The opinion of the court was delivered by: FISHER
This action is brought to obtain judicial determination of the validity of the Affirmative Action Plan devised by the State of New Jersey in compliance with Executive Order #11246.
Motions for summary judgment pursuant to Fed. R. Civ. P. 56 are brought by third party defendants, the federal officials who have been made parties, the State of New Jersey, the City of Newark, and George Fontaine, a citizen of Newark. These motions are based upon constitutional and other grounds.
This controversy began in the Superior Court of New Jersey (Chancery Division), when John Joyce, Jr., John Joyce, Inc., and various contracting associations sought to enjoin Charles Sullivan, Director of the Division of Purchase and Property for the State of New Jersey from opening bids pertaining to the first stage of construction of the N.J. College of Medicine and Dentistry.
The cost of the construction was to be borne by the State of New Jersey with the aid of a grant from the United States. The Federal Government, through its Departments of Health, Education and Welfare, and Housing and Urban Renewal provided a grant of $35.5 million dollars for the project.
The first stage of construction was the power plant and the State of New Jersey advertised for bids which were to be opened on October 23, 1969. This date was then extended to November 26, 1969.
Upon the application to the N.J. Superior Court of the original plaintiffs, John Joyce, Jr., John E. Joyce, Inc., National Electrical Contractors Association, Building Contractors Association of New Jersey, Mechanical Contractors Association of New Jersey, and the New Jersey Chapter of the Structural Steel and Ornamental Iron of New Jersey, the original defendants, (Kervick and Sullivan), were restrained from opening bids on November 16, 1969.
Defendant McCrane has been substituted for defendant Kervick, having replaced him as Treasurer of the State of New Jersey. Defendant Charles Sullivan was succeeded by Edgar Meyers, who has since been succeeded by James A. O'Connor, the present Director of the Division of Purchase and Property for the State of New Jersey.
After obtaining the injunction, the plaintiffs amended their complaint in November, 1969, seeking a declaratory judgment to determine whether the contractors' associations and their members could by law comply with the instructions to bidders.
The defendants, McCrane and Sullivan, counterclaimed alleging the validity of the Affirmative Action Plan and brought a third party action naming as third party defendants: (1) labor unions having jurisdiction over the labor force in the Newark construction area, (2) federal officials concerned with the construction, and (3) George Fontaine, a representative of the community where the Medical College is to be constructed. On January 19, 1970 the federal third party defendants moved to have the matter transferred to this Court.
During March, 1970 the Office of Federal Contract Compliance held hearings in Newark to determine the status of minority groups in the construction trades in that area. As required, notice of these hearings was published in the Federal Register (35 F.R. 4231). Further, representatives of labor unions, contractors, government officials and members of the community were notified and invited to testify at the hearings. The hearings were held on March 18th and 20th with little or no participation by the labor unions.
Following these hearings the committee issued a report titled, "Report of the Panel on Equal Employment Opportunities in the Construction Trades in Newark, New Jersey, 1970". In that document the panel stated that it had found some unions guilty of exclusionary practices as to minorities and this had resulted in an underutilization of minorities in the construction trades in the Newark area.
Having committed $35.5 million dollars for this project and prompted by the findings of the Newark hearings, the Federal Government advised the State of New Jersey that to qualify for this grant the State had to develop another Affirmative Action Plan which would assure equal employment opportunity as required in Executive Order 11246, and also provide job opportunities for the residents of the area.
Pursuant to this the State of New Jersey on April 24, 1970 did submit to the U.S. Department of Health, Education and Welfare a revised Affirmative Action Plan, which plan is contained in N.J. Form #OAEC-5932, "Instructions to Bidders and General Contractors", found in the job specifications for the power plant of the Medical School.
On August 19, 1970 this Court gave the State of New Jersey leave to advertise for bids for the construction of the Medical College provided that no bids be opened until the matter was resolved by the Court. The State of New Jersey has therefore advertised for bids, but all bids sought include the "Revised Affirmative Action Plan".
Under the revised plan, goals are set forth which each contractor must make a good faith effort to meet in utilizing minority journeymen in the performance of his contract. These goals range from 30-37% depending on the craft involved, and indicate the percentage of minority journeymen to be employed in relation to the entire work force in a specific trade. If the contractor fails to meet the goals, he is to be given an opportunity to prove his good faith effort. This effort will be reviewed and evaluated by a review council before any sanctions can be imposed.
Also included in the revised plan is a requirement that the contractor submit with his bid a statement signed by an official of a union with which he has referral arrangements or agreements covering workers to be employed on this project. This statement incorporates the unions in the affirmative action and provides that the unions admit to membership those minority journeymen desiring membership, who are qualified and satisfy the time limits for admission contained in the collective bargaining agreements and union by-laws. If, however, the union fails to sign such a statement, the contractor is in no way excused from his obligation to attempt to reach his goals.
After the plan was approved and bids solicited, the City of Newark on September 16, 1970, was granted leave to intervene as a defendant and a third party plaintiff.
On September 23, 1970 the defendants and third party plaintiffs (McCrane et al.) filed notice of motion for summary judgment and dissolution of the restraints on the bids.
Shortly thereafter on September 25, 1970, the federal third party defendants also moved for summary judgment and dissolution of the restraints.
On October 1, 1970, George Fontaine filed a like notice of motion and on October 7, 1970 the City of Newark followed.
On November 30, 1970 the defendant Unions filed a motion for summary judgment claiming the "Union Statement" of the revised affirmative action plan is in violation of the National Labor Relations Act and further that the unions were not proper parties to the action.
Before this Court then is the disposition of these motions.
The revised plan was based on the findings made by the panel which conducted the hearings in April, 1970 in Newark, and these findings were based not only on testimony but also on figures supplied by both the United States and the State of New Jersey relating to population, unemployment rates, and labor force participation rates. On the basis of all this data, the panel concluded that some unions have failed to admit minorities to membership, failed to refer minorities for employment, and failed to admit minority group members into apprenticeship programs. A portion of the panel's report states:
"The skilled trades with the poorest representation of minorities is as follows:
Electricians: 18 of 1,130 ...