Opinion ID: 413383
Heading Depth: 2
Heading Rank: 4

Heading: Pay-Setting Discretion and Administrative Action

Text: 47 We next examine whether courts have interpreted prevailing wage rate systems in general, and the mariners' system in particular, to require administrative action. We conclude that the case law confers on the executive officials who set prevailing wage rates the substantial, albeit not unlimited, degree of discretion that is commonly associated with administrative action. The officials who set the mariners' rates have at least as much freedom as others who set prevailing rates. These officials determine the mariners' pay by balancing the sometimes countervailing statutory considerations of matching prevailing rates and setting wages consistent with the public interest, see 5 U.S.C. Sec. 5348, not by referring to a statutory schedule or exercising ministerial action. 48 We look first at two companion cases where we have already analyzed the extent of administrative discretion left to executives in setting prevailing rates under 5 U.S.C. Secs. 5341, 5343. In American Federation of Government Employees v. Campbell, 659 F.2d 157 (D.C.Cir.1980), cert. denied, 454 U.S. 820, 102 S.Ct. 103, 70 L.Ed.2d 92 (1981), we examined the prevailing rate statutory system, 5 U.S.C. Secs. 5341-5349, in the course of finding that an appropriations bill effectively amended the prevailing rate statute covering appellant-employees to provide that their wages could not be increased by more than 5.5% in fiscal year 1979. 659 F.2d at 158. A premise of one of the employees' arguments was that the prevailing rate statute leaves agency officials virtually no discretion in setting wage increases. Id. at 161. While we did not decide the precise scope of discretion available to agency officials under these statutes, we concluded that it is greater than the [employees] would permit: The public interest clause surely provides agency officials with some flexibility in setting wage increases. Id. at 163. 49 In the companion case of National Federation of Federal Employees v. Brown, 645 F.2d 1017 (D.C.Cir.1981), we defined more explicitly the scope of the discretion that agency pay-setters have under the public interest clauses of Secs. 5341, 5343. In National Federation, the Secretary of Defense had relied on the public interest clauses to impose a 5.5% pay cap on prevailing rate workers who were not paid with funds appropriated by Congress. We concluded that the Secretary and other officials may exercise discretion ... to alter the rates suggested by [wage surveys made pursuant to Sec. 5343], provided they do so within the confines of the principles [enumerated in Sec. 5341]. Id. at 1025. 22 50 These two cases make clear that officials who set prevailing rate wages under the guidelines of Sec. 5341 have some freedom to select the rates. It is therefore reasonable to label their action administrative, rather than statutory or ministerial. It follows, then, that the process of setting mariners' prevailing rate wages under Sec. 5348 also involves administrative action. 51 The presumption that Sec. 5348 wage-setting is flexible enough to be described as administrative action is also supported by a string of court of claims cases. Most recently, National Maritime Union v. United States, 682 F.2d 944 (Ct.Cl.1982), examined the extent to which the government can limit pay increases for mariners pursuant to the public interest phrase in Sec. 5348. The core facts were similar to those in National Federation of Federal Employees v. Brown: Although Congress' appropriations acts did not specifically impose pay limitations on the mariners in fiscal years 1979 and 1980, certain executive agencies, pursuant to their prevailing rate pay-setting authority, applied the ceilings in force for other government employees to the mariners. The public interest justification was to support the President's anti-inflation program. The court of claims upheld the pay ceilings, and interpreted the public interest proviso of Sec. 5348 even more broadly than our interpretation of Secs. 5341, 5343 in National Federation of Federal Employees v. Brown. 23 It found very broad discretion to set wages under section 5348(a). 682 F.2d at 955. Unless there is a flagrant abuse of discretion, this court will not meddle in an administrative wage-setting process the supervision of which is committed by statute to the agency. Id. (footnote omitted) (emphasis added). 52 In reaching these conclusions, the court of claims relied extensively on its prior decisions interpreting Sec. 5348(a) and its predecessors. In particular, the court noted three cases: Daigle v. United States, 217 Ct.Cl. 376 (1978); 24 Blaha v. United States, 511 F.2d 1165 (Ct.Cl.1975); 25 and Daniels v. United States, 407 F.2d 1345 (Ct.Cl.1969). 26 The court stated that each of these cases identified the countervailing considerations of equality of pay and rates consistent with the public interest, which create a kind of tension ... [that] provides the administrative discretion needed to operate efficiently a wage system. 682 F.2d at 949 (footnote omitted). 27 53 Thus, the court of claims' decisions interpreting Sec. 5348 and its forerunners make it clear to us that the mariners' pay is set by government agencies operating with significant discretion to balance competing statutory considerations. While the shoals of that administrative discretion may not be well charted, it is nevertheless evident that the channel exists. The latitude for executive officials to determine wage rates involves administrative action as that term is commonly understood and has been used in prior cases. Therefore, we have yet another basis for concluding that Sec. 5348 pay-setting is administrative action subject to the Sec. 5373 pay cap.