The opinion of the court was delivered by: WEINSTEIN
Plaintiff, who has a physical disability, is suing his former employer claiming wrongful dismissal from his job, allegedly in violation of section 503 of the Vocational Rehabilitation Act of 1973 as amended. 29 U.S.C. § 793. He contends that the dismissal violated the contract between his employer and the federal government. The contract, as required by section 503, incorporated an affirmative action provision in favor of physically disabled workers. He claims standing to sue as a third-party beneficiary. Plaintiff also contends that the dismissal violated the collective bargaining agreement between his union and his employer; that agreement, it is claimed, incorporated by inference the affirmative action provision. For the reasons indicated below, defendant's motion to dismiss must be granted.
Starting in September 1966, the plaintiff was employed by United as a "ramp serviceman" at Kennedy Airport in New York. In 1969, he was first diagnosed as having epilepsy. United was aware of this diagnosis, as it was of the five seizures that plaintiff experienced from 1969 to 1974. From September 1974 to June 1977, United increasingly restricted plaintiff's employment. On June 6, 1977, plaintiff was placed involuntarily on permanent unpaid sick leave and in 1980, United terminated plaintiff's employment.
It is contended that the restrictions, suspension and dismissal were not justified, as United claims, by plaintiff's disability and that United's actions violated section 503 of the Vocational Rehabilitation Act. That section requires that all contracts over $2,500 made by the United States for property or services include a provision requiring the party contracting with the United States to take "affirmative action to employ . . . qualified handicapped individuals." It also provides for an aggrieved handicapped individual to file a complaint with the Department of Labor and for the Department to take appropriate action if it finds a violation.
The plaintiff originally stated a cause of action directly under the statute. The Court of Appeals, however, held that no such private right of action exists. Davis v. United Air Lines, Inc., 662 F.2d 120 (2d Cir. 1981), cert. denied, 456 U.S. 965, 72 L. Ed. 2d 490, 102 S. Ct. 2045 (1982) criticized in Comment, Closing the Courthouse Door on Section 503 complaints, 49 Bklyn. L. Rev. 1159 (1983). An amended complaint is predicated on the view that plaintiff could sue as a third-party beneficiary of the statutorily mandated contract and for violation of the collective bargaining agreement.
Section 503 provides in relevant part:
(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 . . .
(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. 29 U.S.C. § 793.
A. Third-Party Beneficiary Claim
Although there is little New York law on point, it appears that New York courts would, in the case of a contract mandated by a federal statute, be guided by federal contract law in deciding a third-party beneficiary claim. Filardo v. Foley Bros., 297 N.Y. 217, 225, 78 N.E.2d 480, 484 (1948), rev'd on other grounds, 336 U.S. 281, 69 S. Ct. 575, 93 L. Ed. 680 (1949). The question in Filardo was whether an employee could sue as a third-party beneficiary of a contract between his employer and the United States, which contract stated that the employer "agreed to "obey and abide by all applicable laws ., . of the United States." 297 N.Y. at 219. The employee was suing for violation of the Federal Eight-Hour Law. The New York Court of Appeals stated that "principles of general contract law," 297 N.Y. at 225, i.e., federal common law, controlled the issue.
If the New York rule is that federal law controls in a case like Filardo, it should a fortiori control where, as here, the contract provision does not merely refer to federal law but is mandated in haec verba by federal law. Since New York State courts would follow federal law, federal courts must do so in an action such as this one which is now based on diversity ...