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July 8, 1994

DISTRICT OF COLUMBIA, et al., Defendants.


The opinion of the court was delivered by: THOMAS F. HOGAN

The plaintiffs in this case, a group of private contractors, are challenging a newly-enacted District of Columbia statute, the Displaced Workers Protection Act of 1994, D.C. Code §§ 36-1501 et seq. ("the DWPA"). After carefully considering the plaintiffs' arguments, as well as those of the defendants and intervenors, the Court finds that the DWPA is preempted by the National labor Relations Act, 29 U.S.C. §§ 151 et seq. ("the NLRA"), and is thus invalid and unenforceable. Accordingly, the Court will grant summary judgment in favor of the plaintiffs.


 The relevant facts in this case do not appear to be in dispute. *fn1" DWPA was enacted by the Council of the District of Columbia ("the City Council") and approved by Mayor Sharon Pratt Kelly on February 17, 1994. It became law on April 26, 1994, following a period of congressional review. The DWPA essentially requires contractors who provide certain types of services to retain many of their predecessors' employees after the contractors have taken over service contracts. *fn2"

  The DWPA applies to contractors who employ 25 or more persons and perform food, janitorial, building maintenance, and health care services. D.C. Code § 36-1501(a)(1)-(3). Section 3(a) of the DWPA requires an outgoing contractor at a particular site to provide the contractor who will succeed it at the site with a list of employees, the dates the employees were hired, and their occupation classifications. Id. § 36-1502(a). Section 3 goes on to state that if the new contractor is providing services similar to those of the previous contractor, it is then required to retain for 90 days all employees who had been employed by the previous contractor for eight months or more. *fn3" Id. § 36-1502(b). During that 90-day period, the new contractor may not dismiss a retained employee without cause. Id. § 36-1502(e). After the 90-day transition period, if a written evaluation indicates that the employees' performance has been satisfactory, section 3(f) states that the new contractor "shall offer" continued employment to the retained employee under terms established by the new contractor. Id. § 36-1502(f). Section 4 provides that any employee who has been wrongfully discharged may sue in the Superior Court of the District of Columbia and obtain backpay, costs of lost employment benefits, and reasonable attorney's fees. Id. § 36-1503.

 According to the Report of the Committee on labor, the purpose of the DWPA is:

to prohibit contractors or subcontractors who acquire or provide services under a negotiated or competitive bidding procedure from displacing employees employed by the contractor or subcontractors who loss [sic] or gave up the contract by establishing a 90-day probationary period during which the contractor or subcontractor is prohibited from terminating an employee except for just and sufficient cause.

 Report on Bill 10-307, Intervenors' Motion for Summary Judgment, Appendix B ("Intervenors' Appendix B") at 1. *fn4"

 The legislative history indicates that the City Council heard testimony in favor of and against the DWPA. Carolyn Jones, the Deputy Director for Employment Security Services at the District of Columbia's Department of Employment Services testified in favor of the DWPA, saying that the law "could significantly impact the reduction of the number of unemployed D.C. residents currently collecting unemployment benefits in the job categories covered by the bill." Id. at 14. This testimony and other parts of the legislative history suggest that the DWPA was passed in order to prevent certain workers from becoming unemployed merely because a service contract has changed hands. See, e.g., id. at 18-22, 61-71. The DWPA was strongly backed by the members of Local 82 of the Service Employees International Union ("SEIU"), which has supported a campaign called Justice for Janitors. See id. at 55-62. The DWPA also drew some support from the business community. See id. at 23-28, 45-48. However, several other business groups and the District of Columbia Chamber of Commerce opposed the DWPA. See id. at 29-44, 73-86. The plaintiffs are companies that have contracts to perform various food, janitorial or building maintenance services in the District of Columbia area. Some of the plaintiffs are non-union companies. P&R Enterprises, one of the plaintiffs, took over a contract in the District on April 30, 1994, and expects to take over additional contracts in the immediate future. It has received communications from Local 82 of the SEIU in which the union local demands recognition because it represents employees whom P&R was required to hire under the DWPA. Affidavit of Richard Thompson at PP 2, 11. At least one predecessor's supervisor has asked P&R to retain her pursuant to the DWPA. Second Affidavit of Richard Thompson at P 2.

 On May 24, 1994, the plaintiffs filed this action and requested a temporary restraining order to enjoin the enforcement of the DWPA. The plaintiffs challenge the DWPA on various grounds. The plaintiffs claim that the DWPA is preempted by the NLRA, 29 U.S.C. §§ 151 et seq., and the labor Management Relations Act, 29 U.S.C. § 185. The plaintiffs also allege that the DWPA violates the Contracts Clause of the United States Constitution, U.S. Const. art. I, § 10. The plaintiffs claim, inter alia, that the DWPA's retention provisions effectively require nonunion contractors to recognize unions.

 After a hearing on May 25, 1994, the Court denied the motion for a temporary restraining order and consolidated this matter pursuant to Fed. R. Civ. P. 65(2). On June 7, 1994, the Court conducted a hearing on the consolidated dispositive motions. *fn5" At the hearing, the Court permitted the SEIU and SEIU Local 82 to intervene as defendants in this matter pursuant to Fed. R. Civ. P. 24(b). After hearing argument on the motions, the Court took this matter under advisement.


 The plaintiffs argue that the DWPA is preempted by the NLRA for several reasons: (1) the DWPA interferes with the plaintiffs' right under the NLRA to fire or refuse to hire supervisors because of their union involvement; (2) the DWPA deprives the plaintiffs of the freedom to choose their own representatives for purposes of adjusting grievances; (3) the DWPA deprives the plaintiffs of their federally protected right to hire their own work force upon taking over a contract; and (4) the DWPA interferes with the plaintiffs' freedom to set initial terms of employment. The plaintiffs further argue that the DWPA impairs their contract rights under the United States Constitution.

 There are two dominant theories of NLRA preemption. *fn6" These theories stem from San Diego Building Trades Council v. Garmon, 359 U.S. 236, 244, 3 L. Ed. 2d 775, 79 S. Ct. 773 (1959), and Machinists v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 140, 49 L. Ed. 2d 396, 96 S. Ct. 2548 (1976). Garmon holds that state or local regulations of activities are preempted when the activities are protected or prohibited by the NLRA. 359 U.S. at 244-45. In order to avoid interference with national policy, state or local activities may be preempted under Garmon when the activity is even "arguably" protected or prohibited by the NLRA. Id. Machinists holds that state or local regulations ...

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