the ALJ found that Trinity violated the contract compliance laws when it
refused to comply with OFCCP's requests. R. D. and O. at 12-13. The ALJ recommended
that Trinity be ordered to provide its affirmative action program and supporting documentation
and grant OFCCP access to the Asheville facility for an on-site compliance review. If Trinity
failed to comply, the ALJ recommended it be debarred and that its current contracts be
canceled. Id. at 17- 18.
Trinity excepted to the R. D. and O., arguing that its Asheville facility
is not subject to the provisions of the contract compliance laws. The matter is now before us
for decision.
DISCUSSION
Trinity argues that because its Asheville facility does not perform work
related to Trinity's government contract, Trinity is not required to comply with the contract
compliance laws with regard to that facility. This argument is unsupported either by the plain
meaning of the contract compliance laws or the case law upon which Trinity relies.
We begin this inquiry with the statutory and executive order language
at issue. The Executive Order and its implementing regulations prohibit Federal contractors
and subcontractors with contracts of $10,000 or more from discriminating against employees
and applicants for employment on the basis of race, color, sex, religion, or national origin.
Section 503 of the Rehabilitation Act of 1973 requires all federal contractors and
subcontractors with contracts of $10,000 or more to take affirmative action to employ and
advance in employment qualified individuals with disabilities. 29 U.S.C. §793(a)
(Supp. 1997). Section 4212 of VEVRAA requires all federal contractors and subcontractors
holding contracts of $10,000 or more to take affirmative action to employ and advance in
employment qualified disabled veterans and veterans of the Vietnam era. 38 U.S.C.
§4212. Under the Executive Order "[t]he contractor" is required to furnish
required information and reports and to permit access to its books, records, and accounts so
that OFCCP may ascertain compliance with the Executive Order. Regulations enforcing
Section 503 and the VEVRAA contain similar requirements applicable to "the
contractor." 41 C.F.R. §§60-741.81, 60-250.53.
Trinity concedes that it holds contracts with the federal government.
Stip. at 2. It argues that only those Trinity facilities which actually perform work related to
its government contracts are subject to the requirements of the contract compliance laws.
Trinity therefore asserts that because the Asheville facility does no work related to Trinity's
federal contract, it is exempt from the contract compliance laws.
Trinity confuses the terms "contractor" with
"facility" as those words are used in the contract compliance laws and regulations.
Moreover, Trinity ignores the specific intent of the contract compliance laws to exempt
facilities of covered contractors only by the choice of the Secretary of Labor.
A. "Contractor" Status of Asheville
Facility.
"Prime contractor" is defined in the contract compliance
laws as "any person holding a contract," and a "person" is "any
natural person, corporation, partnership [or] unincorporated association . . . ." 41
C.F.R. §§60-1.3; 60-250.2; 60-741.2. Trinity stipulated that the Asheville
facility "is not separately incorporated and does not constitute a legal entity separate
from [Trinity]." Stip. at 2. It also stipulated that Trinity Industries, Inc., a corporation,
holds government contracts and meets the other thresholds for application of the written
affirmative action program requirements. Id. Thus, Trinity is a covered
government contractor. The contract compliance regulations specifically require development
of written affirmative action programs for each establishment of a contractor. 41 C.F.R.
§§60-1.40, 60-250.5, 60-741.40. Thus, it is absolutely clear that Trinity, as a
contractor, has the responsibility to assure compliance of all of its facilities with the contract
compliance laws absent some applicable exemption.
B. The Exemptions of the Contract Compliance Laws.
All three of the contract compliance laws and their regulations at issue
here have explicit provisions for the exemption of specific contractor facilities. Thus, the
Executive Order provides:
The Secretary of Labor may . . . provide, by rule, regulation, or order,
for the exemption of facilities of a contractor which are in all respects
separate and distinct from activities of the contractor related to the
performance of the contract: Provided, that such an exemption will not
interfere with or impede the effectuation of the purposes of this Order;
and provided further, that in the absence of such an exemption all
facilities shall be covered by the provisions of this Order.
E.O. 11246, Section 204. The VEVRAA and Section 503 regulations contain virtually
interchangeable waiver provisions. See 41 C.F.R. §60-250.3(a)(5); 41
C.F.R. §60-741.4(b)(3) (1996). Moreover, Congress specifically included a waiver
provision in its 1992 amendments to the Rehabilitation Act. Amended Section 503(c)(2)
provides:
2(A) The Secretary of Labor may waive the requirement of the
affirmative action clause required by regulations promulgated under
subsection (a) of this section with respect to any of a prime contractor's
or subcontractor's facilities that are found to be in all respects separate
and distinct from activities of the prime contractor or subcontractor
related to the performance of the contract or subcontract, if the Secretary
of Labor also finds that such a waiver will not interfere with or impede
the effectuation of this chapter.
(B) such waivers shall be considered only upon the request of the
contractor or subcontractor. The Secretary of Labor shall promulgate
regulations that set forth the standards used for granting such a waiver.
29 U.S.C. §793(c)(2)(A) and (B). Trinity makes no claim that it received a waiver from the contract
compliance laws for its Asheville facility. Trinity did seek such an exemption
under the Executive Order. See n.4, above. However, the request was made to
the wrong office, and Trinity was so notified. Trinity did not resubmit a waiver request.
We will briefly discuss Trinity's arguments although we find them to be
without merit. First, Trinity argues that the contract compliance laws only apply to
contractors and subcontractors, and that "the Asheville facility is neither a contractor nor
a subcontractor . . . ." Brief in Support of Exceptions to the Administrative Law
Judge's Recommended Decision and Order (Def. Br.) at 7. This argument is specious.
Trinity is a contractor: as such it is required to comply with the contract
compliance laws. The only available means of exempting the Asheville facility from the
requirements placed upon Trinity is for Trinity to request and the Secretary of Labor to grant
a waiver, neither of which has happened. Trinity appears to believe that the waiver provisions
are self executing. Thus in footnote 1 of its brief Trinity states that "Trinity . . . took
the first step in putting OFCCP on notice that Asheville was exempt." Def. Br. at 2,
n.1. Of course, the waiver is not dependent upon Trinity's "notification" of the
Secretary. Rather, the Secretary must grant the waiver.
Moreover, Trinity's argument fails to recognize a simple principle of
statutory construction: the drafters intended to give meaning to the words and phrases used
such that the language should not be interpreted in a manner that renders a provision of the
statute meaningless. In this case, if a contractor is somehow able unilaterally to exempt one
of its facilities which does not perform work related to the contract, the language of the
Executive Order and Section 503 including a specific requirement that a waiver be requested
from and granted by the Secretary would be rendered meaningless.
Second, Trinity argues that the VEVRAA and Section 503 do not apply
to the Asheville facility because they both contain provisions which state that "[t]he
provisions of this section shall apply to any subcontract entered into by a prime contractor in
carrying out any contract for the procurement of personal property and non-personal services
(including construction) for the United States." 38 U.S.C. §4212; 29 U.S.C.
§793. Trinity argues that "[h]ere, the statutory language contemplates the
obligations of the contracting party, and notes specifically that the obligation extends to related
entities that assist in carrying out the contract ." Def. Br. at 8 (emphasis in
original). Trinity's recitation of these statutory provisions is accurate, however, the provisions
have nothing to do with the facts of this case. Rather, these provisions are concerned with
assuring that prime contractors bind their subcontractors on a government contract to the
contract compliance laws. Here we are not discussing the relative responsibilities of a prime
contractor and its subcontractor. The Asheville facility is not Trinity's subcontractor; it is a
part of Trinity itself.
Trinity relies on several cases to support its argument that facilities of
a covered contractor are exempt from the contract compliance laws if they do not perform
work related to the contract. As discussed below, none of these cases apply to the factual
situation presented here.
First, Trinity relies heavily upon Board of Governors of the
University of North Carolina v. United States Dept. of Labor , 917 F. 2d 812 (4th Cir.
1990), cert. denied , 111 S.Ct. 2013 (1991)(UNC ). UNC had
challenged the Department of Labor's decision that all 16 campuses in the UNC system were
required to comply with the contract compliance laws even though some of them did not have
federal government contracts. The Fourth Circuit held, based upon its analysis of North
Carolina state law, that the UNC system was one state agency for contract compliance
purposes, and therefore that all campuses must comply. Trinity argues that if we were to
scrutinize the details of Trinity's "governance" in the same fashion that the Fourth
Circuit analyzed UNC's governance, we would reach the conclusion that Trinity's system is
not unitary for contract compliance law purposes, and that only Trinity facilities that
participate in federal contracts should be required to comply with the federal contract
compliance laws.
There are several flaws in Trinity's argument. First, Trinity overlooks
the fact that the Fourth Circuit, in evaluating UNC, was applying Department of Labor
regulations that apply specifically and only to state and local government contractors, which
Trinity is not. The regulation at issue in UNC provides that:
The requirements of the equal opportunity clause in any contract or
subcontract with a State or local government (or any agency,
instrumentality or subdivision thereof) shall not be applicable to any
agency, instrumentality or subdivision of such government which does
not participate in work on or under the contract or subcontract.
41 C.F.R. § 60-1.5(a)(4). The Fourth Circuit quoted this language, and then stated,
"[c]learly an agency, instrumentality, or subdivision of a state government
that was not participating in work on or under the contract would not be subject to OFCCP's
review authority." UNC at 818 (emphasis supplied). In its brief, Trinity
replaces "state government" in the Fourth Circuit's statement with "[an
entity]," and then argues that it is "an entity" and is entitled to an exemption.
It is not in Trinity's power to alter the meaning of a regulation by rewriting it. The regulation
cited is found only in the Department of Labor's OFCCP regulation addressing
"Contracts with State or local governments." See 41 C.F.R.
§60-1.5(a)(4).
Trinity also relies upon Hammond v. Donovan , 538 F. Supp.
1106 (W.D. Mo. 1982), to support its position. Def. Br. at 11-12. Hammond is
totally inapposite. In Hammond , the issue decided by the court was whether an
agreement between the federal government and a facility was a grant or a contract. If it was
a grant, as the district court held, then the federal contract compliance laws did not apply.
Here, there is no dispute that the agreement between Trinity and the federal government is a
contract, and that Trinity is a federal contractor. Nothing in Hammond is
applicable to this case.
Trinity also cites OFCCP v. Loffland Bros. Co. , OEO 75-1,
1984 WL 72744 (Apr. 16, 1984). Def. Br. at 12. The issue in Loffland was
whether Loffland was a government contractor or subcontractor. The fact that Trinity is a
federal contractor is not in dispute.
Trinity cannot successfully support its arguments by citing passages from
irrelevant decisions. It's attempt to do so merely accentuates the barrenness of its legal
arguments. The ALJ correctly determined that all of Trinity's facilities are required to comply
with the contract compliance laws as a result of Trinity's status as a government contractor.
Trinity has violated E.O. 11,246, VEVRAA, and Section 503 by refusing to provide copies
of its affirmative action programs and the requested supporting information and records for
its Asheville, North Carolina facility and by refusing to permit access to the premises for an
on-site compliance review.
ORDER
Trinity Industries, Inc. is ordered to cease and desist from violating
Executive Order 11,246, VEVRAA, and Section 503 by denying the Office of Federal
Contract Compliance Programs information required to complete a compliance review of
Trinity's Asheville facility pursuant to 41 C.F.R. Part 60.
Trinity Industries is ordered, no later than 30 days from the issuance of
this Order, to cease and desist from denying the Office of Federal Contract Compliance
Programs access to its premises at Asheville, North Carolina, to conduct an on-site compliance
review including interviews, and inspection of such records and other materials as may be
relevant and material to verifying Trinity's compliance status pursuant to 41 C.F.R. Part 60.
Should Trinity Industries, Inc. fail to comply with this order within
thirty days of its issuance, it is ordered that the present government contracts of Trinity
Industries, Inc. be canceled, terminated, or suspended, and that Trinity Industries, Inc. be
declared ineligible for further contracts and subcontracts, and from extension or modification
of any existing contracts and subcontracts, until such time that it can satisfy the Secretary of
Labor, or her designee, the Deputy Assistant Secretary for OFCCP, that it is in compliance
with the provisions of E.O. 11,246, Section 503, and VEVRAA, and the regulations issued
pursuant thereto, which have been found here to have been violated.
The sanctions invoked here shall be applicable to Trinity Industries, Inc.,
its officers, subsidiaries and divisions and all purchasers, successors, assignees and transferees.
SO ORDERED .
DAVID A. O'BRIEN
KARL J. SANDSTROM
JOYCE D. MILLER
[ENDNOTES]
1 See 41 C.F.R. §1.4 (definition of
subcontract).
2
3
4 See Stip., Exhibits 1, 2, and 3. There is
no evidence that Trinity made any further efforts to obtain a waiver. In any event, OFCCP did not
grant a waiver.
5 See also correction notice, published on March 8, 1996. 61 Fed. Reg. 9532. No
final regulations have yet been issued.
