Chamber Of Commerce v. Reich

74 F.3d 1322 (1996)


President Clinton issued Executive Order No. 12,954 which declares: It is the policy of the executive branch in procuring goods and services that, to ensure the economical and efficient administration and completion of Federal Government contracts, contracting agencies shall not contract with employers that permanently replace lawfully striking employees. The Order explains that the 'balance' between allowing businesses to operate during a strike and preserving worker rights is disrupted when an employer hires permanent replacements during a strike. 'It has been found' that the hiring of permanent replacements results in longer strikes, can change a 'limited dispute into a broader, more contentious struggle,' and results in the loss to the employer of the 'accumulated knowledge, experience, skill, and expertise' of the striking workers. These consequences adversely affect federal contractors' ability to supply high quality and reliable goods and services. Secretary Reich (D) issued final implementing regulations. Prior to the President's Executive Order, there were numerous legislative attempts to restrict the use of permanent replacements. In 1993 the Workplace Fairness Act was introduced in the Senate, which would have made the use of permanent replacements an unfair labor practice. Supporters similarly argued that the use of permanent replacements upsets the 'balance' between labor and management and leads to lower productivity. Ps filed suit prior to D's promulgation of the regulations, seeking declaratory and injunctive relief against D's enforcement of the Executive Order. Ps alleged that the Order is contrary to the National Labor Relations Act (NLRA), the Procurement Act and the Constitution. The district court held that Ps' statutory claim that the Executive Order violated the NLRA is not judicially reviewable since the Procurement Act vests broad discretionary authority in the President. The district court also rejected Ps' statutory claim on the merits, reasoning that under the Executive Order the government was acting in a proprietary capacity and, therefore, NLRA pre-emption was inapplicable. The court stressed that the President's interpretation of the Procurement Act as authorizing the Order was entitled to Chevron-like deference and was reasonable because it furthered the statutory values of 'economy' and 'efficiency' (the government does not attempt to defend on appeal the court's deference to the President's interpretation). Ps appealed.