Petition — Equal Employment Opportunity Commission v. Jersey Central Power & Light Co.

Supreme Gesrt, U. &,

FI L ED

nis A Ts

PAICHAEL RODAK, JR.,CLER

wo, 25 718% 7

Yu the Supreme Gourt of the Writed States

OctToBEeR TERM, 1975

EquaL EMPLOYMENT OpporTUNITY COMMISSION,

PETITIONER

v.

JERSEY CENTRAL Power & Liacut Co.; Loca UNIons

327, 749, 1289, 1298, 1303, 1309 anp 1314, INTERNA«-

TIONAL BROTHERHOOD OF ELECTRICAL WORKERS; OF-

FICE OF FEDERAL CONTRACT COMPLIANCE; GENERAL

‘SERVICES ADMINISTRATION ; NEW JERSEY DIVISION OF

Civ. Rieuts, DEPARTMENT OF LAW AND PUBLIC

SAFETY.

PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

ABNER W. SIBAL,

General Counsel,

JOSEPH T. EDDINS,

Associate General Counsel,

BEATRICE ROSENBERG,

CHARLES L. REISCHEL,

LUTZ ALEXANDER PRAGER,

Attorneys,

Equal Employment Opportunity Commission,

Washington, D.C. 20506.

0 ____,

TABLE OF CONTENTS

Page

Decisions below.................. EN ene Ae eee 1

ET a Te a ee OE aR 1

SL cicupescendndesaandabehednaeine 2

EEE LO LT POO ETON 3

EEE OT LLIN TTT ee OO +

i incuctebdncnccdndccabewendconnsantnasessen 8

Re OG eT ee Oe TT ee a 16

Appendix (Opinions and Judgment of the United States

Court of Appeals for the Third Circuit) --......-.----- 19

TABLE OF AUTHORITIES

Cases:

Alexander v. Gardner-Denver Corp., 415 U.S. 36_----- 8

Carter v. Gallagher, 452 F. 2d 315 (C.A. 8), certiorari

I I I i ieee 10

Erie Human Relations Commission v. Tullio, 493 F.

I 10

Franks v. Bowman Transportation Co., 495 F. 2d 398

(C.A. 5), certiorari granted, No. 74-728, March 25,

REE aS TRA ee 15

Griggs v. Duke Power Co., 401 U.S, 424__..-.-------- 11

Jones v. Lee Way Motor Freight, Inc., 431 F. 2d 245,

certiorari denied, 401 U.S. 954____......----.----- 10

Local 189, United Papermakers and Paperworkers v.

United States, 416 F. 2d 980 (C.A. 5), certiorari

Ss as 12-13

Meadows v. Ford Motor Co., 510 F. 2d 939 (C.A. 6),

petition for certiorari filed, No. 74-1349, April 25,

ESR ER ne NR NN IOS eee ee 16

Quarles v. Philip Morris, Inc., 279 F. Supp. 505 (E.D.

pep, ER ee Te eS ae! a ee ee 13

Rogers v. International Paper Co., 510 F. 2d 1340,

petition for certiorari filed, No. 74-1446, May 17,

Rowe v. General Motors Corp., 457 F. 2d 348 (C.A. 5)-- 8

United States v. Chesapeake & Ohio Ry. Co., 471 F. 2d

582 (C.A. 4), certiorari denied, 411 U.S. 939... .-- 10, 13

(I)

589-728-—75——-1

I

Cases—Continued Page

United States v. Hayes International Corp., 456 F. 2d

Se On, UtttNidwdenemimhdibateCeinshenasendé 10

United States v. Ironworkers Local 86, 443 F.2d 544

(C.A. 9), certiorari denied, 404 U.S. 984_________- 10

Waters v. Wisconsin Steel Works, 502 F. 2d 1309 (C.A.

7), petition ior certiorari filed, No. 74-1064, Feb. 24,

I a ie re ee aoe ty RO Ee Se RCE EN 15

Watkins v. United Steel Workers of America, Local No.

2369, —F.2d—(C.A. 5, No. 74-2604, July 16, 1975) - 15

Statutes:

Title VII, Civil Rights Act of 1964, 42 U.S.C.

2000e et seg. (1970, Supp. II) (78 Stat. 253, as

qunemdes Sy G6 Diet. BGG). .. ccccccccccncceccca passim

§ 703(a), 42 U.S.C. 2000e-2(a)._..__.-.___---_- 2-3

§ 703(c), 42 U.S.C. 2000e-2(c)_-.....---_._-__-- 3-4

§ 703(h), 42 U.S.C. 2000e-2(h)_.___-_______-- passim

Other Authorities:

110 Cone. Rec. 7207 (1964) (Senator Clark)... ____- 11

110 Cone. Rec. 7212-15 (1964) (Senators Clark and

ES a ea ES Si eee Re aE, Ses arin 11

110 Cone. Rec. 7216-17 (1964) (Senator Clark)-_-___ 11

110 Cona. Rec. 12818-19 (1964) (Senator Dirksen) - - - 12

110 Cone. Rec. 12723 (1964) (Senator Humphrey) -- - - 12

110 Conc. Rec. 2727-28 (1964) (Congressman Dowdy) - 12

Cooper and Sobol, Seniority & Testing Under Fair

Employment Laws: A General Approach to Objective

Criteria of Hiring and Promotion, 82 Harv. L. R.

IEEE EER Iy oe ELITE Sree nea 13

43 Guo. Wasn. L. R. 047 (1075) .................. 12

H.R. Rep. No. 92-238, 92d Cong., 1st Sess. (June 2,

i eee ree eae ne 14

Note, Last Hired, First Fired Layoffs and Title VII,

Tins ns, I er eeae 15

“Section-by-Section Analysis of H.R. 1746,” 118

e 8 i a 14

SenaTE Rep. No. 92-415, 92d Cong., Ist Sess. (Oct. 28,

SERED Aa ee RMR AA ee 13-14

Shiskin, Memorandum for the Secretary [of Labor),

NN” EI RE cee airs 9

U.S. Dept. of Commerce, GENERAL PoPpULATION

Sratistics (1970)—NeEw Jersey, # PC(1)B32N.J.- 9

Gu the Supreme Court of the Wnited States

OcroBER TERM, 1975

No. —

EquaL EMPLOYMENT OPPORTUNITY COMMISSION,

PETITIONER

Vv.

JERSEY CENTRAL Power & Licnt Co.; Loca UNIons

327, 749, 1289, 1298, 1303, 1309 anp 1314, INTERNA-

TIONAL BROTHERHOOD OF ELECTRICAL WORKERS; OF-

FICE OF FEDERAL CONTRACT COMPLIANCE; GENERAL

SERVICES ADMINISTRATION ; NEW JERSEY DIVISION OF

Civit Ricguts, DEPARTMENT OF Law AND PUBLIC

SAFETY.

PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

DECISIONS BELOW

The opinions of the panel of the Court of Appeals

are reported at 508 F. 2d 687. (App. 19, infra). The

decision of the district court is unreported.

JURISDICTION

The judgment of the court of appeals was entered

January 30, 1975, and a petition for rehearing was

denied March 4, 1975. On May 27, 1975, Mr. Justice

(1)

2

Brennan by order extended the time for filing a peti-

tion foi a writ of certiorari to and including August 1,

1975. The jurisdiction of this Court is invoked under

28 U.S.C. 1254(1).

QUESTION PRESENTED

Whether layoffs made pursuant to a company-wide

seniority system which eliminate a vastly greater pro-

portion of minority group employees than of other

employees violate Title VII, Civil Rights Act of 1964,

42 U.S.C. 2000e et seq., when the disproportionate

impact results directly from the employer’s post-

1965 unlawfully discriminatory hiring practices which

prevented minority group employees from accruing

sufficient seniority to withstand the layoffs.

STATUTES INVOLVED

This action involves the interpretation of Title VII,

Civil Rights Act of 1964, 42 U.S.C. 2000e et seq. (1970,

Supp. IT) (78 Stat. 253, as amended by 86 Stat. 103).

Section 703(a) of Title VII [42 U.S.C. 2000e-2(a) ]

provides:

It shall be an unlawful employment practice

for an employer—

(1) to fail or refuse to hire or to discharge

any individual, or otherwise to discriminate

against any individual with respect to his com-

pensation, terms, conditions, or privileges of

employment, because of such individual’s race,

color, religion, sex, or national origin; or

(2) to limit, segregate, or classify his em-

ployees or applicants for employment in any

way which would deprive or tend to deprive

any individual of employment opportunities or

3

otherwise adversely affect his status as an em-

ployee, because of such individual’s race, color,

religion, sex, or national origin.

Section 703(c) of Title VIT [42 U.S.C. 2000e-2(c) ]

provides:

It shall be an unlawful employment practice

for a labor organization—

(1) to exclude or to expel from its member-

ship, or otherwise to discriminate against, any

individual because of his race. color, religion,

sex, or national origin;

(2) to limit, segregate, or classify its mem-

bership, or applicants for membership or to

classify or fail or refuse to refer for employ-

ment any individual, in any way which would

deprive or tend to deprive any individual of

employment opportunities, or would limit such

employment opportunities or otherwise ad-

versely affect his status as an employee or as

an applicant for employment, because of such

individual’s race, color, religion, sex, or na-

tional origin; or

(3) to cause or attempt to cause an employer

to discriminate against an individual in vio-

lation of this section.

Section 703(h) of Title VIT [42 U.S.C. 2000e-2

(h)] provides in pertinent part:

Notwithstanding any other provision of this

title, it shall not be an unlawful employment

practice for an employer to apply different

standards of compensation, or different terms,

conditions, or privileges of employment pursu-

ant to a bona fide seniority or merit system, or

a system which measures earnings by quantity

4

or quality of production or to employees who

work in different locations, provided that such

differences are not the result of an intention

to discriminate because of race, color, religion,

sex, or national origin * * *.

STATEMENT OF THE CASE

Jersey Central Power and Light Co. is a public

utility which generates and distributes electrical

power to approximately 43% of New Jersey. At the

time the complaint in this case was filed, it employed

3844 workers, three-quarters of whom (2877) were

covered by a collective bargaining agreement between

the company and seven locals of the International

srotherhood of Electrical Workers (IBEW).

On July 22, 1974, Jersey Central filed a complaint

for declaratory judgment, naming the IBEW locals,

the Equal Employment Opportunity Commission, the

General Services Administration, the Office of Fed-

eral Contract Compliance, and the New Jersey Divi-

sion of Civil Rights as defendants. The complaint

alleged that economic conditions required Jersey Cen-

tral to cut labor costs. Since the company proposed to

accomplish the necessary cuts by laying off employees,

it asked the district court to declare and determine

its possibly inconsistent obligations under its collective

bargaining agreement, on the one hand, and Title VII

of the Civil Rights Act of 1964, Executive Order

11246, and a conciliation agreement signed by the com-

pany, the unions, and the EEOC in December 1973,

on the other.

Under the collective bargaining agreement, layoffs

of employees in the bargaining unit ‘‘shall be made in

5

order of seniority’’ and ‘‘[n]o senior employee shall

be laid off as long as any work which he can reason-

ably be expected to do is being performed by an em-

ployee junior in point of service.” £3.2(a).) Bar-

gaining unit employees with ten or more years of com-

pany service are wholly exempt from layoff. 13.

2(¢).)

During the proceedings below the company provided

information which indicated that layoffs based on

seniority would eliminate a substantial number of

blacks and other minority group members, especially

those hired as part of the company’s affirmative action

programs.’ Subsequently, at oral argument before the

court of appeals, counsel for Jersey Central disclosed

the effects of the actual layoffs.* As of November 22,

* According to statistics provided by the company as an at-

tachment to the affidavit of a company officer, minority-group

employment constituted approximately 1% of Jersey Central's

workforce between 1966 and 1968. Thereafter the number of

minority group employees increased as follows:

Black SSA Other

Dec. 31, 1969_..__.. 81 (2.2%) 12 (0.3%) 4 (0.03%)

Dec. 31, 1970______- 87 (2.3) 13 (0. 3) 4 (0. 03)

Jan. 22, 1972...._.. 101 (2. 6) 16 (0. 4) 4 (0. 03)

Dec. 31, 1972__...-. 130 (3. 6) 23 (0. 6) 4 (0. 03)

Dee. 31, 1973. ...... 181 (4.8) 29 (0.8) 5 (0. 03)

July 27, 1974._..... 211 (5.5) 37 (1.0) 9 (0. 03)

Derived from Appendix D to affidavit of James R. Leva, dated

September 5, 1974. (SSA indicates Spanish-speaking Amer-

icans. )

* The company’s statistics did not distinguish between bar-

gaining unit employees and other employees.

6

1974, the company had laid off 292 employees, 83 of

whom (28.4%) were blacks or members of other mi-

nority groups.’ The layoffs therefore lowered the num-

ber of minority group workers employed by Jersey

Central by almost one-third (32.2%) but reduced non-

minority employment by only 5.8%.* Stated another

way, minority group employment as a percentage of

total employment fell from 6.7% before the layoffs to

4.9% after the layoffs;? non-minority group employ-

ment rose correspondingly, from 93.3% to 95.1%. All

of the bargaining unit employees who were laid off—

both minority group and others—had apparently been

hired after 1971. (See Appendix A to Leva affidavit,

dated September 5, 1974).

Based on somewhat similar (but preliminary) data

the company moved for summary judgment in the

district court. Over the objections of the EEOC that

summary judgment was premature in the absence of

discovery and prior to the joinder of issue,* the dis-

trict court issued partial summary judgment. The

court held that, as a matter of contract law, the senior-

ity provisions of the collective bargaining agreement

could not be used in a manner»which would frustrate

*/.e., 83 of the 258 minority group employees employed im-

mediately before the layoffs. (Calculated from figures appear-

ing in Appendix D to Leva affidavit and in 508 F. 2d at 698

n. 29, App. 35.)

*lau b09 of the 3586 non-minority group employees employed

immediately before the layoffs. (Calculated from figures ap-

pearing in Appendix D to Leva affidavit and in “508 F. 2d at

HIS n. 29; App. at 35.

®* See 508 F. 2d at 698 n, 29; App. at 35.

* The unions had filed their joint answer at the time of the

company’s motion; the other defendants had not.

7

the affirmative action provisions of the later-executed

tripartite conciliation agreement. The court found

that ‘‘to the extent that application of the seniority

clause would substantially reduce the relative per-

centages of those whose hiring is the purpose of the

~.EEOC agreement,” the seniority clause in the collec-

tive bargaining agreement frustrated the conciliation

agreement. The court therefore ordered the parties

to devise a system for laying off employees which

would insure that minority empioyees and female

employees would constitute approximately the same

proportion of the total workforce after the layoffs

as they did before. The district judge expressly de-

clined to rule whethet layoffs conducted solely by

seniority would violate Title VIL.

On an interlocutory appeal by the unions, the court

of appeals reversed. The panel unanimously held that

the conciliation agreement was directed at new hires

and did not cover layoffs. The two agreements, con-

sequently, were not in conflict “either by their express

terms or by implication.” (App. 48-49; 508 F. 2d at

704). We do not here question that holding.

Although the EEOC had argued before the court of

appeals that the question of a possible violation of Title

VIL was not ripe for decision and could not be re-

solved without development of a fuller record, a ma-

jority of the panel (Judges Garth and Hunter)

undertook to consider the issue. The majority held

that, as a consequence of § 703(h) of Title VII, 42

U.S.C. 2000e-2(h), layoffs conducted in accordance

with a facially neutral company-wide seniority system

which “was neither designed nor intended to disguise

5S9-T728—75 —-2

8

discriminatory practices’’ could not violate Title VII.

(App. 55; 508 F. 2d at 706-707 n. 54). The majority

found irrelevant all evidence of past hiring discrimi-

nation, even if the seniority system carried forward

the effects of discrimination occurring after the effec-

tive date of Title VIT. The majority specifically stated

that “proofs of this nature are without probative

value.” (App. 54; 508 F. 2d at 706).

ARGUMENT

The issue presented here by virtue of the panel

majority’s analysis of Title VII—the extent to which

a company-wide seniority system justifies elimination

of minority-group employees who lack seniority be-

cause of their employer’s post-Title VII unlawful

hiring practices—is the most pressing problem in em-

ployment discrimination law, given current economic

conditions. The decision below allows employers who

unlawfully refused to hire minority group members

after the enactment of Title VIT to ‘‘treat the recently

hired and governmentally twice emancipated Blacks

as persons who once again [have] to go to the foot of

the line.” Rowe v. General Motors Corp. 457 F. 2d

348, 358 (C.A. 5). Since the decision below thus per-

mits the eradication of many of the gains made by

minorities during the first decade of Title VII, we

urge that it be reviewed by this Court. This Court has

itself noted, that in the Civil Rights Act of 1964,

“Congress indicated that it considered the policy

against discrimination to be of the ‘highest priority.’ ”

Alexander vy. Gardner-Denver Co., 415 U.S. 36, 47.

9

Review is particularly appropriate since the panel

majority, sua sponte, reached for the Title VII issue

after the district court had properly declined to do so

and after the E.E.O.C. had suggested that the action,

insofar as it involved Title VII, be remanded for full

development of the relevant facts.’ The panel decision

therefore constitutes a ruling that no matter how

flagrant the employer’s violation of Titie VII, iw

matter how aware the unions were of that unlawful

discrimination when they negotiated their collective

bargaining agreement, no matter how long the newly

hired blacks and women may have been in the labor

market, but excluded from employment, company-wide

seniority may govern layoffs unless negotiated with a

specific intent to discriminate.

Even on the present record, the facts of this case

demonstrate the eroding effect the decision below will

have on the progress made under Title VII—prior to

the current recession—in creating job opportunities

for members of minority groups. The evidence indi-

cates that as late as January 1, 1970—more than five

vears after enactment of Title VII—only 2.3% of the

company’s employees were members of minority

groups, a disproportionately low number which, un-

der prevailing case law, indicates a prima facie case of

"If the Court should deem further development of the facts

necessary for consideration of the issue, it would be appropriate

for the Court summarily to vacate so much of the judgment

below as is based on the panel majority’s discussion of Title VII

(in parts III B. and IV of the majority's opinion), so as to

permit the development of a full record in the district court.

10

hiring discrimination.’ In the four years after 1970,

and particularly after the filing of the administrative

charge which led to the Commission’s finding of rea-

sonable cause and to negotiation of the conciliation

agreement, the number of minority-group individuals

employed by Jersey Centrai tripled; even then, they

constituted less than 7% of the workforce. The 1974

layoffs eliminated all but about twelve of the minor-

itv-group employees hired in 1973 and 1974. Like

their counterparts throughout this country’s labor

force—where black males, for example, have lost jobs

at a rate double that of their percentage in the labor

force ‘°—Jersey Central’s minority group employees

bore the brunt of the layoffs, constituting 28.49% of

those who lost their jobs. The majority ruling there-

fore demands review.

SKvie IIuman Relations Commission v. Tullio, 495 F. 2d 371,

373-74 (CLA. 3); United States v. Chesapeake d& Ohio Ry. Co.,

471 F. 2d 582, 586 (C.A. 4), certiorari denied, 411 U.S. 939;

United States v. Hayes International Corp., 456 F. 2d 112, 120

(C.A. 5); Carter v. Gallagher, 452 F. 2d 315, 323 (C.A. 8),

certiorari denied, 406 U.S. 950; United States v. Tronworks

Local 86, 443 FF. 2d 544. 550 (CLA. 9), certiorari denied, 404

U.S. 984: Jones v. Loe Way Motor Freight, Tne., 451 F. 2d 245,

Y47 (CLA. 10), certiorar: denied, 401 U.S, 954.

Jersey Central's headquarters are located in Morristown N.JJ.,

which has a minority population of approximately 23.40. Four

facilities are located in or within five miles of Asbury Park,

with a minority population of 45.600. The company also has

facilities, among others, in Lakewood (minority population

20.1), Red Bank (25.8%), and within eight miles of New

Brunswick (24.1). See U.S. Dept. of Commerce, Generan Por-

ULATION Sravistics (1970)—New Jersey, #PC(1) B32, NwS.,

Table 16,

*Shiskin [Commissioner, Bureau of Labor Statistics], 1em-

ovandum for the Secretary [of Labor], Tatle 2 (April 15,

1975).

11

We contend that Jersey Central’s layoff system

must be analyzed in the same manner as all other

employment practices in order to determine whether

it violates Title VII. In such an analysis, the conse-

quences, not the intent, of an employer's actions de-

termine whether a particular employment practice is

unlawful. See Griggs v. Duke Power Co., 401 U.S.

424, 431, where this Court said that Title VII pro-

scribes “not only overt discrimination but also prac-

tices that are fair in form but discriminatory in

operation.”

We believe that Congress did not intend to permit

the unlawful refusal to hire blacks and other minorities

after the effective date of Title Vil to serve as the

basis for depriving blacks of the employment oppor-

tunities they had finally obtained when such unlawful

conduct ceased. The court of appeals reached a con-

trary conclusion. Its opinion rests primarily on what it

deems to be the intent of Congress as expressed in §703

(h) of Title VII and the 1964 Senate ‘‘dehate’’ which

discussed the effect of the proposed levislation on

seniority rights. We believe that the majority mis-

93:10

applies the *‘debate”."” In 1964, the focus was on the

” The legislative history which the court of appeals uses as

the anchor for its analysis is unusval. It is not a committee

report; neither is it floor debate. Rather it consists of three

memoranda—one of which was prepared by the Department of

Justice—which were introduced into the Concressionat Recorp

without debate or elaboration by Senators Clark and Case.

See 110 Cone, Ree. 7207; 7212-15; 7216-17 (1964). All

three were introduced into the Recorp several weeks before

§ 703(h) was submitted as part of a compromise substitute for

the original bill. There was no discussion of § 703(h)_ itself,

12

effect of the proposed Title VII on preexisting senior-

ity rights, i.e., rights which had accrued when, under

then existing concepts, discrimination in employment

was not unlawful. The remarks did not address them-

selves to the situation which we believe this case may

present where, from the evidence, it appears that for

years after the passage of the 1964 act, an employer

discriminated against minorities unlawfully, so that

a seniority system, even though company-wide, neces-

sarily had the effect of perpetuating unlawful post-

1965 discrimination. It is our position that, whatever

may be the situation with respect to pre-1965 discrimi-

nation, a seniority system which perpetuates post-1965

unlawful discrimination cannot, by its very nature, be

deemed bona side. There is nothing in the 1964 debate

which would indicate that Congress, having outlawed

discrimination in employment, intended to provide that

those groups who had been deprived of the opportunity

for employment after the passage of Title VII, should

continue indefinitely to bear the brunt of that unlawful

discrimination. See 43 Gro. WasH. L. R. 947 (1975).

The panel majority’s analysis is contrary to the

weight of authority, which has consistently construed

§ 703(h) narrowly. Beginning with the leading cases

of Local 189, United Papermakers and Paperworkers

except for a paraphrase by Senator Dirksen, see /d., at 12818-19,

and a statement by Senator Humphrey that § 703(h) “does not

narrow application of the Title, but merely clarifies its present

intent and effect.” /d. at 12723. The majority opinion does not

mention that the House had defeated an amendment which

would have made Title VII inapplicable to employment prac-

tices made pursuant to “a seniority system.” See 110 Cone. Rec.

2727-28 (1964).

13

v. United States, 416 F, 2d 980 (C.A. 5), certiorari

denied, 397 U.S. 919, and Quarles v. Philip Morris,

Inc., 279 F. Supp. 505 (E.D. Va.), courts have held

that seniority systems which incorporate past dis-

crimination and are later used to make employment

decisions which have a discriminatory impact cannot

be bona fide. As Judge Butzner noted in Quarles:

The purpose of the act is to eliminate racial

discrimination. Obviously one characteristic of

a bona fide seniority system must be lack of dis-

crimination.

... [A] departmental seniority system that

has its genesis in racial discrimination is not a

bona fide seniority system.

Id. at 517. And see Rogers vy. International Paper Co.,

210 I. 2d 1340, 1354 (C.A. 8), petition for certiorari

filed, No. 74-1446, May 17, 1975." Tn enacting the 1972

amendments to Title VII, Congress accepted the judi-

ciary’s gloss on Title VII and § 703(h), specifically

citing with approval Local 189 and Quarles and the

leading commentators on seniority systems and Title

VIL.” Senate Rep. Ne. $2-415, 92d Cong., 1st Sess.

“In Rogers v. International Paper Co., 510 F. 2d 1340, 1354

(C.A. 8), the court stated:

“Under Title VII, seniority and promotion policies have been

frequently scrutinized by courts, despite an exemption for ‘bona

fide seniority or merit system[s],’ * * * for they can be subtle

forms of discrimination which perpetuate discriminatory patterns

of the past.”

See also, United States v. Chesapeake & Ohio Ry. Co., 471

F, 2d 582, 587-88 (C.A. 4), certiorari denied, 411 U.S. 939.

* Cooper and Sobol, Seniority and Testing under Fair Em-

ployment Laws: A General Approach to Objective Criteria of

Hiring and Promotion, 82 Harv. L. Rey. 1598 (1969).

14

(Oct. 28, 1971) at 5; H.R. Rep. No. 92-238, 92d Cong.,

Ist Sess. (June 2, 1971) at 8. See, similarly, ‘‘Section-

by-Section Analysis of H.R. 1746 (Equal Employment

Opportunity Act of 1972),” 118 Cona. Rec. 7166

(1972).”

In its opinion the panel majority disregards the

1972 legislative history entirely. It distinguishes the

case law on which the 1972 legislative history is

founded on the ground that those cases involved de-

partmental seniority systems. The philosophy under-

lving those decisions cannot be so lightly disregarded.

The decisions which Congress accepted clearly recog-

nize that a seniority system, founded on discrimina-

tion, cannot be bona fide. The system here, even though

company-wide, is founded on unlawful post-1965 dis-

crimination and cannot be bona fide.

This case therefore does not involve the more diffi-

cult matters raised by the 1964 Senate debate—the

impact of Title VII on seniority which accrued prior

to 1965—since the discrimination which the seniority

system here incorporates occurred in the years after

Title VII took effect and .o employee hired before

1965 is affected. These factors not only distinguish this

‘ase from the statements made in 1964 but also from

the only other appellate decision interpreting Title

VIT in the context of layoffs which eliminate a vastly

The joint “Section-by-Section Analysis” states:

“In any area where the new law does not address itself, or

in any areas where a specific contrary intent is not indicated,

it was assumed that the present case law as developed by tlic

courts would continue to govern the applicability and construc-

tion of Title VII.”

118 Cone. Ree. 7166 (1972).

4 15

disproportionate number of minority employees, Wat-

kins v. United Steel Workers of America, Local No.

2369, F. 2d (C.A. 5, No. 74-2604, July 16,

1975). Watkins involved layoffs of all employees hav-

ing seniority dates after 1951, when the black em-

ployees who were laid off would have been seven

vears old or younger. The court emphasized that the

employer had not discriminated since the effective

date of Title VII. The court therefore did not consider

the problem of post-Act discrimination involved in the

present case. [ts holding, therefore, has no bearing on

the issue presented here."

'’ Two other court of appeals decisions are related to the

issue presented here. Neither, however, is directly on point and

neither discusses the distinction between pre-1965 and_ post-

1965 seniority rights or between pre- and post-Act discrimina-

tion. In Waters ve Wiscousin Nteel Works, 502 F. 2d 1309 (CLA,

7), petition for certiorari filed, No. 74-1064, Feb. 24, 1975, the

court, reviewing a post-trial decision in a non-class action—

where the hiring discrimination had occurred prior to the effee-

tive date of Title Vif—held only that “|oJn balanee, we think

Wisconsin Steel's seniority system is racially neutral, and does

not perpetuate the discrimination of the past.” 502 F. 2d at

Inve: emphasis supplied. In Franks v. Bowman Transporta-

tion Co, AM F. 2d 39S (CLA. 5), certiorari granted, No. 74-

728, March 25, 1975, the court in reviewing a decision in a

case not involving layotfs, held that § 703(h) is a limitation

on the relief which a court can give if it finds a violation of

Tithe VII. Neither the trial court nor the court of appeals

made any determination as to whether the system involved there

was bona fide. The court of appeals merely held that “con-

structive” seniority could not be created by a court in order

to slot an applicant who was discriminatorily denied employ-

ment Into a seniority system assumed to be bona fide. While

we do not believe Franks to be relevant to the issue presented

here, we, with the Solicitor Geneval, have filed a brief in this

589-—T28— 75 --—3

16

Not only does the panel majority opinion fail to dis-

tinguish between seniority which accrued prior to 1965

and seniority which aecrued thereafter, or between

discrimination which occurred prior to 1965, and un-

lawful post-1965 discrimination, it may be read to hold

irrelevant all evidence that some or all of the minor-

ity group employees laid off may themselves have

heen the victims of Jersey Central’s post-1965 hiring

discrimination. By sanctioning the use of eompany

seniority for layoffs under all circumstances—cxcept

where it is being willfully used to disguise diserimina-

tion—the majority appears to authorize the layoff of

persons who applied to the company but were mnfaw-

fully vejected, or who were in the labor market and

would have applied but for Jersey Central’s reputa-

tion as a discriminatory employer. Thus, even

minority group employees who themselves were pre-

vented from acquiring seniority by the company’s un-

lawful post-1965 hiring practices would be victimized

a second time by the seniority system. See Note, Last

Hired, First Fired Layoffs and Title VIT, 88 Harv. L.

Rev. 1544 (1975).

CONCLUSION

For the reasons stated, we urge the granting of the

petition to review so much of the judgment of the

court of appeals as holds that the use of a company-

wide seniority system as a method for determining

Court to argue that we believe it to have been wrongly decided,

Nee also Meadows vy. Ford Motor Co. S10 ¥F, 2d 989 (CLA. 6).

(CLA. 6), petition for certioran filed. No, 74-1549, April 25,

O75,

17

layoffs can never constitute a violation of Title VII

unless willfully used to disguise discrimination.

Respectfully submitted.

ABNER W. Srpat,

General Counsel,

JoserH T. Eppins,

Associate General Counsel,

BEATRICE ROSENBERG,

Cuares L. ReIscHEL,

Lutz ALEXANDER PRAGER,

Attorneys,

Equal Employment Opportunity Commission,

Washington, D.C. 20506.

Aveust, 1975.

I authorize the filing of this petition.

Rosert H. Bork,

Solicitor General.

APPENDIX

APPENDIX

OPINIONS AND JUDGMENT OF THE UNITep States Court

OF APPEALS FoR THE THirp Circuit

Before Vax Dusex, Hunter and Garru, Circuit

Judges

GARTH, Cirenit Judge: This case presents to us,

in an unusual procedural context, the difficult question

of determining which of two alledgedly conflicting

contracts is to dictate the plaintiff employer's course

of conduct. We must resolve whether in reducing a

company’s werk force an employer is obligated to

adhere to collective bargaining agreement provisions

requiring layoffs in reverse order of seniority, or

whether the employer is obligated to implement the

provisions of a conciliation agreement made with

the Equal Empleyment Opportunity Commission

(EEOC) to retain among its employees a larger pro-

portion of minority group and female workers. It is

agreed among the parties that layoffs in reverse order

of seniority will have a disproportionate effect upon

minority group and female workers, as they are the

inost’ reeently hired employees. Despite this conse-

quence, we reverse the judgment of the district court

and held that the provisions of the collective bargain-

ing agreement must govern in this procedural context.

L.A. Procedural History

On July 18, 1974, Jersey Central Power & Light

Company (“Company’’), the employer, brought the

(21)

22

instant action pursuant to 28 U.S.C. $$ 2201, 2202 ° in

the District Court for the District of New Jersey. The

Company sought a judgment declaring its rights and

obligations under: (1) a collective bargaining agree-

ment between the Company and the Unions,* and (2)

a conciliation agreement among the EEOC, the Com-

pany and the Unions.’ Named as defendants in the

action for declaratory judgment were the Unions, the

EEOC, the United States Office of Federal Contract

Compliance (OFCC), the United States General Serv-

ices Administration (GSA), and the New Jersey Di-

vision of Civil Rights.* The Company presented itself

in this litigation as a “neutral’’ party, taking no posi-

128 U.S.C. § 2201 provides:

“In a case of actual controversy within its jurisdiction, except

with respect to Federal taxes, any court of the United States,

upon the filing of an appropriate pleading, may declare the

rights and other legal relations of any interested party seeking

such declaration, whether or not further relief is or could be

sought. Any such declaration shall have the force and effect of

a final judgment or decree and shall be reviewable as such.”

28 U.S.C. § 2202 provides:

“Further necessary or proper relief based on a declaratory

judgment or decree may be granted, after reasonable notice and

hearing, against any adverse party whose rights have been de-

termined by such judgment.”

* The Unions are Locals 527, 749. 1289. 1298, 1303, 1509 and

1314 of the International Brotherhood of Electrical Workers.

‘The Company also sought a declaratory judgment with: re-

spect to its obligations under Executive Order 11,246, 5 C.F.

169 (1974), 42 ULS.C. § 20000, and Title VIL of the Civil Rights

Act of 1964, 42 U.S.C. § 2000e ef seg. The district court, how-

ever, did not base its order on either the executive order or the

statute.

'The New Jersey Division of Civil Rights failed to file a re-

sponse after it had been served with the complaint. It has also

failed to participate in any stage of this litigation.

GSA and OFCC were ineluded as defendants in light of the

Company's status as a federal contractor. As a federal con-

23

tion as to which of the two contracts must govern the

manner by which a substantial cutback in employment

would be effeetuated.” In this posture, the Company

sought guidance from the district court, asserting that

economic circumstances required it to lay off sub-

stantial numbers of employees. The Company alleged

that it could not determine the specific individuals to

be affected until the court declared which of the two

agreements was to govern the layoff procedure.

Contending that it faced multiple suits for back

pay, irreparable injury to itself and to the public, and

severe financial inroads on its resources, on August 23,

1974, the Company moved fe an order requiring the

defendants te show cause why summary judgment

should net be granted *‘declaring the respective rights

of the parties and whether plaintiff [the Company |

violated its collective bargaining agreement with [the

Union] defendants * * * and the Conciliation Agrec-

tractor the Company is subject to the equal employment oppor-

tunity requirements of Executive Order 11,246, which are

enforced by GSA and OFCC. In denying GSA’s and OFCC's

motion to dismiss as to them and in promulgating its order of

September 24, 1974, the district court specifically refused to

interpret the effect of Executive Order 11,216. The court did

indicate that its order “in no way restricts these defendants

[GSA and OFCC] in pursuit of their obligations pursuant to

Exeentive Order 11246".

* Although the Company characterizes its position as that of

a “neutral” party, in substance the Company has taken ad-

verse (albeit inconsistent) positions to those advanced by the

Unions and the FEOC. To cach defendant, the Company has

implicitly asserted that in respect to layoffs it is obligated to ad-

here to its contract with the other. While inconsistent, the Con-

pany’s position sets forth the requisite adverse legal interests to

present 2 justiciable case or controversy. See IL. infra.

589-728-—75 4

24

ment entered into on December 3, 1973 by the lay-

off * * * of [designated] employees. * * *”°

On September 5, 1974, the return date of the order

to show cause, defendants GSA and OFCC moved to

dismiss the complaint pursuant to Fed. R. Civ. P. 12

for failure of the complaint to state a claim upon

which relief could be granted and for lack of subject

matter jurisdiction in the federal district court. De-

fendant EEOC, in turn, did not contest the district

eourt’s jurisdiction but instead opposed the Com-

pany’s motion on the grounds that summary judgment

could not be granted because material facts were in

dispute.’ After the submission of briefs and affidavits,

the district court held a hearing on motions of the

Company and GSA and OFCC, at the conclusion of

*The Company moved for an order to show cause after the

Unions had filed a joint answer (filed July 25, 1974) but prior

to the filing of answers by the Government defendants GSA

and OFCC (filed September 25, 1974) and EEOC (filed Octo-

ber 3, 197+).

* EEOC listed the following as necessary material facts:

“e bod ae oh as

“D>. This office does not presently have information as to

whether any of the employees who will be laid off or who have

already been Jaid off were the actual victims of past discrimi-

natory practices of plaintiff! which the Conciliation Agreement

seeks to remedy.

xe a * % x

“7. It is impossible to determine from the report submitted

by plaintiff pursuant to its obligations under the Conciliation

Agreement, whether plaintiff has fulfilled the requirements of

the Affirmative Action Program executed under the provisions

of the Conciliation Agreement. The report submitted is inace-

quate and meaningless in making any relevant determinations as

to plaintiff's compliance with the Conciliation Agreement.

“S. The development of the above facts, as well as the infor-

mation regarding any alternative which plaintiff may have

available to allow it to absorb employees protected by Tithe VIL,

25

which the court rendered an oral opinion.” The district

court denied the motion to dismiss brought by GSA

and OFCC® and granted partial summary judgment,

requiring the Company to lay off employees in a man-

ner inconsistent with the collective bargaining agree-

ment to avoid a reduction in the percentage of females

and minority group members in the work force. As

such, the district court rejected the Unions’ conten-

tions that the collective bargaining provisions (layoff

by reverse order of seniority) were to control without

modification.

In particular, the district court’s order required

that: (1) the seniority provisions of the collective bar-

gaining agreement could not be construed in such a

manner as to frustrate the purpose of the conciliation

agreement (to wit: that at the end of five years fe-

males and minority group members would constitute a

proportion of the Company’s work force which would

within the framework of its present economic conditions, are

essential material facts not presently before this Court in the

pleadings, affidavits, and other papers on file in this matter.”

a * a ok *

“While we recognize that disputes may indeed exist as to

these particular facts, when and if developed, we cannot say that

these facts were material to the issues before the district court

on the motion for summary judgment. The issues before the

(listriet court were those of contract interpretation and we fail

to discern how these facts, or the lack of them as asserted by

EEOC, have a bearing upon those issues. As discussed in Part

IV ‘nfra, these facts cannot be deemed material so as to pre-

clude summary judgment.”

‘The oral opinion is currently reported at 8 FEP Cases 690,

* As noted, in its opinion the district court specifically refused

io consider issues involving Executive Order 11.246 and Title

VII vielations. Nee n. 4, supra, Compare Western Additions

Community Organ. Vv. NLRB. 158 US. App. D.C. 158, 4585 F.

2d 917 (1973), cert. granted, 415 U.S. 913, 94 S. Ct. 1407, 39

L. Ed. 2d 446 (1974).

26

approximate the proportion of those groups in the

relevant labor market) ; '" (2) the provisions of the con-

ciliation agreement were to prevail over the provisions

of the collective bargaining agreement to the extent

that the two agreements were in conflict; and (3) lay-

offs were to be accomplished in such a manner so that

upon completion, the minority group and female

worker ratios would be the same as those existing as

of July 27, 1974 (approximately one month prior to

the commencement of layoffs).

The district court granted leave to file an interloc-

utory appeal pursuant to 28 U.S.C. § 1292(b). Pur-

suant thereto the defendant Unions applied for leave

to appeal and a panel of this Court granted such

leave “ on October 9, 1974, at the same time staying

the district court’s order and expediting appeal.”

Prior to the hearing on November 15, 1974, defendant-

"We note that the conciliation agreement does not define the

term “relevant labor market.” The EEOC used New Jersey

statewide percentages of females and minority group members

in finding reasonable cause to believe the Company diserimi-

nated against these groups. Although the Unions contest a state-

wide application for the term “relevant labor market”, we need

not, and do not, decide the propriety of such an inclusive defi-

nition in view of our disposition of the issues currently before

tis.

"New Jersey State AFL-CIO filed a brief in this matter

hy consent of the parties.

' The district court provided that it would stay its order

pending application to this Court for a stay pending appeal

only on the condition that the party seeking the stay indemnify

and exonerate the Company “of and from any and all claims

for reinstatment and back-pay made by any employee laid off

during the effectiveness of the stay who is found to have been

improperly laid off at the final determination of the appeal.”

The district court did not enter such a stay absent compliance

by the Unions with the conditions announced by the district

27

appellee EEFOC moved to vacate the October 9, 1974

stay. That motion was denied.”

I.B. Vacts”

The Company is a large public utility operating m

New Jersey and engaged in the generation and dis-

tribution of electrical power throughout approxi-

mately half of that State. As of June 29, 1974, the

Company employed 3,859 employees, of whom 2,877

were in the bargaining units represented by the

Unions involved in the instant proceeding.

On January 28, 1972, a charge had been filed with

the EEOC alleging that the Company and the Unions

unlawfully discriminated against women and *‘minor-

ity group persons,”’ * in violation of Title VIT of the

Civil Rights Act of 1964. The EEOC investigated the

charge and found" reasonable cause to believe that

the Company discriminated against minority group

persons and females with respect to hiring and job

court. Consequently, from September 5, 1974 to October 9, 1974,

the Company laid off employees pursuant to the district eourt

directives,

* The order denying EEOC's motion to vacate was filed on

November 19, 1974.

The facts, indicated in the text. appear in the complaint

and in the various afiidavits filed and are undisputed.

‘In the charge originally filed with the EEOC the term

“minority group persons” included Blacks, Jews and Spanish-

surnamed Americans. However, in the arguments before this

Court and in the data regarding the racial and ethnic break-

down of the Company's employees, the term “minority group

persons” has been used (and as we use that term in’ this

Opinion) primarily to describe Blacks and Spanish-surnamed

Americans,

Tn re Jersey Central Power & Light Co. and Int'l Bhd. of

Elec. Workers, Case No. YNK2-063 (Jan. 19, 1973).

28

assignments.” Thereafter, a conciliation agreement

was entered into among the Company, EEOC, and

the Unions. The conciliation agreement was signed in

January, 1974, to be effective from December 3, 1973

through December 3, 1977. The agreement was di-

vided into several sections. Section I—“General Pro-

Visions’’—provides, tuter alta:

1. It is understood that this Agreement does

not constitute an admission by the Respond-

ents of any violation of Title VII of the Civil

Rights Act of 1964, as amended.

* * * * *

3. The Commission agrees not to sue the Re-

spondents over matters contained in this Agree-

ment subject to Respondent’s compliance with

the promises and representations contained

herein. If the Commission believes that this

Agreement has been violated, it shall first at-

tempt to resolve the dispute with the parties:

then if no Agreement can be reached, the Com-

nussion can seek to enforce this Agreement

through the legal process.

4. This waiver by the Commission extends to

any matter which is covered by this Aereement.

This does not preclude individual Charging

‘Tn issuing its decision as to “reasonable cause’, the EEOC

withheld decision as to the Company's reeruitment and train-

ing practices as they aifected females and minority group per-

sons and as to the Company's promotion practices as they

affected minority group persons only.

With respect to the defendant Unions, EEOC found reason-

able cause to believe that they discriminated against women by

virtue of the maternity benefit provisions in the collective bar-

gaining agreement. The EEOC withheld decision with respect

to allegation. of discrimination by the Union in representa-

tion, referral and membership practices.

Other than as may be reflected in the conciliation agreement,

the record does not reveal the disposition by the EEOC of

those issues which were so reserved.

20)

Parties, or the Commission itself, from filing

charges or suit over new matters or practices

which may arise with respect to practices of

the Respondents.

5. Respondents agree that all hiring and pro-

motion practices, and any and all other condi-

tions of employment shall be maintained and

conducted in a manner which does not discrim-

inate on the basis of race, color, creed, ancestry,

religion, sex, national origin, age, place of birth,

marital status or liability for services in the

armed forces of the United States in violation

of Title VIL of the Civil Rights Act of 1964,

as amended.

t * * * *

Section TIT of the conciliation agreement (“Re-

cruitment and Hiring Practices”) Paragraph 9, obli-

gates the Company to make reasonable efforts to

“recruit minorities and females into those craft areas

where such jobs are to be filled by new hires, where

they have heretofore been under utilized or not em-

ployed.” Paragraph 10 provides that the minority

group persons and female recruits for craft jobs are

to be given credit for experience gained in the craft

with other employers and may be considered for jobs

other than those at the entry level. Paragraph 10 con-

eludes that:

The wages, benefits, other conditions of employ-

ment and seniority date of such employee shall

be determined in accordance with the provisions

of the Collective Bargaining Agreement.

Section IV of the conciliation agreement is entitled

“Promotion and Transfer” and estabiishes a special

program for female and minority group Company

emplovees who are to be given preference for promo-

tions and transfers into vacant positions on the basis

of their company seniority.” Paragaph 2 specifically

Nee n. 22, infra.

30

provides: “For purposes of this Conciliation Agree-

ment Vacancies occasioned by layoff * * * shall not

he considered as vacancies.”

Section Vo (Affirmative Action”) establishes a five

vear afiirmative action program designed to increase

the percentage of minority group and female employ-

ees.” Among other provisions, the agreement alse pro-

vides for reporting (Section IN), a modification of

the maternity leave policy (Section VI) and certain

pavinents by the Company te employees and others for

past discriminatory practices. (Section VIT).”

‘The percentages to be atiamed by December 1977, the end

of the five year affirmative action plan, and the hiring rate

necessary to achieve those percentage goals, are set forth: in the

couviliation agreement :

Hiring Hiring

Min. ‘; Rate Fem. ©, tate ©;

Officials & Managers. _- 3.0 5.0 5.0 s.0

Professional: came 5. 0 SO 50 s.0

Technicians... — - ie 6.0 “0 3.0 40

Sales ___- i ae %. 0 nO 13. 0 20.0

Office Clerical aes 0.0 14.0 46.0 7.0

ee ide s. 0 12.0 1.0 2.0

Semi-Skilled_. 2.22... . 190 us. 0 3.0 5.0

Laborer-Unskilled _ - 24.0 26.0 5.0 5.0

Service Workers __ - P 21.0 $2. 0 31.0 45.0

(Section V. Per. 1).

The primary obligation for achieving these percentaves

among eniplovees is on the Company, as it, and not the Unions,

is solely responsible for hiring. Affidavit ef Edward Semoneit,

‘vat 2 (filed Sept. 5, 1974).

The conciliation agreement also sets forth a eeneral Union

obligation under whieh the Unions acknowledge their express

obligations uncer the agreement and further agree “that they

shail not resist other provisions as set ford: in this Avrceme t.”

(Section VITT).

31

The conciliation agreement has no express seniority

provision nor does it expressly modify or alter the

seniority provisions found in the collective bargain-

ing agreement.” Rather, a fair reading of the concilia-

tion agreement reveals that it is primarily concerned

with the hiring, promotion and transfer of female and

minority group employees.

On December 3, 1973, prior to the execution of the

conciliation agreement by the Company, the Unions

and EEOC, the Company and the Unions entered into

a new collective bargaining agreement effective from

November 1, 1973 through October 31, 1975. In per-

tinent part the collective bargaining agreement con-

tinues the seniority policies in operation among the

bargaining unit employees of the Company.” In re-

gard to layoffs, the collective bargaining agreement

provides inter alia:

°° The uncontradicted affidavit of Edward Semeoneit, President

of the Unions’ System Council which bargains on behalf of the

Unions, reveals that during negotiations for the conciliation

agreement, the EEOC attempted to negotiate a seniority system

which would give minority group and female employees greater

seniority than they would actually have had under the prevail-

ing method of calculating employee seniority. The EEOC’s sug-

gestion, however, was apparently rejected as it does not appear

in the conciliation agreement. As stated in Mr. Semoneit’s

affidavit :

“The EEOC proposed for the conciliation agreement thet

minority end female employees be given artificial seniority for

job selec.con and transfer purposes. We opposed this proposal

and the representative of the EEOC withdrew it. It was agreed,

us is stated in the executed conciliation agreement, that all em-

ployees receive normal seniority pursuant to the terms of the

collective bargaining agreement. (emphasis supplied).”

Semoneit Affidavit, supra n. 18, © 4 at 2.

*1 See Brief for Appellants at 2-3.

589-728— 75——_5

32

3.2. (a) All layoffs, or demotions occasioned

because of falling off or curtailment of work,

shall be discussed with the Union two (2) weeks

in advance of the layoff and shall be made m

order of seniority. No senior employee shall be

laid off as Jong as any work which he ean rea-

sonabiv be expected to do is being performed by

an employee junior in point of service.

* * + * ¥*

3.3. Kiplovees who have been laid off shall

be reinstated to employment as need for their

services arises, in the reverse order of their

lavoff.

3.4. Seniority is defined as length of continu-

ous service with the Company * * *.

+ * * * *

These provisions establish a plant-wide seniority

system * for employees with respect to layoffs.”

The Company in its pleadings asserts that economic

considerations compelled it to announce a layoff of

employees in July, 1974. The Company estimates that

7? Seniority may be measured by a number of different meth-

ods. We here use the terms “plant-wide™ and “company-wide”

seniority to deseribe seniority measured by the total length of

employment with the employer. Other means of establishing

seniority which are not employed here by the Company and

Unions are: length of service in a department (“departmental

seniority”): length of service in a line of progression (“progres-

sion line™ seniority) or length of service in a job (“job” senior-

itv). See generally Cooper & Sobol, Seniority and Testing

Under Fair Employment Laws: A) General Approach to Ob-

jective Criteria of Iliring and Promotion, 82 Harv. L. Rev.

1598, 1601 (1969).

** Under the Company's plant-wide seniority system, prefer-

ence is afforded to the senior worker for purposes of promo-

tion, transfer and other forms of job assignment as well as for

purposes of layoff. See Agreement between Jersey Central

Power & Light Co. and Local Unions 327 et al. ©3.1, 3.8

(a)-(e), Dec. 3, 1973.

33

approximately 400 employees will have been laid off

by mid-December, 1974. The Unions required strict

adherence by the Company to the seniority provisions

of the collective bargaining agreement. The EEOC

responded to the Company’s layoff plans by indicat-

ing that a layoff accomplished by seniority alone

would violate the provisions of the conciliation agree-

ment and Title VIL of the Civil Rights Act of 1964.*'

Confronted with two apparently conflicting con-

tracts, the Company instituted this action for declara-

tory judgment. At about the same time, the Company

and the Unions submitted to an expedited arbitration

proceeding under their collective bargaining agree-

ment to determine if a layoff of employees in reverse

order of seniority would violate the non-diserimination

provision of the collective bargaining agreement.” On

"Nee Company Ailidavit of James Ro Joes, © 7 (filed

July is, 1978). GSA and OFCC likewise atopied (albeit unof-

ficially, see GSA and OFCC Brief at 9, 12-15) the position

that the Company's proposed method of layoil would violate

Executive Order 11,246. 7d. at ©4-6: Afida.it of James R.

Leva, © 12 at 4 (filed July 15, 1974).

* The question submitted to the arbitrator was:

“Will a lavoif of employees in accordanes with the senority

provisions of Article 5.2(a) constitute a violacion of the non-

discrimination provisions of Article Li(d) of the collective

bargaining agreement when applied to the lavotl announced on

July i6th? If so, what method should be utilized in selecting

employees for layoffe”

Article Li(d) of the agreement is apparently broader than

coverage under Title VII in that it additionally proseribes dis-

crimination with respect te marital status and military service.

It provides:

“The Company and the Union agree that the application of

the various provisions of this Agreement shail in no way serve

to discriminate against any individual with respect to his com-

pensation, terms, conditions, or privileges of employment or

otherwise affect his status as an employee because of such in-

34

August 21, 1974, the arbitrator held that a layoff in ae-

cordance with the seniority provisions of the collective

bargaining agreement would not violate tle non-

discrimination provision of the same document.”

In accordance with the arbitrator’s award, on Au-

gust 23, 1974, the Company commenced the layoff in

reverse order of seniority. Layoffs in this manner con-

tinued until September 5, 1974 when the district court

issued its opinion which, as previously noted, required

accommodation with the conciliation agreement.

After the first week of layoffs, statistics provided by

the Company indicated that the layoffs liad a dispro-

portionate impact upon minority group eniployment.”

dividual’s race, color, creed, ancestry, religion, national origin,

sex, age. place of birth, marital status, or liability for service

in the armed forces of the United States.”

26 The opinion of the arbitrator which was to follow his award

does not appear in the record. We note. however, that the

arbitrator did not rule on or consider the possibility of conflict

between layoffs in accordance with seniority and the conciliation

agreement,

** Because of the system of layoff utilized by the Company it

is often difficult to identify in advance the employee who is to

be laid off or terminated. “Layoffs” are accomplished in two

manners: (1) direct layoffs of most junior employees from the

bottom of the Company's companywide seniority list, and (2)

the abolishment of jobs held by senior employees. Layoff ac-

complished by the latter method precludes identification of the

individual who will actually lose his or her job at the time that

the senior employee’s job is abolished. The inability to identify

the employee results from a “bumping” system established by

the collective bargaining agreement: i.e., senior employees who

have been displaced can “bump” employees junior to them on

the companywide seniority list and thereby fill the position for-

merly held by the more junior employee. Article III, € 3.2(a)

of the collective bargaining agreement in part provides:

“No senior employee shall be laid off as long as any work

which he can reasonably be expected to do is being performed

by an employee junior in point of service.”

35

As of August 30, 1974, one hundred seventy-six (176)

employees were identified for layoff or termination, of

which 30.7% or 54, were male or female minority

group persons. As a result of this first group of bar-

gaining unit employees being laid off, the percentage

of male and female minority group employees in the

bargaining unit decreased from 7.9% on July 27, 1974

to 6.49% as of August 30, 1974.° With respect to female

employees only, however, the initial layoff had no

disparate impact. Both before and after the layoff,

women constituted 14.6°, of the totai workforce and

15.2% of the bargaining unit.”

* The first week of lavoff lad a similar disproportionate ef-

fect on minority group employment among fofa7 Company em-

ployees. The precentage of male and female minority group

employees decrensed from 6.76 on July 27, 1974 to 5.60 as of

August 30, 1974.

The figures and percentages noted above and in the text are

found in Affidavit of James R. Leva, Attachment D.. supra

n. 24.

*Jd. The precentage of women listed in James R. Leva’s

Affidavit represents both white and minority group female em-

ployees. Consequently, female minority group persons were in-

cluded in percentages for both minority group employees and

female employees. We do not, howe er, believe this “double-

counting” of minority group female employees to be of signifi-

cance in our analysis of the issues here presented.

At oral argument before us, counsel for the Company stated

that by November 22, 1974 a total of 202 employees were to be

laid off, of whom 83, or 28.47, were minority group members.

The individuals who were to be laid off or terminated by that

date, had been notified, and thereby were identified. The effect

of this layoff on the proportion of minority group employees

would be to decrease the percentage of male and femate minor-

ity group employees in the bargaining unit from 6.407 on Au-

gust 30, 1974 to approximately 4.9¢ as of November 22, 1974.

No representations were made to the Court that this layoff

would similariy create a disproportionate impact upen the

percentage of female employees,

36

Subsequent to the distriet court’s opinion an

nounced on September 5, 1974, the Company began

to program the remainder of its layotis to comply

_ with the district court’s directive that the female and

minority group emplovee ratios existing as of July 27,

1974 he maintained throughout the layoff process. The

Company continued layoffs pursuant to the district

court’s directive until October 9, 1974, at which time

this Court granted a motion to stay the order of the

distriet court. Since October 9, 1974 the Company has

reverted to laying off employees solely by reverse

order of seniority.

IT. Jurisdiction

We need not make any detailed inquiry into the

threshold question of jurisdiction.” We are satisfied

that the pleadings and the record establish the req-

uisite jurisdiction. The complaint, among other juris-

dictional allegations,” predicates jurisdiction on

§30i(2) of the Labor Management Relations Act of

The quesi.ion of lack of subject matter jurisdiction was

raised in the district court by a motion to dismiss filed by de-

fondants GS. and OFCC, This . tion was denied by the

distriet court and defendants GS., and OFCC have not filed

a separate notice of appeal. The failvve of any party to raise a

jurisdictional issue on appeal does not foreclose us from an in-

quiry into jurisdiction sva sponte, See Mansfield, Coldwater &

Lake Michigan Ry. v. Swan, 111 U.S. 379, 582, 48. Ct. 510,

Ys L. Ed. 462 (1884): A//egheny Airlines, Inc. vy. Pennsylvania

Public Utilitu Comm'n, 465 F, 2d 237, 241 (3d Cir. 1972), cert.

denied, 410 U.S. 943, 93 8. Ct. 1367, 35 L. Ed. 2d 609 (1973).

Accordingly, this Court requested all parties, including GSA

and OFCC, to address the issue of jurisdiction during oral

argument before us.

‘' The Company asserted as statutory grounds for jurisdic-

tion: the Declaratory Judgment Act, 28 U.S.C. §§ 2201, 2202;

Title VIL of the Civil Rights Act of 1964, 42 U.S.C. § 2000e

et seg.c 28 U.S.C. $1546; and section 301 of the Labor Man-

37

1947, 29 U.S.C. § 185(a). We agree that in seeking a

wlaratory judgment as to its collective bargaining

oe with the Unions, the Company has properly

invoked our jurisdiction.” Aveo Corp. v. Acro Lodge

agement Relations Act of 1947, 29 U.S.C, $185, Although not

referring to any statute, the Company further contended that

jurisdiction was conferred “by the laws of the United States of

American regulating commerce. * * *”

We recognize that most of the grounds asserted do not prop-

erly inveke jurisdiction in this context. The Declaratory

Judgment Act, 28 U.S.C. $$ 2201, 2202. does not of and by it-

self confer jurisdiction upon the federal courts. but requires an

independent jurisdictional basis. See, e.g., Schilling v. Rogers,

363 U.S. 666, 677. 80 S. Ct. 1288, 4 L. Ed. 2d 1478 (1969);

Gelty Oi) Co. (Eastern Operations). Inc. vy. Ruckelshaus, 467

F. 2d 349 (3d Cir. 1972). cert. denied, 409 U.S. 1125, 93 8S. Ct.

937. 35 L. Ed. 2d 256 (1973). As the employer cannot be the

vietim of disveriminatory employment practices, the Company

cannot invoke jurisdiction under Title VII. See Alewander v.

Glordner-Denver Co., 415 US. 36, 54, 94S. Ct. 1011, 39 L. Fd.

2d 147 (1974): Oudbichon vy. North American Rockiell Corp..

482 F. 2d 569, 575 (9th Cir. 1973). Finally, 28 U.S.C. § 1346 is

incapable of conferring jurisdiction here as only equitable re-

lief is sought. Section 1546 establishes jurisdiction for actions

to recover internal revenue taxes; for actions against the Gov-

ernment in negligence: for civil actions under the Internal Rev-

enue Code $7426: for actions to quiet title in real property in

which the United States claims an interest and for

Any other civil action or claim against the United

States, net exceeding $10,000 in amount, founded either

upon the Ceastitution, or any Act of Congress, * * *

or upon any express or implied contract with the United

States, or for liquidated or unliquidated damages in

cases not sounding in tort * * *,

28 U.S.C. § 1316(a)(2). This last cited provision is limited to

conferring jurisdiction for actions seeking recovery of a money

judgment, which is not claimed here. Richardson vy. Morris, 409

US. 464, 93S. Ct. 629, 34 L. Ed. 2d 647 (1973).

* Although in the proceedings below the district court viewed

the collective bargaining agreement as a contract to be con-

38

735, 390 U.S. 557, 561-562, 88 S. Ct. 1235, 20 L. Ed.

2d 126 (1968); see also Serio v, Liss, 300 F. 2d 386

(3d Cir. 1961).

We also believe that jurisdiction has been prop-

erly invoked with respect to those issues involving

the conciliation agreement and the EEOC. In our

opinion, inasmuch as the EEOC agreement must be

interpreted according to federal substantive law, see

United States v. Seckinger, 397 U.S. 203, 209-210, 90

S. Ct. 880, 25 L. Ed. 2d 224 (1970), the Company’s

cause of action joining EEOC “arises under’ laws of

the United States within the meaning of 28 U.S.C.

§ 1331" See Illinois v. City of Milwaukee, 406 U.S.

91, 100, 92 S. Ct. 1385, 31 L. Ed. 2d 712 (1972); Ivy

Broadcasting Co. v. American Tel. & Tel. Co., 391 F.

2d 486, 492 (2d Cir. 1968). We are also satisfied that

strued pursuant to New Jersey state law, it did so erroneously.

Federal law is to be applied as the substantive law in actions

arising under $301, including those actions which seek declara-

tory judgment. “Federal interpretation of the federal law will

govern, not state law.” JTertile Workers v.-Lincoln Mills, 353

U.S. 448, 457, 77 S. Ct. 912, 918, 1 L. Ed. 2d 972 (1957). In-

deed an action arising under § 301 is controlled by federal sub-

stantive law. even though the proceeding is in a state court.

Humphrey v. Moore, 375 U.S. 335, 84S. Ct. 383, 11 L. Ed. 2d

370 (1964).

* Section 1331 in pertinent part provides:

“(a) The district courts shall have original jurisdiction of all

civil actions wherein the matter in controversy exceeds the sum

or value of $10,000, exclusive of interest and costs. and arises

under the Constitution, laws, or treaties of the United States.”

We are of the view that the Company's verified complaint and

accompanying affidavits are sufficient to establish an amount in

controversy in excess of $10,000.00. We reach this conclusion

even though the Company failed to specifically allege an

amount in controversy, setting forth instead figures and infor-

mation by which its possible liability for back pay claims and

other expenses may be calculated,

—

39

even if there were no independent ground of juris-

diction existing under § 1331," that nonetheless there

exists jurisdiction ancillary to the proper resolution

of the Company’s cause of action based upen the col-

lective bargaining agreement. See Rosado v. Wyman,

397 U.S. 397, 405, 90 S. Ct. 1207, 25 L. Ed. 2d 442

(1970); Almenares v. Wyman, 455 BF. 2d 1075, 1083

(2d Cir. 1971), cert. denied, 405 U.S. 944, 92 S. Ct.

962, 50 L. ld. 2d 815 (1972).

As we have previously indicated, see n, 5 supra,

the Company’s action for declaratory judgment pre-

sents a justiciable case or controversy, as indeed it

must, under Article LIL of the Constitution. /.7.,

Luke Carricrs Ass’n ve MacMullan, 406 U.S. 498, 92

S. Ct. 1749, 32 L. led. 2d 257 (1972); Golden v. Zwiek-

ler, 394 U.S. 103, 89 S. Ct. 956, 22 L. Id. 2d 113

(1969). A case or controversy in the constitutional

sense ‘‘must be definite and concrete, touching the

legal relations of parties having adverse legal inter-

ests.” Aetna Life lnusurance Co. v. Haworth, 300 U.S.

227, 240-241, 57 S. Ct. 461, 464, 81 L. Ed. 617 (1937):

As we hold jurisdiction is present under the grounds noted

in the text, we believe it unnecessary to decide whether the

district court: would also have jurisdiction under § 1337 under

the proposition that the conciliation agreement was entered intae

by the EEOC on authority granted by the Civil Rights Act

of 1964, assertedly an Act of Congress regulating commerce.

Cf. Gardiner ve Nashville Housing Auth. 468 F. 2d 480 (6th

Cir, 1972). Section 1537 in pertinent part provides:

The tests of “arising under” required by Section 1337 are the

civil actions or proceeding arising under any Act of Congress

reguiating commerce * * *,”

The tests of “arising under” required by Section 1337 are the

same as those demanded by Section 1331, except that no juris-

dictional amount need be alleged. Fe/ter v. Southern Pacific Ce..

309 U.S. 526, 329 mn. 4, 79 S. Ct. 847, 3 L. Ed. 2d 854 (1959):

Peyton Vv. Ratlway Evpress Agency, Tne. 316 US. 350, 62 S.Ct.

LIT1, S61. Ed. 1525 (1942).

40

sce also Maryland Casualty Co. vy. Pacifie Coal & Oil

Co., 312 U.S. 270, 273, 61 S. Ct. 510, 85 L. Ed. 826

(1941). A dispute is not too hypothetical for the

proper exercise of federal jurisdiction if there is pres-

ent an immediate adverse effect on the parties in a

concrete situation. See Longshoremen’s Union Vv.

Boyd, 347 U.S, 222, 223-224, 74 8S. Ct. 447, 98 L. Ed.

650 (1954). Moreover, in determining whether a dis-

pute has matured to the point at which the judicial

function may be properly exercised, a court may look

to the announced intentions of the defendants to take

adverse action against the plaintiff. Younger v. Harris,

401 U.S. 37, 42, 91S. Ct. 746, 27 L. Ed. 2d 669 (1971).°

In this regard, the defendants here have announced

their intention to require Company compliance with

each particular contract, although the Company im-

plicitiy challenges (albeit inconsistently) each party's

respective interpretations.” Thus in our view, there

exists a justiciable case or controversy. See Super

Tire Engineering Co. v. McCorkle, 416 U.S. 115, 94

S. Ct. 1694, 40 L, Ed. 2d 1 (1974); ef. National Auto-

matic Laundry & Cleaning Council v. Shultz, 148 U.S.

App. D.C. 274, 443 F. 2d 689 (1971).

* The Supreme Court has indicated that a case or controversy

for judicial resolution is presented where a plaintiff is “either

presently or prospectively subject to the regulations, proscrip-

tions, or compulsions that he * * * [is] challenging.” Laird v.

Jaium, 405 Us. 1, 11, 92 S. Ct. 2818, 2825, 83 LL. Ed. 2d

ist (1972). We believe that this language of the Supreme

Court has particular application here, even though EEOC has

neither sought judicial enforcement of the conciliation agree-

inent nor instituted administrative proceedings under Title VII.

Cf. Abbott Laboratories vy. Gardner, 387 U.S. 136, 151-154, 87

S. Ct. 1507, 18 L. Ed. 2d 681 (1967).

Neem oO supra,

41

Ill. Contract Theory

The district court, viewing the instant proceeding

as one requiring the interpretation of contracts only,

specifically refused to consider the issue of past em-

ployment practices of either the Company or the

Unions. Although we agree with the district court

that the instant controversy must be analyzed accord-

ing to the principles of general contract law, see

United States v. Seckinger, 397 U.S. at 210, 90S. Ct. 880 ;

Pricbe & Sons, Ine. v. United States, 332 U.S. 407,

411, 68 S. Ct. 123, 92 L. Ed. 32 (1947), we must never-

theless differ with that court’s interpretations of the

two contracts and, as such, with its issuance of the judg-

ment predicated upon those interpretations.’

In interpreting the two contracts before us, we must:

first, determine whether or not an express or implied

conflict exists as between the provisions of the concilia-

tion agreement and the provisions of the collective bar-

gaining agreement, and, if such a conflict does exist,

which of the two contracts is to govern; second, if no

such conflict is held to exist, determine if the collec-

tive bargaining agreement must nevertheless be modi-

“When dealing with contract actions, this Court is to review

as a matter of law the interpretation given by the district court

to the pertinent provisions of the written contract. See Emor,

Tne. v. Cyprus Mines Corp., 467 F. 2d 770, 773 (8d Cir. 1972);

N.S. Silberblatt, Inc. v. Seaboard Surety Co., 417 F. 2d 1045,

1055 (8th Cir. 1969).

This standard of review would not be altered even if the

contract were executed by a Government party. Vitex Mfq. Co.

v. Government of Virgin Islands, 251 F. 2d 313 (3d Cir. 1965) ;

see l’nited States v. Hanna Nickel Smelting Co., 400 F. 2d 944

(%h Cir. 1968); #. L. Smidth & Co. vy. United States, 409 F.

2d 1369 (C.C.PLA. 1969).

42

fied to accommodate an overriding public policy. The

district court followed a similar approach concluding

(1) that to the extent that the conciliation agree-

ment conflicts with the collective bargaining agree-

ment, the conciliation agreement prevails; and (2) that

the layoffs are not to be accomplished in the manner

preseribed by seniority clauses of the collective bar-

gaining agreement, because such a method of layoffs

would “frustrate’’ the objective of the conciliation

agreement. We hold both conclusions of the district

court to be erroneous as a matter of law.

A. THE TWO CONTRACTS DO NOT CONFLICT

In our interpretation of both contracts we are goy-

erned solely by federal law.” After comparing and

contrasting the provisions of the two contracts, we are

of the view that no conflict exists with respect to

lavoffs.

The conciliation agreement has, as its objective, the

percentage increase of females and minority group

persons among employees. This objective was to be at-

tained by the Company hiring a greater percentage

of minority group and female workers—not by resort

to a system of ‘tartificial’? seniority. See note 20,

supra, As such the conciliation agreement sought an

*“We are not confronted here, as the district court crrone-

ously believed itself to be. with a “private” collective bergain-

ing agreement to be construed according to state law, and a

vovernment contract to be interpreted by reference to federal

law. Federal substantive law controls in the interpretation of

both the cellective bargaining agreement, se Zealile Workers \

Lincoln Mills, 353 Uls, 448. 77S. Ct. Ole. 1 L. Ed. 2d ove

(1957), and the conciliation agreement. see United States vy.

Sechinaer, SOF US. at vootezlo, 90S. Ck. SSO and Mn ifed States

v. County of Mlcaheny, 522 Uls. VAL IS3. 64S. Ct. fs, 8s

I. Bal. 1200 C19E4).

pe ee ee

45

Increase In the proportion of female and minority

group workers by ‘hires’? and not by “fires.” It is

highly significant to us that the conciliation agreement

contains no overall layoff procedure or seniority sys-

tem. Moreover, the express terms of the conciliation

agreement do mat attempt to affect, nor can we in-

terpret them to affect, the layoff provisions of the

collective bargaining agreement.”

The “new hire” method of attaining a higher pro-

portion of female and minority group workers is evi-

dent throughout the conciliation agreement. In partic-

ular, reference to “new hires” is made in Section ITI,

paragraph 9 of the conciliation agreement, which

provides:

Respondent Company shall make a reasonable

effort to recruit: minoritics and females into

those craft areas where such jobs are to be filled

by new hives, where they have heretofore been

underutilized or not employed. To this end, Re-

spondent Company agrees that in cach tustance

where a job is not to be filled from within, pur-

suaut to the Collective Bargaining Agreement

and practices thereunder, reasonable efforts will

he made to secure a minority or female as out-

lined in paragraph 1 of the Affirmative Action

portion of this Agreement. (emphasis sup-

phed)."”

"In this regard, we note that the district court concluded that

the “specific contingency [layoffs by seniority] was not dealt

with in the formulation of the [conciliation agrecinent] pro-

gram.”

Oral Opmion Tr. at 7; 8 FEP Cases at 692,

*" The contractual exception to filling jobs by female and mi-

nority group “new hires” (i.e, “where a job is not to be filled

from within”) represents a classic example of the seniority

“bumping” system. The terms of the paragraph quoted above

from the conciliation agreement expressly leave intact” the

“bumping” system established by the collective bargaining

agreement,

44 ’

Paragraph 1 of the Affirmative Action program, im

turn, is confined solely to “new hire” situations:

Respondent Company is presently undergoing

its utilization analysis for preparation of its

goals and time tables, The Company agrees to

make every reasonable effort to bring its mi-

nority and female workforce up to parity by lo-

cation and EEO-1 categories as openings for

new hires occur and qualified applicants are

available within five (5) years. (emphasis sup-

plied) .”

We regard the conciliation agreement as unambigu-

ous In its requirements that an increased proportion

of females and minority group persons be hired, but

that once hired, workers in these classes be controlled

by the terms and conditions of employment as set

forth in the collective bargaining agreement. Accord-

ingly, we read the conciliation agreement as not modi-

fying the promotion, transfer or layoff practices es-

tablished by the collective bargaining agreement once

females and minority group persons have been em-

*' Other references to “new hires” are similarty made in sec-

tion ITI, “Recruitment and Hiring Practices.” Paragraph 10

provides for credit to be given for pre-employment experience

“in filling the existing new openings with new hives. * * *”

[emphasis supplied]; paragraph 12 pertains to obtaining refer-

rals of female and minority group persons from job referral

organizations, provided that “the Company shall estimate the

number of vacancies expected to be filled hy new hires, * * *”

femphasis supplied]; and paragraph 13D requires that “[a|s

job vacancies occur which ave to be pile d with new hires, the

employer will first consult the Affirmative Action file. * * *"

jemphasis supplied }.

The reporting obligations of the conciliation agreement. is

similarly directed to only new hires. Section IX, “Reporting,” in

part requires:

A listing of all positions filled by new Aéres identifying

the name, date of hire, rate of pay, race, sex and job title.”

| inphasis supplied |.

itil yn

45

ployed. We hase this interpretation, in part, on two

provisions of the conciliation agreement. As previously

noted, in regard to reeruitment and hiring practices,

section ITT, paragraph 10, provides:

The wages, benefits, other conditions of employ-

ment and seniority date of such employee shall

be determined in accordance with the provisions

of the Collective Bargaining Agreement. (Em-

phasis supplied).

Moreover, in the context of promotions and transfer

practices, section IV, paragraph 2, in pertinent par.

provides:

[T]hose male minorities/females who are

qualified and who had indicated the desire to

transfer shall be given the opportunity to trans-

fer, using their total length of Company serv-

ice, subject to vacancies being available and in

a manner consistent with the current Collective

Bargaining Agreement. For purposes of this

Conctliation Agreement vacancies occasioned by

layoff * * * shall not be considered as vacan-

cies. (Emphasis supplied).”

We thus interpret the conciliation agreement as

being consistent with, rather than in conflict with, the

* The exception created by this paragraph to jobs for female

and minority group employees (i.e. “vacancies oecasioned by

layoff * * * shall not be considered as vacancies”) is con-

sistent with the exception created by the conciliation agreement

in section IIT, paragraph 9. Sve n. 40, supra. Section ITT, para-

graph 9 does not require the Company to use “reasonable ef-

forts” to assign a female or minority group worker to jobs

which are “to be filled from within.” In this context, the plirase

“jobs to be filled from within” has obvious reference to an em-

ployment vacancy occasioned by layoff. In such circumstances,

the “bumping” system nevertheless allows a worker senior to the

worker laid off to occupy the position vacated by the layoff. As

such, the position opened by the layoff cannot be and is not,

properly termed a “vacancy” for purposes of job assignments

for female and minority group workers.

46

collective bargaining agreement, in that it incorporates

the Company seniority system.

EEOC alternatively argues that if not an express,

at least an implicit inconsistency exists between the

two agreements and that this inconsistency requires a

modification ef the seniority provisions of the collec-

tive bargaining agreement. For EEOC’s argument to

succeed, it must persuade us that despite the silence of

the conciliation agreement respecting overall seniority,

we should nonetheless interpret the two contracts as

being inconsistent.

First, EEOC contends that where the subject mat-

ter is the same in two contracts but the contracts con-

tain terms inconsistent with each other, the later

agreement will supersede the earlier agreement.” Sec-

ond, EEOC contends that the Company’s agreement

to use “best efforts” to have its work force reflect the

racial, ethnic and sex composition in the relevant labor

market should be given effect as an implicit modifica-

tion of the seniority provisions. Third, EEOC argues

that the objectives of the conciliation agreement (to

increase the proportion of female and minority group

workers) will be thwarted if effect is given to the

seniority provisions of the collective bargaining

agreement.

We cannot agree with EEOC’s arguments. First,

whether or not a subsequent contract is deemed to

supersede an earlier contract is a question of the

parties’ intent to be ascertained from the contracts

themselves when they are unambiguous. In order for

us to hold that the parties intended the second agree-

ment (here the conciliation agreement) to operate as

a substituted contract, the terms of the second con-

‘It is acknowledged that the collective bargaining agreement

was signed approximately four months earlier than the concili-

ition agreement,

47

tract must be so inconsistent with those of the first that

both contracts cannot stand together."' Here, we can

discern no such intent as the conciliation agreement

is completely silent on the issue of overall seniority.

Hence, despite its later execution we find no inconsis-

tency, apparent or otherwise, between the two con-

tracts. Accordingly, there is no basis to preclude our

sustaining both contracts in full.” See Rosenberg vy.

D. Kaltman & Co. Inc., 28 N.J. Super. 459, 101 A. 2d

94 (1953); compare N.L.R.B. v. Operating Enginecrs

Local 12, 323 F. 2d 545, 548 (9th Cir. 1963); Port of

Seattle v. United States, 450 F. 2d 1363, 1378 (Ct. Cl.

1971).

Second, the conciliation agreement, section II

(Recruitment and Hiring Practices) and V (Affirma-

tive Action Program), requires the Company to use

“best efforts” to increase the percentage of female and

minority group employees. We do not believe that this

undertaking by the Company necessarily modifies by

implication a seniority system of layoffs. We interpret

the “best efforts’? commitment in a context that re-

quires the Company to use its “best efforts’? to in-

crease the female and minority group proportion

among employees as openings for new hires arise. This

““If the new agreement contains terms that are clear/y /n-

cousistent with the previously existing contract * * *, the fact

of inconsistency is itself a sufficient indication of intention to

abrogate the old and substitute the new. * * * It [the new

agreement] operates as a discharge by substitution only so far

as the inconsistency extends.” 6A. Corbin, Contracts, § 1296

(162) [emphasis supplied }.

“In this context. we reiterate our view that the contracts

lefore us are to be interpreted according to principles of gen-

eral contract law inasmuch as Congress has not adopted a dif-

ferent standard by which the conciliation agreement is to be in-

terpreted. See. ¢.g.. Priche & Sous vy. United States, 332 US.

407, 411, GS S. Ct. 123, 92 L. Ed. 32 (1947).

48

is completely consistent with the express terms of the

conciliation .greement (see infra). Third, with respect

to the objective which EEOC claims is defeated if

effect is given to the collective bargaining agreement,

we believe EEOC has only partially stated the objee-

tive of that agreement. As our analysis reveals, the

true objective of the conciliation agreement is to in-

erease the percentage of female and minority group

employees through **new hires’’ only. The express lan-

enage of the conciliation agreement so provides:

The Company agrees to make every reason-

able effort to bring its minority and female work

force up to parity * * * as openings for new

hires oceur and qualified applicants are avail-

able within five (5) years.

Section V, paragraph 1. We thus do not agree with

EEOC or with the district court that layoffs by re-

verse order of seniority would uniawfully frustrate

this objective.”

lience, we conclude that the two agreements are not

in conflict either by their express terms or by im-

“In a static economic situation where an employer under

this type of conciliation agreement is neither obliged to lay off

white male workers and replace them nor to add workers, the

consequence of EEOC’s interpretation is that the employer

would nevertheless be compelled to hire female and minority

group workers or be found to act in continuous violation of

the conciliation agreement. If we were to adopt EEOC's argu-

ment. it would mean that the occurrence of any event which

prevented an increase in the proportion of female and minority

group workers would be considered as frustrating the objective

of the conciliation agreement and thereby constitute a violation

of such agreement.

We decline to interpret the conciliation agreement in the

manner urged upon us. We fail to discern how the objective

of the agreement can lend support to the proposition that when-

ever the Company. because of economic need, lays off employees

and does not accept new hires, it frustrates the objective of the

conciliation agreement,

49

plication. We are obliged, nonetheless, to proceed

to the question of whether an overriding public pol-

icy dictates a modification of the collective bargaining

agreement.

B. PUBLIC POLICY

The district court emphasized that the principal

purpose of the conciliation agreement between the

Company, the Unions and EEOC was to ensure that

at the end of five years the proportion of females and

minority group employees would approximate the

proportion of those groups in the relevant labor mar-

ket. The primary basis for the district court’s modifi-

cation of the collective bargaining agreement was the

district court’s conclusion that insistence on layoff

solely according to the collective bargaining agreement

would frustrate the purposes of the conciliation

agreement.

In support of this analysis the district court cited Adiards

v. Leopoldi, 20 N. A. Super, 45, 89 A. 2d 264 (App. Div.). cert.

dlenied, 10 N. J. S47, OL AL 2d 671 (1952). A more recent Now

Jersey case applying these principles is Porecl/i v. 7itus, 108

N. J. Super. BOL, 261 A. 2d S64 (App. Div. 1969), cert. denied,

DON. AL SLO, P61 AL 2d 355 (1970). In thet case the state court

approved a Board of Edueation’s unilateral suspension of the

collective bargaining agrecment’s promotion procedure, when

local civil disorders provoked an educational crisis requiring

greater promotional opportunities for Blacks than existed at

the time under the Union contract. The court in part stated:

“[T lhe concept of impossibility should prevail where a par-

ticular provision in a schoo! contract is rendered impractical by

subsequent events demanding changes in an educational pro-

gram in order to give meaningful effect to an overriding public

policy.” 108 N. J. Super, at 318, 261 A. 2d at 370.

We note, moreover, that the state court in Porce/li in hold-

ing performance to be “impossible” under the Union contract

believed that to compel performance according to the provisions

of the Union contract would be contrary to the public policy

and welfare.

50

As our analysis indicates, the district court’s con-

clusion in this respect is without merit. Consequently,

we now believe the appropriate inquiry is whether a

seniority clause providing for layoffs by reverse order

of seniority must be modified as being contrary to

public policy and welfare. Cf. Restatement, Con-

tracts, § 369, at 671 (1932). |

In order to declare the provisions of the collective

bargaining agreement (entered into by the parties

freely and without evidence of fraud) void as against

public policy, the contract terms must be invalid on

the basis of clear and distinct legal principles. Thre

Supreme Court has stated:

* * * As the term “public policy’ is vague,

there must be found definite indications in the

law of the sovereignty to justify the invalida-

tion of a contract as contrary to that pol-

icy * * *, Only dominant public policy would

justify [invalidating contracts] * * *.

Muschany vy. United States, 324 U.S. 49, 66, 65 5S. Ct.

442, 451, 89 L. Ed. 744 (1945). Pursuant to this prin-

ciple, public policy of the United States in general,

is to be determined from a consideration ef the Con-

stitution, treaties, federal statutes and applicable legal!

precedents. See Hurd vy. Hodge, 334 U.S, 24, 34-30, 65

S. Ct. 847, 92 L. Ed. 1187 (1948) ; Waschany, 324 U.S.

at 66, 65S. Ct. 442; St. Louis Mining & Milling Co, v.

Montana Mining Co., V71 U.S. 650, 655, 19 S. Ct. 61,

45 L. Ed. 320 (1898). In the case sub judice we are

not without legislative guidance in ascertaining the

public policy applicable to the particular situation

here presented. Title VIT of the Civil Rights Act of

1964 provides Congress’ formulation of public poliey.

Cf. Twin City Pipe Line Co. v. Harding Glass Co,, 283

U.S. 353, 357, 51S. Ct. 476, 75 L. Ed. 1112 (1931). By

jl

Title VII, Congress in the context of employment dis-

crimination supplanted with its own views any judicial

determination of publie policy.” Cf. United States vy.

Atlantic Mutual Ins. Co., 343 U.S. 236, 245, 72 S. Ct.

066, 96 L. Ed. 907 (1952) (Frankfurter, J.,

(lissenting).

Our reading of Tithe VIT reveals no statutory

proscription of plant-wide seniority systems. To the

contrary, Title VIL authorizes the use of “hona fide”

scilority systems:

Notwithstanding any other provision of this

subchapter, it shall not be an unlawful employ-

ment practice for an employer to apply differ-

ent standards of compensation, or different

terms, conditions or privileges of employment

pursuant to a bona fide seniority or merit sys-

a? %,

42 U.S.C. § 20000-2(h). Moreover, we can diseern no

“* * * definite indications * * * to justify the in-

validation of [such] a contract as contrary to that

“To date, two opposing interpretations exist of the legisla-

tive history of Title VII as it pertains to company-wide senior-

ity systems under collective bargaining agreements. Com paré

Wulers v. Wisconsin Nteel Works, 502 iO 2d 1309 (7th Cir.

L9T4) with Watkins v. Steel Workers Local 2369, 369 F. Supp.

l2zl, lezy-1229 (E.D. La, 1974) appeal docketed No. 74-2604

(ath Cir, June 17, 1974). Watkins under its construction of

congressional intent, holds that company-wide seniority sys-

tems may be held to violate Title VII if found to perpetuate

the effects of past discrimination. Waters, on the other hand,

by its interpretation of congressional intent, holds that a com-

pany-wide seniority system, neutral on its face, will not. vio-

late Title VII. Neither court held that Congress intended that

plant-wide seniority systems, without more, violate public pol-

icy. Hence, whether we adopt the Watkins or Waters interpre-

tation of legislative history, we nevertheless conclude that pub-

lie policy does not proscribe seniority provisions such as those

at issue here.

[public] policy.” Muschany, 324 U.S. at 66, 65 S. Ct.

at 451.” While the legislative history of Title VII is

largely uninstructive with respect to seniority rights,

it is evident to us that Congress did not intend that a

per se violation of the Act occur whenever females

and minority group persons are disadvantaged by re-

verse seniority layotts.”” See United States vy. Jackson-

ville Terminal Co., 451 F. 2d 418, 445 (5th Cir. 1971),

cert. denied, 406 U.S. 906, 92 8. Ct. 1607, 31 L. Ed. 2d

815 (1972).

Accordingly, we hold that a seniority clause pro-

viding for layoffs by reverse order of seniority 1s

not contrary to public policy and welfare and conse-

quently is not subject to modification by court decree.

IV. Evidentiary Considerations

r

To this point we have concluded that: (1) the

seniority provisions of the Company's collective bar-

eaining agreement are not inconsistent with any pro-

vision of the conciliation agreement; and (2) the

seniority provisions do not offend public policy.

"In this regard, we recognize that those courts confronted

with devising remedies for aggrieved workers who were diserim-

inated against under departmental seniority systems, have

vranted a form of relief which substitutes a plant-wide seniority

system for a departmental system. £.7.. Franks v. Bowman

Transp. Co. 495 F. 94 398 (Sth Cir, 1974): United States v.

Bethlehem Steel Corp.. 446 F. 2d 652 (2d Cir. 1971). Under such

relief, departmental seniority is discounted, as employees must

compete on the basis of actual number of years employed by

the Company. Consequently, a minority group worker hired

prior to a white worker, but having less years of seniority in

the previously all-white dep.rtment, becomes senior to the white

worker for benefits and promotion. However, a minority group

worker hired affer a white worker remains junior in seniority

to the white worker even after institution of a plant-wide

seniority system. See e.g. Bethlehem Steel Corp., supra at G61.

tecord Note. Business Necessity under Title VIL of the

Civil Rights Act of 1964: A No-Alternative Approach, $4 Yale

53

There remains for our consideration the effect that

evidence of discrimination may have upon laying off

workers in reverse order of seniority. We ‘turn to

evidentiary considerations at this juncture because:

(1) evidence appears in the record indicating dis-

parate Impact on the employment of female and

nunority group workers,” cf. Western Addition Com-

munity Organ., v. N.L.R.B., 485 F. 2d 917 (D.C. Cir.

1973), cert. granted, 415 U.S. 913, 94S. Ct. 1487 29

L.. Ed. 2d 446 (1974); and (2) we are obliged to fur-

nish directions to the district court with respect to

evidence, if any, it may receive concerning those issues

which remain for resolution. |

. Jonsequently we must answer the following ques-

tions : (1) What evidence, if any, may be adduced in

the district court; (2) to what issue is such evidence

to be directed ? Depending upon the answers to the

preceding questions, the ultimate question in this pro-

LJ. 98, 100-01 wn. 17 (1974): and discussion in Developments in

the Law—Employment Discrimination and Title VII of the

Civil Rights Act of 1964, 84 Harv. L. Rev. 1109. 1159-60

(1971). —

“We recognize that the Company’s affidavits contain statistics

for the period 1966-1974 revealing a disproportion in the num-

ber of minority group and female employees. However, we

decline to equate as a matter of law such a statistical showine

with a per se violation of Title VIL. But see Parham vy. Nouth-

mestern Bell Tel. Co., 433 F, 2d 421, 426 (8th Cir. i971) (hold-

ing statistics of gross disparity to constitute a per se violation)

At the most, we believe the better view is that statistics dhow-

ing disparity may present a prima facie case of Title VIL yio-

lation, but, without more, mere statistics are not conclusive

proof of discriminatory practices. See Uuited States y. Buase

Int'l Corp. 456 F. 2d 112, 120 (oth Cir. 1972). Here the record

reveals no more than just bare statistics. In any event. by rea-

son of our disposition (see n. 54, infra) even these statistics are

unavailing to a litigant unless and until the plant-wide senior-

ity provisions are declared not to be bona fide.

54

ceeding becomes: assuming, a. guendo, evidence of

vast discrimination, is judicial modification permitted

of facially neutral plantwide seniority provistons

where these provisions operate to the disadvantage of

female and minority group workers ? /

We are not concerned here with allegations or prool

that the Company's plant-wide seniority system is by

its express terms and intent presently discriminatory.

Nor are we concerned with any charges or proofs that

this plant-wide seniority system, which is facially neu-

tral, was intended and designed to disguise present

discriminatory practices.” The only challenge to the

validity of the Company’s plant-wide seniority system

ix that the seniority system, although facially neutral,

nevertheless violates Title VIT in that it operates to

carry forward the effect of prior acts of diserimina-

tion. If evidence were to be permitted in support of

such a theory, see Watkins, supra note 48, it could, at

best, demonstrate that past discrimination occurred,

and that the effects of such past discrimination are

perpetuated by the present layoff practices under the

current plant-wide seniority system. As we explain

below, proofs of this nature are without probative

value in challenging a bona fide seniority system. We

believe that Congress intended to bar proof of the

“perpetuating” effect of a plant-wide seniority aymem

as it regarded such systems as “bona fide ‘. Con-

evess, While recognizing that a bona fide seniority

system might well perpetuate past discriminatory

practices, nevertheless chose between upsetting all col-

lective bargaining agreements with such provisions

?QOther than the Company affidavits (sec note ol, supid).

the record is completely silent as to proof or assertions that

diseriminatory employment practices exist or that the seniority

provisions are not hbova fide.

8 See 42 ULS.C. § 20000-2(h): note 49, supra.

55

and permitting them despite the perpetuating effect

that they might have. We believe that Congress in-

tended a plant-wide seniority system, facially neutral

but having a disproportionate impact on female and

minority group workers, to be a bona fide seniority

system within the meaning of §703(h) of the Act.

To effectuate this intent, the only evidence proba-

tive in a challenge to a plant-wide seniority system

would be evidence directed to its bona fide character;

that is, evidence directed either to the neutrality of

the seniority system or evidence directed to ascertain-

ing an intent or design to disguise discrimination. As

such, it is not fatal that the seniority system continues

* Our analysis would make it appropriate for a district court

to have evidence presented in two stages. At the first stage, evi-

dence would be received with respect to the bona fide nature of

the plant-wide seniority system. If, based on such evidence, the

court finds the challenged plant-wide seniority system to be

bona fide, no further evidence or inquiry would be needed.

However, if it is established that the plant-wide seniority sys-

tem is not bona fide, then at a second evidentiary stage an ag-

grieved or proper party seeking relief may adduce all evidence

relevant to a Title VII proceeding, including but not limited

to past discriminatory employment practices. See, e.g., John-

son v. Goodyear Tire & Rubber Co., 491 F. 2d 1364 (5th Cir.

1974); United States v. N. L. Indus., Inc., 479 F. 2d 354, 364

(Sth Cir. 1973); United States vy. Jacksonville Terminal Co., 451

F, 2d 418 (5th Cir. 1971), cert. denied, 406 U.S. 906, 92 S. Ct.

1607, 31 L. Ed. 2d 815 (1972); United States v. Bethlehem

Steel Corp., 446 F. 2d 652 (2d Cir. 1971); Robinson y. Loril-

lard Corp., 444 F. 2d 791 (4th Cir. 1971), petitions for cert.

dismissed, 404 U.S. 1006, 92 S. Ct. 573, 30 L. Ed. 2d 655 (1971)

and 404 U.S. 1007, 92 S. Ct. 651, 30 L. Ed. 2d 655 (1972) ;

Papermakers Local 189, 416 F. 2d at 988: see, also, Peters vy.

Missouri-Pacifie R. Co., 483 F. 2d 490 (5th Cir.), cert. denied,

414 U.S. 1002, 94 S. Ct. 356, 38 L. Ed. 2d 238 (1973). In this

context, a bona fide plant-wide seniority system is one which is

facially neutral and was neither designed nor intended to dis-

guise discriminatory practices.

56

the effect of past employment discrimination. We be-

lieve this result was recognized and left undisturbed by,

Congress in its enactment of §703(h) and (j).° Al-

though the Congressional statements which we set out

were made prior to the adoption of the Act in its final

form and therefore were not addressed to the explicit

language of §703(h), these statements nonetheless

were directed to the effect of seniority systems with

which §703(h) is concerned. As such, we believe they

are of primary assistance in interpreting congressional

intent as to seniority systems.”

The Interpretive Memorandum of Senators Clark

and Case, floor managers for the Title VII bill in the

Senate, in pertinent part provided:

Title VII would have no effect on established

seniority rights. Its effect is prospective and

not retrospective. Thus, for example, if a busi-

ness has been discriminating in the past and as

a result has an all-white working force, when

® Section 703(j), 42 U.S.C. § 2000e-2(j), in pertinent part

provides:

“(j) Nothing contained in this subchapter shall be interpreted

to require any employer, * * * to grant preferential treatment

to any individual or to any group because of the race, color,

religion, sex, or national origin of such individual or group

on account of an imbalance which may exist with respect to the

total number or percentage of persons of any race, color, reli-

gion, sex, or national origin employed by any employer, * * *”.

°° Although a recent district court case has rejected the quoted

congressional statements as an interpretive guide because of

this chronology, we do not agree with its analysis. Watkins v.

Steel Workers Local 2369, 369 F. Supp. 1221, 1227-1229 (E.D.

La. 1974), appeal docketed No. 74-2604 (5th Cir. June 17,

1974). We believe that the legislative statements made prior to

the introduction of § 703(h) and dealing directly with seniority

systems are entitled to weight in interpreting congressional in-

tent as to seniority systems as the enactment of §703(h) was

not designed to change the intent and effect of Title VII. Sea

110 Cong. Rec. 12,723 (1964) ; Note, supra n. 50, at 100-01 n. 17.

57

the title comes into effect the employer’s obli-

gation would be simply to fill future vacancies

on a nondiscriminatory basis. He would not be

obliged—or indeed, permitted—to fire whites in

order to hire Negroes, or to prefer Negroes for

future vacancies, or, once Negroes are hired, to

give them special seniority rights at the expense

of the white workers hired earlier, (However,

where waiting lists for employment or training

are, prior to the effective date of the title, main-

tained on a discriminatory basis, the use of such

lists after the title takes effect may be held an

unlawful subterfuge to accomplish discrimina-

tion.) (emphasis supplied.)

110 Cong. Rec. 7213 (April 8, 1964). This interpreta-

tion of the interaction of Title VII with the “‘last hired,

first fired’’ principle of employment seniority was re-

peated in Sentator Clark’s response to written ques-

tions posed by Senator Dirksen:

_ Question. Would the same situation prevail

im respect to promotions, when that manage-

ment function is governed by a labor contract

calling for promotions on the basis of seniority ?

What of dismissals? Normally, labor contracts

call for “last hired, first fired.’’ If the last hired

are Negroes, is the employer discriminating if

his contract requires that they be first fired and

the remaining employees are white ?

Answer. Senority rights are in no way af-

fected by the bill. If under a “‘lagt hired, first

fired’’ agreement a Negro happens to be the

“Jast hired,’’ he can still be “first fired” as long

as it 1s done because of his status as “last

hired’’ and not because of his race.

Question. If an employer is directed to abolish

his employment list because of discrimination

what happens to seniority ?

Answer. The bill is not retroactive, and it will

not require an employer to change existing

seniority lists.

58

110 Cong. Ree. 7217 (April 8, 1964). See also id. at

6996 ( April 6, 1964). Moreover, a memorandum / —

the Department of Justice presented by Senator Clart

similarly interpreted the legislation’s effect upon lay-

offs made pursuant to a system of reverse order of

senlority : |

Title VII would have no effect on seniority

rights existing at the time it takes effect. If, for

example, a collective bargaining contract pro-

vides that in the event of layoffs, those who were

hired last must be laid off first, such a provision

would not be affected in the least by title VI.

This would be true even in the case where owing

to discrimination prior to the effective date ot

the title, white workers had more sentority than

Negroes. Title VII is directed at discrimination

based on race, color, religion, sex or national

origin. It is perfectly clear that when a worker

is laid off or denied a chance for promotion be-

cause under established seniority rules he is low

man on the totem pole he is not being discriumi-

nated against because of his race. Of course, 1 f

the seniority vule itself ws discriminatory, it

would be unlawful under Title VIT, If a rule

were to state that all Negroes must be laid off

before any white man, such a rule could not

serve as the basis for a discharge subsequent to

the effective date of the title. * * * But, in the

ordinary case, assuming that seniority were

built up over a peridd of time during which

Negroes were not hired, these rights would not

be set aside by the taking effect of Title VII.

** * ‘Any differences tn treatment based on

established seniority rights would not be based

on vace and would not be forbidden by the title.

110 Cong. Ree. 7207 (April 8, 1964). (emphasis

supplied.)

Our interpretation of the legislative history of Title

VII (i.e., that Congress did not intend the chaotic

consequences that would result from declaring unlaw-

59

ful all seniority systems which may disadvantage fe-

males and minority group persons, see, e.g., United

States v. Jacksonville Terminal Co., 451 F. 2d at 445, )

has been adopted by other courts as well. The Fifth

and Seventh Circuits agree with our view of the leg-

islative history even though they considered this ques-

tion in the more traditional procedural context of a

Title VII proceeding.” In Waters v. Wisconsin Steel

Works, 502 F. 2d 1309 (7th Cir. 1974), the Seventh

Circuit stated:

An employment seniority system embodying

the “last hired, first fired’’ principle does not

of itself perpetuate past discrimination. To

hold otherwise would be tantamount to shack-

ling white employees with a burden of a past

discrimination created not by them but by their

employer. Tithe VIE was not designed to nur-

ture such reverse discriminatory preferences.

Griggs v. Duke Power Co., 401 U.S. 424, 430-

431 191 S. Ct. 849, 28 L. Ed. 2d 158] (1971).

502 F. 2d at 1320. In Papermakers Local 189 v. United

States, 416 F. 2d 980 (5th Cir. 1969), cert. denied, 397

U.S, 919, 90'S. Ct. 926, 25 L. Ed. 2d 100 (1970), the

Fifth Cireuit reasoned:

No doubt, Congress, to prevent “reverse dis-

crimination” meant to protect certain seniority

rights that could not have existed but for previ-

ous racial discrimination. For example a Negro

who had been rejected by an employer on racial

*? The Seventh Circuit case, Waters v. Wisconsin Steel Works,

supra, was tried under Title VII and 42 U.S.C. § 1981. The

complaint charged that the defendant's employment practices

and policies constituted individual discrimination against the

two plaintiffs. In the Fifth Circuit case, Papermakers Local

189, supra, the action was initiated by the Government. to set

aside job seniority in any form as discriminatory against black

employees under Title VIT.

60

grounds before passage of the Act could not,

after being hired, claim to outrank whites who

had been hired before him but after his orig-

inal rejection, even though the Negro might

have had senior status but for the past dis-

crimination. As the court pointed out in

Quarles, [Quarles v. Phillip Morris, 279 F.

Supp. 505, E.D. Va.] the treatment of “job”

or “department seniority’’ raises problems dif-

ferent from those discussed in the Senate de-

bates: “a department seniority system that has

its genesis in racial discrimination is not a bona

fide seniority system.’’ 279 F. Supp. at 51%.

It is one thing for legislation to require the

creation of fictional seniority for newly hired

Negroes, and quite another thing for it to re-

quire that time actually worked in Negro jobs

be given equal status with time worked in white

jobs. To begin with, requiring employers to cor-

rect their pre-Act discrimination by creating

fictional seniority for new Negro employees

would not necessarily aid the actual victims of

the previous discrimination. There would be

no guaranty that the new employees had actu-

ally suffered exclusion at the hands of the em-

ployer in the past, or, if they had, there would

he no way of knowing whether, after being

hired, they would have continued to work for

the same employer. In other words, creating fie-

tional employment time for newly-hired Negroes

would comprise preferential rather than re-

medial treatment. The clear thrust of the Sen-

ate debate is directed against such preferential

treatment on the basis of race. That sentiment

was codified in an important portion of Title

VIT, § 703()):

“(j) Nothing contained in this subchapter

shall be interpreted to require any employer,

employment agency, labor organization, or joint

labor-management committee subject to this

subchapter to grant preferential treatment to

any individual or to any group because of the

61

race, color, religion, sex, or nati igi

such individual or group on nem boy =

balance which may exist with respect to the

total number or percentage of persons of an

race, color, religion, sex, or national origin -

wgn by any employer, referred or classified

we employment by any employment agency or

abor organization, admitted to membership or

reap hy any labor organization, or admitted

0, or employed in, any apprenticeship or other

training program, in comparison with the total

number of percentage of persons of such race

color, religion, sex, or national origin in an

community, State, section, or other area, or in

oo svete work foree in any communi

§ 300b0- sa)? ° other area.’ 42 USC

We conclude, in agreement with Quarles

Congress exempted from the midi

requirements only those seniority rights that

red white workers preference over junior

d gr This is not to say that Whitfield

[ =e “eo v. United States Steelworkers, Local

= 8, 5 Cir., 263 F. 2d 546] and Quarles and

itle VIT prohibit an employer from giving

compensatory training and help to the Negro

ag who have been discriminated against

itle VIT’s imposition of an affirmative duty on

employers to undo past discrimination permits

ro my action for those who have suf-

| pce a —, discrimination. Papermakers

aay - 2d at 994-995. (Emphasis

We thus conelude in light of the legislati

legislative history

that: on balance a facially neutral ceonnse ng nd

nlority system, without more, is a bona fide seniority

system and will be sustained even though it may

operate to the disadvantage of females and minority

Sroups as a result of past employment practices If

a remedy is to be provided alleviating the effects of

62

past discrimination perpetuated by layoffs in reverse

order of seniority, we believe such remedy must be

preseribed by the legislature and not by judicial

deeree.

Having reached this conclusion our analysis is com-

plete. Here, with the meager record before us and

considering the manner in which the issues are

framed, we need not, and indeed could not, decide

whether any different result would obtain in an action

brought by an aggrieved party * were the requisite

burden of proof sustained. See note 54, supra; and

generally Alexander V. Gardner-Denver Co., supra.

What we decide here can obviously affect and bind

only the parties present in this litigation. Of the

parties before us, none has offered evidence to prove

that the seniority provisions are not bona fide.

Having ascertained no basis in the record, or as a

matter of law, to sustain the partial summary judg-

ment order of September 23, 1974 as it pertains to the

subject of layoffs, we will remand to the district court

with directions: (1) to vacate so much of the Septem-

ber 23, 1974 order as is inconsistent with this opinion:

and (2) to conduct such further proceedings not in-

consistent with this opinion as may thereafter be

required.

Each party will bear its own costs.

VAN DUSEN, Circuit Judge, (concurring) :

While concurring in the judgment of the court, I

respectfully am unable to agree with the majority’s

s There is no case which we have examined which has been

brought in a similar procedural context. All of the cases pre-

senting analogous issues have resulted from either a complaint

alleging individual or class discrimination in violation of Title

VII, see, e.g.. Pettway v. American Cast Iron Pipe Co., 494 F.

9d 211 (5th Cir. 1974), or a classic “pattern or practice” suit

instituted by the Government, see, ¢.9., L ‘nited States v. N. L.

Indus., Inc., 479 F. 2d 354 (8th Cir. 1975).

“i

63

view of (1) the effect of public policy behi

VIt, and (2) the legislative vets of that og “

majority opinion at pages 704-710. Because this case

is being remanded and past discrimination may be

found on an amplified record in this or a related case

I will state my views briefly.’

The importance of the policy underlying Title VII

was acknowledged by the Supreme Court in Alexander

v. Gardner-Denver Co., 415 U.S. 36, 94 S. Ct. 1011

39 L, Ed. 2d 147 (1974), a case involving “the proper

relationship between federal courts and the grievance-

arbitration machinery of collective bargaining agree-

ments in the resolution and enforcement of an indivi-

dual’s rights to equal employment opportunities under

Title VII * * *.” Jd. at 38, 94S. Ct. at 1014-1015. as

follows: 7

, [LJegislative enactments in this area have

ong evinced a general intent to accord parallel

*Even though the parties to this case fail to create a record

on remand which permits relief under 42 U.S.C. § 2000e-1 ff

other parties, such as employees affected by the current layoffs,

are not foreclosed from bringing actions under Title VII or

alternative statutes such as 42 U.S.C. $1981, see Watkins v

U.S. W. A. 369 F, Supp. 1221 (E.D. La. 1974); Comment,

Implying Punitive Damages in Employment Discrimination

Cases, 9 Harv. Civ. Rights-Civ. Lib. L. ‘Rev. 325, 348 (1974)

Also, actions can be brought under state law pursuant to Title

10, NWJ.S.A. §$ 5-15 ff., see 42 U.S.C. § 2000e-5(c) and (d), and

possibly, under the N.L.R.A. for breach of the union’s dute a

paged representation. See Western Addition Community Org v

V.L.RB., 198 US. App. D.C. 138, 485 F. 2d 917, 930 n, 38

pet cert. granted, 415 U.S. 913, 94 S. Ct. 1407, 39 L. Fd.

2d 446 (1974). But see Comment, Labor Unions and Title VII:

The Impact of Mansion House, 41 Tenn. L. Rev. 718 721-22

( 1974). Under these circumstances, the statements of this cunt

in the majority opinion may become very important in subse-

quent proceedings in the district court in thi

is or related ca

of the type described above. =

64

or overlapping remedies against discrimination.

In the Civil, Rights Act of 1964, 42 U.S.C.

§ 2000a et seq., Congress indicated that it con-

sidered the policy against discrimination to be of

the “highest priority.”” Newman V. Piggie Park

Enterprises, supra, at 402 [Newman v. Piggie

Park Enterprises, Inc., 390 U.S. 400, 88 S. Ct.

964, 19 L. Ed. 2d 1263]. Consistent with this

view, Title VII provides for consideration of

employment-discrimination claims I several

forums. [Citations omitted.] And, in general,

submission of a claim to one forum does not

preclude a later submission to another, See 42

U.S.C. §§ 2000e-5(b) and (f) (1970 ed. Supp.

IL); McDonnell P uglas Corp v. Green, supra

[McDonnell Douglas Corp, v. Green, 411 US.

792, 93 S. Ct. 1817, 36 L. Ed. 2d 668.] More-

over, the legislative history of Title VII mani-

fests a congressional intent to allow an indivi-

dual to pursue independently his rights under

both Title VII and other applicable state and

federal statutes. The clear inference is that Title

VII was designed to supplement, rather than

supplant, existing laws and institutions relat-

ing to employment discrimination,

* * * * *

Title VII * * * concerns not majoritarian

processes, but an individual’s right to equal em-

ployment opportunities. Title VII's strictures

are absolute and represent a congressional com-

mand that each employee be free from dis-

criminatory practices. Of necessity, the rights

conferred can form no part of the collective-

bargaining process since waiver of those rights

would defeat the paramount congressional pur-

pose behind Title VIT. 415 U.S. at 47-49, 51-

52, 94S. Ct. at 1019-1020, 1021. See also td, at

44-45, 56-60, 94 S, Ct. 1011. [Footnotes omuit-

ted. |

The importance of this policy has prompted courts

to require that labor agreements of various types be

65

modified to effect the ends of Title VII. See, e.g.,

Waters v. Wisconsin Steel Works, 502 F. 2d 1309 (7th

Cir. 1974) ; Pettway v. American Cast Iron Pipe Co.,

494 F, 2d 211 (5th Cir. 1974) ; Vogler v. McCarty, 451

F. 2d 1236 (5th Cir. 1971) ; Contractor’s Association

of Eastern Pa. v. Sec’y. of Labor, 442 F. 2d 159, 174

(3d Cir. 1971) ; United States v. Sheet Metal Workers,

Local 36, 416 F. 2d 123 (8th Cir. 1969); Savannah

Printing Union vy. Union Camp Corp., 350 F. Supp.

632, 636 (S.D. Ga. 1972). These modifications were

ordered even though the seniority provisions were

‘neutral on their face, and even neutral in terms of

intent,’’ where the effect was “to ‘freeze’ the status

quo of prior discriminatory employment practices.”’

Griggs v. Duke Power Co., 401 U.S, 424, 430, 91 S. Ct.

849, 853, 28 L. Ed. 2d 158 (1971). See also Robinson

v. Lorillard, 444 F. 2d 791, 796-797 (4th Cir. 1971).

The objective criterion of intent and the rationale of

these cases apply equally to plant-wide seniority sys-

tems where the plant formerly hired on a ‘whites

only” basis.’ “If the seniority practices struck down

* * * were not ‘bona fide’ within the meaning of sec-

tion 703(h), because they discriminated on grounds of

race, and if former exclusionary practices in those

cases established that the present differences in treat-

* For example, I cannot agree with the majority’s statement

(p. 706 of filed opinion) that “the only evidence probative in a

challenge to a plant-wide seniority system would be * * *

evidence directed either to the neutrality of the seniority system

or evidence directed to ascertaining an intent or design to dis-

guise discrimination.” See also last sentence of note 54. After

the changed conditions occuring through employment of minor-

ity persons in early 1974, the “different terms, conditions or

privileges of employment pursuant to a bona fide seniority * * *

system” may have become, and hence their continuation would

be, “the result of an intention to discriminate.” See 42 U.S.C.

§ 2000e-2(h).

66

ment of whites and blacks were the result of ‘an in-

tention to discriminate’ within the meaning of section

703(h), then, for the identical reasons, section 703(h)

does not validate seniority practices in formerly white

only plants.’’ Cooper & Sobol, Seniority and Testing

Under Fair Employment Law: A General Approach

to Objective Criteria of Hiring and Promotion, 82

Harv. L. Rey. 1598, 1629 (1969) [footnotes omitted ].*

Tt is true that certain cases have indicated that plant-

wide seniority systems would be treated differently

from job or departmental seniority. Waters v. Wis-

consin Steel Works, 502 F. 2d 1309, 1318-1320 (7th

Cir. 1974) ; Local 189, United Papermakers & Paper-

workers v. United States, 416 F. 2d 980, 994-995 (5th

Cir. 1969), cert. denied, 397 U.S. 919, 90 S. Ct. 926,

25 L. Ed. 2d 100 (1970). However, the basis for such

distinction has been the courts’ view of the legislative

history of the Act, rather than any conclusion that

the principles which required modification of other

seniority practices did not apply to plant seniority. I

disagree with the interpretation of the legislative his-

tory expressed in Waters and Local 189, as well us by

the majority at pp. 707-710.

I find persuasive the writers who contend that the

legislative histcry indicates that Congress, in enact-

ing Title VII, did not intend to preclude remedies

altering plant seniority which perpetuates diserimina-

tion. See Watkins v. U.S.W.A., 369 F. Supp. 1221,

1227-1229 (E.D. La. 1974), app. pending; Cooper &

°For the effe.ts of plant-wide seniority on a minority group

in a period of lay-offs in a specific situation, see Plantwide

Seniority, Black Employment and Employer Affirmative Action,

- 96 Industrial & Labor Relations Review 686 (1972).

*For this reason. I cannot scree with the sweeping language

in the last sentence of the second complete paragraph ending on

page 706 of the majority opinion.

ee ee

67

Sobol, supra; Comment, The Inevitable Interplay of

Title VII and the National Labor Relations Act: A

New Role For the NLRB, 123 U. Pa. L. Rev. 158,

163-64 (1974). But see Note, Business Necessity Under

Title VII of the Civil Rights Act of 1964: A No-Alter-

native Approach, 84 Yale L.J. 98, 100-01 n, 17 (1974).

For these reasons, I disagree with the majority’s

conclusion at page 710 that no relief could be forth-

coming to an aggrieved party who established that a

plant-wide seniority system embodied in the collective

bargaining agreement perpetuated past discrimination

without proving a subjective discriminatory intent.

JUDGMENT

This cause came on to be heard on the record from

the United States District Court for the District of

New Jersey and was argued by counsel.

On consideration whereof, it is now here ordered and

adjudged by this Court that the cause be, and the same

is hereby remanded to the said District Court with di-

rections to vacate so much of the September 23, 1974

order as is inconsistent with the opinion of this

Court and to conduct such further proceedings not in-

consistent with the opinion of this Court as may there-

after be required. Each party to bear its own costs.

Attest:

Clerk.

January 30, 1975.

Certified as a true copy and issued in lieu of a

formal mandate on March 12, 1975.

Test: THomas F. Quinn,

Clerk, United States Court of Appeals

for the Third Circuit.

U.S. GOVERNMENT PRINTING OFFICE: 1978