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06/26/75 Workers, Afl-Cio, v. James D. Hodgson

June 26, 1975

WORKERS, AFL-CIO, APPELLANTS

v.

JAMES D. HODGSON, SECRETARY OF LABOR, ET AL. 1975.CDC.129 DATE DECIDED: JUNE 26, 1975



UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE

Appeal from the United States District Court for the District of Columbia (D.C. Civil Action 1263-71).

APPELLATE PANEL:

McGowan and MacKinnon, Circuit Judges, and Van Pelt,* Senior District Judge for the District of Nebraska.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE VAN PELT

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 *fn1 and the Union appealed. We affirm. I. THE SERVICE CONTRACT ACT

The Service Contract Act of 1965, as originally enacted, controls this appeal.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. II. EVENTS GIVING RISE TO THIS LAWSUIT

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 , 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 ...


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