The Supreme Court cleared the way yesterday for the Carter administration to enforce its anti inflation wages and price guidelines by denying federal contracts to guideline violators.
But, in an urelated action involving discrimination rather than inflation sanctions, a lower federal court granted Uniroyal Inc. a temporary restraining order to stop the government from canceling the company's $36 million in federal contracts.
Although the two cases are not linked, Uniroyal - on of the country's largest rubber and plastics makers - faces possible contract debarment for wage guideline violations as well as alleged racial and sex discrimination.
The Supreme Court's action, although it did not go the merits of the guidelines dispute, amounted to a major legal victory for the administration's beleaguered inflation fighters.
For the lack of one justice's vote, the court refused to hear argument's from the AFL-CLO that a lower appelated court had erred in upholding the president's power to enforce the "voluntary" guidelines by refusing to do business with guideline offenders.
It takes four of the nine justices to grant review. Only Justices Thurgood Marshall, Byron R. White and William J. Brennan Jr. voted to hear the case, meaning that the lower court ruling stands.
This ruling, handed down last month by the U.S. Court of Appeals for the District of Columbia, held that President Carter was within his constitutional and statutory authority in threatening to deny contracts worth $5 million or more to firms that don't comply with wage and price guidelines. In doing so, it reversed a May decision by U.S. District Court Judge Barrington Parker that the penalties made the program mandatory rather than voluntary, thus going beyond what Congress allowed.
Inflation warriors, who have had little to cheer about as prices soar and labor contracts burst the guidelines, expressed relief and said the contract denial penalties will be invoked when appropriate.
The administration has already targeted United Airlines for sanctions, although it concedes it may not be able to do more than urge bureaucrats to use other airlines. It has also cited Uniroyal, Firestone and Goodrich for "probable noncompliance," the first step toward contrict debarment.
Early yesterday General Electric Co. reached a tentative contract agreement with unions representing 115,000 workers that, according to union sources, provides wage increases of more than 30 percent over three years.
This would appear to exceed the administration's nominal wage-benefit standard of 7 percent a year, or 22.5 percent compounded over three years. But GE officials offered no assessment of the pact's cost and administration officials declined comment. GE does business worth $2 billion a year, about 10 percent of its total, with the federal government.
Union sources said the contract provides vastly improved cost-of-living protection, expanded benefits for retirees, and wage increases that could, if inflation ranges between 9 and 12 percent over the next three years, add about $2 to the current average hourly wage base of $6.70.
Beyond GE, and Westinghouse later this month, the administration faces its toughest guidelines test yet in bargaining scheduled this month between the "Big Three" auto makers and the powerful United Auto Workers union which was repeatedly told the administration to "stay the hell out" of its negotiations. Some auto company officials, on the other hand, contend that the administration so sretched the guidelines to accommodate a 30-plus percent settlement for the Teamsters that the ceilings are meaningless.
Moreover, the Supreme Court's nod to the government's enforcement powers comes at a time when the administration is soliciting labor as well as industry for a "consensus" anti-inflation plan for 1980. This will require more "diplomacy" than the administration has shown in the past, one official conceded yesterday.
In the Uniroyal anti-discrimination case, U.S. District Court Judge Harold H. Greene said that the legal issue was unique enough to warrant more detailed arguments and that the firm would be irreparably harmed if he did not block the government in the meantime.
Greene set a hearing for July 12.
The Labor Department, acting on complaints about layoffs of female workers at an Indiana plant 11 years ago, announced last Friday that the government would no longer do business with company until it complies with equal employment opportunity regulations. It said that the company refused to cooperated in a departmental investigation of discrimination charges and that it "falsely" claimed it didn't discriminate.
Uniroyal, with $2.7 billion in annual sales, is the largest firm ever debarred from contracts by the government because of alleged discrimination.
In court yesterday, Uniroyal said the government moved against it because it was disputing federal power to obtain information. The company said in a brief that the government was imposing the "most severe sanctions available" while not saying "what specific action it must take to avoid such sanctions."