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GENERAL ELEC. v. N.Y. ST. DEPT. OF LABOR

June 7, 1990

GENERAL ELECTRIC COMPANY, PLAINTIFF,
v.
NEW YORK STATE DEPARTMENT OF LABOR; THOMAS F. HARTNETT, INDUSTRIAL COMMISSIONER OF THE STATE OF NEW YORK; CHARLES DROBNER, DIRECTOR OF PUBLIC WORK, NEW YORK STATE DEPARTMENT OF LABOR; ROBERT ABRAMS, ATTORNEY GENERAL OF THE STATE OF NEW YORK, DEFENDANTS.



The opinion of the court was delivered by: Robert L. Carter, District Judge.

  OPINION

Plaintiff General Electric ("GE") seeks an order declaring invalid New York's prevailing wage law, N.Y.Lab.Law § 220 (McKinney 1986 & Supp. 1990), on various grounds, and enjoining the statute's enforcement or incorporation into state contracts. Presently before the court are motions for summary judgment by both GE and defendants, New York State's Department of Labor (the "Department"), Industrial Commissioner, Director of Public Work of the Department, and Attorney General (collectively, the "State").

BACKGROUND INFORMATION

The facts relevant to this case are described in detail in the court's prior opinion in this case, General Electric Co. v. New York State Department of Labor, 698 F. Supp. 1093, 1094-95 (S.D.N.Y. 1988) (Carter, J.), familiarity with which is presumed. In that decision, the court denied GE's motion for a preliminary injunction, finding that Section 220 was not preempted either by the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., or by the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151, et seq. An appeal followed and on November 29, 1989, the United States Court of Appeals for the Second Circuit vacated this court's decision. The Court of Appeals held that the provisions of Section 220 concerning "supplements" were preempted by Section 514(a) of ERISA, though not by the NLRA. General Electric Co. v. New York State Department of Labor, 891 F.2d 25 (2d Cir. 1989). The Court of Appeals also remanded to this court for determination of whether the manner in which wage and supplement rates are established under Section 220 constitutes an unconstitutional delegation of legislative power. 891 F.2d at 27. Each party now moves for summary judgment pursuant to Rule 56, F.R.Civ.P.

PARTIES' CONTENTIONS

In support of its motion, plaintiff first argues that the supplement provisions of Section 220 are part of a unitary statutory scheme and, the Court of Appeals having established that those provisions are preempted by ERISA, the non-supplement provisions must also fall. Plaintiff asserts that the severability of a statute is a question of legislative intent and that the New York legislature did not intend that the supplement and non-supplement provisions be severable.

Plaintiff next argues that if Section 220 is found severable by the court, all statutory references to "supplements," not just those concerning supplements which are to be provided through employee benefit plans, must be declared preempted by ERISA. Plaintiff also reasons that the Department's disparate treatment of contractors according to whether they provide benefits through ERISA plans would violate the equal protection clause of the Fourteenth Amendment.

As in its motion for a preliminary injunction, plaintiff asserts that Section 220 violates due process by delegating the legislative power to set prevailing wage rates to private parties — i.e., parties to collective bargaining agreements ("CBAs") negotiated in the locality — without providing adequate standards governing the exercise of that power.

Finally, although the Court of Appeals affirmed this court's finding that Section 220 is not preempted on its face by the NLRA, 891 F.2d at 27, plaintiff argues that it now submits additional information tending to show that the Department's application of the statute intrudes upon areas prohibited to the states and is therefore preempted.

In opposing plaintiff's motion for summary judgment, the State responds that the wage provisions of Section 220 are independent from the supplement provisions and readily severable, that the non-ERISA supplement aspects of the statute were not held preempted by the Court of Appeals and are severable from the ERISA supplement provisions, and that the valid provisions of the statute have a rational basis as applied to plaintiff and therefore do not violate equal protection.

Defendants also contend that the United States Constitution does not prohibit state legislation which looks to the dealings of private parties to give specific meaning to its substantive provisions. They further argue that this court and the Court of Appeals have resolved the NLRA preemption issue in their favor.

In addition to these arguments, the State asserts in support of its own motion for summary judgment on counts one, three, four and five of plaintiff's complaint that the court has previously found that it lacks subject matter jurisdiction over plaintiff's state law claims. Plaintiff does not refute this contention.

DISCUSSI ...


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