The opinion
ALVIN B. RUBIN, Circuit Judge,
dissenting:
While I respect my brethren’s considered judgment, I take a different view not only of the record but, more important, of the standards for determining when Title VII condemns ostensibly neutral employment procedures that in practice have adverse racial impact. These views compel me to conclude that the majority not only departs from the criterion fixed by the Supreme Court for evaluating such practices but also endorses the attitude of a magistrate eager to ratify employer actions tainted by the effects condemned by the Equal Employment Opportunity Act. I, therefore, respectfully dissent.
I.
This is a Title VII disparate impact case in the nature of a class action. The Equal Employment Opportunity Commission (EEOC) charged Kimbrough Investment Company, owner of the Sheraton Biloxi Motor Inn, with race discrimination in hiring, job assignments, promotion, and transfer. The EEOC also charged that the Sheraton *104 maintained racially segregated job classifications and departments. The EEOC presented statistical evidence of segregated departments and testimony from several individuals who had been assigned jobs in historically black departments despite their preference for jobs in white departments.
The EEOC claimed that most hiring was by word-of-mouth, and that job openings were rarely advertised and never posted. It also claimed that there were no hiring standards and that the decision was an entirely subjective choice made by the hotel’s department supervisors. Hiring only those who had access to information about vacancies, according to the Commission, meant that blacks never found out about openings in white départments. Subjective decisions by supervisors, all of whom except the head bellman and the banquet manager were white, presented particular opportunities for discrimination. 1
The disparate impact claim focused on the Sheraton’s “folder system” of hiring. Applicants were directed to a security guard. The guard told each applicant what positions were available and gave him an application form. The EEOC alleged that the guards “steered” blacks toward black departments by telling them that there were no jobs in white departments 2 or by suggesting that they list their choice of positions with a job in a black department first on the application. 3
The completed application was forwarded to Kimbrough’s executive secretary, who placed it into a folder marked with the job the applicant sought. If the applicant listed two or more jobs, the application was placed only in the folder for the first job listed. If the application stated that the applicant would accept any position, it was placed into the “anything” folder.
The EEOC charged that the “anything” folder contained a disproportionate number of black applicants’ forms and that, when job openings occurred, the Sheraton never considered the applications in the “anything” folder. 4 These facts, the Commission claimed, established that the impact of the “anything” folder in particular and the folder system in general fell disproportionately on blacks.
The magistrate determined that the EEOC failed to prove a prima facie case. He stated as a conclusion of law:
[I]t has been the long standing policy of the Defendant to maintain a folder placement system when correlating [sic] and referring to the employment applications. This policy is uniformly followed by the Defendant and applied to all persons regardless of race.... Although the record indicates that the folder system may not be the best system which the Defendant could have utilized, the facts fail to indicate that blacks were treated any differently than whites under the folder sys *105 tern, or that the folder system had a disparate effect on blacks. 5
The magistrate erred in framing the legal inquiry as whether white applicants were treated differently from blacks. 6 The sole issue in a disparate impact case is whether a facially neutral employment practice disproportionately disqualifies members of a protected group from employment. See Wheeler v. City of Columbus, 686 F.2d 1144, 1150 (5th Cir.1982) (Clark, C.J.) 7 Thus the question that should have been answered is whether in actual operation a practice under which all applicants were treated alike adversely affected the minority group. This is the way in which we have examined standards that, although applied to everyone alike, exclude all or disproportionate numbers of protected groups, such as diploma, 8 height and weight, 9 and testing requirements. 10
The magistrate adverted to the real effect of the folder system: he found that the EEOC had not proved that the system does “in fact” discriminate. In this comment, he was clearly erroneous. 11 Indeed at oral ar *106 gument the employer conceded that the EEOC had established a prima facie case of discrimination based on the hotel’s maintenance of predominantly black departments. See majority op. at 101. Considering this merely counsel’s error, my brethren dismiss the admission. They then conclude that, in any event, the employer rebutted that showing and “proved that its employment practices were rooted in ‘legitimate business reasons.’ ” Id. at 102 (quoting Johnson v. Uncle Ben’s, Inc., 657 F.2d 750 , 753 (5th Cir.1981), cert. denied,-U.S.-, 103 S.Ct. 293 , 74 L.Ed.2d 277 (1982)). With all deference, I suggest that, even were there a “legitimate business reason,” it would not be sufficient to excuse discriminatory practices. The test is simply incorrect. In addition, even were business reason enough, there is no evidence in the record to support the existence of any business reason for this separation of departments by race save the fact that “it had always been done this way.” That traditional consideration is not a legitimate business reason.
II.
In Griggs v. Duke Power Co., 401 U.S. 424 , 91 S.Ct. 849 , 28 L.Ed.2d 158 (1970), the Supreme Court set forth the elements of proof in a disparate impact case. To make out a prima facie case, the plaintiff must prove that “practices, procedures, or tests neutral on their face, and even neutral in terms of intent ... operate to ‘freeze’ the status quo of prior discriminatory employment practices.” Id. at 430 , 91 S.Ct. at 853 , 28 L.Ed.2d at 163 . The employer must then rebut this showing by demonstrating “business necessity. If an employment practice which operates to exclude Negroes cannot be shown to be related to job performance, the practice is prohibited.” Id. (emphasis added).
The Griggs Court left no doubt that: “Congress has placed on the employer the burden of showing that any given requirement must.have a manifest relationship to the employment in question.” Id. at 432 , 91 S.Ct. at 854 , 28 L.Ed.2d at 165 (emphasis added). In Dothard v. Rawlinson, 433 U.S. 321, 329 , 97 S.Ct. 2720, 2726 , 53 L.Ed.2d 786, 797 (1977), the Court reiterated, “Once it is thus shown that the employment standards are discriminatory in effect, the employer must meet ‘the burden of showing that any given requirement [has] a manifest relationship to the employment in question.’ ” (emphasis added) (quoting Griggs, 401 U.S. at 432 , 91 S.Ct. at 854 , 28 L.Ed.2d at 164 ).
In New York City Transit Authority v. Beazer, 440 U.S. 568 , 99 S.Ct. 1355 , 59 L.Ed.2d 587 (1979), the Court stated that the plaintiff’s statistical showing of disparate impact was “assuredly rebutted by the [defendant’s] demonstration that its ... rule (and the rule’s application ...) is ‘job related.’ ” Id. at 587 , 99 S.Ct. at 1366 , 59 L.Ed.2d at 603 (footnote omitted; emphasis added). The Court added in the footnote: “The record thus demonstrates that the [defendant’s] rule bears a ‘manifest relationship to the employment in question.’ ” Id. at 587 n. 31, 99 S.Ct. at 1366 n. 31, 59 L.Ed.2d at 603 n. 31 (emphasis in original) (quoting Griggs, 401 U.S. at 432 , 91 S.Ct. at 854 , 28 L.Ed.2d at 164 ); see also Beazer, 440 U.S. at 602 , 99 S.Ct. at 1374 , 59 L.Ed.2d at 612 (the employer “had the burden of showing job relatedness”) (dissenting opinion).
We have used the words “business reason” but not in a way intended to water down the standard exacted by the Supreme Court. In Johnson v. Uncle Ben’s, Inc., 657
*107 F.2d 750 (5th Cir.1981), cert. denied, - U.S. -, 103 S.Ct. 293 , 74 L.Ed.2d 277 (1982), we held:
It is not part of the plaintiff’s burden [in disparate impact cases] to prove absence of a legitimate business reason for the challenged practice. Knowledge of a legitimate business reason is uniquely available to the employer who is accordingly required to persuade the court of its existence by a preponderance of the evidence.
657 F.2d at 753. The Uncle Ben’s court’s use of the words “legitimate business reasons” does not, in my view, change the long-standing requirement that the employer prove “business necessity” or “job-relatedness.” That is the standard which the Supreme Court has repeatedly employed in disparate impact cases, e.g., Beazer, 440 U.S. at 587 & n. 31, 99 S.Ct. at 1366 & n. 31, 59 L.Ed.2d at 603 & n. 31, and it has also been ours. See Johnson v. Uncle Ben’s, Inc., 628 F.2d 419 , 427 (5th Cir.1980), vacated, 451 U.S. 902 , 101 S.Ct. 1967 , 68 L.Ed.2d 290 (1981). Therefore, it was the employer’s burden in this case to demonstrate a manifest relationship between job requirements and the folder system. The record contains no evidence of this whatever. Even construed most favorably to the employer (as it should not be, because the employer bore the burden of proof), the evidence shows at best only that the folder system was convenient and was not adopted with discriminatory intent.
III.
The magistrate found neither that the folder system and the resultant job stratification were exacted by job requirements nor even that they were based on “business reasons.” He concluded instead that, even if the EEOC had made out a prima facie case, the defendant “articulated nondiscriminatory reasons for its employment policies.” (emphasis added). Without finding the conclusion to be clearly erroneous or legally in error and without referring to the evidence, the majority amends this finding and concludes that “the employer proved that its employment practices were rooted in ‘legitimate business reasons.’ ” Majority op. at 102 (emphasis added).
In the margin, I have set forth every word of testimony that I have found in the record by which the employer attempted to show the “business necessity” of the folder system. 12 There is simply no evidence of job-relatedness. Indeed the magistrate stated that the folder system is “not the best system which Defendant could have utilized.” 13 Given this explicit finding, I *108 see no demonstration of any relationship between the folder system and job requirements, let alone proof of it by a preponderance of the evidence.
The employer conceded the existence of a prima facie case of disparate impact. The employer failed to meet the burden of rebutting that case. The court’s approval of the Sheraton’s system denies implementation of the Supreme Court’s majestic statement in Griggs : “What is required ... is the removal of artificial, arbitrary, and unnecessary barriers to employment when the barriers operate invidiously to discriminate on the basis of racial or other impermissible qualities.” 401 U.S. at 431 , 91 S.Ct. at 853 , 28 L.Ed.2d at 797 . We must require the removal of even those walls created by the paper-thin layers of a file folder that become impenetrable racial barriers. With all due respect, I dissent.
. These claims, of course, are disparate treatment rather than disparate impact charges. The EEOC did not press the disparate treatment claims on appeal and I mention them only to give the complete background.
. Jacqueline Taylor, a black, testified that she applied for a job as a cocktail waitress, a “white” position. She was told that there were no openings and filled out an application for “busgirl or openings.” Two white cocktail waitresses were hired within two weeks of Taylor’s application. Larry McGill, a black who sought to apply fqr a job as a waiter, was directed to the bellman department because there were allegedly no openings for waiters.
. Ronnie Lewis, a black, applied for work as a busboy, waiter, and security guard, with busboy listed first. The EEOC contended that the waiter and security positions were “white”; Mr. Lewis, despite military training as a guard, was never considered for security guard vacancies.
The magistrate concluded, however, “although there is no evidence ... that the Defendant always informed applicants of this procedure [filing the application under the first job listed], there is no suggestion that the Defendant attempted to deceive either white or black applicants in that regard.”
. Clarence Hawthorne, a black, indicated “open” on his application. He had worked eight years as a machine operator and testified that he was interested in a maintenance, office, bartending, or waiter position. He was not considered for any of thirty vacancies in maintenance during the six months after his application.
. The magistrate also found:
In attacking the folder system ... the Plaintiff has alleged that the system has a disparate effect towards blacks in general. This Court is of the opinion, however, the [sic] plaintiff has failed to make a showing by a preponderance of the evidence that the folder system does in fact discriminate against blacks because of race. The folder system was set up with the intention of placing the hundreds of applicants into positions requested as a preference. To be sure, there were instances evidenced where qualified black individuals were placed into lower level positions when they had experience in upper level positions. However, the Plaintiff has failed to demonstrate that white applicants were treated any differently under this system. (emphasis added).
. The majority attempts to demonstrate that the magistrate understood the issue in the disparate impact portion of this case by quoting his finding of fact that the EEOC failed to prove “that the folder system has a disparate impact on black applicants or black employees moving from one position to another.” Such summary treatment of the disparate impact question is not adequate given the contradictory language in both the above-quoted finding of fact and conclusion of law. See supra note 5 & accompanying text.
. See also Griggs v. Duke Power Co., 401 U.S. 424 , 91 S.Ct. 849 , 28 L.Ed.2d 158 (1970) (employment standard not significantly related to job performance, disqualified blacks at substantially higher rates than whites, and applied to jobs formerly filled only by whites).
. Griggs, 401 U.S. at 431 , 91 S.Ct. at 853 , 28 L.Ed.2d at 163 (high school completion requirement not shown to have demonstrable relationship to successful job performance); Johnson v. Uncle Ben’s, Inc., 628 F.2d at 427; Payne v. Travenol Laboratories, 565 F.2d 895 , 899-900 (5th Cir.), cert. denied, 439 U.S. 835 , 99 S.Ct. 118 , 58 L.Ed.2d 131 (1978).
. Dothard v. Rawlinson, 433 U.S. 321, 329-32 , 97 S.Ct. 2720, 2726-28 , 53 L.Ed.2d 786, 796-797 (1977).
. Griggs, 401 U.S. at 431 , 91 S.Ct. at 853 , 28 L.Ed.2d at 163 (test not shown to have demonstrable relationship to successful job performance); Ensley Branch, NAACP v. Seibels, 616 F.2d 812 , 816-18 (5th Cir.), cert. denied, 449 U.S. 1061 , 101 S.Ct. 783 , 66 L.Ed.2d 603 (1980).
. The magistrate refused to credit the EEOC’s statistical proof of segregated departments because the paralegal who prepared the exhibits admitted that she had classified all persons whose race was unknown as white. Yet there was ample and uncontradicted testimony from a number of witnesses, including defendant’s witnesses Longnecker and Kimbrough, that until 1977 there were no blacks in security, maintenance, office, sales, accounting, bartender, front desk, and cocktail waitress positions. The bell stand was an all black department and the kitchen was predominantly black. As Richard Kimbrough stated referring to the Sheraton’s workforce at the time of trial: “[Blacks] have been hired basically in the areas that they have applied for, and most of them applied for the kitchen. And they have applied for housekeeping and they have applied for bellman, that’s where they have been mostly working.”
The magistrate concluded that the undisputed testimony about the existence of segregated departments was insufficient to make out a prima facie case of discrimination. Yet he found: “The accounting and general, front desk, sales department, beverage and the maintenance have been predominantly white, whereas the bells and kitchen departments have remained predominantly black.” He concluded that this fact was insignificant because blacks applied in disproportionately high numbers to the “black departments” and in disproportionately low numbers to the “white departments”; thus, the Sheraton’s hiring reflected the applicant flow. He also added that the
*106 EEOC “failed to present any evidence of the desirability of the predominantly white departments as opposed to the predominantly black departments.... very few blacks were even interested in applying for jobs in these predominantly white departments____ there was no proof whatsoever that any black was deterred from applying for jobs in these departments. ... no evidence was presented concerning any pay disparity between the ... departments .... ”
In effect, the magistrate chose to ignore the existence of segregated departments and of the folder system’s perpetuation of that segregation. The testimony is sufficient to establish a prima facie case of racial discrimination. Although counsel for Kimbrough conceded this point at oral argument, my brethren consider this an inadvertent and incorrect admission.
. Martin Longnecker, Sr., the hotel’s former accountant, gave the only direct testimony about the “necessity” for the folder system. Q. Mr. Longnecker, are you familiar with the folder procedure for classifying applications at the Sheraton?
A. Yes, I am.
Q. Are you aware of how those folders are kept?
A. Yes, I am aware.
Q. And do you know how long the folder system has been in existence?
A. I would say since the motel was started back in ’71 or ’72.
Q. When do you have personal knowledge of it being in existence?
A. My own personal knowledge is when I took over the job.
BY THE COURT: February of 1977?
A. February of 1977.
Q. Mr. Longnecker, with respect to the folder procedure that you testified you were familiar with a moment or two ago, is there some business reason why all applications are not lumped in a single folder?
A. Well, if they were all lumped in one folder, it would require a great deal of research to get a particular applicant, so therefore, it is departmentalized for easy referral in chronological order. The folder is taken that way, or filed that way.
John Hahn, Chief of Security, testified that people applying for more than one job were, after 1978, required to fill out multiple applications. He stated: “That was the reason it was done that way and it was a lot easier to file.”
. In Dothard , the Court held that if the employer proves that the challenged requirement is job-related, the plaintiff may then show that “other selection devices without a similar discriminatory impact” would also serve the employer’s legitimate interest. 433 U.S. at 329 , 97 S.Ct. at 2727 , 53 L.Ed.2d at 797 . Therefore, even if the Sheraton had proved that the folder system is job-related, the district court’s finding that other selection systems would have been better and would not have had discrimina *108 tory impact means that the plaintiff should have prevailed. See Zuniga v. Kleberg County Hosp., 692 F.2d 986, 992-93 (5th Cir.1982) (less discriminatory alternative).