[Federal Register Volume 59, Number 108 (Tuesday, June 7, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13715]


[[Page Unknown]]

[Federal Register: June 7, 1994]


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DEPARTMENT OF LABOR
Office of Federal Contract Compliance Programs

 

Commonwealth Aluminum Corporation Reinstatement

AGENCY: Office of Federal Contract Compliance Programs, Labor.

ACTION: Notice of Court Order Staying the Debarment Commonwealth 
Aluminum Corporation.

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SUMMARY: A previous notice in the Federal Register, appearing on May 
27, 1994, at Vol. 59 No. 102, 59 FR 27581, advised of the court-ordered 
stay of debarment of Commonwealth Aluminum Corporation (hereafter 
``Commonwealth Aluminum''), as an eligible bidder on Government 
contracts and subcontracts or other modifications of any existing 
Government contracts or subcontracts, and further advised that a copy 
of the Order would be published as soon as possible.

FOR FURTHER INFORMATION CONTACT:
Annie Blackwell, Director Program Policy, Office of Federal Contract 
Compliance Programs, U.S. Department of Labor, 200 Constitution Ave., 
NW., room C-3325, Washington, DC 20210 (202-219-9430).

SUPPLEMENTARY INFORMATION: A copy of the Order dated May 19, 1994, 
issued by Judge Jennifer Coffman of the U.S. District Court for the 
Western District of Kentucky, in Commonwealth Aluminum Corp. v. Reich, 
Case No. 94-0071-O(C), is attached hereto.

    Signed the 31st day of May 1994, Washington, DC.
Shirley J. Wilcher,
Deputy Assistant Secretary for Federal Contract Compliance Programs.

United States District Court, Western District of Kentucky, 
Owensboro, Division

    Commonwealth Aluminum Corporation, Plaintiff v. United States of 
America; United States Department of Labor; Employment Standards 
Administration; Office of Federal Contract Compliance Programs; 
Robert B. Reich, Secretary, United States Department of Labor; 
Bernard E. Anderson, Assistant Secretary, Employment Standards 
Administration; Shirley J. Wilcher, Deputy Assistant Secretary, 
Office of Federal Contract Compliance Programs, Defendants. Case No. 
94-0071-O(C); filed: May 23, 1994.

Findings of Fact, Conclusions of Law Preliminary Injunction and 
Stay

    Pursuant to 5 U.S.C. 705 of the Administrative Procedure Act and 
F.R.C.P. 65, plaintiff, Commonwealth Aluminum Corporation 
(``Commonwealth'') moves the Court to stay the effectiveness of the 
Final Order and Decision issued by John R. Fraser, Acting Assistant 
Secretary for Employment Standards in the matter styled Office of 
Federal Contract Compliance Programs, United States Department of 
Labor, Plaintiff, v. Commonwealth Aluminum, formerly Martin-Marietta 
Aluminum of Kentucky, Inc., Defendant, Case No. 82-OFC-6 pending 
judicial review of that decision by this Court. The Court has 
considered the entire record herein including the affidavits submitted 
by plaintiff in support of its application. Now, therefore, the Court 
makes the following findings of fact, conclusions of law, and enters 
the following Preliminary Injunction and Stay of Agency Action:

Findings of Fact and Conclusions of Law

    Commonwealth is the corporate successor to Martin-Marietta Aluminum 
of Kentucky, Inc. On or about September 3, 1982, defendant, Office of 
Federal Contract Compliance Programs, United States Department of Labor 
(``OFCCP'') filed an administrative complaint against Commonwealth 
alleging that Commonwealth had violated provisions of the 
Rehabilitation Act of 1973, as amended, 29 U.S.C. 793, et seq., and the 
regulations promulgated thereunder, in connection with its hiring 
practices at its aluminum plant in Lewisport, Hancock County, Kentucky.
    After the close of pleadings and discovery, the issues raised by 
the Administrative Complaint were tried before Administrative Law Judge 
Daniel J. Roketenetz on June 24, 1985 through June 27, 1985. Judge 
Roketenetz issued a Recommended Decision and Order on June 26, 1986. In 
his Recommended Decision and Order, Administrative Law Judge Roketenetz 
recommended dismissal of OFCCP's Administrative Complaint in its 
entirety. OFCCP took exception to the Recommended Decision and Order of 
Administrative Law Judge Roketenetz. The parties briefed the exceptions 
to the Assistant Secretary for Employment Standards.
    The Acting Assistant Secretary for Employment Standards, United 
States Department of Labor, issued a Final Decision and Order in Case 
No. 82-OFC-6 on or about February 10, 1994. The Acting Assistant 
Secretary for Employment Standards has ruled that Commonwealth violated 
Sec. 503 of the Rehabilitation Act of 1973. Concomitantly, the Acting 
Assistant Secretary has ordered that Commonwealth give five of the 
complainants in the proceedings offers of employment within sixty days 
of Commonwealth's receipt of the Order, and has ordered retroactive 
seniority and other benefits. In addition, the Acting Assistant 
Secretary has ordered that Commonwealth will be ineligible for the 
award of any government contracts or subcontracts and will be 
ineligible for extensions or other modifications of any existing 
government contracts or subcontracts if it does not comply with the 
other components of his Order.
    Commonwealth owns and operates and aluminum plant located near 
Lewisport in Hancock County, Kentucky. The plaintiff produces aluminum 
in sheet form which it sells and distributes to various customers. 
Employees who work in production and maintenance are members of the 
Local 7325, United Steel Workers of America and are hourly personnel. 
All complainants involved herein sought jobs in the production or 
maintenance area within the plant. Between 1980 and today, Commonwealth 
has had government contracts with a total value of $4,500,622.48. 
Commonwealth has had no direct government contracts since 1990. 
Commonwealth has one government subcontract which, when fulfilled, will 
have a total value of $4,805,129.40.
    OFCCP debarred Commonwealth as a government contractor and on April 
29, 1994, OFCCP published a notice of Commonwealth's debarment in the 
Federal Register. Such debarment notice appears at 59 Federal Register 
22178.
    The parties have advised the Court of the balancing factors under 
the Celebrezze case and several other Sixth Circuit cases with respect 
to temporary injunctions. The factors are: Likelihood of success, 
irreparable harm, public interest and looking at the harm to everyone. 
The Court will address each of those, albeit fairly briefly.
    With regard to the likelihood of success, the Court does not 
believe that there can be an automatic knee jerk reaction in every case 
where the Department of Labor reverses the ALJ. The Court understand 
that, at this stage, its responsibility is to facially address the 
merits. However, the mere reversal of an Administrative Law Judge alone 
is not necessarily enough. Nonetheless, the Administrative Law judge 
has had the opportunity to see the witnesses, review documents, and 
measure credibility. In this particular case, Commonwealth has shown a 
likelihood of success because it has already won once in front of an 
Administrative Law Judge and in light of the other factors which the 
Court will address. The Court does not credit the concern of the 
plaintiffs that there has not been any allegation that the individual 
complainants would have been employed to do government contract work.
    The issue of irreparable harm is the most intriguing for the Court. 
The Court has done its own research in addition to the research 
furnished by the parties. There are no controlling cases. Several are 
persuasive, including Firestone Tire & Rubber Co. v. Marshall, 23 FEP 
Cases 527 (E.D. Tex 1980), that debarment constitutes irreparable harm. 
The Court disagrees with that conclusion. In the Court's opinion, the 
proper analysis is to examine the harm of compliance and not the harm 
of non-compliance. There are several reasons for the Court's 
conclusion. One reason is that there are cases that are persuasive and 
while not exactly on point, indicate that the courts in various factual 
settings were looking to the cost of compliance rather than the cost of 
non-compliance. Those cases are Ledbetter v. Baldwin, 479 U.S. 1309 
(1986); Ruiz v. Estelle, 650 F.2d 555, at 573 (5th Cir. 1981); and 
Petroleum Exploration, Inc. v. Public Service Commission, 304 U.S. 209 
(1938). In Petroleum Exploration, the petroleum company argued that it 
was being forced to choose between complying with an agency order on 
the one hand, which would require a high expenditure of money, or on 
the other hand non-compliance, which would subject it to harsh 
penalties. In that particular situation, the Supreme Court states ``the 
necessity to expend for the investigation or to take the risk for non-
compliance does not justify the injunction. It is not the sort of 
irreparable injury against which equity protects.'' Id. at 221. 
Petroleum Exploration does not instruct courts to look at the cost of 
compliance, but it does begin to hint at that concept. Another case the 
Court found persuasive was Southern Ohio Coal Co. v. Office of Surface 
Mining Reclamation and Enforcement, Dept. of the Interior, 831 F.Supp. 
1324 (S.D. Oh. 1993), rev'd on other grounds, 1994. U.S. App., Lexis 
6813, April 8, 1994. In that particular case, the district court 
assessed the threat of irreparable injury based on compliance rather 
than on non-compliance.
    The Court also finds persuasive the case that was cited on the day 
of the temporary restraining order hearing, Uniroyal, Inc. v. Marshall, 
20 FEP cases 446 (D.C. Cir. 1979). While Uniroyal does not explicitly 
state the standard, the Court of Appeals clearly considered the cost of 
avoiding debarment and not the cost that would be due to the debarment 
itself. In this Court's opinion, explicit in the balancing test is the 
rule that you consider the cost of compliance.
    All of the foregoing cases are persuasive and are one reason the 
Court believes that the proper measure is the cost of compliance with 
the Department of Labor's ruling. The principal reason the Court is 
considering cost of compliance as the measure of harm is that this 
Court should not encourage non-compliance with the Department of Labor 
order. There cannot be an automatic reaction in every case where an 
order of debarment has issued or is about to issue. If debarment 
constituted irreparable harm, every debarment could be enjoined and the 
Court does not believe that is a good rationale.
    The Court notes that the meaning of the order is less than clear 
and this is reinforced by the footnotes addressing the meaning of the 
order which appear in the defendants' response and plaintiff's reply 
filed herein. In that connection, the Court found persuasive Wisconsin 
Gas Co. v. F.E.R.C., 758 F.2d 669, 674 (D.C. Cir. 1985), cited by both 
parties, which held that the proper focus is upon recoverable monetary 
loss. In this case, plaintiffs cannot sue the government or the 
individuals so in the Court's opinion, there would be no recoverable 
monetary loss.
    The Court noted to the parties that if OFCCP agreed that 
Commonwealth must only offer the next available job and if the 
Department of Labor or if OFCCP agreed that Commonwealth could withdraw 
those offers, or if they had already become full blown employment 
situations, if the OFCCP would agree that those employees could be let 
go if Commonwealth won here, then there would not be an irreparable 
harm because you would have the Uniroyal situation. In Uniroyal the 
D.C. Circuit ruled that once the documents requested were produced, if 
Uniroyal won on the appeal, the documents would be returned and 
stricken from the record. In that connection, the Court is attempting 
to create a Uniroyal situation here, if it exists, so that in this 
particular situation there would not be any irreparable harm.
    In response to the Court's request that the parties confer, OFCCP 
placed on the record herein the statement that such are precisely the 
terms presented to Commonwealth. In contrast, Commonwealth asserts that 
even such an arrangement does not protect it from liability to the 
individual employees. This exchange, which occurred after the Court 
announced its decision, persuades the Court that Commonwealth is 
irreparably harmed, since OFCCP lacks the requisite ability to shield 
Commonwealth from all liability in the event Commonwealth extends 
offers of employment and later succeeds here. These facts, therefore, 
are not parallel to those which existed in Uniroyal.
    Going on to the third element, public interest, and the fourth, 
harm to others. The Court has heard testimony concerning Commonwealth 
being a new company with a different approach. The Court has also heard 
testimony concerning administrative delay. There is a legitimate public 
interest in wanting employers to offer employment opportunities to 
everyone regardless of disability, regardless of age, gender, race, all 
of those factors. If this heightens the public interest, then it also 
heightens the government's responsibility. If there is a high 
government responsibility, then waiting seven or eight years to render 
an opinion frustrates the purposes of the Rehabilitation Act. In the 
Court's opinion, the government has acted, if not unconscionably, 
perhaps unfairly. Therefore, in the Court's opinion, the public 
interest--if it does swing over to the side of the government at the 
outset--swings back because of the administrative delay that has 
occurred here. Whether this case is considered on an expedited basis or 
not, there is no further harm to the government. There is some value in 
the employer being able to rely on its understanding that at some point 
a proceeding is ended. It is not reasonable to wait seven years and 
come in and do something and then expect immediate compliance.
    As far as harm to any third parties, the employees who are still in 
the work force are working now. To the extent that Commonwealth should 
lose this case on its merits, those employees can gain monetary relief, 
and that will be satisfactory. The Court will not hear a claim about 
the public agency's harm to it because of the delay that has been 
involved here.

Preliminary Injunction and Order

    Based upon the foregoing Findings and Conclusions, it is Ordered 
and Adjudged as follows:
    1. Defendants, their officers, agents, employees, attorneys, and 
representatives, are immediately enjoined and restrained, directly and 
indirectly, whether alone or in concert with others, until further 
orders of this Court, from doing any of the following:
    a. Seeking, attempting to seek, or taking any affirmative steps to 
enforce that portion of the February 10, 1994 Order of the Acting 
Assistant Secretary for Employment Standards which requires 
Commonwealth to make offers of employment to Gregory Gray, Wilda 
Matthis, Kenneth Sherrard, William Zellers, and Thomas Marshall, or 
from seeking to enforce that portion of the Order which grants relief 
in favor of Robert Etnire.
    b. Seeking, attempting to seek, or taking any affirmative steps to 
enforce or place into effect that portion of the February 10, 1994 
Order of the Acting Assistant Secretary for Employment Standards which, 
under certain conditions, makes Commonwealth ineligible for the award 
of any government contracts or subcontracts and makes Commonwealth 
ineligible for extensions or other modifications of any existing 
government contracts or subcontracts.
    2. The Final Decision and Order of the Acting Assistant Secretary 
for Employment Standards, United States Department of Labor, dated 
February 10, 1994, in the matter of Office of Federal Contract 
Compliance Programs, United States Department of Labor, Plaintiff v. 
Commonwealth Aluminum formerly Martin-Marietta Aluminum of Kentucky, 
Inc., Defendant, Case No. 82-OFC-6, shall be, and it is hereby, stayed 
and such stay shall remain in full force and effect until such time as 
this Court specifically orders otherwise.
    3. Within three business days of the date hereof, defendants shall 
furnish the Court and Commonwealth with a full and complete written 
listing of all agencies, contractors, or others, to whom notice of 
Commonwealth's debarment was sent by defendants.
    4. Within five business days of the date hereof, defendants shall 
send written notification to all agencies, contractors, any third 
parties identified pursuant to paragraph 3 hereof, and the Federal 
Register, that the effect of Commonwealth's debarment has been stayed 
by the United States District Court for the Western District of 
Kentucky, Owensboro Division, pending the appeal by Commonwealth of the 
Decision which resulted in the debarment order which notification shall 
include a complete copy of this Temporary Injunction.
    5. No security shall be required in connection with this Order.
    So Ordered effective as of May 19, 1994, at 6:20 p.m.
Jennifer B. Coffman,
Judge, United States District Court, Western District of Kentucky.
[FR Doc. 94-13715 Filed 6-6-94; 8:45 am]
BILLING CODE 4510-27-M