In a major victory for business groups, a U.S. appeals court Friday overturned President Clinton's order barring the federal government from contracting with employers who hire replacement workers during a lawful strike.
The three-judge panel ruled unanimously that Clinton's order conflicted with federal labor law, which it said guaranteed employers the right to hire permanent replacements.Clinton said he regretted the decision. "I strongly believe that this executive order is economically sound, fair and legal, and accordingly I am instructing my Justice Department to take all appropriate steps to have this decision overturned," he said in a written state-ment.
Business groups hailed the ruling, saying it showed Clinton had overstepped his authority in issuing the order in March last year. They charged he had acted in an improper attempt to win political support from labor unions.
But union leaders and Labor Secretary Robert Reich bitterly denounced the decision.
"We don't want American service men and women in Bosnia trying to keep the peace while driving around on tires made by rookies and replacement workers," Reich said in a statement.
The Clinton administration had argued that the executive order was needed to help protect the government, including the military, from getting inferior quality goods from contractors.
The ruling was an important victory for the U.S. Chamber of Commerce, a business trade asociation, and several other groups that had filed a lawsuit challenging the order.
"From the beginning we said this order was unconstitutional and a transparent political payoff to this administration's labor union allies," Chamber of Commerce Gen-eral Counsel Stephen Bokat said.
Senior Vice President Paul Huard of the National Association of Manufacturers, another business group, said the order "had an immediate adverse impact on balance in collective bargaining negotiations."
But AFL-CIO President John Sweeney criticized the decision as "simply wrong as a matter of policy and of law" and said, "It serves employers who want to wage war on workers and hurts the rest of us."
The labor federation, whose 78 affiliated unions represent 13 million workers, failed in 1992 and 1994 to persuade Congress to bar employers from permanently replacing striking workers.
"Now three judges appointed by Presidents) Reagan and Bush have declared that firing strikers is right and that even the president of the United States cannot refuse to do business with federal contractors who throw out their experienced, skilled employees and replace them with workers who often are poorly prepared," Sweeney said.
The appeals court reversed a decision by U.S. District Judge Gladys Kessler, a Clinton appointee, upholding the order as legal.
In May, the Labor Department issued final regulations that allowed Secretary Robert Reich to terminate existing contracts worth more than $100,000 when employers hire replacements. He also can disqualify firms from future government contracts.
In the appeals court's 31-page opinion, Judge Laurence Sil-ber-man wrote, "It is . . . undisputed that the (National Labor Relations Act) preserves to employers the right to permanently replace economic strikers as an offset to the employees' right to strike."