at 41 C.F.R. § 60.741.3(a)(5) (1991) and narrowed the scope of coverage
under Section 503.
At the time of WMATA , and at the time the instant case was
filed, Section 503
required government contractors, "in employing persons to carry out such
contract[s],"
to take affirmative action to employ and advance qualified handicapped individuals. 29 U.S.C.
[Page 2]
§ 793(a). The WMATA court found this quoted language "quite
plain,"
and held that the Department's waiver regulation was inconsistent and could not be used to sweep
in all employees of the contractor. 55 EPD at 65,560. Accordingly, the court concluded that
coverage did not extend to an applicant for a carpenter position where the employer's government
contract was to provide certain shuttle bus services. Id.
The Department dismissed its appeal of WMATA and the
Assistant Secretary
agreed that the decision set forth a new "working-on-the-contract" standard that
significantly changed existing law. See OFCCP v. Yellow Freight Sys., Inc. , Case No.
79-OFCCP-7, Aug. 24, 1992; OFCCP v. Rowan Cos., Inc. , Case No. 89-OFC-41, May
28, 1992; see also OFCCP v. Norfolk Southern Corp. , Case No. 89-OFC-31, Oct. 3,
1995, slip op. at 4-5, and cases cited therein; OFCCP v. CSX Transp. Inc. , Case No.
88-OFC-24, Oct. 13, 1994, slip op. at 26-29. Since the record in this case did not contain
evidence
meeting the WMATA standard, the case was remanded to the Administrative Law Judge
(ALJ) for development of evidence and findings on the working-on-the-contract issue.
See Decision and Order of Remand dated December 21, 1994.
On remand the parties engaged in discovery and offered numerous
affidavits. By
Recommended Decision and Order (R. D. and O.) dated July 20, 1995, the ALJ granted Keebler's
motion to dismiss for failure to meet the WMATA standard. OFCCP filed exceptions
and
Keebler filed a response. Upon review, we deny OFCCP's exceptions and accept the ALJ's
recommended decision as modified below.
We note that the court's decision in WMATA was legislatively
overturned by Pub.
L. 102-569, § 505(a), 106 Stat. 4427 (1992), which amended Section 503 by striking the
working-on-the-contract limitation. See 29 U.S.C. § 793(a) (Supp. V 1993).
Therefore, this case, arising before Congress invalidated the
"working-on-the-contract" provision, but pending at the time the court in
WMATA invalidated the
waiver regulation, is in a unique posture.
Facts
DeAngelis was a production attendant at Keebler's Raleigh, North
Carolina facility from
January 7, 1985 through April 16, 1985. She helped produce a snack food called Tato Skins.
The
Tato Skins were not earmarked or designated for particular destinations but were shipped to
between 65 and 70 distribution centers. Exhibit E at 11-12, 16. Another Keebler facility located
in Bluffton, Indiana also produced and shipped Tato Skins to the distribution centers. The
distribution centers then filled orders placed by customers, including the government. During the
[Page 3]
period of DeAngelis' employment, Keebler had several government contracts under which it
provided Tato Skins to military bases and commissaries. R. D. and O. at 5.
Analysis
The ALJ found that OFCCP failed to meet its burden of proof. Noting
that discovery and
the production of evidence were hampered by the passage of time, he found the record
insufficient
to show that the Tato Skins used to fill the government contracts were produced either at the
Raleigh facility or the Bluffton facility or both. He explained that while the possibility existed
that
those Tato Skins were produced at DeAngelis' Raleigh facility, a finding to that effect would be
conjectural. R. D. and O. at 5-6. The ALJ rejected OFCCP's argument that the determination
of who is employed by a contractor to carry out a government contract should be based on job
categories, and that in this case coverage should therefore extend to all production attendants at
both the Raleigh and Bluffton facilities. He found that accepting OFCCP's argument would
improperly place the burden on Keebler and, as a practical matter by lumping together employees
of the two facilities, would reinstitute the underlying rationale of the waiver rule held invalid by
WMATA . R. D. and O. at 6. We agree.
The Act, prior to the 1992 amendments, was worded narrowly to
require affirmative action
with respect to persons or individuals employed to carry out the contract. To establish coverage
of the individual complainant, OFCCP must prove by a preponderance of the evidence that the
individual was working or would have worked on a government contract absent the
discriminatory act. Here, the evidence establishes only that DeAngelis had a randomly equal
chance, the same as all production attendants from both facilities, to have worked on the Tato
Skins used to fill Keebler's government contracts. R. D. and O. at 6; see OFCCP's Brief
at 9, 17, 21. Such a showing is not sufficient to carry OFCCP's burden of proof.
OFCCP charges that because of Keebler's distribution system, it would
have been
impossible at any time to demonstrate that DeAngelis or the Raleigh plant worked on Tato Skins
that fulfilled a government contract. The evidence, however, shows that during the relevant time
period products could be traced back to the manufacturing facility. Doan W. Edmonston testified
that as the Raleigh plant manager, he occasionally received complaints from the corporate office
about foreign objects in the products. Exhibit E at 17. The corporate office could identify and
distinguish the facility by the location code and date stamped on the packaging. Id . at
18. Contrary to OFCCP's argument, its proof failed not because Keebler did not separate its
production attendants and commingled packages of Tato Skins at the distribution center, but
because invoices, corporate records, and packages containing location and date codes were no
longer available when this discovery was conducted. See, e.g. , Exhibits B and C; R. D.
[Page 4]
and O. at 6. Thus, OFCCP's burden was not impossible or unworkable, and we find no reason
to resort to the Department's proposed regulations for instruction as OFCCP urges.3
Finally, OFCCP contends that a narrow interpretation of Section 503 is
inconsistent with
the 1992 statutory amendment and general principals favoring a broad interpretation of remedial
legislation. The amendment does not retroactively operate to give the Act under which Keebler
contracted a different meaning. Statutory amendments and administrative rules are not construed
to have retroactive effect absent clear congressional intent favoring such a result. Landgraf
v. USI Film Prod. , 114 S. Ct. 1483, 1500, 1505 (1994) and cases cited therein (explaining
presumption against statutory retroactivity); United States v. Security Indus. Bank , 459
U.S. 70, 79 (1982) (explaining rule against retrospective operation that interferes with antecedent
rights); OFCCP v. Burlington Northern, Inc. , Case No. 80-OFCCP-6, Fin. Dec., Dec.
11, 1991, slip op. at 16-17.
[Page 5]
Accordingly, the complaint IS DISMISSED.
SO ORDERED.
DAVID A. O'BRIEN
Chair
KARL J. SANDSTROM
Member
JOYCE D. MILLER
Alternate Member
[ENDNOTES]
1 On April 17, 1996, the
Secretary of Labor delegated authority to issue final agency decisions under this statute and the
implementing regulations to the newly created Administrative Review Board (ARB). Secretary's
Order
2-96 (Apr. 17, 1996), 61 Fed. Reg. 19978, May 3, 1996 (copy attached).
Secretary's Order 2-96 contains a comprehensive list of the statutes,
executive order, and
regulations under which the ARB now issues final agency decisions. A copy of the final
procedural
revisions to the regulations implementing this reorganization, 61 Fed. Reg. 19982, is also
attached.
2 The waiver
regulation provided that all of a contractor's facilities were covered and subject to Section 503
affirmative
action requirements unless the contractor had obtained a waiver from the Director of OFCCP,
exempting
particular facilities which were separate and distinct from performance of the covered contract.
In
the
absence of such waivers, employees of, or applicants for employment with, a government
contractor who
might not individually be involved in government contract work were deemed covered by
Section
503 in
view of the contractor's inaction in seeking and obtaining a waiver. OFCCP v. Yellow
Freight
Sys.,
Inc. , Case No. 79-OFCCP-7, Aug. 24, 1992, slip op. at 2.
3 The
WMATA decision does not support the legal standard based on job categories that
OFCCP
proposes. The WMATA court focused on job categories only in response to OFCCP's
arguments
and to illustrate the direct nexus required to establish coverage.
OFCCP also relies on various other cases by analogy, however, none of
those cases arise
under
statutes containing a working-on-the-contract or similar provision. In addition, the ALJ's
recommended
ruling in OFCCP v. Yellow Freight Sys., Inc. , Case No. 89-OFC-40, ALJ Dec., May 17,
1994,
relied on by OFCCP is not binding authority. A final decision on that ruling was never issued
because the
parties subsequently submitted a consent decree that was approved by the Assistant Secretary on
February
29, 1996.