Wood v. Diamond State Telephone Co., Civ. A. No. 76-57.

• Citation: 440 F. Supp. 1003
• Decision Date: 22 November 1977
• Docket Number: Civ. A. No. 76-57.
• Parties: Robert Spencer WOOD, Plaintiff, v. DIAMOND STATE TELEPHONE COMPANY, a Delaware Corporation, and Bell Telephone Company of Pennsylvania, a Pennsylvania Corporation, Defendants.
• Court: United States District Courts. 3th Circuit. United States District Court (Delaware)

440 F. Supp. 1003

Robert Spencer WOOD, Plaintiff, v. DIAMOND STATE TELEPHONE COMPANY, a Delaware Corporation, and Bell Telephone Company of Pennsylvania, a Pennsylvania Corporation, Defendants.

Civ. A. No. 76-57.

United States District Court, D. Delaware.

November 22, 1977.

Thomas Herlihy, III, of Herlihy & Herlihy, Wilmington, Del., for plaintiff.

Martin P. Tully and Richard D. Allen of Morris, Nichols, Arsht & Tunnell, Wilmington, Del., Hubert Thurschwell, The Diamond State Tele. Co., Philadelphia, Pa., for defendants.

OPINION

STAPLETON, District Judge:

Robert Spencer Wood brought this action against The Diamond State Telephone Company, a Delaware corporation (hereinafter "Diamond"), The Bell Telephone Company of Pennsylvania, a Pennsylvania corporation, The American Telephone and Telegraph Company, a New York corporation, and The American Telephone and Telegraph Company of Delaware, a Delaware corporation. Pursuant to a stipulation among the parties, the action has been dismissed with prejudice as to the latter two corporations.

The original complaint alleges that Wood, a veteran with a disability of 30% or more, is entitled to damages flowing from Diamond's refusal to hire him. He applied for employment with Diamond and was subsequently interviewed and scheduled for a medical examination on February 5, 1974. Shortly after the examination, according to the complaint, Wood was told that he would not be hired because "in ten or twenty years . . . he might develop some condition related to his present disability" which would subject Diamond to a disability pension claim.

The plaintiff's first theory of recovery is grounded upon Section 503 of the Vietnam Era Veteran's Readjustment Act of 1972, 38 U.S.C. § 2012 (1972), as it existed prior to its amendment in December of 1974. Section 503 then provided:

(a) Any contract entered into by any department or agency for the procurement of personal property and non-personal services (including construction) for the United States, shall contain a provision requiring that, in employing persons to carry out such contract, the party contracting with the United States shall give special emphasis to the employment of qualified disabled veterans and veterans of the Vietnam era. The provisions of this section shall apply to any subcontract entered into by a prime contractor in carrying out any contract for the procurement of personal property and nonpersonal services (including construction) for the United States. The President shall implement the provisions of this section by promulgating regulations within 60 days after the date of enactment of this section, which regulations shall require that (1) each such contractor undertake in such contract to list immediately with the appropriate local employment service office all of its suitable employment openings, and (2) each such local office shall give such veterans priority in referral to such employment openings.

(b) If any disabled veteran or veteran of the Vietnam era believes any contractor has failed or refuses to comply with the provisions of his contract with the United States, relating to giving special emphasis in employment to veterans, such veteran may file a complaint with the Veterans' Employment Service of the Department of Labor. Such complaint shall be promptly referred to the Secretary who shall promptly investigate such complaint and shall take such action thereon as the facts and circumstances warrant consistent with the terms of such contract and the laws and regulations applicable thereto.

Sometime before the initiation of this lawsuit, the plaintiff resorted to the administrative remedy provided by subsection (b) above. His decision to bring suit before the Department of Labor's final determination was apparently due to his fear that the applicable time period within which he might bring this action might expire in the interim. In October, 1976, the Assistant Regional Administrator of the Office of Federal Contract Compliance Programs, Department of Labor, without mentioning the Veteran's Readjustment Act claim, determined that Diamond, "by refusing to hire Wood, had violated its obligations under affirmative action provision of The Vocational Rehabilitation Act of 1973, 29 U.S.C. § 793." That Act, in relevant part, provides that:

(a) Any contract in excess of $2,500 entered into by any Federal department or agency for the procurement of personal property and nonpersonal services (including construction) for the United States shall 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 as defined in section 706(6) of this title. The provisions of this section shall apply to any subcontract in excess of $2,500 entered into by a prime contractor in carrying out any contract for the procurement of personal property and nonpersonal services (including construction) for the United States. The President shall implement the provisions of this section by promulgating regulations within ninety days after September 26, 1973.

(b) If any handicapped individual believes any contractor has failed or refuses to comply with the provisions of his contract with the United States, relating to employment of handicapped individuals, such individual may file a complaint with the Department of Labor. The Department shall promptly investigate such complaint and shall take such action thereon as the facts and circumstances warrant, consistent with the terms of such contract and the laws and regulations applicable thereto.

On January 3, 1977 the plaintiff was permitted to amend his complaint to include a second count relating to this latter statutory provision.

The matter presently before the Court is the defendants' motion to dismiss both counts of the complaint on the ground that neither states a claim upon which relief can be granted.

I. THE VIETNAM ERA VETERAN'S READJUSTMENT ACT OF 1972 CLAIM.

Defendants maintain that there is no private cause of action under Section 503 of the Veteran's Readjustment Act. I find it unnecessary to reach that issue, however. Plaintiff does not allege that defendants breached Diamond's contract with the government by failing "to list . . . with the appropriate local employment service office all of its suitable employment openings" or by refusing to consider referrals resulting from such listings. Rather, he alleges that the defendants breached their duty by failing to accord plaintiff a "job preference" and by applying an employment criterion which had a disparate impact on disabled veterans. I reluctantly conclude that, because of the meaning given to the requisite "special emphasis" by the other terms of Section 503, the scope of the defendants' duties under Diamond's contract did not include an obligation to afford the plaintiff a job preference or to refrain from applying a criterion having a disparate impact.

The Report of the Senate Committee on the Vietnam Era Veteran's Readjustment Act of 1972 indicates that Section 503 "is a logical extension of the President's Executive Order No. 11598 issued on June 16, 1971 . . .."¹ That Order required "Government contracts . . . to contain assurances that the contractor . . shall, to the maximum extent feasible, list all of its suitable employment openings with the appropriate office of the state employment service system. . . ."² The Senate Report noted that the increase in listings as a result of this Order had not been as great as anticipated and that Section 503 was "intended to achieve more effectively the intent of the President's Executive Order". The "logical extension" referred to was the deletion of the phrase "to the maximum extent feasible", the addition of a requirement that each local employment office "give such veterans priority in referral to such employment openings" and the creation of an administrative remedy for violations of the duties imposed.

This view of Section 503 is consistent with the contemporaneous understanding of those charged with the responsibility of implementing that section. The implementing regulations specify a contract clause to be inserted in every federal contract over $2,500. That clause provided only that "the contractor, to provide special emphasis to the employment of qualified disabled veterans and veterans of the Vietnam era, agrees that all suitable employment openings . . . shall be offered for listing at an appropriate local office of the State employment service system . . . and to provide such reports to such local office regarding employment openings and hires as may be required". 41 C.F.R. § 50-250.6. The contract clause goes on to explain that, while the duty imposed "shall involve . . the acceptance of referrals of veterans and non-veterans, the listing of employment openings does not require the hiring of any particular job applicant or from any particular group of job applicants".

In summary, I conclude that the scope of Section 503 of the Vietnam Era Veteran's Readjustment Act, as it existed prior to December 3, 1974,³ was limited to assuring the listing of job openings with State employment agencies and to the preference of certain veterans in referrals by those agencies. It imposed no duties and created no rights with respect to the employer's decision to hire or not to hire. Accordingly, Count I of the complaint must be dismissed.

II. THE REHABILITATION ACT OF 1973 CLAIM.

Section 503 of The Rehabilitation Act of 1973, which I shall refer to by its Code section number, Section 793, to avoid confusion with Section 503 of the Veterans Act, has been set forth above. A review of the implementing regulations is helpful by way of supplement. Section 60-741.4 of those regulations provides in part:

Each agency and each contractor and subcontractor shall include the following affirmative action clause

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