Petition — UNITED STEELWORKERS OF AMERICA v. FORD (Nos. 75-1478, 75-1475)
Supreme Court brief1975
Ask Donna
What actually matters in this document.
Text
i?
APR 13° 1976
IN THE aie
Suyreme Court of the Cnited States
October Term, 1975
N. €5-i1478
Unrtep STEELWORKERS OF America, AFL-CIO-CLC, and
its Loca, Unions 1013, 1131, 1489, 1700, 1733, 2122,
2210, 2405, 2421, 2927, 3662 and 4203,
Petitioners,
v.
Joun S. Forp, Witure Cain, Witire L. Coteman, Joe N.
Taytor, Ropert Cain, Davin Bowe, Eart Beit, EQuAL
EMPLOYMENT OpporTUNITY CoMMISSION, and UNITED
StaTes STEEL CorPORATION.
Petition for a Writ of Certiorari
to the United States Court of Appeals
for the Fifth Circuit
BERNARD KLEIMAN Micuae. H. GorresMAN
Car B. FRANKEL Ropert M. WeINBERG
United Steelworkers of Bredhoff, Cushman, Gottesman
America, AFL-CIO-CLC & Cohen
Five Gateway Center 1000 Connecticut Avenue, N.W.
Pittsburgh, Pa. 15222 Washington, D.C. 20036
TeroME A. Cooper
Joun FALKENBERRY
Cooper, Mitch & Crawford
409 North 21st Street
Birmingham, Ala. 35203
a sO —- Ne
’ an : 33
eS
i
TABLE OF CONTENTS
Page
RE EEE 6 ccovcunscugdecscuucdeceseouseaceones 1
ET on 465 644000000 c06600cunetesetésdeseennen 2
GPS UIEe SUNUUEEED occ ccsccccccdeccccseneuaceceess 2
Se SOE och nnienn cncecssovecsenensnsenees 3
DCCC TE GF BE GED 6 oc ccncovesesccccoceesetoans
REASONS FOR GRANTING THE WRIT ................. 19
GUE 6.004005 sccndsorcannehakaseueceasnnaceduans 25
Appendix:
Opinion of the District Court .............cececeecees App. |!
Opinion of the Court of Appeals .................045. App. 29
Order and Opinion on Petition for Rehearing ........... App. 53
CITATIONS
Cases:
Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975) .. 2, 13, 17, 19-23
Bing v. Roadway Express, Inc., 485 F.2d 441 (5th Cir. 1973) .. 11
Ferrell-Hicks Chevrolet, Inc., 160 NLRB 1692 (1966) ......... 24
Fibreboard Paper Products Corp., 138 NLRB 550 (1962), en-
forced 322 F.2d 411 (D.C. Cir. 1963), affirmed 379 U.S. 203
SEED cucnenecesccsedeesadesncetnasénschpanscucennees 24
Kohler Co., 148 NLRB 1434 (1964), enforced 345 F.2d 748
Se GE GED KKK ddd ces entodundenecccdeesonsuasaones 24
Lemon v. Kurtzman, 411 U.S. 192 (1973) ...........000.00.- 19
Page
Local 138, Operating Engineers, 151 NLRB 972 (1965) ........ 24
Local 189 v. United States, 416 F.2d 980 (5th Cir. 1969), cert.
SE Ee GU GOOD 60 vn.cice 6dcceuncssutenunues 8, 15
Lodge 743, International Association of Machinists v. United Air-
craft Corp., —F.2d—, 90 LRRM 2272 (2nd Cir. 1975) ...... 24
Long v. Georgia Kraft Co., 455 F.2d 331 (5th Cir. 1971) ....... 11
Matter of Bethlehem Steel Corp., OFCC Dkt. 102-68 (1970) .. 9-11,
12, 15
NLRB vy. Baltimore Transit Co., 140 F.2d 51, 55 (4th Cir. 1944),
GES GHEE Ge WE FO CHUN ove cscs eccccevcnccdececes 24
NLRB v. E & B Brewing Co., 276 F.2d 594 (6th Cir. 1960), cert.
GES TD Gs Ge CUED eee cccccedcceccccccsccvesvees 24
NLRB v. Guy F. Atkinson Co., 195 F.2d 141, 149 (9th Cir. 1952) 24
NLRB vy. IBT, Local 41, 225 F.2d 343 (8th Cir. 1955) ......... 24
Quarles v. Phillip Morris Co., 279 F. Supp. 505 (E.D. Va. 1968) 7, 8
Retail, Wholesale and Department Store Union v. NLRB, 466 F.2d
Se Ge SS CUED i. bwewGhdee Weeekauendudcecedecetae 23
Rowe v. General Motors Corp., 457 F.2d 348 (5th Cir. 1972)... 11
United States v. Allegheny-Ludlum Industries, Inc., 8 FEP Cases
198 (N.D. Ala. 1974), affirmed 517 F.2d 826 (5th Cir. 1975),
pets. for cert. pending, Nos. 75-1005, 75-1008 ............. 16-17
United States v. Bethlehem Steel Corp., 312 F. Supp. 977 (W.D.-
N.Y. 1970), mod. 446 F.2d 652 (2nd Cir. 1971) ... 8-9, 11, 12, 15
United States v. Georgia Power Co., 474 F.2d 906 (5th Cir. 1973) 11
United States v. H. K. Porter Co., 296 F. Supp. 40 (N.D. Ala.
_ PPP PTTOTT TTT TTT TT ee CIT TT TTT 8, 11, 12, 15
United States v. Hayes International Corp., 456 F.2d 112 (5th
BE COED bn. dves ce cdeecncdessthpccddnisnecnenceReaedices 11
United States v. Jacksonville Terminal Co., 451 F.2d 418 (5th
- | | PPeeererrrrrTTrrrrTrrcrririTiciy rite 11
Page
United States v. Local 189, 301 F. Supp. 906 (E.D. La. 1969),
affirmed 416 F.2d 980 (5th Cir. 1969), cert. denied 397 U.S.
GE GD sdkcdadeeiscceesccadaccaiteiietiaeae 7, 8
Whitfield v. United Steelworkers of America, 263 F.2d 546 (5th
Cir. 1959), cert. denied 360 U.S. 902 (1959).... 6-7, 8, 11, 14-15
Statutes and Executive Orders:
Civil Rights Act of 1964, Title VII, 42 U.S.C. §2000e et seq. ... 2-25
Section 706(g), 42 U.S.C. §2000e-5(g) ...............45. 3, 19
Section 707, 42 U.S.C. §20000-6 2.0... ccc ccc cece cceccces 3
Executive Order 11246
National Labor Relations Act, 29 U.S.C. $151 et seq ...... 19, 22-25
IN THE
Supreme Court of the Gnited States
October Term, 1975
No.
Unrrep STEELWoRKERS OF AmMeErRIcA, AFL-CIO-CLC, and
its Loca Unions 1013, 1131, 1489, 1700, 1733, 2122,
2210, 2405, 2421, 2927, 3662 and 4203,
Petitioners,
v.
Joun S. Forp, Witure Carn, Witur L. CoLeman, Joe N.
Taytor, Ropert Carn, Davin Bowir, Eart Beit, EQuar
EMPLOYMENT OpporTUNITY CoMMISSION, and UNITED
STaTES STEEL CORPORATION.
Petition for a Writ of Certiorari
to the United States Court of Appeals
for the Fifth Circuit .
Petitioners pray that a writ of certiorari issue to review
the judgment of the United States Court of Appeals for the
Fifth Circuit.
OPINIONS BELOW
The memorandum of opinion of the United States District
Court for the Northern District of Alabama, issued Decem-
ber 11, 1973, is reported at 371 F.Supp. 1045, and is re-
printed at App. 1-28 (pages 1-28 of the appendix to this
2
petition). The opinion of the United States Court of Ap-
peals for the Fifth Circuit, issued October 8, 1975, is re-
ported at 520 F.2d 1043, and is reprinted at App. 29-52.
The order and opinion of that court on the petitions for re-
hearing, issued January 14, 1976, is reported at 525 F.2d
1214, and is reprinted at App. 53-54.
JURISDICTION
The opinion of the United States Court of Appeals for
the Fifth Circuit was issued on October 8, 1975. Timely
petitions for rehearing were filed by several parties, and
were denied (with clarification of the original opinion) on
January 14, 1976. This Court has jurisdiction pursuant to
28 U.S.C. §1254(1).
QUESTION PRESENTED
Whether, applying the principles enunciated in Albe-
marle Paper Co. v. Moody, 422 U.S. 405 (1975), a district
court abused its discretion when it concluded, for the fol-
lowing reasons, that it would be inequitable to award back-
pay to most black employees at a steel plant for the conse-
quences of a seniority system which perpetuated the effects
of assignment discrimination occurring prior to the enact-
ment of Title VII of the Civil Rights Act of 1964:
(a) The Company and Union had been “in the
forefront of expanding employment opportunities for
blacks” and had “modified the employment practices
. . . periodically to comply with all legal requirements
as from time to time they with reason understood them
to be;”
(b) A consistent line of judicial and administrative
decisions had declared that “the dangers and com-
plexities of the steel manufacturing process” precluded
modification of the seniority system, and the Company
and Union had relied upon those decisions in main-
taining the seniority system as it was; and |
3
(c) The court could not in any event “make whole,”
monetarily, those discriminatorily affected by the sen-
iority system, for it is impossible to determine who suf-
fered monetarily from the system, let alone in what
amounts.
STATUTE INVOLVED
Section 706(g) of the Civil Rights Act of 1964 (Title
VII), as amended, 42 U.S.C. §2000e-5(g), provides in
pertinent part as follows:
“If the court finds that the respondent has intention-
ally engaged in or is intentionally engaging in an un-
lawful employment practice charged in the complaint,
the court may enjoin the respondent from engaging
in such unlawful employment practice, and order such
affirmative action as may be appropriate, which may
include, but is not limited to, reinstatement or hiring
of employees, with or without back pay (payable by
the employer, employment agency, or labor organiza-
tion, as the case may be, responsible for the unlawful
employment practice), or any other equitable relief as
the court deems appropriate.”
STATEMENT OF THE CASE
This petition results from consolidated actions brought
under Title VII of the Civil Rights Act of 1964, attacking
employment practices at the largest steel plant in the South,
the Fairfield Works of United States Steel Corporation
(hereinafter “the Company”). Plaintiffs were the United
States (which brought a “pattern and practice” action un-
der Section 707 of the Act, 42 U.S.C. §2000e-6) and several
black employees suing on behalf of certain classes of black
employees under Section 706(g) of the Act, 42 U.S.C.
§2000e-5(g). Defendants were the Company, and the Uni-
ted Steelworkers of America and several of its locals (herein-
after collectively “the Union”).
4
The complaints alleged that the Company had, until
1962, discriminatorily assigned newly-hired black em-
ployees only to certain jobs. As that discrimination pre-
dated the enactment of Title VII, plaintiffs could not and
did not claim that it violated Title VII, nor that they
should receive a remedy therefor. But plaintiffs contended
that the “line of progression” seniority system contained in
the collective bargaining agreement perpetuated, after en-
actment of Title VII, the effects of the pre-Act discrimina-
tion. As relief for this perpetuation of effects of pre-Act dis-
crimination, plaintiffs sought the remedies which courts have
traditionally ordered in similar cases arising in industries
other than steel: a decree permitting those who had been
discriminatorily assigned to use plant seniority, and to re-
ceive rate retention, upon transferring to other lines of pro-
gression. Plaintiffs also sought back pay for the defendents’
failure to install these remedies immediately when the Act
became effective.
Defendants contended that business necessity precluded
the installation of plant seniority and rate retention in steel
plants, and thus that their seniority system did not unlaw-
fully perpetuate the effects of the Company’s prior assign-
ment discrimination. Defendants did not dispute the pro-
priety of plant seniority and rate retention in other indus-
tries; their defense was predicated upon unique characteris-
tics of the steel manufacturing process, described herein.
Following a six-month trial, the district court devised a
means for providing plant seniority and rate retention which
it believed consistent with business necessity.’ These reme-
dies were installed by the court’s decree. However, the
1 The system devised by the district court contained special features,
tailored to the unique characteristics of the steel industry, designed
to assure that discriminatees would receive “training and experience
before rising to more responsible positions” and thus to avoid creating
“a significant hazard to personnel and equipment.” App. 15-16, nn.
25, 27, 29. ae
5
court denied backpay for the defendants’ failure to install
such remedies earlier. The court explained that defendants
had relied upon earlier decisions holding that business neces-
sity precluded the furnishing of these remedies in steel plants,
and it concluded that an award of backpay would in any
event be speculative (because it could not be established that
any particular employee would have fared better had the
remedies been installed earlier). For these reasons, the
court held that in the particular circumstances of the case
an award of backpay would be inequitable.
The employee-plaintiffs appealed the denial of backpay,
and the court of appeals ruled that the district court had
abused its discretion in denying backpay. Our petition
seeks review of this back pay holding.
1. The History of Litigation Involving Seniority Systems
in the Steel Industry Prior to the Trial of the Instant
Case.
Steel plants differ vastly from plants in other industries
whose practices have been adjudicated under Title VII.
Steel plants are much larger: for example, the plant involved
in this case employs 12,0006 persons (App. 3). In a steel
plant, there are an enormous number of different jobs, with
widely varying skill requirements. Here, for example, there
are more than a thousand different jobs in the production
and mainienance unit alone (App. 4). The steel manu-
facturing process involves manifold operations performed on
molten metals, creating enormous hazards for all employees
if someone fails to perform his job properly. Employment
in steel plants is highly cyclical. The seniority systems which
have developed in steel plants, responsive to these unique
conditions, consequently are far more complex—and must
be far more complex to ensure that at all times each job
will be manned by an employee with the requisite skills—
than those in other industries. A graphic description of
these attributes of steel plants is provided in Judge Pointer’s
opinion, at App. 2-10.
Because steel plants are different, it is perhaps not sur-
prising that the law relating to seniority systems in the steel
industry developed differently than it did with respect to
such systems in other industries. The early decisions con-
firmed the defendants’ belief that it would be unsafe to al-
low employees to utilize plant seniority and rate retention in
a steel plant, i.e. that to permit employees to move on an
accelerated basis to jobs for which they had received neither
training nor experience would endanger the lives not only of
those who took advantage of these opportunities, but also of
those who worked in the vicinity and could suffer the con-
sequences of improper handling of molten metal. As the
court below recognized, the early decisions furnished “re-
spectable support” for the defendants’ belief that “the reme-
dies of plant-service seniority and rate retention would not
be applied to the steel industry due to the dangers and com-
plexities of the steel manufacturing process,” App. 48-49.
In 1956, a decade before passage of Title VII, this Union
began a program to merge separate black and white senior-
ity lines in southern steel plants. The program began with
the Houston plant of Armco Steel Corporation, the second
largest steel plant in the south. Consistent with their con-
cerns about safety, the company and union did not author-
ize employees in the previously black lines to exercise sen-
iority accumulated prior to merger for the purpose of mov-
ing on an accelerated basis to the more sophisticated jobs in
the previously white lines; rather, they provided that such
employees would begin to accumulate seniority for such ad-
vancement from the date of the mergers. Soon after the
mergers had been accomplished, a few black employees filed
suit alleging that the Union had breached its duty of fair
representation by not allowing black employees to use their
accumulated seniority in the merged lines. The Fifth Cir-
cuit rejected the claim. Whitfield v. United Steelworkers of
America, 263 F.2d 546 (5th Cir. 1959), cert. denied 360
U.S. 902 (1959). Declaring that “angels could do no more,”
7
Judge Wisdom approved the seniority system as fair “recog-
nizing the necessity for reasonable standards of operating
efficiency.” 263 F.2d at 551.
The seniority system in Fairfield, challenged in the instant
case, was modeled after that approved in Whitfield. The
mergers of formerly black and white seniority lines, accom-
plished prior to enactment of Title VII, were not lightly
undertaken in the social climate then prevailing in Alabama,
nor were they accomplished without pain for those who
made them. As Judge Pointer found (App. i4, n. 23) :
“These changes pre-dated most of the dramati:
changes in education, housing, public accommodations,
etc. Responsible leaders for the company and unions
were, according to the evidence, subjected to threaten-
ing and abusive communications, vilification generally
in the community, and hanging in effigy. Ten years la-
ter, when the battle cry has changed such that it typi-
cally begins, ‘we’re not fighting integration but... ,’
there is a tendency to block out the memory of what
was said and done in the early 60s.”
Title VII, for whose en:ctment the Union had lobbied
strongly (App. 25), took effect in 1965. It became apparent
from the earliest decisions that, in the smaller, less compli-
cated plants found in other industries, Title VII would re-
quire that assignment discriminatees be awarded plant sen-
iority and rate retention in order to eliminate the continuing
effects of pre-Act discrimination. See, e.g. Quarles v. Paillip
Morris Co., 279 F.Supp. 505 (E.D. Va. 1968) (tobacco
plant) ; United States v. Local 189, 301 F.Supp. 906 (E.D.
La. 1969) (paper mill). However, the courts uniformly de-
clared that the greater hazards and complexities of steel
production made it a “business necessity” that plant senior-
ity and rate retention—with their potential for rapid move-
ment of untrained and inexperienced employees to highly
skilled, dangerous jobs—not be implemented in steel plants.
8
The first Title VII decision involving a steel plant was
United States v. H. K. Porter Co., 296 F.Supp. 40 (N.D.
Ala. 1968). Although finding that the seniority system per-
petuated the effects of past assignment discrimination, the
court declined to order the systemic seniority changes de-
creed in Quarles and Local 189. The court emphasized that
it had no dispute with the propriety of those remedies in the
tobacco and paper industries (Jd. at 62-63), but found that
they were inappropriate in light of the greater complexity
of steel production (Id. at 63-72, see especially pp. 66-67).
Shortly thereafter, the Fifth Circuit had occasion to con-
firm the uniqueness of steel plants. Affirming the district
court’s decision in Local 189 installing systemic seniority
changes in a paper mill, Local 189 v. United States, 416
F.2d 980 (5th Cir. 1969), cert. denied 397 U.S. 919 (1970),
the court distinguished both Whitfield and H. K. Porter on
the ground that the remedies mandated by Title VII for
other industries were inappropriate for steel. The court
stated that its holding in Writ field had been predicated upon
a finding that, in view of the widely divergent skill require-
ments between different steel plant lines of progression, the
system adopted by the company and union “was conceived
out of business necessity, not out of racial discrimination.”
416 F.2d at 993. The district court’s decision in H. K. Porter
was distinguished because:
“The record in that case, as the district court viewed
it, showed that safety and efficiency, the component
factors of business necessity, would not allow relaxa-
tion of the job seniority system. We see no necessary
conflict between Porter’s holding on this point and our
holding in the present case.” (Jbid.)
The next Title VII decision in the steel industry was
United States v. Bethlehem Steel Corp., 312 F.Supp. 977
(W.D.N.Y. 1970), involving the Lackawanna plant of
Bethlehem. The court there found that the seniority system
9
perpetuated the effects of prior discrimination, and it recog-
nized that decisions involving plants in other industries had
awarded the plant seniority and rate retention remedies
sought by the Government. (Jd. at 993). Nevertheless,
after reviewing “the history of the steel industry” (Id. at
994), the court declined to award such remedies, believing
that they “would be arbitrary in . . . application and effect”
and “would have adverse effects wholly out of proportion
to the injustice which [they] seek [] to cure” (Id at 995).
The next steel industry decision was Matter of Bethlehem
Steel Corp., OFCC Dkt. 102-68 (Dec. 18, 1970), involving
the Sparrows Point plant of Bethlehem. This case arose
not uider Title VII, but under the parallel antidiscrimina-
tion provisions of Executive Order 11246. Under that Or-
der, charges of discrimination deemed meritorious by the
Office of Federal Contract Compliance are referred in the
first instance to a three-member Hearing Panel appointed
by the Secretary of Labor. In its extensive decision, the
Panel,’ by a 2-1 vote, although finding that the seniority
system perpetuated the effects of past discrimination, de-
clined to award the plant seniority and rate retention reme-
dies sought by the Government. The Panel applauded ju-
dicial awards of those remedies in other industries, but con-
cluded that the unique attributes of steel production ren-
dered those remedies inappropriate in the steel industry
(Id. at page 48) :
“We must continue to bear in mind that Sparrows
Point is not a small factory but is a vast complex of
manufacturing operations. In fact, it constitutes a large
complicated industrial community or society with an
intricate and highly sensitive organization of relation-
ships of production processes, maintenance relation-
? The Chairman of the Panel was Father Dexter Hanley of George-
town Law School. The other panel members were Peter Seitz and
Lloyd Bailer, both distinguished arbitrators.
10
ships, and above all, people. Changes in basic rules
have far-reaching consequences.
“Thus, in the light of case law and reason, we con-
clude that we are asked to look to the viability of an
economic enterprise; to the practical problems of the
effects of the proposed guideline remedies [plant senior-
ity and rate retention] upon production, safety, morale,
and responsible labor relations, including collective bar-
gaining obligations. We further conclude that in doing
this we must be attentive to the special difficulties, his-
tory and needs of the steel industry and of the Spar-
rows Point plant.”
The Panel then analyzed for eleven pages the testimony
introduced by the company and the union as to “why these
remedies would be unworkable at Sparrows Point and in the
basic steel industry generally” (Jd., p. 48, see generally Id.
pp. 48-59), and concluded upon that analysis “that a de-
fense of business necessity has been made and that the impo-
sition of the OFCC guidelines at the Sparrows Point plant
would be arbitrary and unreasonable on the facts in this
case.” (Id. p.59).
The Panel emphasized that it was not disputing the pro-
priety of these remedies in other industries, but only in steel
(Id. pp. 59-60) :
“In saying that the OFCC guideline plan is not one
well adapted for operation at Sparrows Point as appro-
priate relief for those continuing to suffer the effects of
past discrimination, we do not mean to imply that such
a plan may not have been an appropriate measure of
judicial relief under the less complex and different cir-
cumstances before the courts in the Crown-Zellerbach
[Local 189] and Quarles cases. Neither do we suggest
that such a plan may not be appropriate and desirable
as a means of eliminating the present effects of past dis-
crimination in other cases that may arise in the future.
Our deep concern stems from the fact that the simple
11
yet abstract formula of the OFCC’s guideline plan sim-
ply does not fit the circumstances of the highly sophisti-
cated and complex industrial society represented in the
collective bargaining agreement between the United
Steelworkers of America (AFL-CIO) and Bethlehem
Steel Corporation.”
The Panel found “additional support for the foregoing
conclusion in the fact that such a remedy as proposed by the
Government has not been adopted in any case involving the
steel industry” (Jd. p. 60), citing the Fifth Circuit’s decision
in Whitfield, and the district court decisions in H. K. Porter
and Bethlehem (Lackawanna). (Id. pp. 60-63).
It was not until June, 1971, with the Second Circuit’s re-
versal of the Bethlehem (Lackawanna) decision, that any
court declared the remedies of plant seniority and rate re-
tention feasible in a steel plant, 446 F.2d 652 (2nd Cir.
1971). At the time of the Second Circuit’s Bethlehem de-
cision, H. K. Porter was pending on appeal to the Fifth Cir-
cuit. The appeal had been argued in April, 1970, but al-
though the Fifth Circuit had issued innumerable decisions
requiring the institution of plant seniority and rate retention
in cases involving other industries which came before it sub-
sequent to the H. K. Porter orgument, * no opinion in H. K.
Porter issued for four years.*
2@ See, e.g. United States v. Jacksonville Terminal Co., 451 F.2d 418
(Sth Cir. 1971) (railroad terminal) ; Long v. Georgia Kraft Co., 455
F.2d 331 (Sth Cir. 1971) (paper mill) ; United States v. Hayes Inter-
national Corp., 456 F.2d 112 (5th Cir. 1972) (military aircraft manu-
facturing and repair plant) ; Rowe v. General Motors Corp., 457 F.2d
348 (Sth Cir. 1972) (automobile assembly plant); United States v.
Georgia Power Co., 474 F.2d 906 (5th Cir. 1973) (electrical power
company); Bing v. Roadway Express, Inc., 485 F.2d 441 (5th Cir.
1973) (trucking firm).
® Ultimately, following Judge Pointer’s decision in the instant case,
the parties to H. K. Porter agreed upon a remedy patterned after
Judge Pointer’s, and the Fifth Circuit disposed of the case by approv-
ing installation of the agreed-upon remedy.
12
Following the Second Circuit’s Bethlehem decision, at a
time when the Government, the Company and the Union
were seeking to settle the instant case without trial, counsel
for the Government and the Union (who were also counsel
in H. K. Porter) wrote to the Fifth Circuit urging a prompt
decision in H. K. Porter, explaining that the parties’ ability
to settle was hampered by the conflict between the Second
Circuit’s Bethlehem decision and the district court’s H. K.
Porter decision, and that “significant guidance . . . could
be furnished by a decision in the H. K. Porter case.”* Never-
theless, no decision was forthcoming in H. K. Porter, and
the instant case proceeded to trial.*
* This letter stated in pertinent part:
“The Plaintiff in the above-captioned case, United States of America,
and the Union defendant, United Steelworkers of America, AFL-CIO,
are also parties to another Title VII Lawsuit, United States v. United
States Steel Corp., Civil No. 70-706, pending in the Northern District
of Alabama which poses issues very similar to those in the instant case.
Trial of that case is scheduled to begin in May, 1972.
The Plaintiff and the Union have begun preliminary discussions
looking toward a means for resolving that suit without contested litiga-
tion. While the Plaintiff is-of the view that the Bethlehem Steel de-
cision, 446 F.2d 652, is to a significant extent, persuasive on the sen-
iority issue, the parties’ ability to resolve that issue in the United States
Steel case is limited by their uncertainty as to the ultimate outcome of
the H. K. Porter appeal.
Because of the importance of the United States Steel case, which
involves more than 10,000 employees, we believe that the Court would
wish to be made aware of the significant guidance which could be fur-
nished by a decision in the H. K. Porter case.”
5 Similarly, despite the Second Circuit’s decision, there was a pro-
tracted delay before the OFCC’s appeal from the Panel decision in
Bethlehem (Sparrows Point) was resolved. Although all briefs on that
appeal had been filed by February, 1971, and the Second Circuit’s de-
cision issued in June, 1971, the Secretary of Labor did not issue lus
decision upholding the appeal until January 1, 1973, by which time
the trial in the instant case had been concluded.
>
13
2. -The District Court’s Decision in the Instant Case
The trial of the instant case consumed six months, from
June through December, 1972. The court ultimately found
that the existing seniority system “perpetuated the effects of
the pre-1963 discrimination” (App. 14), and concluded
that a curative remedy could be fashioned which would be
consistent with “business necessity” (App. 14-16).°* That
injunctive remedy was installed by a 150 page decree en-
tered in May, 1973 (App. 2).
However, with the exception of a relatively small number
of employees whose claims the court regarded as special,
the court declined to award backpay. Although writing two
years before this Court’s decision in Albemarle Paper Co. v.
Moody, 422 U.S. 405 (1975), the court correctly anticipated
the central features of that decision: (1) that once discrimi-
nation has been proved, “successful plaintiffs should ordi-
narily be awarded backpay” unless there are special consid-
erations which would render such an award “unjust,” App.
17; (2) that “a claim for back pay cannot be defended on
the lack of evil intent or even on a showing of good will,”
App. 24; and (3) that the question is one entrusted by the
statute to the “equitable discretion” of the district court,
App. 17.
The court believed that here two factors combined to ren-
der an award of back pay unjust.® First, it would be impos-
sible to determine which employees, if any, had suffered
from the absence of plant seniority and rate retention. As
the violation here was a failure to install these remedies
earlier, the purpose of back pay would be to “make whole”
®* As noted above, n. 1, the court’s remedy had special features to
deal with the unique safety and operational considerations existing in
steel plants.
* Except in the case of three departments, where the court awarded
backpay totalling over $200,000. The court also awarded attorneys
fees in the amount of $205,000. App. 20-22, 27-28.
14
those who would have fared better but for the delay in their
installation. But here we cannot know who those persons
are. Only those who would have exercised the option of
moving to other jobs could even arguably be entitled to a
monetary remedy, and there was no evidence that such per-
sons existed. Moreover, an employee who did exercise the
option to move to another job might have fared worse
—in terms of the amount of compensation he received—
rather than better on his new job. “The ultimate conclusion,
simply, is that in the particular context of this case the
assessment of back pay for the pre-1963 discrimination sys-
temically perpetuated by the effect of inhibiting seniority
standards upon the bidding procedures would be fraught
with speculation and guess-work” (App. 23). “If... an
accurate determination—-or even a reasonably accurate esti-
mate—of individual rights is to be a cornerstone for back
pay awards, then, with the exception of the three specific
situations [where the court awarded backpay], this cannot
be done in the present case, and most certainly not within
the physical and fiscal limitations of the court” (App. 24).
The second factor rendering a backpay award unjust, the
district court ruled, was that the defendants had reasonably
relied upon the prior decisions holding that business neces-
sity precluded installation of the plant seniority and rate re-
tention remedies in steel plants. Here the parties had not
simply acted in good faith; the courts had furnished them
“good reason to believe that the seniority system at Fairfield,
lauded in Whitfield . . ., also was consistent with Title VII,
at least in this circuit,” App. 25. While emphasizing that
this latter consideration was not a defense to a finding of
liability—and thus to the issuance of injunctive relief—the
court found it to “merit some consideration, in equity, par-
ticularly where a purpose of back pay awards is to encourage
nonjudicial solutions,” App. 25).
As the court explained (App. 24) :
“Here, the company—particularly at upper man-
15
agement levels—and the unions—particularly at the
international level, and their representatives—have
been in the forefront of expanding employment oppor-
tunities for blacks. There is no need to recount the
evidence which establishes the many initiative steps
taken by them to eliminate racial discrimination, al-
beit still falling short by today’s standards. They have
modified the employment practices at Fairfield peri-
odically to comply with all legal requirements as from
time to time they with reason understood them to be.
The Steelworkers union was, in fact, active in obtain-
ing support for passage of Title VII. They had good
reason to believe that the seniority system at Fairfield,
lauded in Whitfield v. United Steelworkers, 263 F.2d
546 (CA5 1959), also was consistent with Title VII,
at least in this circuit.“*
““* In Local 189 v. United States, 416 F.2d. 980 (CA5
1969), the first appellate decision requiring a revision
of a seniority system such as at Fairfield Works, the
court saw no necessary conflict with the decision of the
district court in United States v. H. K. Porter, 296 F.
Supp. 40 (N.D.Ala. 1968), which had upheld such a
system in the steel industry. The District Court in
United States v. Bethlehem Steel Corp. (Lackawanna
plant), 312 F. Supp. 977 (W.D.N.Y. 1970), concluded
that remedies such as required in Local 189 were in-
appropriate in the steel industry. A similar conclusion
was reached by a Hearing Panel in the Matter of
Bethlehem Steel Corp. (Sparrows Point Plant), OFCC
Dkt. 102-68, issued December 18, 1970. Not until
June 1971, was the Bethlehem Steel (Lackawanna)
decision reversed by the Second Circuit, 446 F.2d 652.
Even so, the H. K. Porter decision was then on appeal
to the Fifth Circuit and, particularly in view of its
treatment in the Local 189 opinion, the strong possi-
bility of a conflict in circuit decisions remained. An
16
effort was made on behalf of the parties in the case
sub judice to obtain information, at least tentatively,
as to the Fifth Circuit’s decision in H. K. Porter for
guidance at Fairfield Works, but the decision has not
been rendered.”
3. The Steel Industry’s Response to the District Court’s
Injunctive Reforms
Judge Pointer’s decree in the instant case, entered on May
2, 1973, provided the catalyst for an industry-wide solution
to the seniority problems in the steel industry—a solution
which was implemented before the appeal from the denial
of back pay reached the court below. Shortly after Judge
Pointer’s decree was entered, the Union approached the
major steel companies which bargain jointly with it, and
suggested that the parties negotiate a proposal to be sub-
mitted to the interested Government agencies for an indus-
try-wide solution of steel industry Title VII problems. After
three months of negotiations, the Union and these compa-
nies reached agreement upon a proposal which they ten-
dered to the Department of Justice, the Department of La-
bor and the Equal Employment Opportunity Commission.
There followed six months of negotiations between these
parties, eventuating in the filing of a lawsuit and two con-
sent decrees, applicable to more than 240 steel plants, which
were approved by Judge Pointer on April 12, 1974. United
States v. Allegheny-Ludlum Industries, Inc., 8 FEP Cases
198-199 (N.D. Ala. 1974).
The consent decrees were modeled after Judge Pointer’s
decision in the instant case, although in some respects they
furnished even broader relief to alleged discriminatees.
United States v. Allegheny-Ludlum Industries, Inc., 517
F.2d 826, 851 n.28 (5th Cir. 1975). The Fifth Circuit has
declared that the consent decrees’ injunctive provisions “im-
plement the policies of Title VII and related laws to an
17
exceptionally thorough degree,” id at 881, and has recog-
nized this to be “one of those rare instances in which the
government has, to its satisfaction, successfully negotiated
a comprehensive voluntary accord,” id at 848. Thus the
Union and the Companies, upon learning that the early
rulings that “business necessity” precluded the institution of
seniority reform in the steel industry were wrong, promptly
agreed to institute wholesale reforms throughout an entire
industry, although at only a handful of plants had litigation
even been initiated in the decade following Title VII’s pas-
sage.
As part of the consent decrees, the Union and Companies
will offer $30.9 million dollars to affected employees in the
steel industry, of which approximately four million dollars
is to be offered to employees at Fairfield. Regardless of the
outcome of the instant litigation, the affected employees at
Fairfield will have had an opportunity to be “made whole”
to the tune of four million dollars.
4. The Court of Appeals’ Decision in the Instant Case
Against this backdrop, the private plaintiffs prosecuted
an appeal from the district court’s denial of back pay. (The
Government, although initially filing a notice of appeal, did
not pursue it once the consent decrees were approved, ad-
vising the court below that it was satisfied with the mone-
tary relief furnished by the consent decrees, App. 30).
The court below held that Judge Pointer “must be
charged with an abuse of discretion” in limiting backpay
as he did (App. 31). Construing this Court’s decision in
Albemarle Paper as imposing “a nearly certain, if not ‘au-
tomatic or mandatory,’ duty to award back pay to discrimi-
natees who can prove their entitlement to monetary recov-
ery” (App. 43), the court found both of the grounds relied
upon by Judge Pointer, although factually correct, legally
impermissible bases for denying backpay.
18
The court below acknowledged that, as Judge Pointer
had found, it would be impossible to determine who had
suffered, and in what amount, from the defective seniority
system (App. 32-33, 39, 41-45). But the court thought it
no ground for denying backpay that insufficiencies of proof
rendered the district court unable to “award the back pay
to the minority employees who . . . would have occupied”
better jobs with a proper seniority system (App. 43).
Rather, the “situation” requires a “quagmire of hypotheti-
cal judgments” (App. 44). Unable to determine who suf-
fered, or to what extent black employees’ lower earnings
resulted from innocent causes rather than from the defects
in the seniority system, the court should dispense back pay
in “pro rata shares” to all the employees in affected groups.
The court cautioned, however, that “alternative methods
possessed of superior certainty should be exhausted before
the court resorts to racially-drawn classwide comparisons or
pro rata approaches” (App. 45).
With respect to the other ground relied upon by Judge
Pointer, the court below agreed that “the union gleans re-
spectable support for its contention” that the prior decisions
had indicated that “the remedies of plant-service seniority
and rate retention would not be applied to the steel industry
due to the dangers and complexities of the steel manufactur-
ing process,” App. 48-49; nor did the court below dispute
“Judge Pointer’s finding that [the Union] ‘had good reason
... at least in this circuit,’ 371 F. Supp. at 1062, to believe
that the Fairfield seniority systems comported with the
law,” App. 49. But the court below concluded that the dis-
trict court abused its discretion nonetheless in relying upon
this consideration to deny back pay, App. 49-51. The court
viewed the hardship befalling the Company and Union as
one of “the usual risks of litigation,” App. 50, and refused
to “subvert” Title VII’s “integral [backpay] scheme with
a crazy-guilt pattern of different back pay liability dates,
industry-by-industry, plant-by-plant . . .,” App. 50-51.
19
REASONS FOR GRANTING THE WRIT
This case provides an important opportunity for this
Court to elucidate the meaning of its decision ia Albemarle
Paper Co. v. Moody, 422 U.S. 405 (1975). In Albemarle,
this Court declared that the language of Section 706(g)—
“with or without backpay”—vests district courts with equi-
table discretion in determining whether backpay should be
awarded, a discretion which must be exercised in light of
“the purposes which inform Title VII,” id at 417. The
court below understood Albemarle to impose “a nearly cer-
tain, if not ‘automatic or mandatory’ duty” to award back
pay to those who suffer economic loss from a violation of
Title VII. From that starting point, the court below pro-
ceeded to ignore a “well established” principle of equity:
that it is unfair to visit a monetary award upon those who
have reasonably relied upon prior decisions authorizing their
conduct. Lemon v. Kurtzman, 411 U.S. 192, 199, 203
(1973) :
*, . . [S]tatutory or even judge-made rules of law
are hard facts on which people must rely in making
decisions and in shaping their conduct. This fact of
legal life underpins our modern decisions recognizing
a doctrine of non-retroactivity.
+ * *
“It is well established that reliance interests weigh
heavily in the shaping of an appropriate equitable
remedy. City of Phoenix v. Kolodziejski, 399 U.S. 204
(1970); Cipriano v. City of Houma, 395 U.S. 701
(1969) ; Allen v. State Board of Education, 393 U.S.
544 (1969) .”
This reliance principle has been consistently recognized in
cases arising under the National Labor Relations Act, upon
which the backpay provision of Title VII was “expressly
modeled,” Albemarle, 422 U.S. at 419. Whether the court
below was correct in holding this principle inapplicable to
20
Title VII is a question which should be decided by this
Court.
In Albemarle, this Court deciared that “backpay is not
an automatic or mandatory remedy; like all other remedies
under the Act, it is one which the courts ‘may’ invoke.” 422
U.S. at 415. But the Court warned that “important na-
tional goals would be frustrated by a regime of discretion
that ‘produce[d] different results for breaches of duty in
situations that cannot be differentiated in policy,’” Jd. at
417.
Accordingly, discretion must be exercised in light of “the
purposes which inform Title VII,” bid. The “primary ob-
jective” is a “prophylactic one”: to provide a “spur or cata-
lyst which causes employers and unions to self-examine and
to self-evaluate their employment practices,” and thus elimi-
nate discrimination, Jd. at 417-418. The other purpose is
“to make persons whole for injuries suffered on account of
unlawful employment discrimination,” Jd. at 418.
From these basic principles the Court evolved the follow-
ing standards for measuring the exercise of district court
discretion, Jd. at 421-422:
“Tt follows that, given a finding of unlawful discrimi-
nation, backpay should be denied only for reasons
which, if applied generally, would not frustrate the
central statutory purposes of eradicating discrimina-
tion throughout the economy and mak ng persons
whole for injuries suffered through past discrimination.
The courts of appeals must maintain a consistent and
principled application of the backpay provision, con-
sonant with the twin statutory objectives, while at the
same time recognizing that the trial court will often
have the keener appreciation of those facts and circum-
stances peculiar to particular cases.”
Applying these standards to the district court’s decision
21
in Albemarle, this Court held that the court had abused its
discretion by relying upon the defendants’ absence of bad
faith—“under Title VII, the mere absence of bad faith
simply opens the door to equity; it does not depress the
scales in the employer’s favor,” id. at 422—but held that
the court might have been acting within its discretion in
denying backpay because of the plaintiffs’ belated claim
therefor, if the evidence disclosed that the defendants were
prejudiced by the delay and that the plaintiffs’ trial conduct
was not excusable, id. at 423-424. If upon remand the dis-
trict court again denied backpay ‘spon this ground,
“The standard of review will be the familiar one of
whether the District Court was ‘clearly erroneous’ in
its factual findings and whether it ‘abused’ its tradi-
tional discretion to locate ‘a just result’ in light of the
circumstances peculiar to the case.” Jd. at 424.
Of course, if the defendants in Albemarle were exoner-
ated because of the belatedness of the claim, the exonera-
tion would not be vindicating either the “make whole” or
the “prophylatic” objective of Title VII. But this Court
recognized that in particular situations there can be coun-
tervailing equities which would not make a back pay award
“a just result.”
In the instant case, the district court concluded that a
backpay award would be unjust. Such an award would not
truly vindicate the “make whole” objective of Title VII,
for—as the Fifth Circuit agreed—it is impossible to know
who suffered, in what amount, and from what cause, so
that any award would rest upon a “quagmire of hypotheti-
cal judgments.” Nor would a backpay award vindicate the
“prophylatic” objective of Title VII, for here the defend-
ants had “self-examine[d] and . . . self-evaluate{d] their
employment practices” (Albemarle, at 417-418): at great
personal cost, in a violently hostile social climate, they had
“been in the forefront of expanding employment opportuni-
22
ties for blacks,” had taken “many initiative steps . . . to
eliminate racial discrimination,” and had “modified the
employment practices at Fairfield periodically to comply
with all legal requirements as from time to time they with
reason understood them to be” (App. 25).
While a back pay award thus would little serve the ob-
jectives of Title VII, the district court found that it would
be greatly inequitable because of a special consideration ap-
plicable only to steel plants: the uniform line of decisions
advising the parties that business necessity precluded the
instaiiation of plant seniority and rate retention in steel
plants, decisions upon which the parties had reasonably re-
lied. Tailored as it was to this unique consideration,’ the
district court’s decision was consistent with the Court’s later
admonition in Albemarle that back pay not be denied “for
reasons which, if applied generally, would . . . frustrate the
central statutory purposes.” Ironically, the court below, in
reversing, stood Albemarle on its head: it rejected the dis-
trict court’s approach precisely because it had narrow ap-
plication. To the court below, the district court’s approach
would “subvert” the scheme of Title VII by creating “a
crazy-quilt pattern of different back pay dates, industry-by-
industry, plant-by-plant.” Thus the court below shrank
from the very uniqueness of the case which this Court de-
clared in Albemarle to be the touchstone of the equitable
discretion to deny back pay.
The district court’s decision was consistent with, and the
decision of the court below unfaithful to, well-established
principles developed under the back pay provision of the
NLRA, after which Title VII’s back pay provision was
“expressly modeled.” Albemarle, supra, 422 U.S. at 419.
As this Court explained in Albemarle, it is reasonable to
‘There is no other industry which the courts have seen, at any
time, as warranting an exception from the customary plant seniority
and rate retention remedies.
23
assume “that Congress intended that Title VII’s back pay
provision would be implemented consistently with that of
the NLRA,” Jd. at 419-420.
There have been numerous decisions under the NLRA
holding that parties who have justifiably relied upon legal
pronouncements in earlier cases will not be held liabie for
back pay for their conduct prior to the reversal of those pro-
nouncements. Retail, Wholesale and Department Store
Union v. NLRB, 466 F.2d 380, 387-393 (D.C. Cir. 1972)
is representative. In that case an employer had relied upon
a construction of the NLRA announced in several Board
decisions; this Court subsequently issued a decision which
required the Board to reverse its earlier construction; and
the Board awarded back pay against the employer for its
conduct prior to this Court’s ruling.
The court of appeals reversed the award of back pay,
holding that it would be inequitable to award back pay
against an employer who had acied in reliance upon the
state of the law as it then existed. Citing numerous deci-
sions under the NLRA, the court noted that “courts have
not infrequently declined to enforce administrative orders
when, in their view, the inequity of retroactive application
has not been counterbalanced by sufficiently significant stat-
utory interests.” Id. at 390. The court emphasized that the
situation before it was not one in which the law had merely
been uncertain, but rather one “where the Board had con-
fronted the problem before, had expressed an explicit stand-
ard of conduct, and now attempts to punish conformity to
that standard under a new standard subsequently adopted.”
Id. at 391. Noting that following the change in the law
the employer had “moved promptly to comply,” id. at 393,
the court concluded that it would “work hardship upon [the
employer] altogether out of proportion to the public ends to
be accomplished” were the employer held liable for back
pay for actions taken in reliance upon the previous state of
the law. Ibid.
24
This principle—that those who justifiably rely upon legal
pronouncements should not be required to pay back pay be-
cause they are subsequently overruled—has been applied
in a variety of contexts over the course of the NLRB’s
history.®
The most recent application of this principle is Lodge
743, International Association of Machinists v. United Air-
craft Corp., F.2d , 90 LRRM 2272 (2nd Cir.
1975). There, the Court found that it would be “unjust” to
assess backpay against an employer in circumstances far less
compelling than the instant case. There had never been a
prior decision squarely holding lawful the conduct in which
the employer engaged, but there were decisions on analo-
gous issues which the court believed furnished “a basis for
concluding that the same rule should apply” to the employ-
er’s conduct, 90 LRRM at 2295. The Court believed that
from a “reasonable reading of decisions existing” at the time
of the employer’s actions, “one could have concluded” that
the employer was authorized to act as it did. Jd. at 2296.
Noting that the employer’s actions were taken in good faith
and on the advice of counsel, the court was “not .. . dis-
posed to permit imposition of a substantial liability upon the
Company.” Jbid.
In one respect, the instant case presents a more com-
pelling claim for exoneration than any of the NLRB cases.
® See, e.g., NLRB v. Baltimore Transit Co., 140 F.2d 51, 55 (4th
Cir., 1944), cert. denied, 321 U.S. 795 (1955); NLRB v. Guy F. At-
kinson Co., 195 F.2d, 141, 149 (9th Cir. 1952) ; NLRB v. IBT, Local
41, 225 F.2d 343, 348 (8th Cir. 1955); NLRB v. E@B Brewing Co.,
276 F.2d 594 (6th Cir. 1960), cert. denied, 366 U.S. 908 (1961);
Fibreboard Paper Products Corp., 138 NLRB 550, 555 n. 21 (1962),
enforced, 322 F.2d 411, 415 (D.C. Cir. 1963), affirmed, 379 U.S. 203
(1964); Kohler Co., 148 NLRB 1434, 1454 (1964), enforced 345
F.2d 748 (D.C. Cir. 1965); Local 138, Operating Engineers, 151
NLRB 972, 974 (1965); Ferrell-Hicks Chevrolet, Inc., 160 NLRB
1692, 1695-98 (1966).
25
In none of the NLRB cases did the Board or courts tell the
employer that he should act as he did, but only that it was
lawful for him to do. Here, the courts told the Union and
the Company that it was a “business necessity” for them to
act as they did—that “the dangers and complexities of the
steel manufacturing process” dictated foregoing plant se-
niority and rate retention. The courts thus had said more
than that the defendants’ course of conduct was lawful;
they had corroborated the defendants’ own belief that that
course was a necessity.
CONCLUSION
For the reasons set forth above, the petition for writ of
certiorari should be granted.
Respectfully submitted,
BERNARD KLEIMAN MicwHae.t H. GotresMAN
Car B. FRANKEL Ropert M. WEINBERG
United Steelworkers of Bredhoff, Cushman, Gottesman
America, AFL-CIO-CLC & Cohen
Five Gateway Center 1000 Connecticut Avenue, N.W.
Pittsburgh, Pa. 15222 Washington, D.C. 20036
Jerome A. Cooper
JouHN FALKENBERRY
Cooper, Mitch & Crawford
409 North 21st Street
Birmingham, Ala. 35203
Attorneys for Petitioner
Appendix I
APPENDIX
United States District Court,
N. D. Alabama, S. D.
Dec. 11, 1973.
UNITED STAT LS of America, Plaintiff,
LutHer McKinstry, et al., Plaintiffs;
WituiaM Harpy, et al., Plaintiffs;
Joun S. Forp, et al., Plaintiffs;
E_per Brown, et al., Plaintiffs;
Evex P. Love, et al., Plaintiffs ;
Tuomas Jounson, et al., Plainiiffs;
James Dona p, et al., Plaintiffs ;
James Fitimcame, Plaintiff ;
Vv.
UNITED STATES STEEL CORPORATION et al.,
Defendants.*
. MEMORANDUM OF OPINION
POINTER, District Judge.
Consolidated trial of these Title VII cases’ began in June, 1972.
In Dec mber, 1972—after hundreds of witnesses, more than 10,000
pages of testimony, and over ten feet of stipulations and exhibits
(the bulk being in computer or summary form )—the parties rested,
subject to the submission of certain supplemental computer studies
and analysis. Trial would have been even more prolonged but for
the severance of one major issue (test validation) and for the very
* Consolidated with: McKinstry v. United States Steel Corp., 66-
343; Hardy, 66-423; Ford, 66-625; Brown, 67-121; Love, 68-204;
Johnson, 69-68; Donald, 69-165; Fillingame, 71-131.
Civ. A. Nos. 70-906, 66-343, 66-423, 66-625, 67-121, 68-204,
69-68, 69-165 and 71-131.
1 The Fillingame suit, CA 71-131, brought by a white emplovee, is
essentially a charge of unfair representation against the union. The
other private suits; brought by black’: ner —~ gree make claims under
42 U.S.C.A. § 1981 as well as under Title VII.
2 Appendix
professional attitude of all counsel in expediting trial.? A decree
of over 150 pages was entered May 2, 1973, covering most issues;
and on August 10, 1973, a final judgment was entered covering
all remaining issues except that of test validation. This preface is.
given to explain why the court in this opinion has chosen not .to
deal with each aspect and issue but rather to focus on matters re-
lated to the few questions as to which appeal has been taken.*
OVERVIEW OF OPERATIONS AND ORGANIZATION
“Fairfield Works”, one of the largest units of United States Steel
Corporation, consists of nine plants in Jefferson County, Alabama.
Two (Ore Conditioning; Coke & Coal Chemicals) process raw
materials. Two (Ensley; Fairfield) are basic steel producing facili-
ties, with some finished products. Four (Tin; Wire; Sheet; Besse-
mer Rolling) make finished products. The ninth* (Rail Trans-
portation) provides rail transportation services for the other eight.
The plants came into being at different times, and some were
initially under different ownerships. Ensley, the oldest part of the
works, was started in 1886, while Ore Conditioning, the most re-
cent, was constructed in 1939-40. The nine plants now form a
single interrelated steel producing operation, with operation re-
sponsibility vested in a General Superintendent. His principal man-
agerial assistants, called Division Superintendents, have functional
responsibilities which may include operations at more than one
plant.
Similarly, union organization—and subsequent management rec-
ognition—occurred at different plants at varying times during the
late 30’s and early 40’s. Two locals of the Steelworkers represent
2 For example, on one day the court was able to hear over 60 wit-
nesses relative to a narrow dispute of fact. Rarely was the court called
upon to rule on matters of authenticity of documents.
3 The court has been advised that the appeals are limited to back
pay and earnings retention (“red circle”) issues. While this opinion is
filed subsequent to entry of judgment the essential findings and con-
clusions were communicated to the parties prior to the judgment in a
series of informal conferences.
+The term “plant” is a misnomer for Rail Transportation but, s
nevertheless in this opinion of convenience. ein
Appendix 3
production and maintenance (P & M) employees of the Rail
Transportation plant; a separate Steelworkers local represents
P & M employees at each of the other eight plants. A separate
Steelworkers local represents plant protection employees through-
out the works, and another represents the unionized clerical and
technical (C & T) employees works-wide.®
In recent years the basic principles for employment of P & M
employees have been established in triennial industry-wide negotia-
tions leading to, e. g., the 1965 Basic Steel P & M Agreement.
These principles have, however, since 1953 been modified on a
local basis through the adoption of “local seniority rules and regu-
lations”, in which the various locals have asserted their independ-
ence in collective bargaining. The consequence is that, though the
basic principles are similar, there are ten separate arrangements
governing seniority for P & M employees at Fairfield Works, as
well as a separate arrangement for plant protection workers and
one for the unionized C & T employees. It should be noted that
employees holding trade and craft (T & ©) positions in a plant
are part of the same local which represents non-T & C employees
at that plant and are subject to the same collective bargaining
agreement, though with some special provisions for T & C jobs.
In the steel industry in general, and at Fairfield Works in par-
ticular, there are significant fluctuations in operational require-
ments and, hence, in manpower levels. Some jobs may be worked
on a three-shift-a-day, seven-day-a-week basis (‘‘2l-turns”), and
then at other times worked one-shift-a-day, five-days-a-week by a
single man or crew (“5-turns”), or even completely halted, with a
variety of intermediate manning levels. Within a given plant one
operation ma »e on a 21-turn basis and another, during the same
period, on a 5-turn basis. This fluctuation constitutes a major
factor in the study of the “system” at the works and, in turn, is
dealt with at length in the collective bargaining rules.
On a relatively busy day one would expect to find some 12,000
®* The United Steelworkers of America, AFL-CIO-CLC, and the
twelve Steelworkers locals constitute, along with the company, the de-
fendants in this litigation. Three other unions, not named as defend-
ants, have represented a limited number of employees in specialized
operations.
4 Appendix
persons on the job® at Fairfield Works, of which some 27% would
be black employees.’ P & M employees constitute the bulk of the
work forct-—typically some 3,100 blacks and 6,000 whites—and,
accordingly, it is not surprising that this litigation has tended to
focus principally on employment practices and conditions concern-
ing P & M employees.
There are over a thousand P & M positions, most of which are
filled by more than one employee on a given day. ‘These positions
have a technical name generally descriptive of their principal func-
tion, e. g., “Rail Straightener Helper”, and frequently have a shop
name, e. g., “Gagger’’. Each position has a prescribed job class
level, e. g., “JC 4”, which determines the relative wage scale for
that job in comparison with other jobs.* Most, but not all, posi-
tions have production-oriented incentive pay arrangements, either
* There would be severa! thousand additional employees either sick,
on vacation or leave, or on lay-ofi.
7 The record of the company in isiring blacks over the yéars is suf-
ficiently good that in none of the suits is there a general claim of dis-
crimination in hiring. There is a claim of discrimination as to hiring
for certain types of jobs (e. g., supervisory) and as to initial assign-
ment of blacks disproportionately to less desirable plants. On this lat-
ter claim the court finds from the evidence no such discrimination
since July 1965; and on the first claim the court has included in the
decree provisions to mandate judicially parts of the company’s “Af-
firmative Action Compliance Program.”
8 The job class levels, which range from a low of JC 1 to a high of
JC 30, were established in the late 40’s and early 50’s as an outgrowth
of a wage inequity study program initiated under the auspices of the
War Production Board and conducted on an industry-wide basis. The
levels were established after a consideration of a number of factors
inherent in the jobs as performed at the time of the study, e¢. g., physi-
cal effort, mental effort, skills, responsibility, working conditions, et
cetera. The industry—companies and unions-—has agreed not to re-
evaluate these ratings except where the factors have changed since the
time of the study. At triennial bargaining sessions the actual hourly
rate for each job class level is determined by negotiation; e. g., under
the 1971 agreement the hourly rates start with $3.385 for JC 1 and
rise to $5.905 for JC 30. While agreeing not to reevaluate JC deter-
minations for particular jobs absent a change in the job content, the
parties have occasionally negotiated “differentials” far “out-of-line” ar
special situations (e. g., trade and craft).
“—-*
~
Appendix 5
direct or indirect, some by individual performance and others by
crew or group productivity. The differences between these nego-
tiated incentive plans may be quite significant: for example, a JC
2 position with a “good” incentive plan may be more attractive
financially than one rated JC 6 with a “poor” plan. Of course,
the earnings of any individual P & M employee are also dependent
upon how many hours are worked and when (e. g., overtime, shift
premiums, and Sunday and holiday premiums).
SENIORITY SYSTEM
Within each plant the higher paying jobs—virtually all in JC 5
or above, and some in JC 4—are grouped for promotional and
retention purposes in ladder-like sequences called lines of progres-
sion or promotion (LOP).’ The groupings generally, but not al-
ways, are composed of occupations which work together on some
process (¢. g., feeding and operating a rolling machine) or which
perform similar functions (e. g., maintaining production or inven-
tory records). For the most part the upward sequence is from the
lowest JC occupation in the line to the highest; but, here again,
there are numerous instances in which a higher job in the LOP
may, whether by reason of its JC level, incentive plan, or otherwise,
be a lower paying job in practice than one or more of those below
it.
When a vacancy arises in a job in an LOP, those persons on the
immediately preceding rung of the ladder are entitled to first con-
sideration. If one of these persons is selected, this may create a
vacancy on that step of the ladder, which in turn is filled by pro-
*Composition of the several hundred LOPs in Fairfield Works
varies widely. Many have but one job (which eliminates the promo-
tional aspect of the LOP concept). Some are long lines, with the bot-
tom job(s) being JC 4 and, after many intervening occupations, a
top job as high as JC 30. Some LOPs have a top job below JC 10;
others have their bottom job above JC 10. Some have multi-manned
jobs, a number of employees working the same job at the same time;
others have but one employee filling each level of the ladder. Most
LOPs are ladder-like; but some have one or more branches, which
may or may not reunite. Some treat several jobs as being on the same
level or even as the same step of the ladder; others treat each job as
a new step even if there is no change in earnings.
6 Appendix
motion of a person on the next preceding rung, etc. If this process
ultimately produces a vacancy on the bottom step of the ladder,
it is filled by bringing a new employee into the LOP.
The selection of which of several employees on the same step of
the LOP is to be promoted is essentially’® a question of which is
the “oldest” employee. At this point a generalization as to works-
wide practice can no longer be made; for under some local plant
rules the oldest employee is the one who has been on the preceding
job longest (occupational seniority), while in others it is the em-
ployee with longest service in the LOP (LOP seniority), in the
department (departmental seniority), or in the plant (plant senior-
ity).
In most plants the method for determining age for promotional
purposes is also used to determine age for the purpose of job en-
titlement on reductions and increases in manpower levels. The
younger or junior employee so determined, is, in a work reduction,
“rolled back” to the next lower job or jobs in the LOP until his
age is sufficient to allow him to “hold”, thereby displacing at that
point a junior employee who then in like manner rolls back into
lower jobs or into the pool. The process is, in essence, reversed on
an increase in manpower levels. There are various special rules,
not identical for all plants nor necessarily uniform within the same
place, to cover particular situations; such as where a younger em-
ployee is for some reason holding a higher job in the LOP, or
where an employee prefers “going to the street” and taking supple-
mental unemployment benefits (SUB), or where an LOP contains
lower jobs that, due to prior mergers of lines or otherwise, the em-
ployee has not previously worked. There are special rules covering
temporary assignments and delineating between those vacancies
considered permanent and those deemed temporary.
The lower rated jobs, except in the Ore Conditioning Plant, are
grouped into pools, which generally correspond to geographical
10 1nder the contracts age is the determining factor only where
ability to perform the work and relative fitness of the competing em-
ployees are relatively equal. In practice most vacancies are filled in
accordance with the age factor.
Appendix 7
divisions or departments in the plant." These offer no promo-
tional opportunities as such;’* rather they are essentially “waiting”
jobs—more menial jobs to which employees are assigned while they
wait to get into, or return to, an LOP job. Assignment of pool
employees to temporary vacancies in LOPs is left to the discretion
of management, the evidence indicating that .the principles em-
ployed in making such assignments vary from one supervisor to the
next.
Permanent vacancies in an LOP which are not filled by em-
ployees already in that LOP” are filled by a bidding system speci-
fied in the collective bargaining agreements: the vacancy is
“posted”; interested employees, whether in the pool or from other
LOPs, can bid on the vacancy; the company is then required, as-
suming relatively equal abilities and fitness, to select that bidding
employee with the most plant service where the job is located. A
grievance and arbitration procedure is spelled out in the contracts;
and the evidence demonstrates that the unions have, in promotional
11 The basic concept of the pools, which were established in 1962-63,
is not challenged by the United States or the private plaintiffs. The
pools provide better protection against layoff than existed prior to
their creation, utilizing plant age to determine entitlement to a pool
job. In a sense the pool jobs represent a bottom job for all lines of
promotion.
12 There is a limited form of promotional opportunity within a pool.
The Company and local union have classified the jobs in each area
pool according to their relative desirability (from the standpoint of
earnings, exertion and working conditions). The employees on pool
jobs having the longest service in the area which the pool covers are
entitled to a job with Job Desirability Level 1 (most desirable), those
with the next longest such service to JDL 2 jobs, and those with the
least such service to JDL 3 jobs. The selection of which job in the
applicable JDL an employee is assigned has been left to management’s
discretion.
18 Those with recall rights to the LOP are first offered the position
before it is bid. It may be noted that, while most frequently it is the
bottom job in the LOP that is posted, on occasions (for example, when
employees lower in the line decline the promotion or when there is a
large upturn in the level of operations) some intermediate job or jobs
in an LOP may also be filled by the bid procedure.
8 Appendix
disputes as well as in other matters, fairly pursued such remedies
for the employees without regard to their race or color."
A significant degree of choice is reserved to the individual em-
ployee. He'® may decline to bid from the pool or another LOP
on a posted vacancy in an LOP to which, based on plant age, he
presumably would be entitled. He may decline to take a perma-
nent promotion from a job in an LOP to a higher job in that line.
He is usually allowed to decline to accept a temporary assignment,
whether that be a step-up in his own LOP or an opportunity given
a pool employee to work on an LOP job. He may, after having
declined such opportunities or assignments in one or more occa-
sions, change his mind when the situation is next again presented.
Each LOP is, in essence, separate from all other LOPs, without
transfer rights except through the bid procedure,’* which generally
means starting at the bottom of the ladder and, under the occupa-
tional and LOP age systems, as a “new” man. In practical effect
this means that an employee’s promotional history, at least in retro- ~
spect, is to a <ignificant degree preordained by the LOP which,
through the voluntary bid system, he successfully chooses to enter.
** This is particularly significant in matters such as promotional dis
putes because the union will generally find itself urging a position that,
at the same time, is adverse to the best im-><diate financial interest of
another of its members. In making this finding and conclusion, the
court is not expressing agreement with the result of each grievance
about which some evidence was presented at trial, nor is the court
saying that in each such dispute was any racial discrimination cor-
rected. Rather, the court is saying that in the handling of grievances
there has been no racial discrimination as a systemic matter, allowing
for the possibility of some isolated aberrations.
15 The masculine gender is used throughout this opinion for con-
ve uence. It should be noted however that the company has a number
of female employees, including many in P & M jobs. This litigation
does not involve any charges of sex discrimination, nor does the court
imply that there is any evidence of such discrimination. However, in
framing its decree, the court has attempted to avoid any provisions
that would result in such discrimination or tend to perpetuate the ef-
fects of past discrimination, if any, based on sex.
16 As an exception, the company and union in the Sheet plant have
provided a link between units 123A and 125A.
Appendix 9
At the time of making his choice of LOPs he can do little more
than guess as to his future.*7 An LOP which at the time appears
to be most promising may, due to differences in the health or cir-
cumstances of other employees, in technological advances, in the
demand and competitive situation for particular products, et cetera,
provide in fact fewer opportunities than LOPs which he chose to
turn down. Even within an LOP he may find himself confronted
with a similar dilemma when the line divides into separate
branches. The point of the foregoing is not to condemn as such the
seniority system, but rather to emphasize that choice and chance
play a vital role in the system—and are, indeed themselves major
elements of the system which this court is called upon to evaluate
under the provisions of Title VII and 42 U.S.C. § 1981.
PERSPECTIVE
In this litgiation the court is looking not at a still photograph,
but rather at a motion picture, one which pans across nine plants
in Jefferson County, Alabama, and occasionally picks up activities
in Pittsburgh or on a college campus. It commences many years
before passage of the 1964 Civil Rights Act. Nor has it ended with
the institution of these suits; indeed, it continued to run during the
five months of trial such that a frame of July 1972 had undergone
changes when compared with one in December of that year. In
like manner, the court is asked to fashion remedies by estimating
what this motion picture can depict in the months and years ahead.
With over 10,000 employees, the number of interactions between
employees and of possibilities for employment disputes becomes,
over a period of years, rather astronomical. Given the racial com-
position of the work force, it is not surprising that a very large
number of disputes would be considered by one or more of the
participants as having racial implications. Indeed, it is under-
standable that black employees, having experienced various forms
17 For example, in 1968 Oscar Beaton was the successful bidder in
two separate LOPs. His choice (contrary to his foreman’s advice) has
resulted in a $1,200.00 loss (comparing his earnings to those of the
employee who advanced to the other job on his declination) in a
three year period, and quite likely with result in further losses in the
yeazs ahead. .
10 Appendix
of direct and indirect racial discrimimation in other areas of life,
would frequently perceive any disappointments in employment
matters from a like perspective. To accept this as so does not mean,
of course, that their perceptions are either always correct or never
correct.
The court’s attention in this litigation’® is directed however not
to individual complaints as such, but to charges of discriminatory
procedures, policies, and continuing practices. The focus is upon
a system, not upon the isolated aberrations therefrom as such. The
system, of course, involves nct merely a study of rules and proce-
dues, whether express or implied, but also a consideration of how
these work in application. There is evidence, for example, that
George Davis, a black millwright, may have the wrong seniority
date. The applicable rule has been that his “age” is to be com-
puted from the time he became a millwright helper, and he says
that he became a helper earlier than the date shown for him on
the seniority lists. While not called upon to determine the merits
of each such complaint. the court can, however, conclude from
the evidence concerning Davis and others that (1) one of the
attributes of the system is that it is not perfect—the possibility of
error is indeed a part of the system; (2) the system provides mecha-
nisms for the correction of errors (e. g., the grievance procedure
and collective bargaining); and (3) the corrective mechanisms
are themselves imperfect.
The focus of this litigation is whether this imperfect system, with
its imperfect correcting mechanisms, meets the standards imposed
by law and, to the extent it does not, how such should be corrected.
So, we are concerned about the “‘age” cf George Davis not to cor-
rect an error in his seniority date, but rataer to evaluate the system
and its elements. If the number of like incidents is sufficiently high,
we may take this to be characteristic of the system and, if it tends
to affect blacks to a greater degree than whites, we are called upon
18 Of course, an action can be brought respecting a single, isolated
act of discrimination under 42 U.S.C.A. § 2000e-2. But each of the
private plaintiff cases here involved has a broader scope. It is doubt-
ful that the court could have physically managed the litigation if each
possible claim of individual discrimination had been pressed through
the vehicle of these cases.
Appendix 11
to view the system in this respect as racially discriminatory and
provide rectification.
Seniority questions in a real sense are not matters of the company
or the union “doing something’ to somebody else, but rather dis-
putes between two employees or groups of employees in which a
major objective of company and union is to survive unscathed.
Yet the perspective of the plaintiffs (as well as white employees)
frequently is that “they”—meaning the company or union or both
—did something or failed to do something. But the plaintiffs and
the other employees are in many respects part of the “they”,
whether as employees of a corporation which can only act through
its agents, or as members of a union which likewise is ultimately
dependent upon the actions of its members.”®
It is easy enough to hold that policies established by the work’s
General Superintendent are those “of the company”. At lower
echelons the answer is more difficult. For example, the racial preju-
dice of a turn foreman translated into action by the unfair assign-
ments of temporary work, or of some skilled white workman in
ref 1g to give training to a black employee, is discrimination.
But when such actions are contrary to established policy of the
company, a policy which upper management attempts to enforce
within means reasonably available, these should not, it seems, be
taken as company action,” that is, insofar as representing any pol-
icy or procedure of the company.
When is a procedure racially discriminatory? Only when the
impact falls solely on black employees? Only when the beneficiaries
of the practice are solely white cmployees? If affirmative answers
were to be given, very few, if any, of the plaintiffs’ claims could be
7® In this connection it is not without significance that the unions at
the Wire plant and Bessemer Rolling Plant are dominated by black
members.
0 A distinction can be drawn between an unintended or accidental
act and an intended act which, though without bad motives, produces
a proscribed result. Cf. Griggs v. Duke Power Co., 401 U.S. 424, 432,
91 S.Ct. 849, 28 L.Ed.2d 158 (1971), and Rowe v. GM Corp., 457
F.2d 348 (CA5 1972). This is not, of course, to rule that an individual
claim under Title VII cannot be predicated on an action by a fore-
man in the scope of his employment.
12 Appendix
sustained. This court concludes to the contrary, that a practice or
procedure which has mixed racial effects may nevertheless be pre-
sumptively violative ot Title VII where the benefits or detriments
therefrom bear a significant correlation to race. It should be noted
that efforts to correct such situations can likewise be expected to
produce benefits and detriments which do not completely follow
racial lines.
Finally, this court must continue to remind itself that the prin-
ciples governing this industrial community were not divined in the
sanctuary of a theoretician’s office, but rather to a large extent were
evolved through trial and error over a long span of time by people
having to live with the consequences.** So then, the court should
be wary of adopting a cavalier attitude towards unnecessary altera-
tions in the basic fiber and structure of this community, while at
the same time keeping in mind that the “business necessity” doc-
trine means that what the words denote and that these long-stand-
ing rules “do not, per se, carry the authoritative imprimatur and
moral force of sacred scripture, or even of mundane legislation.”
United States v. Jacksonville Terminal Co., 451 F.2d 418, 454
(CA5 1971).
DISCRIMINATION
The foundation for this litigation rests upon the undisputed fact
that at Fairfield Works a policy of segregation was generally fol-
lowed until the past decade. Most LOPs were segregated, with the
black-only and few racially-mixed lines containing, not surprisingly,
most of the less desirable jobs and none of the highest paying ones.
There were few black employees in T & C positions, and none in
clerical and technical jobs, plant protection occupations, or man-
agerial and supervisory positions.
In the early 60’s, however, largely in response to Executive Or-
der 10925 and Whitfield v. United Steelworkers, 263 F.2d 546
(CA5 1959), non-discrimination became the announced official
1 Note also that the older practices, developed when there was di-
rect segregation of most P & M jobs, were not themselves racially mo-
tivated—they rather were dealing with relative seniority between em-
ployees of the same race.
Appendix 13
policy at the works. By 1963, the company and unions had estab-
lished the system, previously described, for pooling the lowest pay-
ing jobs and for open bidding into the LOPs. They also had be-
gun a program for merging LOPs, a program under which, ulti-
mately, a majority of the formerly all-black and racially-mixed
lines were merged into formerly all-white ones.”
The formal opening of the door did not, of course, constitute an
immediate panacea for all blacks whose employment opportunities
had been so long restricted. A number of contributing factors can
be identified as explanation of why the change in announced policy
was somewhat less than what it was advertised, and perhaps ex-
pected, to accomplish: the actual loss of seniority on changing
LOPs . . . the fact that entry-level LOP jobs sometimes involve
a reduction in overall-earnings . . . the belief, due in large part to
confusion over the rules, that there were other disadvantages to
bidding into a new line . . . the rejection of some black bidders
through application of the ability and fitness standards . . . the
skepticism and suspicion by many blacks as to the reality of new
opportunities . . . the disapproval and resistance expressed by many
white employees to such changes . . . the unwillingness, particularly
among older black employees, to leave familiar conditions, to as-
sume greater responsibilities, or to be considered troublemakers. . .
the inability, again particularly among the older employees to learn
new skills . . . etc. Furthermore, enjoyment of these new oppor-
tunities was directly dependent upon vacancies coming open; and
the overall manpower levels at Fairfield Works have generally been
on the decline during the past decade.
The point is that, while the 1962-63 changes represented a truly
22 Mergers were generally accomplished by tacking formerly black
or mixed jobs to the bottom of existing white lines. This, however,
was understandable because such jobs, as noted, were typically the
lower-paying less-skilled ones. It is in the placing of intermediate jobs,
in the establishment of 1A-1B (see infra) lines, and in the failure or
delay in merging lines that active (as distinguished from passive per-
petuating) discrimination can be seen.
14 Appendix
radical alteration in the employment practices at Fairfield,* some
passage of time was needed for these processes to begin transform-
ing the statistical profile, at least as viewed by an outside observer.
It is clear that on July 2, 1965, the effective date of Title VII,
the basic principles of the seniority system in effect at Fairfield
were not “actively” discriminatory.** It is likewise clear that in
many respects this system, in violation of Title VII, has perpetuated
the effects of the pre-1963 discrimination. Local 189 v. United
States, 416 F.2d 980 (CA5 1969).
The sequential arrangement of jobs in a line of promotion has a
tendency, by its very nature, to prolong the effects of a prior re-
striction of blacks to lower jobs, as does the judicial impediment to
“bumping” incumbents. However, when supplemented by a stand-
ard that uses occupational or LOP age to measure promotions or
retention priority, the secondary position of blacks becomes fixed—
initially behind, they will remain behind their white contempo-
raries in progressing up the ladder towards better jobs. Use of
LOP age produces similar results where, as here, the past discrimi-
nation involved segregated lines; and even departmental age has
like consequences where, as here, black employees were not as-
signed, in the past, proportionately among all departments.
INJUNCTIVE RELIEF
The principal remedial step directed by the court to alleviate
this situation has been to mandate the use of plant age in measur-
*8 These changes pre-dated most of the dramatic changes in educa-
tion, housing, public accommodations, etc. Responsible leaders for the
company and unions were, according to the evidence, subjected to
threatening and abusive communications, vilification generally in the
community, and hanging in effigy. Ten years later, when the battle-
cry has changed such that it typically begins, “We’re not fighting in-
tegration, but . . .,” there is a tendency to block out the memory of
what was said and done in the early 60’s.
*4 Plaintiffs do not really seek to posit a cause of action under 42
U.S.C.A. § 1981 on pre-1963 acts in view of the statute of limitations
question. See Buckner v. Goodyear Tire, 339 F.Supp. 1108 (N.D.Ala.-
1972), aff'd, 476 F.2d 1287 (CA5 1973).
+
Appendix 15
ing seniority for premotion,” retention, and recall purposes.** Also,
the court directed forty-one additional mergers of LOPs, primarily
to increase promotional opportunities. In a large number of LOPs
other changes were directed, as by transferring one or more oc-
cupations from one line to another, or by altering the relative posi-
tion of some jobs (to correct the typical placements of formerly
black jobs below comparable white jobs), or by “boxing”, “block-
ing”, or connecting jobs in a line in such a way as to provide the
equivalent of job skipping where not contrary to business necessity
shown by the evidence.*” The 1A-1B concept was ordered abol-
ished.”* :
To increase the number of occasions in which these new rights
may be exercised in conformity with the principles enunciated in
25 For promotional purposes there is a year’s waiting period before
plant age may be used by a new entrant into an LOP. This is to insure
a minimum period for training and experience before rising to more
responsible positions in the line. As shown by the evidence, a failure
to require such a period not only would create a significant hazard to
personnel and equipment, but also would have substantial adverse ef-
fect under the production-oriented incentive plans on the compensa-
tion of other employees, including members of the plaintiff class. By
other provisions of the decree the pre-1963 black employees choosing
to enter a new LOP are, however, granted earnings protection in their
new line during this waiting period.
26 Use of plant age, or even company age, would not necessarily be
an appropriate remedy if the company had been guilty in the past of
racial discrimination in hiring. There is no evidence in this case of
any such discrimination regarding P & M jobs.
27 The court does find and conclude from the evidence that business
necessity has been shown and established for the basic principal in-
volved in the line of promotion concept and that, in the particulars
where not so shown, the same could be corrected without discarding
the principle itself.
28 Many “mergers” of lines were effected by tacking a fort.erly
black line near the bottom of a white LOP, but as a separate root or
branch. The top jobs in such a 1B branch were to have, on paper if
not always in practice, a priority to entry-level vacancies in the 1A
branch, though without any credit for time spent in 1B jobs. In many
of these situations this concept was coupled with the incorporation of
“Rule VII-A-l-a”, which, at least on paper, gave whites up in the
1A line the right to roll back into IB jobs on reductions in force.
16 = Appendix
Local 189 v. United States, supra, the court has directed that op-
portunities for promotion be afforded not only in the event of the
death, retirement or promotion of other employees, but also with
appropriate safeguards” in recall situations following force reduc-
tions of at least fifteen days. For like reason, the court has, in view
of the very limited promotional opportunities potentially available
in the Bessemer Rolling Mill and in the Maintenance of Way De-
partment of the Rail Transportation Division, directed that such
LOPs be realigned as departments in the Fairfield Steel plant, with
a carry-forward of their former plant age for use in bidding on
jobs in other LOPs in their new plant.
Temporary assignments of pool employees to LOP jobs are sig-
nificant both in terms of increased interim earnings and in view
of the training afforded thereby. To assure fair treatment, the
court has directed the company to utilize plant age in determining
the pool employee to fill a temporary vacancy in an LOP in the
area served by that pool.
Across-the-board, uniform, color-blind modifications in the se-
niority rules, such as summarized in the three preceding paragraphs,
do not in every particular erase the continuing effect of past dis-
crimination. Accordingly, special remedies—as by requiring train-
ing and testing for certain craftsman occupations and by judicially
mandating portions of the “Affirmative Action Compliance Pro-
gram” promulgated by the company—have been incorporated in
the court’s decree to rectify the impact of past discrimination in
T & C positions, C & T occupations, and supervisosy jobs. A sig-
nificant feature of these provisions is that, while the company is
not required to appoint an unqualified person to such positions,
yet it may not reject as unqualified a black applicant who possesses
qualifications equal to those which were possessed by any white
applicant for the same or like position who in the past was selected
and who has performed successfully in such position.
%° A few jobs—those in which a high degree of skill is required on
the most responsible jobs in a given operation—have been designated
as “critical” jobs and excluded from those in which periodic reshuffies
may occur as a consequence of increases and decreases in the work
force. This protection, deemed essential if reshuffling is to be allowed
on other jobs, is limited to the manning levels during normal opera-
tional levels.
Appendix 17
To minimize unnecessary confusion and turmoil and to assure
accurate dissemination and understanding of the court’s decree of
May 2, 1973, two complementary provisions were included in the
order. First, a ninety-day delay was provided for most of the sub-
stantive changes in the seniority system.*® Secondly, and equally
important, the court established an on-the-site three-member Im-
plementation Committee, consisting of a knowledgeable representa-
tive of the company, of the unions, and of plaintiff class. In addi-
tion to acting as a communications link, the implementation Com-
mittee is available to monitor the grievance procedures for possible
deviation from the principles established by the court decree and
has assisted in the preparation of plans for upgrading to journey-
man status certain black employees in conformity with the court’s
decree.
BACK PAY AND FUTURE PAY
Back pay is properly viewed as an integral part of the whole of
relief, which seeks not to punish the defendant,®’ but to compen-
sate the victim of discrimination. United States v. Georgia Power
Co., 474 F.2d 906 (CA5 1973). Cf. Moody v. Albemarle Paper
Co., 474 F.2d 134 (CA4 1973) (in view of strong congressional
policy successful plaintiffs should ordinarily be awarded back pay
unless special circumstances would render the award unjust).
This policy, however, is one that guides the court in its exercise
of equitable discretion.** Monetary awards must nevertheless be
80 The dissemination process was accomplished more rapidly and
with fewer problems than had been anticipated; and, accordingly,
many of the changes were, by agreement of the parties and with the
court’s approval, put into effect prior to the August 1, 1973, deadline.
$1 But see United States v. N. L. Industries, 479 F.2d 354, ‘CA8
1973) in which the court indicated that the deterrent effect of back-
pay awards, spurring other employers and unions to initiate corrective
measures, is more important than the compensatory role. This com-
ment sounds much like punitive damages.
32 Concluding that the award of back pay in these cases is but a
part of an equitable procedure, the court has denied any right to a
jury trial. Johnson v. Georgia Highway Express, Inc., 417 F.2d 1122
(CA5 1969) ; Lynch v. Pan American World Airways, Inc., 475 F.2d
764 (CA5 1973).
4
18 Appendix
made only for actual damage. Lea v. Cone Mills Corp., 438 F.2d
85 (CA4 1971); Moody v. Albemarle Paper Co., 474 F.2d 134
(CA4 1973). While equity may for purposes of injunctive relief
presume damages from the invasion of a legal right, United States
v. Hayes Intern’! Corp., 415 F.2d 1038 (CA5 1969) ,* traditionally
the courts have required, as a prerequisite to compensatory mone-
tary awards, both proof that the claimant has actually sustained a
loss from the defendent’s improper conduct and evidence from
which the amount of such damage can be determined with a rea-
sonable degree of accuracy. See United States v. Huff, 175 F.2d
678 (CA5 1949); Blake v. Robertson, 94 U.S. 728, 24 L.Ed. 245
(1877); Philp v. Nock, 17 Wall. 460, 84 U.S. 460, 21 L.Ed. 679
(1873). The question becomes what evidence is sufficient for these
purposes and, of necessity, what party has the burden of proof with
respect thereto.
“Statistics often tell much, and. Courts listen.” Bing v. Road-
way Express, Inc., 444 F.2d 687 (CA5 1971). An argument can
be made on the basis of the opinions in Cooper v. Allen, 467 F.2d
836 (CA5 1972) and Hodgson v. First Federal Savings & Loan
Ass’n, 455 F.2d 818 (CA5 1972), that evidence, such as statistical
data, which would suffice to shift the burden of proof* to the de-
fendant respecting the alleged discrimination by the employer,
would likewise shift such burden to the defendant respecting the
claim for back pay. In Cooper and Hodgson, however, both of
which involved claims of discrimination by applicants who were
refused employment, the real controversy was not whether the
plaintiffs had been injured, but whether such injury was the result
of discrimination.
The array of statistical evidence presented in this case by the
plaintiffs strongly indicates that the effects of past racial discrimina-
tion have been perpetuated by the employment practices at Fair-
field Works, and the court has placed great weight upon such evi-
33 Also see 42 Am. Jur. 2d Injunctions § 29.
*4 The distinction between the burden of going forward with the
evidence and the burden of persuasion, each sometimes meant under
the label “burden of proof”, is frequently blurred, even in cases which
specifically deal with the issue. See, e. g., McDonnell Douglas Corp. v.
Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973).
Appendix 19
dence both in finding statutory violations and in tailoring injunc-
tive relief to remedy the same. But proof that these practices have
discriminated on the whole against black employees—or, stated
another way, discriminated against the “average” black employee
—is not evidence that William Hardy,* for example, has been
damaged by a violation of Title VII. Nor, at least in the absence
of evidence supporting punitive action for willful misconduct, does
the class action device transform individual claims into a “fluid”
claim for the class as a whole. Cf. Eisen v. Carlisle & Jacquelin,
479 F.2d 1005 (CA2 1973), cert. granted 414 U.S. 908, 94 S.Ct.
235, 38 L.Ed. 2d 146 (1973).
The applicable rule has been stated by the Fifth Circuit as fol-
lows:
But, back wages are not to be automatically granted when-
ever a person is ordered reinstated. The wages sought must
be “properly owing to the plaintiffs.” This requires positive
proof that plaintiff was ordinarily entitled to the wages in
question and, being without fault, would have received them
in the ordinary course of things but for the inequitable con-
duct of the party from whom the wages are claimed. Jinks |
v. Mays, 464 F.2d 1223, 1226 (CA5 1972).
This principle was, by quoting the foregoing with apparent ap-
proval, held applicable to Title VII cases in United States v.
Georgia Power Co., 474 F.2d 906, 922 (CA5 1973), the court not-
ing that a finding of racially disproportionate earnings due to em-
%5 Hardy, lead plaintiff in the first private action filed, is a signifi-
cant example for the reason that he was a member of a group, blacks
in the Blast Furnace Department of the Ensley Steel plant, with re-
spect to which the evidence was sufficient to show injury from dis-
criminatory practices on which individual damage claims were suscep-
tible of fair approximation. Yet, when the lengthy “flow charts” were
prepared showing the impact which the court decree would have
made had such provisions been instituted by the parties back in July
1965, it turned out that Hardy himself had not been damaged by the
old system, but indeed had greater earnings under it than the new
system would have produced. The back pay awards were limited, of
course, to those who had been injured, and accordingly Hardy himself
got no benefits from the back pay award in favor of members of the
class which he represented.
20 Appendix
ployment practices is not by itself a proper premise for the making
of a back pay award. Thus, in Bing v. Roadway Express, Inc.,™*
485 F.2d 441 (CA5 1973), where one employee was found to be
entitled under the evidence to back pay, other claimants were not:
“The other four are not entitled to back pay because . . . even if
Roadway had not been discriminatory, they could not have ob-
tained road jobs earlier than they did. Therefore they suffered no
financial loss from Roadway’s discrimination.” At 452. In a case
such as the one sub judice, where employee initiative and choice
are critical factors in the job selection process, it seems clear that
the burden of proof must, consistent with traditional rules of juris-
prudence, be placed on the claimant to establish his injury and
damages.
In three situations this burden was carried; that is, the evidence
showed that a particular group of black employees, or some of
them, had been injured by an unlawful employment practice and,
at least with supplementation of the original evidence, it would be
%6 On the surface Bing I], by using qualification dates rather than
application dates, may appear inconsistent with this decision. Inso-
far as seniority is concerned, footnote 12 of the Bing I] opinion notes
that “qualification date” is essentially only a variation on the theme
of company seniority, which, under the particular circumstances of the
case sub judice, is the equivalent of the plant seniority mandated by
the court. This court’s consideration of the significance of the bidding
system upon the back pay claims is, however, somewhat at variance
with the reasoning of the Fifth Circuit regarding Bing’s back pay
claim. The variance is thought to be justified by factual differences
in the two cases. Here, the bidding system was recognized by the par-
ties prior to July 1965 as giving, in the context of Bing IJ, transfer
rights; in Bing ’J the “application” process was in July 1965 not a
recognized right, but indeed contrary to the established no-tranfer
policy. Here, some three years of experience with the open bidding
- system had elapsed so that by July 1965 blacks knew—or should have
known—that they could enter the formerly all-white LOPs; in Bing I
the court recognized that in July 1965 blacks, with the exception of a
few who had the courage to “fight the system”, did not bother to ap-
ply because they knew full well that blacks were not going to be hired
as road drivers. Here, there are scores of possible jobs of varying at-
tractiveness to a given employee; in Bing J] the issue related to a
single higher-paying, higher-status job, obviating any real question of
interest.
Appendix 21
possible to fix with a reasonable degree of accuracy, though not
with exactitude and certainty, the approximate amount of their
respective individual damages. The groups, and the causative em-
ployment practice involved, were: employees in the former Pratt
City Car Shop LOP, where a needed merger of segregated lines
was inexcusably rescinded until December 1971 (the Ford class) ;
employees in the Blast Furnace Department of the Ensley Steel
plant hampered by discriminatory lines of promotion (“1A-1B”
configurations) (the Hardy class); and PM Finishing Hookers in
Fairfield Steel’s Plate Mill Department, whose promotional oppor-
tunities were frustrated by placement of the Finishing Craneman
jobs up in a separate line of promotion (the McKinstry class).
.The basic approach to fixing the damage claims in these situa-
tions was to assume that the changes made in the affected LOPs
by the court decree had been cm on July 2, 1965, along with
the’ changes in measurement of “age” (i. e., by using plant age)
and in defining when vacancies bd (i. e., on force’ cut-backs of
15 days or more). The employees in the lines were assumed to
possess equal fitness and skill and to be equally interested in accept-
ing vacancies higher in the LOP*’ Then a history was prepared
since July 1965, showing deaths, retirements, transfers, increases
and decreases in work forces, etc., and vacancy events thereby de-
termined. Employees were then ‘slotted into the vacancies using
plant age and the assumptions indicated, producing in essence a
flow chart of hypothetical personnel changes. Earnings in a hypo-
thetical assignment were determined during a particular time -seg-
ment by looking at the earnings in fact of the employee who ac-
tually worked during that same time by the assumed occupant at
the job and multiplying those hours worked times the hourly rate
of the hypothetical assignment. Then the employee’s hypothetical
earnings were compared to his actual earnings over the same peri-
od. Those shown to have sustained a loss by such study were then
87 A variation was made in the Ford case due to the significant
number of declinations of promotion by both white and black em-
ployees. One study was prepared assuming no declinations had the
new system been in effect; a second study was: prepared assuming the
same declinations under the new -system as took-place under the old
system. The results of the two studies were then averaged. -
22 Appendix
given an award of back pay equal to 150%*™ of the difference in
earnings. Sixty-one employees received back-pay awards, most be-
ing several thousand dollars though with a spread from a low of
$74.62 to a high of $9,851.90. The employment practices causing
these damages were joint products of company and local union
action, and, utilizing 42 U.S.C.A. § 2000e-2(c)(3), the court
assessed one-half of each award against the responsible local un-
ion,** and the other half against the company.
Each flow chart involved assumptions as to a single LOP and
the employees already in such LOP. Even so, many hours were
required to make the necessary calculations. Other approaches
suggested by plaintiffs were rejected by the court as inconsistent
with the requirement to determine on an individual basis the ac-
tual loss caused by the unlawful employment practice.
One might argue that, albeit with the expenditure of thousands
of man-hours, comparable studies could be made to estimate dam-
age caused by the hindrance to the bidding system resulting from
#8 A 50% increment to the ascertained back-pay loss was added,
essentially as a prospective-pay equivalent, because the affected em-
ployees, even under the decree, will require some additional time to
reach their “rightful place.” The best estimate of this was, on the
average, some 3-4 years, which represents about one-half of the period
involved in the study, hence the 50% increment.
*° The international union was not really responsible for the prac-
tices giving rise to the three back-pay awards. It should, moreover,
be noted that the international has taken a strong role of leadership,
not always without disagreement from the locals, in pushing non-dis-
criminatory policies.
*° Plaintiffs’ suggestion that damages be ascertained by comparing
average white employee earnings in the LOP during the period with
the earnings of blacks is fundamentally inconsistent with the “rightful
place” approach—the court should determine the loss caused by the
unlawful employment practice, as distinguished from that which is
the result of pre-Act discrimination independent of perpetuating poli-
cies. The suggestions regarding lump-sum payments, whether or not
accompanied by distinctions based on age or years of employment,
while easier in administration and probably more understandable to
the affected employees, would result in some employees being paid
more than their loss and-otiers less, thus actually creating inequity
among recipients of back pay. ee en ee ae —
5 le a a LTE
Appendix 23
use of occupational or LOP age. The court could, for example,
be asked to hypothesize that entry into LOPs had been filled since
July 1965, purely on the basis of departmental age without regard
to the bidding system. But, apart from personal preferences, not
all vacancies offer the same actual or apparent opportunities. The
most senior employee would be slotted to the first vacancy, perhaps
one with lower earnings than his pool job, and, indeed, due to lack
of subsequent vacancies in upper jobs in the LOP, it might end up
as the final spot for that employee. A younger employee under
this‘ hypothesized movement could experience the fortuitous circum-
stance of getting into a line which subsequently had a number of
vacancies or increased work requirements, and move rapidly up
to higher paying jobs. Perhaps the court would be asked to assume
that the more senior employees, after entering an LOP, would
have moved to another LOP having a subsequent vacancy. Or
perhaps the court would be asked to reconstruct a progression using
complete hindsight, i. ¢., look back now at all vacancies and opera-
tional levels in LOPs over the eight years, determine in retrospect
which turned out to be “the best”, and hypothetically assign the
employees in order of department, plant or company age—such an
approach would, of course, produce a fundamentally false meth-
odology for measuring loss caused by any unlawful employment
‘ The ultimate conclusion, simply, is that in the particular context
of this case the assessment of back pay for the pre-1963 discrimina-
tion systemically perpetuated by the effect of inhibiting seniorit
standards upon the bidding procedures would be fraught with
speculation and guess-work.*’ What were problems in assessing
back pay in the three situations in which the sarne was awarded
are unsurmounted obstacles to the across-the-board claims for back
#1 While the analysis has dealt with the problems of entering lines of
promotion, similar difficulties arise regarding promotions witliin many
LOPs, particularly where there are branches in an LOP or where a
job in an LOP actually has higher earnings than some. job(s) above it
in the line, It should be reiterated that this litigation is concerned:
with systemic discrimination; it has not determined, or .attempted
to determine, each claim of individual discrimination, such. as. the:
assertion of some black employee who may assert that the rejection. ot
his bid on a job was racially motivated. |, .., r
24 Appendix
pay generally. This conclusion is reached whether under the label
of failure of proof,*? Jinks v. Mays, 464 F.2d 1223, 1226 (CA5
1972), or under the label of equitably determining the true bal-
ance of interests, United States v. Georgia Power Co., 474 F.2d
906, 922 (CA5 1973). As stated in Georgia Power,
The trial court’s decision must also include a weighing of
issues as to limitations and laches . . ., factors of economic
reality (i. ¢., the relative expense of accurate determination of
individual rights vis-a-vis the amounts involved) and, most
assuredly, the physical and fiscal limitations of the court to
properly grant and supervise relief. This listing is intended
to be illustrative and not exhaustive. It is our intention to
leave the issue altogether open for reconsideration and deci-
sion by the court below. 474 F.2d at 922.
If, as indicated, an accurate determination—or even a reasonably
accurate estimate—of individual rights is to be a cornerstone for
back pay awards, then, with the exception of three specific situa-
tions noted, this cannot be done in the present case, and most cer-
tainly not within the physical and fiscal limitations of the court.
While it is clear that a claim for back pay cannot be defended
on the lack of evil intent or even on a showing of good will, Rowe
v. GM Corporation, 457 F.2d 348 (CA5 1972) (remanding for
reconsideration of, inter alia, back pay notwithstanding strong evi-
dence of good will), this is not to say that such matters are com-
pletely unworthy of any consideration, at least in equitably attempt-
ing to strike a true balance of interests. See, e. g., LeBlanc v._
Southern Bell Telephone & Telegraph Co., 333 F.Supp. 602
(E.D.La.1971), aff'd, 460 F.2d 1228 (CA5 1972); Jinks v. Mays,
42 In this case it is not so much that the evidence is insufficient, as
that the. evidence adduced demonstrates that assessment of damages
cannot be made consistent with applicable principles of law.
43 It should be noted that the court has considered the question of
back pay both from the perspective of class action claims in the pri-
vate suits and as part of:the relief appropriately sought in the Attorney
General’s suit. In indicating to the parties in January 1973, its con-
clusion that the Attorney General was not precluded from seeking
back pay for the victims .of discrimination, the court, as it turned oti;
correctly predicted the decision of the-Fifth Circuit in Georgia Power’.
ae Aa Ia cect NE +a hima tetttaa tact eae Bete ost oe lal
Appendix 25
464 F.2d 1223 (CA5 1972); Schaeffer v. San Diego Yellow Cabs,
Inc., 462 F.2d 1002 (CA9 1972).
Here, the company—particularly at upper management levels
—and the unions—particularly at the international level, and their
representatives—have been in the forefront of expanding employ-
ment opportunities for blacks. There is no need to recount the evi-
dence which establishes the many initiative steps taken by them to
eliminate racial discrimination, albeit still falling short of today’s
standards. They have modified the employment practices at Fair-
field periodically to comply with all legal requirements as from
time to time they with reason understand them to be. The Steel-
workers union was, in fact, active in obtaining support for passage
of Title VII. They had good reason to believe that the seniority
system at Fairfield, lauded in Whitfield v. United Steelworkers,
263 F.2d 546 (CA5 1959), also was consistent with Title VII, at
least in this circuit.* Though not a defense, reasonable good faith
efforts at compliance merit some consideration, in equity, particu-
**In Local 189 v. United States, 416 F.2d 980 (CA5 1969), the
first appellate decision requiring a revision of a seniority system such
as at Fairfield Works, the court saw no necessary conflict with the
decision of the district court in United States v. H. K. Porter, 296
F.Supp. 40 (N.D.Ala.1968), which had upheld such a system in the
steel industry. The District Court in United States v. Bethlehem Steel
Corp. (Lackawanna plant), 312 F.Supp. 977 (W.D.N.Y.1970), con-
cluded that remedies such as required in Local 189 were inappropriate
in the steel industry. A similar conclusion was reached by a Hearing
Panel in the Matter of Bethlehem Steel Corp. (Sparrows Point Plant),
OFCC Dkt. 102-68, issued December 18, 1970. Not until June 1971,
was the Bethlehem Steel (Lackawanna) decision reversed by the Sec-
ond Circuit, 446 F.2d 652. Even so, the H. K. Porter decision was
then on appeal to the Fifth Circuit and, particularly in view of its
treatment in the Local 189 opinion, the strong possibility of a conflict
in circuit decisions remained. An effort was made on behalf of the
parties in the case sub judice to obtain information, at least tentatively,
as to the Fifth Circuit’s decision in H. K. Porter for guidance at Fair-
field Works, but the decision has not yet been rendered. In forming
the decision for Fairfield Works, no effort has been made to analyze
factual differences from H. K. Porter. Rather, the court has, on the
basis of the evidence produced in this case, concluded that violations
of Title VII have occurred and formed remedial measures considered
appropriate thereto.
26 Appendix
larly where a purpose of back pay awards ‘s to encourage non-
judicial solutions.
It should perhaps be noted, though obvious, that in this case the
parties being asked to provide damages have not received any
monetary benefit from the conduct being proscribed. The recipi-
ents of the compensation which should have been paid to the vic-
tims of discrimination here are not the company and the unions,
but rather fellow employees. As immediate displacement of in-
cumbent fellow-workers through “bumping” is considered inappro-
priate, so also is any consideration of assessing damages directly
against those who have benefited from the wrongful practice. The
point is—though this, of course, is true in virtually all employment
discrimination cases—that there is no factor of unjust enrichment
for consideration by the court in weighing the equities.*°
Another factor for consideration in weighing the equities on an
award of back pay is the extent of other relief being granted. In
this case, concluding for the reasons already mentioned that back-
pay should not be awarded to the rank-and-file black employee,
though also recognizing that, while not susceptible of sufficient
proof, black employees generally have suffered over a number of
years from prior discrimination, the court, quite frankly, has made
its injunctive relief somewhat broader than what might strictly be
required to correct the statutory violations.“ The award which
45 Of course, some of the beneficiaries of the unlawful practices were
black employees, just as some of those hindered by such practices were
white employees. One may well question the equity of an award which
required payment of back wages to those blacks underpaid (assuming
the evidence were sufficient for such purpose) without giving any
credit for over-payments to other blacks which were necessary results
of the same act or procedure. Likewise, where a system is being re-
formed because of its effect on blacks generally, rather than from any
actual desire to discriminate against blacks, one may question the
equity of an award which failed to compensate those white employees
who might be shown to have suffered loss from the very same system.
46 This is not to suggest that the remedial provisions establish any
Utopia for black employees, any more than the prior rules were so
viewed by whites. Experience indicates that as new rights are obtained,
other less annoying problems invariably are perceived as increasingly
troublesome.
Appendix 27
cannot be made for pre-Act discrimination and which under the
evidence should not be made for post-Act perpetuating policies is
in part taking the form of broader injunctive relief for the whole
class of black employees, including those who have not suffered
the prior discrimination. In this sense the victims of past discrimi-
nation are responsible for a better legacy to the younger members
of their race.
One further item bears mention; namely, the provision for a
form of prospective pay. As part of the injunctive relief those pre-
1963*" employees who elect to take advantage of their new rights
by entering new lines of promotion are provided earnings-protec-
tion, or “red-circling”, in their new line. This is intended to make
more meaningful those rights and applies, subject to appropriate
limitations, during that first year after entering a new line in which
they cannot use their plant age for promotional purposes. As dis-
tinguished from the formula used in the Bethlehem Steel Lacka-
wanna settlement, the red-circle rate includes not only protection
of the job class rate, but also the incentive earnings.
ATTORNEYS FEES
The same policy that conimends the award of back-pay is re-
flected in the statutory authorization to award attorney’s fees to
the prevailing parties. The special circumstances which prevented
the court from awarding back-pay except in three situations are
not, however, problems in the award of attorney’s fees. Each of
the cases brought by black employees, except for one relating to
allegedly segregated facilities—which had been corrected prior to
suit—, can properly be viewed as ones in which the plaintiffs pre-
vailed. After consideration of the evidence presented in connection
with application for fees, the court awarded fees in each of such
cases (except the facility case, which had been abandoned) based
* Only those employees who had service prior to the open bidding
system should have been deterred from bidding by virtue of the in-
equitable seniority standards to be used in the line of promotion. As
the conversion to the bidding procedure actually took place over a
period of time, no one point clearly stands as “the” cut-off point. The
court chose January 1, 1963, as, on balance, a fair place for demarca-
tion.
28 Appendix
on the traditional factors and on the policy of fairly supporting
these “private Attorneys General” suits. The total awarded was
$205,000.00, and was divided between the company and the par-
ticular local union involved in the case. It should be noted that
but for the major role carried by the United States in its pattern
and practice suit, the time and, in turn, the award of attorney’s
fees would no doubt have been even more substantial.
DECISION
The findings of fact and conclusions of law contained in this
memorandum were the basis for the court’s decree of May 2, 1973,
and its judgment of August 10, 1973.
Appendix 29
United States Court of Appeals,
Fifth Circuit. *
Oct. 8, 1975.
UNITED STATES of America, Plaintiff-Appellant,
v.
UNITED STATES STEEL CORPORATION et al.,
Defendants-A ppellees.
Joun S. FORD, et al., Plaintiffs-A ppellants,
Cuirrorp Craic anD L. G. Puitups, Movants-Appellants,
Vv.
UNITED STATES STEEL CORPORATION e al.,
Defendants-Appellees.
No. 73-3907.
Appeals from the United States District Court for the Northern
District of Alabama.
Before THORNBERRY, MORGAN and CLARK, Circuit
Judges.
THORNBERRY, Circuit Judge:
‘These appeals arise from a sharply-contested employment dis-
crimination case which involves over 3,000 black steelworkers. The
proceedings below culminated in a decree, entered May 2, 1973,
in which District Judge Pointer ordered major changes in the se-
niority structures at the nine plants of defendant United States Steel
Corporation’s Fairfield Works, Birmingham, Alabama. Of main
interest for present purposes, Judge Pointer found that the Fair-
field seniority systems (occupational, line of progression, and de-
partmental )—products of collective bargaining between the com-
pany, the United Steelworkers of America, AFL-CIO, and various
locals—operated to lock blacks into lower-paying and less-desirable
jobs, and thus perpetuated the effects of the company’s pre-Title
VII active racial discrimination in hiring and initial assignments.
The district court ordered implementation of a broad scheme of
plant service seniority, rate retention (“red circling’), racial quo-
tas for hiring and promotion, and other remedies designed to eradi-
30 Appendix
cate continuing impediments to blacks’ reaching their “rightful
places.” Those measures are not before us for review, as the de-
fendants did not appeal from the court’s findings or the decree.
A number of complaints were consolidated below for trial. Out
of six certified private class actions brought pursuant to 42 U.S.C.
§ 2000e-5 and 42 U.S.C. § 1981, involving 464 black employees,
the district court awarded back pay to sixty-one members of three
classes (the Hardy, McKinstry, and “original” Ford classes). No
appeals were taken with respect to those three classes. The govern-
ment also litigated a “pattern or practice” suit, 42 U.S.C. § 2000e-
6, and sought back pay for the approximately 2,700 remaining
blacks in the Fairfield production and maintenance workforce.
This prayer was denied, and is the subject of the present appeal.
The government, however, has withdrawn its appeal in favor
of the nationwide steel industry settlement, to which United States
Steel and the Union are parties. See United States v. Allegheny-
Ludlum Industries, Inc., 5 Cir. 1975, 517 F.2d 826. In this court
the representative appellant for the rank and file black workers on
whose behalf the government unsuccessfully sought back pay be-
low is John S. Ford, who, throughout the trial, represented only
thirty-five blacks in the Fairfield Car Shop of the Rail Transporta-
tion Division (the “original” Ford class), The substitution was
accomplished by Judge Pointer in the May 2 decree, wherein he
summarily enlarged the “original” Ford class so as to include in a
F.R. Civ.P. 23(b)(2) class action judgment all blacks employed
at Fairfield prior to January 1, 1973 who were not otherwise repre-
sented in a private class action. Thus, the district court designated
in practical and legal effect a “new” Ford class.
The now-unchallenged facts which supplied the bases for find-
ings of liabilitity on the part of the company and the unions, and
hence the works-wide injunctive relief, are reported with the opin-
ion of the district court, United States v. United States Steel Corp.,
N.D.Ala.1973, 371 F.Supp. 1045, 1049-57. The “new” Ford class
appeal involves issues concerning the manageability of the class
action and whether back pay is available to putative class members.
There is in addition an appeal by a group of former black and white
ore miners from the denial of their application for permissive in-
tervention pursuant to F.R. Civ P. 24(b). That is denominated
Appendix 31
the Craig appeal. Following careful consideration of the district
court’s opinion, the briefs and oral arguments of the parties, to-
gether with the parties’ Joint Appendix, we are of the opinion that
the district court must be charged with an abuse of discretion in
the denial of back pay to every member of the new Ford class. This
is largely due to a recent series of binding case law developments in
this circuit and in the Supreme Court. These cases were decided
subsequent to December 11, 1973, the date of the district court’s
opinion, and therefore Judge Pointer did not have the benefit of
them. Furthermore, subsequent to the May 2, 1973 enlargement
of the “original” Ford class—or, if one prefers, substitution of the
“new” Ford class—this court sitting en banc issued guidelines ad-
dressed to the handling of Rule 23(b) (2) employment discrimina-
tion class actions in the trial courts. Whether the substance of
these guidelines was observed below is not apparent from the rec-
ord.
On remand, a variety of additional determinations must be made
before this case will be capable of assured resolution. We there-
fore vacate the denial of back pay to the group on whose behalf
the government sought back pay below (the “new” Ford class),
and remand for further proceedings consistent with this opinion-
and other controiling authority. On remand the district court
should carefully redetermine the propriety of the amorphous
“new” Ford class in light of the consequences of binding such a
group to a final judgment. Also, specific findings should be made
with regard to the availability of back pay and certain of the de-
fendants’ special defenses. Finally, it is necessary that the district
court reexamine its legal approach in the context of the foregoing
tasks. The existing analysis is no longer acceptable—if ever it was
—to justify a generalized conclusion that back pay should not be
awarded to victims of employment discrimination. To the extent
that the trial court may conclude that additional back pay is now
warranted, it should proceed to Stage II of the bifurcated class ac-
tion procedure, discussed infra. At that point it should invite the
parties’ proposals for computation and distribution, and select a
reasonable method for making the affected class whcle, while avoid-
ing—as far as possible—the “quagmire of hypothetical judgments.”
We are of the view that the present record in the Craig appeal
presents essentially a grievance by ore miners generally—the use of
32 Appendix
plant age instead of company age for seniority purposes—rather
than a complaint by blacks that whites were discriminatorily fa-
vored in promotion and regression. The testimony relevant to in-
tervenors’ application indicated that the focal feature of the senior-
ity system affected the 593 whites and 331 blacks in the sarae man-
ner: all lost company (ore mine) seniority when assigned to Fair-
field Steel Plant. The district court correctly determined that this
does not present a palpable Title VII dispute. “The Act does not
require a remedy for those not discriminated against.” Gamble v.
Birmingham Southern R.R., 5 Cir. 1975, 514 F.2d 678, 686. In-
tervenors now indicate they are prepared to make a specific show-
ing of discrimination directed at black ore miners in violation of
Title VII. We conclude that this appeal must be dsmissed for want
of Title VII jurisdiction, irrespective of other requirements for in-
tervention. Whether the proffered showing should be allowed by
way of a repleaded application and new evidence in support of in-
tervention will be a question for the district court on remand.
We now proceed to outline the parameters of the district court’s
inquiry on remand.
I. THE “NEW” FORD CLASS ACTION
Judge Pointer’s designation of the “new” Ford class dovetails
with his most complicated set of findings and reasons for denying
back pay to the class’s members: “failure of proof” or “equitably
determining the true balance of interests.” 371 F.Supp. at 1061.
In three private class actions, involving around 360 black steel-
workers, the court found from the evidence specific aspects of the
pertinent seniority structures which it was able to identify as having
caused economic injury to certain class members. Jd. at 1059-60.
Sixty-one individuals received awards of back pay which were
measured with a substantial degree of certitude. In the broader
government (“‘new” Ford) action, Judge Pointer denied back pay,
not for want of evidence of racial discrimination—such evidence
was abundant in statistical form—but because he was unable to
isolate specific causal factors to explain earnings disparities between
an average black and average white worker in a given production
and maintenance line, ability and plant seniority being relatively
equal. Noting that under the Fairfield open bidding and job classi-
fication scheme “choice and chance,” id at 1053 (emphasis in origi-
WOMB ste ants etic eed on ee ela Balke
Appendix 33
nal), played major roles in predicting every line or pool employee’s
success—irrespective of race or seniority lock-in, see id. at 1059
n.36—Judge Pointer “presumed” damages for purposes of injunc-
tive relief, id. at 1058, but concluded that individualized back pay
could not reasonably be afforded “within the physical and fiscal
limitations of the court.” Jd. at 1061-62.
It is simply unclear whether the district court believed that in-
dividual awards of back pay to class members must be predicated
on proof of each discriminatee’s personal economic loss and racially-
discriminatory causation at the liability stage (Stage I) of the trial.
Appellant Ford argues that Judge Pointer did so believe, and cer-
tain portions of the opinion support the argument. E. g., id. at
1058 & n.35. On the other hand, the court in fact proceeded to
a second, individualized stage, see Baxter v. Savannah Suger Re-
fining Corp., 5 Cir. 1974, 495 F.2d 437, 443-45, cert. denied, 419
U.S. 1033, 95 S.Ct. 515, 42 L.Ed.2d 308 (1974), with respect to
the three private classes in which back pay was awarded. 371
F.Supp. at 1059. Moreover, it appears that the court clearly rec-
ognized the liability phase’s emphasis on proof of broad patterns
and practices, as opposed to individual damages. Jd. at 1053 &
n.18, 1061 & n.41. Also, Judge Pointer correctly anticipated our
decision in United States v. Georgia Power Co., 5 Cir. 1973, 474
F.2d 906, where we held that the government may seek and re-
cover back pay for discriminatees in a “pattern or practice” action.
371 F.Supp. at 1061 n.43. In summary, the critical factor by
which Judge Pointer distinguished the large government suit from
the smaller private classes was his ability in the latter instances to
identify the causal discriminatory features of the seniority systems
and the manner in which they affected those classes, in contrast
with his inability to make such determinations in the former case.
See id. at 1059.
As if to illustrate this justification for denying back pay, Judge
Pointer considered several possible methods by which back pay
arguably might have been awarded to the members of the “new”
Ford class. He rejected these approaches as either inequitable and
lacking in probative value (gross comparison of average black and
average white earnings in the line of progression) ; inequitable and
overly speculative (factor out the chance of bidding into jobs that
34 Appendix
turned out less advantageous in the long run) ; or inequitable and
unduly complex in terms of time and expense (use complete hind-
sight to flow chart all historical vacancies and operation levels; hy-
pothetically assign the most senior blacks to the openings that
turned out to be most advantageous). Jd. at 1060-61. The latter
two methods would yield similar, if not identical results, and prob-
ably either would have led in some instances to the quagmire, see
Pettway v. American Cast Iron Pipe Co., 5 Cir. 1974, 494 F.2d
211, 260-61. Yet in the cases of the sixty-one blacks to whom he
awarded back pay from among some 360 potential recoverees in
three private classes, it appears that Judge Pointer did utilize a
method which resembled the approaches he rejected for the larger
group. It is clear that the court reconstructed eight years of work-
force changes in the three departments and hypothetically assigned
plant-senior blacks, in order of plant seniority, to the vacancies (re-
defined in light of the decree) which the court determined those
blacks would have occupied but for discrimination. The effect of
the bidding system, moreover, is reflected only in the awards within
the “original” Ford class, where the court found a “significant num-
ber of declinations of promotion by both white and black employ-
ees.” 371 F.Supp. at 1060 n.37. The court clected to disregard the
bidding system in the Hardy (Ensley Steel Plant blast furnace de-
partment) and McKinstry (finishing hookers in the Fairfield Plate
Mill) classes. The defendants have not complained of the court’s
approach as to those two classes.
Appellant Ford strongly contends that the district court’s denial
of back pay to the larger class of nonrecoverees reflects a manifestly
erroneous reliance on “difficulty of ascertainment,” a theory which
this court has discredited as a general defense to back pay liabili-
ty. E. g., Johnson v. Goodyear Tire @& Rubber Co., 5 Cir. 1974,
491 F.2d 1364, 1380; Pettway, supra. There are, however, two
distinct aspects of both the back pay problem and Judge Pointer’s
reasoning. First, there is the requirement that the economic dis-
parity—the damages—be the reasonably certain result of unlawful
conduct perpetrated against the aggrieved individual or the class
to which he belongs, See 42 U.S.C. § 2000e-5(g). But second,
once a court has determined that a defendant’s inequitable con-
duct caused some damages to the class, or to a representative
sample of its members, then the burden falls upon the wrongdoer
Appendix 35
to explain away or disprove the damages which each claimant’s
evidence arguably supports. In other words, our decisions estab-
lished that, with respect to computing those damages <a are
the reasonably certain result of the wrong,
(1) unrealistic exactitude is not required, [and] (2) uncer-
tainties in determining what an employee would have earned
but for the discrimination, should be resolved against the
discriminating employer.
Pcttway, supra, 494 F.2d at 260-61 (footnotes omitted); see also
Johnson v. Goodyear, supra. Although it appears that Judge
Pointer recognized these distinct problems, his opinion confuses
them. Statements which may fairly be read to rely on the ab-
sence of proof of each discriminatee’s individual loss at the lia-
bility stage add to the confusion. 371 F.Supp. at 1058.
Hence, the decision below yields an anomalous contrast. The
evidence demonstrated that, since 1965, certain features of the
seniority systems had operated widely to reduce blacks’ mobility
to better jobs in production and maintenance units, including su-
pervisory positions and trades and crafts, and furthermore to deny
blacks the training and preparation necessary for advancement to
the better jobs. The district court found that those features per-
netuated the effects of past discrimination in violation of Title VII
and ordered injunctive reforms. In three relatively small depart-
mental classes, moreover, the court could identify specific features
which had caused economic losses to the classes, and awarded
back pay to certain class members after taking additional evidence.
Nowhere did the court draw a qualitative distinction between the
discrinination practiced against the small classes and that prac-
ticed against the “new” Ford class, yet it denied back pay through-
out the latter group. Thus, the only distinction of substance fol-
lowed from the district court’s inability to discern causal factors
as to the larger group’s losses in the sense that damages, to be
compensable, must be the result of a legal wrong and not some
other cause. This inability may have been compounded by a mis-
understanding of the role of individual proof at the liability stage
(Stage I).
We believe that both of these difficulties can be largely obviated
36 Appendix
on remand by the fundamental expedient of reexamining the
scope of the “new” Ford class. In a conscientious effort to elimi-
nate multiplicitous litigation by binding the otherwise unrepre-
sented employees to a Rule 23(b)(2) class judgment in which
able counsel on both sides has vigorously and thoroughly litigated
the issues, the district court created a class which it found in es-
sence to be so diverse and unmanageable that the effects of un-
lawful discrimination could not be separated from other plausible,
but not demonstrably unlawful, causes of members’ reduced earn-
ings. On remand the district court should conduct a hearing and
take evidence as to the propriety of the “new” Ford class, its scope
in terms of the ingredients of the judgment, if any, by which it
ought to be bound, and its size and membership. General guidance
is contained in our en banc opinion, Huff v. N. D. Cass Co., 5
Cir. 1973, 485 F.2d 710, although the court should tailor its in-
quiry on remand to the particular circumstances of this case. We
do not intend to restrict the focus of a highly serious determina-
tion which must involve great flexibility, and concerning which
the district court bears special responsibility. See Hutchings v.
United States Industries, Inc., 5 Cir. 1970, 428 F.2d 303, 310-11.
Inasmuch as the issues already have been thoroughly litigated,
at least from the standpoint of basic liability and systemic injunc-
tive relief, the district court need not fear to tread preliminarily on
the merits of a classwide request for back pay. The question on
remand will be comprehensive and multifacited: the extend to
which the “new” Ford class is maintainable in a “meaningful and
manageable” sense as a class action seeking monetary relief. Huff,
supra. As a corollary matter, the court should consider the ade-
quacy of the representation, F.R. Civ.P. 23(a) (4), which in this
court has been impressive. In this respect the court should con-
sult Huff, supra, Johnson v. Georgia Highway Express, Inc., 5 Cir.
1969, 417 F.2d 1122, 1125, and Judge Godbold’s specially con-
curring opinion in that case. We also suggest that the court enter
findings in support of its determination.
If the district court again concludes that the “new” Ford class
action should go forward, the matter will not then be ended, nor
will it automatically be appropriate to proceed to Stage II, as de-
scribed in Baxter, supra. It seems to us that much trouble might
be eliminated—though we encourage the district court’s inde-
Appendix 37
pendent judgment on the point—by the use of subclasses under
Rule 23(c) (4). See the discussion in Nix v. Grand Lodge of Int'l
Assn. of Machinists, 5 Cir. 1973, 479 F.2d 382, 385-86, cert. de-
nied, 414 U.S. 1024, 94 S.Ct. 449, 38 L.Ed.2d 316 (1973). See
also Weathers v. Peters Realty Corp., 6 Cir. 1974, 499 F.2d 1197,
1200; Jenkins v. United Gas Corp., 5 Cir. 1968, 400 F.2d 28,
35; Oatis v. Crown Zellerbach Corp., 5 Cir. 1968, 398 F.2d 496,
499; 7A C. Wright & A. Miller, Federal Practice and Procedure
§ 1790 (1972).
It appears that the district court’s principal difficulty with the
“new” Ford class was its size and diverse composition. Those as-
pects have made meaningful review equally problematic for this
court. A large variety of employment practices coalesced to greater
and lesser degrees to affect groups of black employees across differ-
ent plants, departments, job classifications, and earned seniority
levels throughout Fairfield Works. In considering whether to des-
ignate subclasses for the purposes of back pay, the district court
has at its disposal the injunctive decree of May 2, 1973, the de-
cree’s Appendices, and the parties’ lengthy stipulation which de-
scribes the seniority and job classification systems during Fairfield’s
history up to the trial. These items provide substantial assistance
in identifying those departments and lines which were affected by
specific practices ordered enjoined, and the contexts and effects of
the unlawful practices. The district court by now is intimately
familiar with the cause and should encounter no impassable ob-
stacles in drawing subclass lines on the basis of the objective com-
monality of particular seniority effects as to given groups of em-
ployees. We believe that this approach may greatly facilitate the
court’s determination of the groups of employees within the larger
class who are entitled to proceed to Stage II and the presentation
of individual back pay claims. Likewise, it should provide this
court with a complete picture of the district court’s mental proc-
esses in the event this lawsuit again comes before us.
In conclusion to this part we dispose of several arguments which
are ancillary to the basic class action problems. Initially, we reject
appellee United States Steel’s argument that appellant Ford lacks
standing as a matter of law to respresent any class of black em-
ployees broader than the “original” Ford class, in which his per-
38 Appendix
sonal back pay claim has been satisfied. The scope of Mr. Ford’s
standing is a matter which the district court should address in the
first instance as an element of the inquiry on remand. The court
should consider the question in light of Jenkins, supra, and Long
v. Sapp, 5 Cir. 1974, 502 F.2d 34, 42, toge:her with any other
relevant cases. Nor do we dccept the argument that the designa-
tion of a “new” Ford class constituted inherent error or an unau-
thorized substitution of parties. Rule 23(c)(1) does require the
court to determine the propriety of a class action “[a]s soon as
practicable” after its commencement, but the rule adds that the
order “may be conditional, and may be altered or amended before
the decision on the merits.” What is of immediate concern to us
is not the class modification standing alone, but the analysis upon
which it was entered and the mischief which it inadvertently pro-
duced with regard to back pay. The modification itself is not
unique in either its purpose or its timing. See, e. g., Hairston v.
McLean Trucking Co., M.D.N.C.1974, 62 F.R.D. 642, 663-64.
It is literally authorized by Rule 23, provided other constitutional
and procedural safeguards are satisfied. Finally, we disagree with
appellant Ford’s argument that we may venture no review what-
ever of the class enlargement, for want of a notice of cross-appeal
by the appellees. F.R.App.P. 4(a). By contrast with a trial ruling
which results in the sustaining or denial of a claim or defense, the
certification of a class action involves important consideratons of
judcial housekeeping. If we assume, somewhat skeptically, that
formal notice of cross-appeal is necessary to bring this class action
order forward, we would hold nonetheless that the circumstances
of this case are sufficient to bring the order within the principle that
“the rules themselves ought not be allowed to subvert the ‘just’ re-
sult which 28 U.S.C. § 2106 obliges every appellate court to reach
in cases lawfully brought before it for review.” 9 J. Moore’s Fed-
eral Practice {] 204.11[5], at 948 (1973) (footnote omitted). In
any event, this circuit is committed to the proposition that “[a]ction
by the court on maintainability may be triggered by motion of the
parties or on the court’s own initiative.” Huff, supra, 485 F.2d at
712 (emphasis added). Just as the district court took up the matter
without formal request by any party below, this court may properly
do likewise in the interest of justice.
Appendix. 39:
II. BACK PAY
In Part I we summarized the chief reasons upon which the dis-
trict court denied back pay to the “new” Ford class: the inability
to identify and distinguish the various causes of class members’ eco-
nomic losses, perhaps with some emphasis on the difficulty of as-
certaining the amount of compensable damages. Just as the court’s
discussion of these problems is unclear it is also unclear whether
Judge Pointer’s concern lay with the proof of economic injury to
the class, or with the absence of each member’s individual proof at
the liability-injunction stage (Stage I). The court also gave other,
less prominent reasons for denying back pay: lack of bad faith on
the part of the defendants; good faith efforts to comply with the
law together with reliance on judicial and administrative decisions
which had given positive treatment to steel industry seniority sys-
tems; the absence of unjust enrichment to the defendants; and the
breadth of other affirmative relief. 371 F.Supp. at 1062-63.
As general or complete defenses to recovery of back pay by any
employee, the district court’s reasons must fail. Controlling prece-
dent disposes of absence of bad faith, no unjust enrichment, and
broad injunctive relief as a counterweight for denial of back pay.
See Albemarle Paper Co. v. Moody, —— US., . , 95
S.Ct. 2362, 2374, 45 L.Ed.2d 280, 299 (1975); Baxter, supra, 495
F.2d at 442-43; Pettway, supra, 494 F.2d at 252-53; Johnson v.
Goodyear, supra, 491 F.2d at 1376-77; United States v. Georgia
Power Co., 5 Cir. 1973, 474 F.2d 906, 921. With deference to
Judge Pointer, we recognize his precognition that the absence of
bad faith—or even the presence of good faith—will not by itself
defeat a claim for back pay, but is at best a factor to be considered
in the larger balance. 371 F.Supp. at 1062. Accord, Moody,
supra, USS. at , 95 S.Ct. at 2374, 45 L.Ed.2d at 299
(majority opinion) ; USS. at , 95 S.Ct. at 2389, 45
L.Ed.2d at 315 (Blackmun, J., concurring in the judgment).
Also to be rejected are the burden of proof-equitable balance
justications mentioned earlier, along with the reliance theory, which
we treat infra as a special defense. With regard to the proof prob-
lems, the inquiry and procedure we suggested in Part I should as-
sist the court on remand in identifying particular groups of em-
ployees who are entitled, one-by-one, to present personal claims for
40 Appendix
back pay. Not unreasonably at the time of his decision, Judge
Pointer read certain language in our Georgia Power opinion, 474
F.2d at 922, as authorizing a blanket denial of back pay as a matter
of discretion in view of the proof, causation, and computation prob-
lems posed by the “new” Ford class’s claim. 371 F.Supp. at 1059,
1061. Indeed, after our subsequent opinion in Johnson v. Good-
year, supra, one might have thought that a conflict existed within
this circuit as to the circumstances under which a district judge
could decline to award back pay to an aggrieved class, despite find-
ings of employment discrimination practiced against the class. Later
in Pettway, however, all doubt was resolved in favor of the John-
son v. Goodyear presumption, which entitles the class to proceed
with individual claims for back pay once the class representative has
made out a prima facie case of systemic discrimination. There
Judge Tuttle (who also authored Georgia Power) explained the
Georgia Power language as an expression of factors to be consid-
ered in connection with the individual claimant’s burden, rather
than the class’s:
This holding {in Johnson v. Goodyear] is entirely consistent
with, and flows from our decision in Georgia Power that the
presumption in favor of a member of a class discriminated
against does not per se entitle an employee to back pay with-
out some individual clarification. (citing Georgia Power, 474
F.2d at 921-22).
494 f.2d at 259 (emphasis added). Thus, regardless of what might
have been a reasonable reading of Georgia Power at one time, that
case can no longer be taken for the sweeping proposition that “‘fac-
tors of economic reality ... and... the physical and fiscal limita-
tions of the court to properly grant and supervise relief” may oper-
ate to preclude an award of back pay to every aggrieved employee
in a large class action.
Instead, in an effort to relieve tension between management dif-
ficulties with numerous, sometimes diverse claimants and Title
VII’s policy of compensation for discrimination-caused economic
injuries, this court has established a bifurcated approach in class
actions seeking back pay. At Stage I the class must demonstrate a
prima facie case of employment discrimination. Sometimes sta-
tistical evidence alone will suffice; on other occasions live testimony
ee eee ee eee ee
Appendix 41
or additional exhibits may be necessary. At all events, however, the
stress at Stage I is upon demonstration of the defendant’s broad
employment policies and practices, the defendant’s rebuttal and
business necessity defenses, and the inferences which remain at the
close of the evidence. See United States v. T. I. M. E—D.C.,5
Cir. 1975, 517 F.2d 299 at 315-16; Rodriguez v. East Texas Motor
Freight, 5 Cir. 1974, 505 F.2d 40, 53-55; United States v. Hayes
International Corp., 5 Cir. 1972, 456 F.2d 112, 120. Although
the district court may then find liability and conclude that injunc-
tive relief is appropriate, as did the court below, it is improper at
Stage I to require any particular discriminatee to prove personal
monetary loss. Baxter, supra, 495 F.2d at 443.
Thus, the focus at the close of Stage I is still upon the class, ‘as
opposed to any particular putative member. As we noted earlier,
once the class has proven a prima facie case of discrimination—as
was done below—then it is presumptively entitled to move into
Stage II with the presentation of individual back pay claims. John-
son v. Goodyear, supra. This presumptive entitlement serves the
important function of filling the logical hiatus between large-scale
practices and statistically significant effects, which were shown at
Stage I, and individual members’ claims for sums of money due,
which have not yet been demonstrated. At this point the basic
question which seemingly perplexed the district court arises: may
the court, consistently with the “make whole” purpose of back pay,
require a class or subclass to demonstrate some tangible economic
loss as a class or subclass, attributable to one or more proven dis-
criminatory practices? In other words, may the court condition the
presumption upon some quantifiable showing of causation between
inequitable conduct and economic injury-in-fact to an objectively
and empirically homogeneous group qua group?
We need not further constrict the district court’s statutory discre-
tion by saying that it may never do so under any circumstances.
Logically, a suit that proceeds as a class action for monetary relief
necessarily contemplates some degree of proven economic damage
to the class in general, as a result of the defendant’s violations.
Where, as here, the circumstances of a large class action raise oc-
casional issues of alternative causation—as with the bidding system
and the irregular correspondence between hourly wages and job
42 “Appendix
classification—some minimal burden on a given group may be ap-
propriate. On the other hand, the fact that a defendant has man-
aged to discriminate against many people instead of a few is no
ticket to freedom from liability to those who suffered less than the
most obvious victims. “Important national goals would be frus-
trated by a regime of discretion that ‘produce[d] diffierent results
for breaches of duty in situations that cannot be differentiated in
policy.” Moody, supra, USS. at , 95 SCt. at 2371, 45
L.Ed.2d at 296, quoting Moragne v. States Marine Lines, 398 US.
375, 405, 90 S.Ct. 1772, 1790, 26 L.Ed.2d 339. Moreover, any
causation burden which the court imposes on the group, as such,
must be not only minimal in weight, but also very general in scope,
so as to avoid converting the procedure into the protracted series of
claimant-by-claimant trials which Baxter commits to a later stage.
With these considerations in mind, and cognizant of our responsi-
bility to “maintain a consistent and principled application of the
backpay provision,” Moody, supra, US. at , 95 S.Ct. at
2373, 45 L.Ed.2d at 299, we conclude that the district court may
require a Class or subclass to come forward, as a part of the class
or subclass prima facie case, with some threshold showing of eco-
nomic loss and causation, if the defendant’s evidence has drawn
into substantial question the group’s entitlement to move into Stage
II claimant-by-claimant. In all likelihood the defendant’s ability to
raise substantial doubt about the groups’s entitlement will occur
only rarely. We anticipate that the defendant would have to show
convincingly, and with statistically fair exhibits, that a given group
of discriminatees outearned, or at least earned as much as, a plant
seniority-comparable group of whites during the discriminatory pe-
riod. Even this kind of showing will not defeat the right of each
member of the group to claim back pay at Stage II, if the class
representative can make a reasonable argument that the exhibit is
distorted, or that a significant number of members might have
earned even more than their white contemporaries but for the con-
tinued effects of discrimination. Positive proof by each member of
the group is not necessary at that point. The representative need
only raise on behalf of the class a reasonable inference of “‘cogniz-
able [economic] deprivations to it as a class,” Baxter, supra, 495
F.2d at 443, “based on racial discrimination by the employer [or
union] in the employment relationship.” Johnson v. Goodyear, su-
Appendix 43
pra, 491 F.2d at 1375. This inference justifies the presumption
which entitles the group to move into Stage II.
On remand the district court should reconsider its approach to
back pay for the “new” Ford class in light of the preceding discus-
sion. The procedures suggested in Part I, supra, may well facilitate
the court’s task. Consideration of judicial efficiency are important,
but there is no reason why the need for efficiency cannot be recon-
ciled with what is by now a nearly certain, if not “automatic or
mandatory,” duty to award back pay to discriminatees who can
prove their entitlement to monetary rcovery. Cf. Moody, supra. In
the event the court again decides that any particular group within
the affected class should not go forward to Stage II, it must care-
fully articulate its findings and conclusions. Jd. —— U.S. at
n.14, 95 S.Ct. at 2373 n.14, 45 L.Ed.2d at 299 n.14; Stevenson v.
International Paper Co., 5 Cir. 1975, 516 F.2d 103, at pp. 117-
118.
Insofar as the district court may conclude that additional back
pay is now in order, the burden-of-proof rules respecting individual
claims are set forth in Baxter, 495 F.2d at 443-45, and Johnson v.
Goodyear, 491 F.2d at 1379-80. These rules generally contemplate
a scheme of proof, computation, and distribution initiated by a
series of claimant-by-claimant trials, and we have spoken accord-
ingly heretofore in describing the functions of Stage II.
After consulting Pettway, supra, 494 F.2d at 258, with regard
to Alabama limitations, the beginning date, and the closing date of
the back pay period, the district court, with the assistance of the
parties, should strive to the fullest practicable degree to award back
pay by reconstructing hypothetically each eligible claimant’s work
history. This was done in the cases of the sixty-one employees who
received back pay following the trial below. 371 F.Supp. at 1060.
To the extent that actual, historical vacancies in the employer’s
workforce can be flow-charted with reasonable accuracy, the court
should award the back pay to the minority employees who, in its
sound judgment, would have occupied those vacancies but for dis-
crimination, and whose projections show a loss of wages. Part of
“t]he key is to avoid . . . granting a windfall to the class at the
employer’s expense. . . .” Pettway, supra, at 262 n.151. Therefore,
if the parties can reasonably reconstruct the history of the changes
44 Appendix
in the Fairfield workforce, the court should utilize those data for
identifying “vacancies” in light of its decree, and should not pre-
sume that additional vacancies occurred. Apart from protecting
the defendant, this method has the virtue of distributing the re-
covery to the victims who, by the greater likelihood, are entitled to
it.
On the other hand, the remainder of “the key” is to avoid “the
unfair exclusion of claimants by defining the class or the deter-
minants of the amount too narrowly.” Jd. Quite probably there
are some aggregations of claimants, similar in plant seniority and
ability, each of whom might reasonably be slotted into the same his-
torical vacancy and awarded a “winner-take-all” sum of back pay.
Obviously, this cannot be done if the court is to remain faithful to
the actual experience of the plant. Such a situation calls forth the
“quagmire of hypothetical judgment” for which Pettway, 494 F.2d
at 262-63, suggests several alternative solutions. The district court
is free to consider the classwide approaches suggested in Pett-
way, as well as any other reasonable methods for making the
affected class whole. We commend the court particularly to the
use of pro rata shares, id. at 263 & n.154, in those instances where
the quagmire persists even after reasonable efforts geared toward
greater individual certainty have been attempted. This method
involves a distribution across the affected group of the sum which
represents the largest loss suffered by a group member who, as
likely as any other, could have occupied the vacancy in question
but for discrimination. Individual awards can be computed for
each member of the group by the use of a linear progression for-
mula. For example, if during a given period white A, with less
plant seniority, occupied a job at which he earned $15,000, but
blacks B, C, D, E, and F, with respective earnings in lower jobs
of $10,000, $11,000, $12,000, $13,000, and $14,000, each were
equally capable and substantially equal in superior plant seniority,
than their pro rata recoveries for the period could be computed
as follows: 5x + 4x + 3x + 2x + x = $5,000. The variable, x,
comes to roughly $333. Thus, B, whose hypothetical loss is five
times greater than F’s, recovers about $1,665; C recovers $1,332;
D takes $999; E recovers $666; while F, who suffered the least
economic injury, recovers $333. The defendants may wish to
argue that under no circumstances would employee F, the one with
Appendix 45
the most damages, or for that matter any of the other discrimi-
natees, have succeeded to the job ahead of A, or ahead of another
black. The defendants have the burden of persuasion on the point,
by a standard of “clear and convincing” evidence. Johnson v.
Goodyear, supra, 491 F.2d at 1380.
Of course, the pro rata method will seldom, if ever, work out as
conclusively or as simply as the example. The threshold determina-
tion of the eligible group of employees will often present complex
factual issues. The court that opts for a pro rata method will have
to deal with tediously-computed fractional constants in most cases.
By suggesting such a method we do not intend to exclude other rea-
sonable alternatives, for we recognize that “the trial court will often
have the keener appreciation of those facts and circumstances pe-
culiar to particular cases.” Moody, supra, US. at , 95
S.Ct. at 2373, 45 L.Ed.2d at 299. Also, we reemphasizc that alter-
native methods possessed of superior certainty should be exhausted
before the court resorts to racially-drawn classwide comparisons or
pro rata approaches. See Judge Bell’s specially concurring opinion
in Pettway, supra, 494 F.2d at 267. Similarly, the indiscriminate
black-white wage averaging approach advanced by the plaintiffs
and rejected by the district court, 371 F.Supp. at 1060 n.40, would
seem to be foreclosed by our decision in Georgia Power as a basis
for making individual awards, see 474 F.2d at 921-22, absent at
least a precise breakdown of subgroups from the standpoint of plant
age. See Pettway, supra, 494 F.2d at 262, discussing Stamps v.
Detroit Edison Co., E.D.Mich.1973, 365 F.Supp. 87, 121-22 [rev'd
on other grounds, sub nom., Equal Employment Op. Com’n v.
Detroit Edison Co., 6 Cir. 1975, 515 F.2d 301]. In conclusion,
we express full confidenc
This text is long and has been trimmed here. Open the source document for the complete record.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.