The opinion of the court was delivered by: TEITELBAUM
This is an action brought by the United States against the Duquesne Light Company of Pittsburgh to enforce the contractual obligations imposed by Executive Order No. 11246, as amended (3 C.F.R. 169 et seq.). The Executive Order provides that all (non-exempt) contractors with the government agree to engage in non-discriminatory employment practices as part of their contractual obligations.
The complaint alleges that Duquesne Light is a government contractor subject to Executive Order 11246, and that the company has utilized employment practices which discriminate against blacks and women in violation of the Executive Order and the regulations promulgated thereunder. The government seeks, inter alia, injunctive relief against Duquesne Light, including compensatory payments (back pay) to black and female employees of the defendant company and to black and female applicants who were rejected for employment.
The case is presently before the Court on Duquesne Light's motion under Rule 12 of the Federal Rules of Civil Procedure to dismiss those portions of the complaint which seek an award of back pay for persons allegedly discriminated against in employment by defendant on the basis of race or sex, and who continue to suffer the current effects of such alleged discrimination; in addition, defendant contends that the instant suit should be dismissed as to its Shippingport Atomic Power Station on grounds that a 30-day show cause notice was not issued by the Federal Energy Research and Development Administration regarding that facility. For reasons noted briefly below, defendant's motion will be denied.
Defendant initially contends that there exists no congressional or constitutional authority for an executive decision to secure [in a breach of contract action] back pay for the victims of racial or sexual discrimination practiced in the past by government contractors. A similar issue was decided in Contractors Ass'n. v. Secretary of Labor, 442 F.2d 159 (3rd Cir. 1971). In that case, plaintiffs challenged the validity of affirmative action programs instituted by the Secretary of Labor under the auspices of Executive Order 11246. The Court of Appeals held that statutory authority for the programs could be found in § 205(a) of the Federal Property and Administrative Services Act of 1949, 40 U.S.C. § 486(a) [hereinafter "FPASA"].
This section empowers the President to take measures to implement the basic policy of the Act, which is to establish an "economical and efficient" system for government procurement of property and services.
The affirmative action programs before the Court in Contractor's Ass'n. were found to be in furtherance of the policy underlying the FPASA because:
Similarly, the President may believe that the availability of restitutionary relief, by providing an incentive to eliminate discriminatory employment practices, would decrease government costs as effectively as would affirmative action programs of the type upheld in Contractor's Ass'n. The Court is not concerned with the validity of such a theory; whether vel non a back-pay order would further the purposes of the Act is a question to be determined by the President under § 205(a) of the FPASA. Here, where the question is the authority of the executive to enact a program, it is enough for the Court to say that neither the language nor the policy of the statute is contradicted by a suit for restitutionary relief.
As an alternative ground for its decision, the Court in Contractor's Ass'n. stated that the Executive Order could be supported by the inherent authority of the President, regardless of whether statutory authorization could be found. 442 F.2d at 171. Whether the authority be inherent or statutory, it would include the right to seek a back-pay order for the reasons stated above.
Having decided that statutory and constitutional authority for the executive to seek restitutionary relief from government contractors allegedly guilty of discriminatory employment practices does exist, we turn to the question of whether Executive Order 11246 itself and the regulations issued pursuant thereto allow the government to enforce the provisions of the Order by means of an action for, inter alia, back pay.
The sanctions and penalties available for the enforcement of the Executive Order are listed in § 209(a) thereof. Under this section, contracts with non-complying contractors may be cancelled or they may be continued upon condition that the contractor comply with the Executive Order in the future. A non-complying contractor may be barred from entering into future contracts with the government. Also, the Secretary of Labor may "[recommend] to the Equal Employment Opportunity Commission or to the Department of Justice that appropriate proceedings be instituted under Title VII of the Civil Rights Act of 1964."
Nowhere in the Executive Order or its accompanying regulations is a back-pay order specifically mentioned. This should not, however, be interpreted, by negative implication, as a statement of an intention to exclude a back-pay order as a sanction available to remedy violations of the Executive Order. Section 209(a)(2) allows the Secretary of Labor to:
"Recommend to the Department of Justice that, in cases in which there is a substantial . . . violation . . . of the contractual provisions set forth in Section 202 of this Order, appropriate proceedings be brought to enforce those provisions, including the enjoining, within the limits of applicable law, of organizations, individuals, or groups who prevent directly or indirectly, . . . compliance with the provisions of this Order." (Emphasis added.)
By its reference to "appropriate proceedings," § 209(a)(2) confers on the government discretion to invoke the equitable powers of this Court. Absent a [congressional] limitation upon those powers, the government may seek any remedy which will effectuate the purposes of the Order, provided only that the government is constitutionally or statutorily empowered to request such relief. That this Court has the equitable power to grant, and that the government has authority to seek restitutionary relief are established propositions. Mitchell v. DeMario Jewelry, 361 U.S. 288, 4 L. Ed. 2d 323, 80 S. Ct. 332 (1959); Porter v. Warner Co., 328 U.S. 395, 66 S. Ct. 1086, 90 L. Ed. 1332 (1946). This Court therefore decides that the Executive Order does permit the government to request restitutionary relief.
Section 209(b) of Executive Order 11246 provides that:
"Under rules and regulations prescribed by the Secretary of Labor, each contracting agency shall make reasonable efforts within a reasonable time limitation to secure compliance with the contract provisions of this Order by methods of conference, conciliation, mediation and persuasion before ...