with the public interest for any category of Federal pay rates to be increased by more than 5.5 percent during fiscal year 1979.

* * * * * *

In the public interest to control inflation, each officer or employee in the executive branch who has administrative authority to set rates of pay for any Federal officers or employees should exercise such authority, to the extent permissible under law, treaty, or international agreement, in such a way as to ensure that no rate of pay for any category of officers or employees is increased more than 5.5 percent during fiscal year 1979. * * *

A similar order, using the same language, was promulgated for fiscal 1980 by the Director of the Office of Personnel Management (OPM), limiting fiscal 1980 pay increases to 7.02 percent.⁸ Plaintiffs here challenge these administratively imposed caps for the fiscal years 1979 and 1980. It is undisputed that plaintiffs' counterparts in private industry received substantially higher increases during this period.

Plaintiffs have also challenged certain overtime and premium pay practices of NOAA in connection with the pay ceilings. In fiscal 1979 (June 6, 1979) and fiscal 1980 (June 16, 1980), MSC increased premium pay by 7.5 percent and 12.83 percent, respectively (the industry rate), while NOAA did not. MSC also paid overtime at these above-ceiling rates, while NOAA did not. The Government confesses judgment as to the unpaid NOAA premium pay, but suggests that the MSC overtime pay should have been limited by the pay ceiling. Both parties have moved for summary judgment on this issue also.

II.

The statutory provision for prevailing rate employees (the prevailing rate system) is found in subchapter IV of chapter 53 of title 5, United States Code, comprising sections 5341 through 5349.⁹ Section 5341 as a whole states the policy of Congress for the fixing and adjustment of rates of pay of prevailing rate employees. That policy includes four enumerated and specific principles, set out in the statute. Section 5341 reads, in its entirety:

It is the policy of Congress that rates of pay of prevailing rate employees be fixed and adjusted from time to time as nearly as is consistent with the public interest in accordance with prevailing rates and be based on principles that —

(1) there will be equal pay for substantially equal work for all prevailing rate employees who are working under similar conditions of employment in all agencies within the same local wage area;

(2) there will be relative differences in pay within a local wage area when there are substantial or recognizable differences in duties, responsibilities, and qualification requirements among positions;

(3) the level of rates of pay will be maintained in line with prevailing levels for comparable work within a local wage area; and

(4) the level of rates of pay will be maintained so as to attract and retain qualified prevailing rate employees.

The structure of subchapter IV indicates that section 5341 relates generally to the entire subchapter, just as the definitions section (§ 5342) does.

Sections 5343, 5348, and 5349 provide the specific authority for setting wages for different groups of employees. Section 5343 covers the vast majority of prevailing rate employees;¹⁰ section 5349 covers certain organizations; and section 5348(a) applies to federal mariners. Section 5348 reads, in pertinent part:

(a) * * * the pay of officers and members of crews of vessels * * * shall be fixed and adjusted from time to time as nearly as is consistent with the public interest in accordance with prevailing rates and practices in the maritime industry.

Both of the sections of particular significance here, 5341 and 5348, contain an identical formula: "fixed and adjusted from time to time as nearly as is consistent with the public interest in accordance with prevailing rates." These are the operative words of section 5348(a),¹¹ and they have been used continuously since the appearance of the phrase in the Classification Act of 1949.¹² This phrase (the 1949 phrase) has therefore survived, in virtually identical form, 33 years, a recodification of title 5 in 1966,¹³ and a complete revision of the prevailing rate system in 1972.¹⁴ The 1966 and 1972 actions made no changes in the meaning of the 1949 phrase in section 5348(a).¹⁵ By contrast, the present section 5341 has no predecessors.¹⁶ Our case turns on the meaning of the 1949 phrase in the context of the present section 5348(a).

A.

The first question to be addressed is whether section 5348(a) permits any agency discretion at all in the setting of wages or whether it simply mandates equivalence between the public and private sectors. We hold that discretion is intended and we have so held on previous occasions.

The language of the key phrase commands such an interpretation. "As nearly as is consistent with the public interest" qualifies or limits the main thrust of the sentence, which is "fixed and adjusted from time to time * * * in accordance with prevailing rates." We may draw two conclusions from this structure. First, the primary purpose of the statute is to ensure that the pay of these employees will be comparable to those in the private sector.¹⁷ Second, the public interest is a consideration placed in opposition to equality of pay. The language "as nearly as is consistent with" anticipates that equality of pay may not always be entirely consistent with the public interest. These countervailing considerations create a kind of tension in the statute which is crucial to the system, as it provides the administrative discretion needed to operate efficiently a wage system.¹⁸

The existence of the countervailing considerations has been recognized in the three leading cases interpreting section 5348(a) and its predecessors (which use identical language): Blaha v. United States,¹⁹ Daniels v. United States,²⁰ and Daigle v. United States.²¹ In Blaha²² we stated:

We think Congress meant to authorize Government agencies * * * to adopt private industry pay practices * * * subject of course to the "public interest" exception * * *.

And the court in Daniels²³ concluded:

The stated provision vests the Secretary of the Navy with great discretion in setting wages. It is his administrative responsibility to determine how closely the salaries of the specified personnel can parallel the maritime industry's rates and still be "consistent with the public interest."

The question whether the pay shall be fixed in accordance with, or nearly in accordance with, and, if the latter, how nearly to, prevailing rates, depends upon the public interest. The point, summed up in Daigle, is that the phrase "consistent with the public...