August 21, 2015

Court tells prime contractor: Discriminate, or don't bid

By Court tells prime contractor: Discriminate, or don't bid

The Seventh Circuit issued a decision this week that basically tells prime contractors this: If you don’t want to discriminate against subcontractors on the basis of race and sex, then don’t bid on public contracts. The case is Dunnet Bay Construction Company v. Borggren, and the decision is here.

Prime contractor Dunnet Bay Construction Company submitted the lowest responsible bid for a highway construction project in Illinois.  But the Illinois Department of Transportation rejected the low bid because Dunnet Bay did not hire enough subcontractors on the basis of race and sex.  Understand what that means. To favor subcontractors who are the “right” race and sex, a prime contractor must disfavor – discriminate against – subcontractors considered by the state to be the “wrong” race and sex.

When Dunnet Bay sued the state, claiming the program that required discrimination violated equal protection, the Seventh Circuit held Dunnet Bay as a prime contractor lacked standing to sue. To have standing in federal court, a plaintiff must have suffered some direct or substantial injury or be likely to suffer such an injury if a particular wrong is not redressed. The Seventh Circuit concluded that a person does not suffer injury by being forced to discriminate against another.

PLF attorneys filed a brief in this case noting that three federal circuits hold the opposite.  In a case called Monterey Mechanical Co. v. Wilson, the Ninth Circuit explained that being required to discriminate was an actionable injury:

Even if a general contractor suffers no discrimination itself, it is hurt by a law requiring it to discriminate, or try to discriminate, against others on the basis of their ethnicity or sex. A person required by the government to discriminate by ethnicity or sex against others has standing to challenge the validity of the requirement, even though the government does not discriminate against him.

The Sixth Circuit in Safeco Insurance Company of America v. City of White House, and the D.C. Circuit in Lutheran Church-Mo. Synod v. FCC, came to the same conclusion.

The court’s decision essentially means that prime contractors are barred in the Seventh Circuit from challenging state and federal contracting programs requiring the utilization of subcontractors on the basis of race and sex. To learn the disturbing facts of this case, see our earlier post, here.

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