APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
Before: Adams and Weis, Circuit Judges and Bloch,*fn* District Judge
Opinion ANNOUNCING THE JUDGMENT OF THE COURT
Plaintiff brought suit, pursuant to § 504 of the Rehabilitation Act of 1973, claiming he was denied employment by the defendant because he is handicapped. Section 504, 29 U.S.C. § 794, provides: "No otherwise qualified handicapped individual . . . shall . . . be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. . . ." Although the lower court dismissed plaintiff's action because he lacked standing to bring his suit, we think the question posed by this appeal is, in fact, whether § 504's prohibition against discrimination by federal grantees encompasses a ban against employment discrimination.
The lower court concluded plaintiff did not have standing to sue defendant for employment discrimination "unless 1) providing employment is a primary objective of the federal aid received by the defendant, or 2) discrimination in employment necessarily causes discrimination against primary beneficiaries of the federal aid." LeStrange v. Consolidated Rail Corp., 501 F. Supp. 964 (M.D. Pa. 1981). The court further refined the first prong of its standing test to require the plaintiff to show he is a primary beneficiary of the federal aid received by the defendant, and that the primary objective of the federal aid be to create new jobs, and not merely to maintain employment or to compensate for lost jobs. Plaintiff could not meet either of the two prongs of the lower court's standing test.
This standing test had its genesis in the case of Trageser v. Libbie Rehabilitation Center, Inc., 590 F.2d 87 (4th Cir. 1978). The Trageser analysis has since been adopted by the Eighth Circuit in Carmi v. Metropolitan St. Louis Sewer District, 620 F.2d 672 (1980), the Second Circuit in United States v. Cabrini Medical Center, 639 F.2d 908 (1981), and the Ninth Circuit in Scanlon v. Atascadero State Hospital, 677 F.2d 1271 (1982). Trageser and its progeny rely on § 505(a) (2) of the Rehabilitation, Comprehensive Services, and Developmental Disabilities Act of 1978, amending the Rehabilitation Act of 1973, which provides:
"The remedies, procedures, and rights set forth in title VI of the Civil Rights Act of 1964 shall be available to any person aggrieved by any act or failure to act by any recipient of Federal assistance or Federal provider of such. . . ."
Title VI served as the model for § 504 of the Rehabilitation Act. Section 601 of Title VI provides:
"No person . . . shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance."
Section 602 of Title VI authorizes federal departments and agencies to promulgate regulations to enforce § 601's prohibition against discrimination, including regulations providing for the termination of federal funding in the event of non-compliance, id., § 2000-d-1. However, § 604 provides:
"Nothing contained in this subchapter shall be construed to authorize action under this subchapter by any department or agency with respect to any employment practice of any employer . . . except where a primary objective of the Federal financial assistance is to provide employment."-
Trageser concludes, first, that § 604 limits not only agency action, but also the actions of private litigants. It then concludes that the remedies, procedures and rights of Title VI extended to the victims of handicap discrimination by the 1978 amendments to the Rehabilitation Act includes § 604's limitation on the right to bring an action for employment discrimination.
The lower court reformulated the Trageser holding into a test for standing, peculiar to § 504 actions. We see no reason to formulate any test for standing for § 504 actions other than that promulgated by the Supreme Court for general application, that is (a) does the plaintiff allege "that the challenged action has caused him injury in fact, economic or otherwise;" and (b) "[is] the interest sought to be protected by the complainant . . . arguably within the zone of interests [sought] to be protected or regulated by the statute or constitutional guarantee in question." Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 152-53, 25 L. Ed. 2d 184, 90 S. Ct. 827 (1970). The relevant question on this appeal would then be whether plaintiff's interest in being free from employment discrimination falls within the zone of interests sought to be protected by § 504. However, the correct formulation of the test for standing for § 504 actions is not the crucial issue presented by this appeal. For however the test is formulated, the crucial issue is whether § 504, as amended in 1978, covers employment discrimination against the handicapped by federal grantees.
The Supreme Court recently confronted this same issue within the context of Title IX of the Education Amendments of 1972, and we believe its approach in North Haven Board of Education v. Bell, 456 U.S. 512, 102 S. Ct. 1912, 72 L. Ed. 2d 299, 50 U.S.L.W. 4501 (1982), dictates our approach in this case.
Section 901(a) of Title IX, like § 504 of the Rehabilitation Act, is modeled after § 601 of Title VI of the Civil Rights Act. It provides:
"No person . . . shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance. . . ."
The Department of Education promulgated regulations pursuant to Title IX, prohibiting federally funded education programs from discriminating in employment on the basis of gender. Two Connecticut public school boards brought separate suits challenging its authority to issue the regulations, arguing Title IX was not meant to reach the employment practices of educational institutions.
The Supreme Court began its analysis by focusing on the statutory language, concluding first that "[A] female employee who works in a federally funded education program is "subjected to discrimination under" that program if she is paid a lower salary for like work, given less opportunity for promotion, or forced to work under more adverse conditions than are her male colleagues," id. at 4503, and, therefore, that, "Because § 901(a) neither expressly nor impliedly excludes employees from its reach, we should interpret the provision as covering and protecting these "persons' unless considerations counsel to the contrary," id. To determine whether "other considerations counsel to the contrary," the Supreme Court looked to the legislative history "for evidence as to whether Congress meant somehow to limit the expansive language of § 901," id. The Court found no such evidence and held, "Title IX proscribes employment discrimination in federally funded education programs," id. at 4507.
The statutory language of § 504 of the Rehabilitation Act and § 901 of Title IX being virtually identical, we are bound to conclude, like the Supreme Court in North Haven, that because § 504 "neither expressly nor impliedly excludes employees from its reach, we should interpret the provision as covering and protecting these "persons' unless other considerations counsel to the contrary." For like female employees, handicapped employees are "subjected to discrimination under" a federally funded program if they are paid lower salaries, given less opportunity for promotion, or forced to work under more adverse conditions than are their non-handicapped colleagues.Similarly, a handicapped individual is certainly "subjected to discrimination under" a federally funded program if, as alleged in our case, he is not hired at all, solely because of his handicap.
Of course, Trageser and the courts which have followed it, including the lower court in this case, find counsel to the contrary in § 505(a) (2) of the 1978 amendments to the Rehabilitation Act, extending the remedies, procedures and rights of Title VI victims of handicap discrimination. Title IX contains no provision similar to § 505(a) (2). Trageser would also argue that § 505(a) (2) should be read together with § 505(a) (1), 29 U.S.C. § 794a(a) (1), extending the remedies, procedures and rights of Title VII to victims of handicap discrimination by the federal government. The failure of Congress to extend Title VII to victims of discrimination by federal grantees indicates to the Trageser court its intention to limit the scope of § 504 to discrimination other than employment discrimination. We do not believe that the statutory language of § 505(a) (2), even when read in the context of § 505(a) (1), indicates a desire to narrow the scope of § 504. For this reason, we would nonetheless find § 504 prohibits employment discrimination by federal grantees unless anything in the legislative history of either § 504 or § 505(a) (2) counsels to the contrary.
Section 505 (a) (2) extends the remedies, rights and procedures of Title VI to (1) persons; (2) aggrieved by any act or failure to act by either a recipient or a provider of federal funds. Title VI consists of six provisions,*fn1 and the only one which extends to persons any rights or remedies is § 603, 42 U.S.C. § 2000d-2, providing for judicial review of agency action.
The plain words of § 604 limit its application to departments or agencies. Given the statutory scheme of which Title VI is a part, it is not illogical to assume Congress intended precisely what it said and no more. Title VI is, of course, a part of the 1964 Civil Rights Act. The 1964 Civil Rights Act also has a Title VII, which deals exclusively with employment discrimination on the basis of race, color or national origin by any employer with 15 or more employees working day for at least 20 weeks. Obviously, the sweep of ...