Court Opinion

ID: 7279191
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:05:28.006384+00
Date Added: 2024-06-11T16:18:59.399024
License: Public Domain

FAHY, Senior Circuit Judge,
dissenting:
I do not think the ease as presented to the District Court was susceptible of disposition by summary judgment. I accordingly must dissent from affirmance of the grant of such judgment for the Secretary of the Navy, appellee. The record does not establish that the bidders for the contract and the prospective employees thereunder were not entitled to the benefit of a wage determination by the Department of Labor. For an exemption from the requirement of a wage determination to be valid it must be established by “strong and affirmative evidence” that such exemption was “necessary and proper” to protect the public interest or to avoid serious impairment of Government business.1 *291Moreover, the reasons for the exemption are required to be consistent with the remedial purpose of the Service Contract Act, 41 U.S.C. §§ 351-357 (1970), as amended, 41 U.S.C.A. §§ 351-358 (Supp. 1973)2
The District Court found, and it is not disputed, that the Navy without adequate justification “failed to comply with the unambiguous language of the pertinent regulations3 and SF-98 [Notice of Intention to Make a Service Contract] imposing a mandatory duty to furnish all readily available wage data. The relevance and probative value of such information is to be determined by the Department of Labor, not the contracting agency.” Nevertheless, the court granted summary judgment for the Navy because the court found solely on the basis of the Hall affidavit and deposition that “the evidence is insufficient to conclude that had the Navy supplied the information required and readily available to it the decision of the Department of Labor not to make a wage determination would have been otherwise.” This, I think erroneously, placed the burden upon the unsuccessful bidder to establish, or else suffer summary judgment against it, that had the Navy complied with its duty in the matter, the Labor Department would have made the wage determination. The burden surely was upon the Navy to establish, in a manner free of any material issue of fact, that the determination would not have been made.4 If, as the court found, “the evidence is insufficient” to enable the District Court to conclude a wage determination would have been made, the Navy was not entitled to summary judgment.
Furthermore, the post factum reasons advanced for the finding that no wage determination would have been made had Navy complied with its obligations are not supported by the record.
The Hall submission by affidavit and deposition clearly indicates that the primary reason that any enclave wage determination was not made was that the Administrator of the Wage and Hour and Public Contracts Division of the Labor Department had prohibited such determinations, as a matter of policy. The Administrator wanted to prevent incumbent contractors from artificially raising wages at the end of their contracts. The fear of such action is not as a matter of law on this record strong and affirmative proof that an exemption for all enclaves as a class is necessary and proper for the protection of the public interest. The effect of the policy is to deny indiscriminately the protections afforded by the Act to a great number of service employees, contrary to the remedial purposes of the Act. Less extreme measures may well avoid the danger feared. Moreover, there is no indication that wages had been raised by the incumbent contractor in this ease.
In any event, Mr. Hall’s evidence is that he never determined whether the facilities here involved qualified as enclaves, and he conceded that had the pol*292icy been otherwise, respecting enclaves, and had the Navy submitted the required information, he could not say whether or not sufficient resources for verification would have been available. It is therefore clearly conjectural now to postulate as a reason to support the decision not to make an enclave determination the Division’s lack of resources to verify the wage data of Kentron. Such conjecture is not adequate justification to support the exemption as being necessary and proper to protect the public interest or avoid serious impairment of government business.
Lack of Division resources is postulated as the basis also for not making an area or partial wage determination. There is serious doubt that such a reason not to make a wage determination qualifies under any statutory standard consistently with the remedial purposes of the Act. Moreover, the Division was not dependent upon its personnel alone for the compilation of data.5 Mr. Hall’s judgment that he lacked resources to make such a determination was made in ignorance of information necessary for an informed decision. He did not know what information the Navy had which should have been submitted; he did not know how many of the job classifications listed by the Navy represented service employment, because the Navy’s descriptions were not adequate; he did not know that Kentron had been the incumbent contractor since 1961, or that in its previous contracts there was a schedule of wages, although he did know generally that wage data was available, but not specifically what the Navy had available; hence he was unaware of the need for a wage determination to protect service employees with seniority.6 His decision was made, moreover, under a possibly mistaken assumption that he had far less time available than the regulations allowed.7 He admitted that he could not say whether or not he would have been able to make a wage determination had additional time been available.8
The Hall affidavit and deposition, considered with the failure of the Navy to comply with its mandatory obligations, and the pure speculation that had it done so a wage determination by Labor could not or would not have been made, presents a record free of that “strong and affirmative evidence” that the exemption of a wage determination, a determination of great importance to employees as well as bidders, was “necessary and proper” to protect the public interest or to avoid serious impairment of Government business. This is aside from the grant of summary judgment for Navy upon an erroneous view of where lay the burden of establishing that the determination would not have been made had the Navy complied with its obligation.
I respectfully dissent from affirmance of the grant by the District Court of summary judgment for appellees.

. 33 Fed.Reg. § 4.123(b), at 9890 (1968), as amended, 29 C.F.R. § 4.123(b)(1) (1972), which provided:
(b) Administrative action under section 4(b) of the Act. The authority conferred on the Secretary by section 4(b) of the Act will be exercised with due regard to the remedial purpose of the statute to protect prevailing labor standards and to avoid the undercutting of such standards which could result from the award of Government work to contractors who will not observe such standards, and whose saving in labor cost therefrom enables them to offer a lower price to the Government than can be offered by the fair employers who maintain the prevailing standards. Administrative action consistent with this statutory purpose may be taken under section 4(b) with or without a request therefor, when found necessary and proper in accordance with the statutory standards. No formal procedures have been prescribed for requesting such action. However, a request for exemption from the Act’s provisions will be granted only upon a strong and affirmative showing that it is necessary and proper in the public interest or to avoid serious impairment of Government business. If the request for administrative action under section 4(b) is not made by the headquarters office of the Contracting agency to which the contract services are to be provided, the views of such office on the matter should be obtained and submitted with the request or the contracting officer may forward such a request through channels to the ■agency headquarters for submission with the latter’s views to the Administrator of the Wage and Hour and Public Contracts Divisions, Department of Labor.
All exemptions must be justified as “necessary and proper” whether or not a request for an exemption is made. The requirement that a request for an exemption make a “strong and affirmative showing” that the exemption is “necessary and proper” merely informs the party requesting the exemption of the degree of justification required by the Act. The same degree of justification is also demanded of the Labor Department when it exempts a contract though an exemption was not requested since there seems to be no reason consistent with the Act that would require a higher degree of justification when a request is made. The fact is that because of labor negotiations the Navy indicated that it did not want a wage determination to be made. Hall Deposition at 144-145 and Tyburski Memoranddum of Sept. 8, 1970, regarding telephone conversation of Sept. 4, 1970, with the Navy Contract Officer. Although this conversation took place the day after *291Mr. Hall said he decided not to make a wage determination, the memorandum suggests that the Labor Department was willing to make a wage determination if the Navy so desired.

. Iiid.

. The Navy’s submission of SF-98 was untimely, without the required explanation as well as without the necessary wage information. 33 Fed.Reg. § 4.4(a) & (b) at 9882 (1968), as amended, 29 C.F.R. § 4.4(a) & (b) (1972) and 34 Fed.Reg. § 12.1005-2 (a) & (b), at 17902 (1969), as amended, 32 C.F.R. § 12.1005-2 (a) & (b) (1972).

. Since the regulations required the exemption to be justified, as being “necessary and proper in the public interest or to avoid serious impairment of Government business” “with due regard to the remedial purpose of the statute,” 33 Fed. Reg. § 4.123(b) at 9890 (1968), the burden was on the Navy to present the reasons for the exemption. If the reasons presented are found to be either invalid or insufficient, then the Navy may have the additional burden to prove that the error was harmless, notwithstanding the invalidity or insufficiency of the justification for the exemption.

. 29 C.F.R. § 1.3 (1972) and 33 Fed.Reg. § 4.164, at 9895-9896 (1968), as amended, 29 C.F.R. § 4.164 (1972).

. Mr. Hall also may not have known that the contract was for five years since no indication of the duration of the contract was given by the Navy in its submission of SF-98 and appended information.

. The Hall deposition at 73, 86-89. Appellant suggests that a wage determination could have been made anytime prior to 10 days before the awarding of the contract. 33 Fed.Reg. § 4.5(b) at 9883 (1969), as amended, 29 C.F.R. § 4.5(b) (1972). I refrain from deciding whether this reading of the regulation is correct. If it is correct, then Mr. Hall’s reasons are clearly insufficient.

.Hall Deposition at 89. The Tyburski Memorandum, note 1, supra, suggests that the Labor Department was willing and able to make a wage determination. Also, Mr. Hall in his affidavit states that he could have made a partial wage determination, but it was a question of resources.