Petition — Prudential Insurance Co. of America v. National Organization for Women

Supreme Court brief1977

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Supreine Court of the United States

OcToBER TERM, 1976

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,

METROPOLITAN Lire INSURANCE COMPANY AND

JoHN Hancock MutruaL Lire INsurRANCE COMPANY,

* Petitioners,

NATIONAL ORGANIZATION FOR WOMEN

Wasuinoton, D.C. CHAPTER, ET AL.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

JEROME ACKERMAN

MicHAkEL S. Horne

Roperick A. DEARMENT

888 Sixteenth Street, N.W.

Washington, D.C. 20006

Attorneys for Petitioner, The Prudential

Insurance Company of America

J. Austin Lyons

Maraaret F, Keiiy

One Madison Avenue

New York, New York 10010

Attorneys for Petitioner, Metropolitan

Life Insurance Company

WruuM F. Joy

Rosert P. Joy

One Beston Place

Boston, Massachusetts 02108

Attorneys for Petitioner, John Hancock

Mutual Life Insurance Company

January 31, 1977

TABLE OF CONTENTS

Page

NS Be 6 vi. tds den endsanenenbcnddsneeneae 2

oe Cee adads 6obebenenes Per ee 2

QuESTIONS PRESENTED ..........-. 5 a la tee dae Seal 3

Statutory Provisions INVOLVED ............e02ee00: 3

STATEMENT OF THE CASE ..... Peete ete e eee ee ee en eens 5

Reasons FOR GRANTING THE WRIT .............--005: 12

I. The Holding Below, as It Relates to the Incor-

poration Within the (b)(3) Exemption of Sec-

tion 709(e) of the Civil Rights Act of 1964, and

44 U.S.C. § 3508, Presents Important and Re-

curring Questions of Statutory Construction and

It Reaches a Result Expressly Questioned by a

SURES CE THO COG ec ccc cccccccccsceccees 12

II. The Holding Below, as It Relates to the Incor-

poration Within the (b)(3) Exemption of 18

U.S.C. § 1905 and Similar Rulings of the Court

of Appeals for the District of Columbia Circuit

Are in Direct Conflict with a Recent Decision of

the Court of Appeals for the Fourth Cireuit .. 20

III. There Is a Compelling Need for Issuance of a

Writ of Certiorari Before Judgment Since This

Is the Only Way Petitioners May Obtain Mean-

ingful Review by This Court Before Disclosure

of the Specific Documents at Issue Occurs and

Since This Court Will Then Have an Oppor-

tunity To Review Simultaneously Conflicting

Decisions from Different Circuit Courts ...... 27

I ne a eo ee 30

ii Table of Contents Continued

Page

Appenprx A—Memorandum Opinion of the United

States District Court for the District of Columbia,

Ne SG. TIGD co ncccccsccccsssvcccsvesvcses la

Appenprx B—Order of United States District Court

for the District of Columbia, which, inter alia, de-

nied motions for preliminary injunction with re-

spect to the documents at issue, December 6, 1976 43a

Appenpix C—Order of United States District Court

for the District of Columbia, which temporarily

enjoined release of the documents to allow peti-

tioners to seek a stay pending appeal from the

Court of Appeals, December 16, 1976 ........... 44a

Appenprx D—Order of the United States Court of Ap-

peals for the District of Columbia Circuit denying

motion for a stay pending appeals, January 19,

| SPPPTETTETITPTETILITITT TCT T TL 47a

AprEenpix E—Statutory Provisions Involved ........ 50a

Apprenpix F—Sample Employer Information Report

| PPPS TT Pr errr rr rrery rr ree ree 64a-65a

TABLE OF AUTHORITIES

CasEs:

Avco Corp. v. Aero Lodge 735, 390 U.S. 557 (1968) ... 20

Bolling v. Sharpe, 344 U.S. 873 (1952) ..........-45. 29

Chamber of Commerce v. Legal Aid Society, 423 U.S.

Be GUE oo dnbcnccnendsdavnceseseusénaes passim

Charles River Park ‘‘ A’’, Inc. v. Department of H.U.D.,

519 F.2d 935 (D.C. Cir. 1975) ..........608.. 8, 21, 27

Crown Central Petroleum Corp. v. Kleppe, 14 FEP

Cases 40 (D. Mid. 1976) ..c.cccccsccccscccccse 18, 25

Chrysler Corp. v. Schlesinger, 412 F.Supp. 171 (D.

Be, SPE Sh ckcdvecddereverindscresnessdedsccre 18

Ditlow v. Volpe, 362 F. Supp. 1321 (D.D.C. 1973), rev’d

on other grounds, 494 F.2d 1073 (D.C. Cir.), eert.

denied, 419 U.S. 974 (1974) ....... cece eee eevees 21

Table of Contents Continued iii

Page

FAA Administrator v. Robertson, 422 U.S. 255 (1975)

22, 25

Goodyear Tire € Rubber Co. v. Dunlop, 13 FEP on”

Se EE tcvcodebadiudesenseecdoe ces 14, 18

Grumman Aircraft Engineering Corp. v. Renegotiation

Bd., 425 F.2d 578 (D.C. Cir. 1970), rev’d on other

grounds, 421 U.S. 168 (1975) ................6. 13, 21

H. Kessler € Co. v. EEOC, 472 F.2d 1147 (5th Cir.

MEE $4650-6650h0 464s s tbe hebesess eedede vedere 13

Holiday Inns, Inc. v. Kleppe, 13 FEP Cases 1337 (W.D.

i ee ine ae and 18, 22, 26

Hughes Aircraft Co. v. Schlesinger, 384 F. Supp. 292

SEER an eas eben 18

Irons v. Gottschalk, No. 74-1365 (D.C. Cir., Oct. 21,

gO RUE Ee ee ee 24

Lawyers Cooperative Publishing Co. v. Schlesinger,

No. 1974-212 (W.D. N.Y., July 3, 1974) .......... 18

Legal Aid Society v. Brennan, 13 FEP Cases 860 (N.D.

SE ME Chant band in dea Vdedddknstceenas 18

a avin iv eu A Gv dsb 40 s0sK0ce ens 18

21, 25

Schecter v. Weinberger, 506 F.2d 1275 (D.C. Cir. 1974) 25

Sears, Roebuck & Co. v. General Services Admin., 384

F. Supp. 996 (D.D.C. 1974) ...............056. 10, 18

Sears, Roebuck & Co. v. General Services Admin., 402

F.Supp. 376 (DDC. 1975) ..... 0. cc ccccccuec’ 14,18

Sears, Roebuck & Co. v. General Services Admin., 509

F.2d 527 (D.C. Cir. 1974) .........ccccececes passim

United States v. Thomas, 361 U.S. 950 TED bdesses 28

- ee A _ ecb eahbch Gained d dokeeudcede passim

estinghouse Elec. Corp. v. Schlesinger, 392 F. Supp.

1246 (E.D. Va. 1974) .......... 4 Leekeoneees _ 18

iv Table of Contents Continued

Page

STATUTES:

Civil Rights Act of 1964:

Section 709(c), 42 U.S.C. § 2000e-8(c) .......... 9,13

Section 709(d), 42 U.S.C. § 2000e-8(d) ......... 15, 16

Section 709(e), 42 U.S.C. § 2000e-8(e) ........ passim

Federal Aviation Act of 1958, Section 1104, 49 U.S.C.

B IGOE . . wcccccccccecessessbeueueee anne 23, 24, 25

Freedom of Information Act:

5 UBC. § GES... cccccvccsuscucesceueneneeee passim

5 U.BC. § GEBCR(S) ...ccccccccsesusecuauene passim

5 UBC. § GERID)IE) ..ccccccesseccccsnnauneee 26, 27

Government in the Sunshine Act, P.L. 94-409, Stat. 1241

(Sept. 18, 1976) .....cvccccsevesssescssceseeneen 22

Social Security Act, Section 1106, 42 U.S.C. 1306 .... 25

Trade Secrets Act, 18 U.S.C. § 1905 .............. passim

28 U.B.C. § 19B6(1) ... occcccccecccceunu ean 3

44 UB.C. 8 SBOB ...cccccccscsceessucnnn ene

44 UB.C. § BOBla) ..cccvccccccessseeeuenenee passim

MISCELLANEOUS:

Attorney General’s Memorandum on the Public Infor-

mation Section of the Administrative Procedures

Act, June 1087 ....cccccccccccccccsceseseeuns 13, 22

Executive Order 11246, 3 C.F.R. 169-177 (1974)... . passim

General Accounting Office Report, ‘‘The Equal Em-

ployment Opportunity Program for Federal Non-

construction Contractors Can Be Improved,’’

GAO MWD-75-63 (April 29, 1975) ............. 19

Hearings on S. 921 Before the Subcomm. on Constitu-

tional Rights of the Senate Comm. on the Judici-

ary, 85th Cong., 2d Sess. (1958) .............4+- 22

Lardner, Use, Abuse of Freedom of Information Act,

Washington Post, July 27, 1976, at A4......... 20

Note, Protection From Government Disclosure—The

Reverse—FOIA Suit, 1976 Duke L.J. 330 ....... 8

Table of Contents Continued v

Page

Note, Reverse-Freedom of Information Act Suit: Con-

fidential Information in Search of Protection, 70

N.W.U. L. Rev. 995 (1976) ............c cc cceee 8

OFCCP Compliance Manual, Section 2-202 .......... 19

Sen. Conf. Rep. No. 94-1178, 94th Cong., 2d Sess.

LEE SEES 22, 25

Silfrin, Official Claims Lawyers Misuse Information

Act, Washington Post, January 28, 1977 at D7 .. 20

Supreme Court Rules, 19(1)(6) .................... 20

RMU ET OUIUIDD occ ccc cccccccccccccccecs 9

CE EE 10

CG 15

H.R. Rep. Ne. 880, 94th Cong., 2d Sess., Part I (1976) 24

H.R. Rep. No. 1497, 89th Cong., 2d Sess. (1966) ...... 22

IN THE

Supreme Court of the United States

OcToBEeR TERM, 1976

No.

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,

MerTROPOLITAN Lire INSURANCE COMPANY AND

JoHN Hancock Mutua Lire INsurANceE CoMPANy,

Petitioners,

Vv.

NATIONAL ORGANIZATION FOR WOMEN

WasuHinoton, D.C. CHAPTER, ET AL.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Petitioners, The Prudential Insurance Company of

America (‘‘Prudential’’), Metropolitan Life Insur-

ance Company (‘‘Metropolitan’’) and John Hancock

Mutual Life Insurance Company (‘‘John Hancock’’),

respectfully petition this Court to issue a writ of cer-

tiorari to the United States Court of Appeals for the

District of Columbia Circuit to review before judg-

ment petitioners’ appeals now pending in that Court

of Appeals from an order and opinion of the United

States District Court for the District of Columbia.’

1In addition to the District of Columbia Chapter of the Na-

tional Organization for Women, the other respondents, collectively

OPINIONS BELOW

The memorandum opinion of the District Court,

which has been reported at 14 FEP cases 83, appears

at Appendix A to this petition. As a writ of certiorari

before judgment is being sought, there is no full opin-

ion below by the Court of Appeals. However, on Janu-

ary 19, 1977 the Court of Appeals denied a stay in this

case evidently on the authority of Sears, Roebuck &

Co. v. General Services Admin., 509 F.2d 527 (D.C. Cir.

1974), which deals with the same issues.’ See Appendix

JURISDICTION

The order of the District Court permitting disclo-

sure of the documents at issue, which appears at Ap-

pendix B to this petition, was entered on December 6,

1976. On December 16, 1976, petitioners, Prudential,

Metropolitan and John Hancock, each filed notices of

appeal from the District Court’s order and those ap-

peals have been docketed and consolidated by the

referred to as the Federal respondents, are now: Secial Security

Administration of the Department of Health, Education and Wel-

fare; Joseph A. Califano, Jr., in his official capacity as Secretary,

U.S. Department of Health, Education and Welfare; James B.

Cardwell, in his official capacity as Commissioner of Social Se-

curity; Everett M. Friedman, in his official capacity as Chief,

Insurance Compliance Staff, Social Seeurity Administration of

HEW;; F. Ray Marshall, in his official capacity as Secretary of

Labor; A. Diane Graham, in her official capacity as Acting Diree-

tor, Office of Federal Contract Compliance Programs, U.S. De-

partment of Labor.

2 Earlier on December 16, 1976 the District Court issued an

order temporarily enjoining release of the documents in question

to permit the petitioners to seck a stay pending appeal from the

Court of Appeals. This December 16, 1976 Order appears at

Appendix C.

United States Court of Appeals for the District of

Columbia Circuit. See Appendix D. The jurisdiction of

this Court to issue a writ of certiorari before judgment

is invoked under 28 U.S.C. § 1254(1).

QUESTIONS PRESENTED

Whether a private employer’s EEO-1 reports in the

possession of a Federal agency, other than the Equal

Employment Opportunity Commission, are made ex-

empt from disclosure by the (b)(3) exemption in the

Freedom of Information Act and that exemption’s in-

corporation of 42 U.S.C. § 2000e-8(e) and 44 U.S.C.

§ 3508 (a).

Whether a private employers’ EEO-1 reports and

related affirmative action plans (AAPS) in the posses-

sion of a Federal agency are made exempt from dis-

closure, insofar as they contain confidential statistical

data, by the (b)(3) exemption’s incorporation of 18

U.S.C. § 1905.

STATUTORY PROVISIONS INVOLVED

. 5 U.S.C. § 552, known as the Freedom of Informa-

tion Act, provides in part:

‘*§ 552 Public Information, agency rules, opinions,

orders, records, and proceedings.

(b) This section does not apply to matters that

are— ;

(3) specifically exempted from disclosure by

statute ;”’

(The full text of 5 U.S.C.

§ 552 is set forth in

Appendix E)

Section 709 of the Civil Rights Act of 1964, 42 U.S.C.

§ 2000e-8 provides in part:

‘*§ 2000e-8 Investigations—Examination and copy-

ing of evidence related to unlawful employ-

ment practices.

* * -

(e) Prohibited dislosures; penalties

It shall be unlawful for any officer or employee of

the Commission to make public in any manner

whatever any information obtained by the Com-

mission pursuant to its authority under this sec-

tion prior to the institution of any proceeding

under this subchapter involving such information.

Any officer or employee of the Commission who

shall make public in any manner whatever any

information in violation of this subsection shall

be guilty of a misdemeanor and upon conviction

thereof, shall be fined not more than $1,000, or im-

prisoned not more than one year.”’

(The full text of 42 U.S.C

§ 2000e-8 is set forth in

Appendix E)

44 U.S.C. § 3508(a) provides:

‘*§ 3508. Unlawful disciosure of information; pen-

alties ; release of information to other agencies

(a) If information obtained in confidence by a

Federal agency is released by that agency to an-

other Federal agency, all the provisions of law

including penalties which relate to the unlawful

disclosure of information apply to the officers and

employees of the agency to which information is

released to the same extent and in the same man-

ner as the provisions apply to the officers and em-

ployees of the agency which originally obtained

the information. The officers and employees of the

agency to which the information is released, in

- ° eS

addition, shall be subject to the same provisions of

law, including penalties, relating to the unlawful

disclosure of information as if the information

had been collected directly by that agency.”

(The full text of 44 U.S.C.

§ 3508 is set forth in

Appendix E)

18 U.S.C. § 1905, sometimes referred to as the Trade

Secrets Act, provides:

**1905. Disclosure of confidential information

generally

Whoever, being an officer or employee of the

United States or of any department or agency

thereof, publishes, divulges, discloses or makes

known in any manner or to any extent not author-

ized by law any information coming to him in the

course of his employment or official duties or by

reason of any examination or investigation made

by, or return, report or record made to or filed

with, such department or agency or officer or em-

ployee thereof, which information concerns or re-

lates to the trade secrets, processes, operations,

style of work, or apparatus, or to the identity,

confidential statistical data, amount or source of

any income, profits, losses, or expenditures of any

person, firm, partnership, corporation, or associa-

tion; or permits any income return or copy there-

of or any book containing any abstract or particu-

lars thereof to be seen or examined by any person

except as provided by law; shall be fined not more

than $1,000, or imprisoned not more than one year,

or both; and shall be removed from office or em-

ployment.”’

STATEMENT OF THE CASE

Under the Freedom of Information Act (‘‘FOIA’’),

5 U.S.C. § 552, the competing considerations favoring

aecess to Government records on the one hand and

recognizing on the other the legitimate interest in con-

fidentiality of those who supply information to the

Government typically require a carefully reasoned

balancing of the FOTA’s disclosure provisions with its

exemptions, and with various other relevant statutes

precluding or penalizing disclosure of records in the

possession of the government. In dealing with the issue

now before the Court, however, the lower courts have

adopted a wholly mechanical test. Under it, the end re-

sult depends entirely on whom a request for informa-

tion is directed to rather than on what information is

being requested. Thus, if a member of the public, pur-

suant to the FOTA, requests the Employment Infor-

mation Reports EEO-1 (‘‘EEO-1 reports’’) filed by

the petitioners, or by any of the thousands of other

employers who file such reports, and if the request is

addressed to the Equal Employment Opportunity

Commission (‘‘EEOC’’), it must be denied. Indeed,

the responsible officials of the EEOC would be subject

to criminal prosecution if they granted the request.

But if the same member of the public, pursuant to the

same Act, requests the same EEO-1 reports of the

same employer from a sister agency of the same Fed-

eral Government, such as the Office of Federal Con-

tract Compliance Programs (‘“OFCCP”’), it is so

clear as a matter of law (at least in the eyes of two

members of the Court of Appeals below) that the doc-

uments must be disclosed forthwith that parties seek-

ing to prevent disclosure of their records are not even

to be accorded the right to a full hearing on the merits

before disclosure occurs.

This is senseless. It does not serve the interests of

the supplier of the information, it does not serve the

interests of private parties seeking the information,

and it does not serve the interests of the Government.

It is an approach which made no sense to Mr. Justice

Douglas. Chamber of Commerce v. Legal Aid Society,

423 U.S. 1399, 1311-13 (1975). It is so capricious an

approach that to urge it is to suggest or imply that

the Congress acted either out of ignorance of its own

statutes or with an utterly irrational legislative in-

tent. But it is the approach which the courts below,

putting form miles above substance, would make the

law of the land.

The instant case grows out of a request under the

FOIA made by the respondent District of Columbia

Chapter of the National Organization for Women

(““NOW”’) for access to, among other things, the

EEO-1 reports and certain affirmative action materials

submitted by the insurance company petitioners to

various Federal agencies. NOW’s request was ad-

dressed to the Insurance Compliance Staff of the So-

cial Security Administration, which has direct respon-

sibility over the insurance industry in the enforcement

of the equal employment opportunity obligations im-

posed on Government contractors by Executive Order

11246, 3 C.F.R. 169-177 (1974).’

Before final administrative decisions were reached,

NOW filed suit below under the FOTA against the

Federal respondents, and against Prudential, Metro-

politan, John Hancock and one other insurance com-

pany to compel disclosure of the requested documents.‘

* Prudential, Metropolitan and John Hancock all hold Govern-

ment contracts and are therefore subject to the requi

Executive Order 11246. wsieeewaiti

*The ICS informed Metropolitan that disclosure would take

place without administrative review of Metropolitan’s request for

Prudential, Metropolitan and John Hancock each as-

serted timely ‘‘reverse-FOIA’’ cross-claims against

the Federal respondents seeking injunctive relief to

prevent disclosure of their EEO-1 reports and other

affirmative action materials either to NOW or to other

members of the public.’ Following generally adverse

administrative determinations, the petitioners moved

for preliminary injunctions to restrain release of the

documents pending a full trial on the merits. After a

hearing on these motions, the District Court, on De-

cember 6, 1976, issued a memorandum opinion and an

order that permit, inter alia, the Federal respondents

to release the insurance companies’ EEO-1 reports and

some portions of their affirmative action plans, on the

theory that there was little or no probability that the

insurance companies would ultimately be successful on

the merits in view of the prior decisions—which the

District Court had to consider controlling—of the U.S.

Court of Appeals of the District of Columbia Circuit.

confidentiality, which the ICS had received prior to NOW’s re-

quest for disclosure. Metropolitan then filed suit in the Southern

District of New York requesting declaratory and injunctive relief.

NOW did not intervene in the New York action, Metropolitan v.

Usery, 75 Civ. 4182, but instead chose to pursue the matter solely

in the District of Columbia.

*The term ‘‘reverse FOIA’’ suits has been used in various

lower court decisions and scholarly articles to describe actions in

which a private party seeks judicial relief to prevent threatened

disclosure under color of the FOTIA. See e.g., Westinghouse Elec.

Corp. v. Schlesinger, 542 F.2d 1190 (4th Cir. 1976) ; Charles River

Park ‘‘A’’, Ine. v. Department of H.U.D., 519 F.2d 935 (D.C.

Cir. 1975); Note, Protection From Government Disclosure—The

Reverse—FOIA Suit, 1976 Duke L.J. 330 (1976); Note, Reverse-

Freedom of Information Act Suit: Confidential Information in

Search of Protection, 70 Nw. U.L. Rev. 995 (1976).

a ee

EEO-1 reports are two-page Government-printed

forms (a blank sample appears at Appendix F'), which

all large and moderate-sized employers are required to

file for each of their facilities with 25 or more employ-

ees. Completed reports show, among other things, the

number of employees in each of the nine standard job

classifications at an employer’s facility, broken down

by sex and minority group classifications. For example,

an employer’s EEO-1 report would indicate for each

facility the total number of technicians (one of the

nine job categories) employed at the facility, and total

males and total females in that category, Negro males

and females, Oriental males and females, American

Indian males and females, and Spanish-surnamed

American males and females. In addition to an EEO-1

report on each facility, an employer must also submit

a consolidated report providing a similar breakdown

of its total workforce. Because they maintain many

separate large and small facilities throughout the

United States, the insurance company petitioners an-

nually file hundreds of EEO-1 reports. Prudential, for

example, annually files over 600 separate EEO-1

forms, all of which (for 1975) are encompassed by the

NOW FOfA request. Every EEO-1 report, including

those in question here, contains a legend at the bottom

which states, ‘‘All reports and information obtained

from individual reports will be kept confidential as re-

quired by Section 709(e) of Title VIT.’’ See Appendix

The EEOC requires that EEO-1 forms be filed annu-

ally by every employer with 100 or more employees,

pursuant to its authority under Section 709(c) of the

Civil Rights Act, 42 U.S.C. § 2000e-8(c). See 29 CFR

§ 1602.7 (1975). In addition, any employer with 50 or

more employees and a Government contract or sub-

contract amounting to $50,000 or more is required to

file an EEO-1 report annually for each facility with

the Department of Labor’s OFCCP pursuant to its

authority under Executive Order 11246. 41 CFR § 60-

1.7 (1976).

The insurance company petitioners, both as Gov-

ernment contractors and as employers of more than

109 persons, are required to file EEO-1 reports under

Section 709 of the Civil Rights Act and Executive Or-

der 11246. However, since the EEO-1 report has a

standard format developed by the EEOC and the

OFCCP, petitioners are required to file only one set

of EEO-1 reports each year with a single data process-

ing service (the so-called ‘Joint Reporting Commit-

tee’’)® that in turn supplies copies of employers’

EEO-1 reports to the EEOC and the OFCCP upon

agency request. The various Executive Order com-

plianee agencies subordinate to the OFCCP, such as

the Insurance Compliance Staff, either can obtain

EEO-1 reports directly from this data processing serv-

ice or indirectly through the OFCCP.

In rejecting the insurance companies’ arguments

that their EEO-1 reports are exempt from mandatory

disclosure under the (b)(3) exemption, the District

Court relied principally on the District of Columbia

Cireuit’s decision in Sears, Roebuck & Co. v. General

Services Admin., 509 F.2d 527 (D.C. Cir. 1974). The

(b)(3) exemption provides that the FOIA does not

apply to documents which are specifically exempted by

* As was pointed out by the plaintiff in Sears, Roebuck & Co. v.

General Services Admin., 384 F. Supp. 996, 1002 (D.D.C. 1974)

the ‘‘Joint Reporting Committee’’ is funded and largely staffed

by the EEOC and thus appears to be an alter ego of the EEOC.

another statute. In Sears, the District of Columbia

Circuit held that the (b)(3) exemption was unavail-

able in a situation almost identical to this case since

the Court rejected the applicability of Section 709(e)

of the Civil Rights Act and 44 U.S.C. § 3508 to the dis-

closure of EEQO-1 reports by a compliance agency un-

der Executive Order 11246. Although the District

Court held that substantial portions of the petitioners’

affirmative action plans are exempt from disclosure

under the (b)(4) exemption, which protects confiden-

tial business information, it did not find sufficient evi-

dence of competitive injury under the narrow reading

by the Court of Appeals of the (b)(4) exemption to

justify withholding the remainder of the affirmative ac-

tion plans and the EEO-1 reports.

The petitioners also argued below that their EEO-1

reports and their affirmative action plans were pro-

tected from disclosure by the (b)(3) exemption’s in-

corporation of 18 U.S.C. § 1905, which imposes crimi-

nal sanctions for unauthorized disclosure of confiden-

tial statistical data submitted to the Government.’ The

District Court, following what for it was the ‘‘control-

ling precedent”’ of the Court of Appeals decisions in

the District of Columbia, rejected this argument on the

theory that Section 1905 has no independent effect

since it is no broader than the (b) (4) exemption. This

result is directly contrary to the holding of the Fourth

Circuit in Westinghouse Elec. Corp. v. Schlesinger,

542 F.2d 1190 (4th Cir. 1976).

* Metropolitan has raised in the Court of Appeals and raises

here the applicability of 18 U.S.C. § 1905 to disclosure not only

of its EEO-1 reports, but also of its affirmative action plans and

portions of compliance review reports which are derived from

Metropolitan’s affirmative action plans.

REASONS FOR GRANTING THE WRIT

I. The Holding Below, as It Relates to the Incorporation Within

the (b)(3) Exemption of Section 709(e) of the Civil Rights Act

of 1964, and 44 U.S.C. § 3508, Presents Important and Recurring

Questions of Statutory Construction and It Reaches a Result

Expressly Questioned by a Justice of This Court.

This case warrants plenary review by this Court be-

cause it presents frequently recurring legal issues re-

lating to the applicability under the FOTA’s (b)(3)

exemption of Section 709(e) of the Civil Rights Act

of 1964 and 44 U.S.C. § 3508 to the contemplated dis-

closure of EEO-1 reports. This Court’s guidance on

these FOIA questions, which have broad applicability

and public importance,’ is sorely needed. That a serious

question exists is demonstrated by the conflict between

the result reached below and the views expressed by

Mr. Justice Douglas on this question in Chamber of

Commerce v. Legal Aid Society, 423 U.S. 1309 (1975).

Section 709(e) of the Civil Rights Act unquestion-

ably prohibits officers and employees of one Federal

agency—the EEOC—from disclosing EEO-1 reports

since Section 709(e) prohibits disclosure of any infor-

mation obtained by the Commission under its Section

8 The number of FOIA eases, including FOIA eases involving

affirmative action materials, is growing rapidly. While figures are

not readily available on the total number of FOIA eases involving

affirmative action materials, at least 15 of the cases cited herein

involve FOIA-affirmative action decisions over the past two or

three years. As for FOIA eases generally, 183 FOIA complaints

were filed in the District of Columbia alone in 1976—a threefold

inerease as compared with 1975. See Weissman v: CIA, No. 76-

1566, slip op. p. 11, fn. 11, (D.C. Cir., January 6, 1977). More-

over, while the national average rate of appeals is 9% for all

eases, in the District of Columbia 30% of all closed FOIA cases

result in appeals. bid.

709(¢) power to compel recordkeeping and reporting

by employers. 42 U.S.C. § 2000e-8(¢) and 8 (e). Thus,

it has been undisputed that the EEOC may not disclose

EEO-1 reports, outside the use of the reports in EEO

litigation. See generally H. Kessler & Co. v. EEOC,

472 F.2d 1147, 1148-9 (5th Cir. 1973). It has also never

been disputed that Section 709(e) was incorporated by

the (b) (3) exemption to the FOIA, making EEO-1 re-

ports exempt from mandatory disclosure by the

EEOC.’ Pursuant to 44 U.S.C. § 3508, the Section

709(e) restrictions on disclosure should remain appli-

cable even though disclosure by another federal agency

is proposed. See Grumman Aircraft Engineering

Corp. v. Renegotiation Bd., 425 F.2d 578, 582 (D.C.

Cir. 1970) rev’d on other grounds, 421 U.S. 168 (1975).

Therefore, in light of Section 709(e), 44 U.S.C.

§ 3508, and the (b)(3) exemption to the FOIA, the

latter statute should not be interpreted as requiring

disclosure of EEO-1 reports merely on the theory that

some Government agency other than EEOC, such as

the Insurance Compliance Staff or the Department of

Labor, has been requested to make the disclosure. Al-

though EEO-1 reports are not generally filed directly

with the EEOC but with its data processing agent,

the essential prerequisites of Section 709(e) and 44

U.S. § 3508 are satisfied. The EEO-1 reports were

obtained pursuant to the EEOC’s authority under See-

tion 709 and they were obtained ‘‘in confidence.’’ Con-

° Seetion 709(e) was among the statutes specifically identified as

coming within the scope of the (b)(3) exemption by the U.S.

Attorney General's authoritative and often cited memorandum on

the FOIA. Attorney General’s Memorandum on Publie Informa-

— of the Administrative Procedure Act, June 1967, at

p. 32.

bbws

sequently, even if Section 709(e) and 44 U.S.C. § 3508

do not require criminal prosecution for release of

EEO-1 reports by non-EEOC employees, these statu-

tory provisions nevertheless indicate an unmistakable

congressional intent to protect EEO-1 reports from

public dissemination—an intent which is frustrated by

the unduly narrow interpretation of the Section 709

(e) and 44 U.S.C. § 3508 by the courts below.

In rejecting the applicability of Section 709(e) and

44 U.S.C. § 3508, the Federal courts in the District of

Columbia in Sears, Roebuck & Co. v. General Services

Admin., 509 F.2d 527 (D.C. Cir. 1974) and similar

eases,”’ have relied on the fact that the EEO-1 reports

were not collected or released directly by the EEOC,

but rather by the “Joint Reporting Committee,’’—the

EEOC-funded data processing service that physically

handles the processing of the reports. Since 709(e) is

a criminal statute, the Cireuit Court in Sears felt com-

pelled to so narrowly construe its meaning as to ob-

secure totally the legislative intent behind the provision.

This formalistic approach, based on blind reliance on

a canon of construction, leads to the anomaly of one

agency of the Government being compelled to release

a standard form document while officials of a sister

agency are subject to criminal penalties if they release

the very same document.

The dual reporting requirements of the EEOC and

OFCCP should not obscure the fact that the insurance

company petitioners and other large employers must

1° E.g., Goodyear Tire & Rubber Co. v. Dunlop, 13 FEP Cases

1734 (D.D.C. 1975) ; Robertson v. Department of Defense, 402 F.

Supp. 1342 (D.D.C. 1975) ; Sears, Roebuck & Co. v. General Serv-

iees Admin., 402 F. Supp. 378 (D.D.C. 1975).

file EEO-1 reports even if they hold no Government

contracts; thus, Section 709(e) by its express terms is

applicable to the EEO-1 reports that these employers

(who happen also to be contractors) file annually.

When it originally enacted and later amended Section

709, giving the EEOC information-gathering author-

ity, Congress clearly intended that the EEOC should

coordinate its information gathering with other

agencies such as the OFCCP." However, in encourag-

ing coordinated reporting functions to avoid duplica--

tion, certainly Congress did not intend for such coordi-

nation to become a means of circumventing the dis-

closure prohibitions of Section 709(e) and 44 U.S.C.

§ 3508." Indeed, a desire to encourage coordination,

“In an interpretative memorandum on Title VII that Senators

Clark and Case, the Senate floor managers, introduced into the

record as part of the Senate debates on the 1964 Civil Rights Act

the possibility of coordinating federal reporting requirements was

offered to assuage fears that EEOC reporting might prove onerous:

**Any recordkeeping requirements imposed by the Commission

could be worked into existing requirements and practices so

as to result in a minimum additional burden. Furthermore,

the Federal Reports Act of 1942, 5 United States Code 139-

139f, gives the Director of the Bureau of the Budget authority

to coordinate the information-gathering activities of Federal

agencies, and he ean refuse to approve a general recordkeeping

or reporting requirement which is too onerous or poorly co-

“se with other requirements.’’ 110 Cong. Ree. 7214

Coordination of recording requirement was made mandatory by the

1972 Amendment to the Civil Rights Act when the following sen-

tence was inserted as part of Section 709(d) :

“Tn prescribing requirements pursuant to subsection (ec) of

this section, the Commission shall consult with other interested

— and a ng -—_ = shali —— to coordinate

requirements with those adopted such agencies.’’ 42

U.S.C. § 2000e-8(d) (1974). ‘

a Indeed, in 1972 when Congress provided the EEOC with the

authority to furnish information to State and local equa] employ-

especially coordination that leads to the use of common

reporting forms, is utterly inconsistent with the notion

of permitting the right hand of government to do that

which the left hand is expressly forbidden from doing.

Whether Section 709(e) is viewed as a means of serv-

ing the government’s interest in encouraging the free

flow of information to the government or protecting

the interests of private parties in the confidentiality

of their affairs, it is clear that the purpose of Section

709(e) is thwarted when disclosure is allowed, and in-

deed compelled, depending on the fortuitous cireum-

stance of which agency of government is asked to yield

the documents.

Subsequent to Sears, acting on a stay request in

Chamber of Commerce v. Legal Aid Society, 423 U.S.

1309 (1975), Mr. Justice Douglas considered this very

question and expressed grave doubts as to the narrow

construction of Section 709(e) adopted in Sears and

followed in the instant case:

‘« information contained in the EEO-1’s, the

AAP’s and the CRR’s which are prepared from

the EEO-1's, is arguably protected from disclosure

by § 709(e). See H. Kessler d&: Co. v. EEOC, 472 F.

2d 1147, 1152, 1153 (CA 5 1973) (en bane) (major-

ity and dissenting opinions.

To be sure, the information in the AAP’s and

the EEO-1’s in this case was not obtained directly

by the EEOC. Rather, the information was appar-

ently collected by a Joint Reporting Committee of

ment opportunity agencies it was made clear this information was

not to be disseminated by such recipients:

‘‘Such information shall be furnished on the condition that it

not be made publie by the recipient agency prior to the in-

stitution of a proceeding under State or local law involving

such information.’’ 42 U.S.C. § 2000e-8(d) (1974).

In the ease of information shared with other Federal agencies,

44 U.S.C. § 3508 made this kind of explicit condition unnecessary.

both the EEOC and the federal compliance agency

(in this case, GSA) under Executive Order No.

11246. But the information in the EEO-1’s was

obtained, in part, on behalf of the EEOC, see 41

CFR $ 60-1.7(a) (1), and much of the information

contained in the AAP’s is essentially in the nature

of that protected by § 709. Compare 41 CFR pt.

60-2 with 42 U.S.C. § 2000(e)-8(c) (1970 ed.,

Supp. IIT). Indeed, certain policy considerations

underlying the regulations precluding release by

the GSA of information contained in the AAP’s

are akin to those motivating the confidentiality

implemented by § 709. Compare 41 CFR § 60-40.3

(a)(5) with H. Kessler & Co., supra, at 1150, In

view of the foregoing, though some of the informa-

tion involved here neither was obtained, nor is to

be disclosed, by the EEOC, the congressional pur-

pose of confidentiality, protected by criminal sanc-

tions, is not to be lightly circumvented.’’ 423 U.S.

at 1311-13“ (emphasis added).

Contrary to this cogent reasoning, the Court of Ap-

peals below will not even stay disclosure pending a full

hearing on the merits of the Section 709(e) issue.

The precise FOIA disclosure issues posed by this

ease have in recent years produced countless adminis-

trative determinations by agencies to which FOIA

requests have been addressed and also a large number

** Mr. Justice Douglas went on to deny the stay because the dis-

closure about to occur was in a pretrial discovery context and was

subject to protective orders which mitigated, if they did not com-

pletely preclude, any irreparable injury to the party resisting dis-

closure. In the instant case, there is no comparable qualification or

limitation on the disclosure which the Federal respondents propose

to make and upon which NOW insists.

of sometimes conflicting court decisions.“ Indeed, a

substantial share of lower court FOIA jurisprudence

has emerged from cases involving threatened disclo-

sure of EEO-1 reports. The frequency with which the

issues presented here have been litigated in the lower

court underscores their broad public importance not

only to the multitude of companies which must submit

EEO-1 reports to a myriad of Federal agencies but

also the Governmental custodians of such documents

and to private parties who wish to have access to such

documents.

Even though this case arises in the context of a

FOTIA request made to the Insurance Compliance Staff

of the Social Security Administration of HEW, the

decision will have equal applicability to disclosure of

EEO-1 reports by any of the other Executive Order

11246 compliance agencies that collectively control the

1 See e.g., Legal Aid Society v. Chamber of Commerce, 423 U.S.

1309 (1975) ; Westinghouse Electric Corp. v. Schlesinger, 542 F.2d

1190 (4th Cir. 1976); Sears, Roebuck & Co. v. General Services

Admin., 509 F.2d 527 (D.C. Cir. 1974) ; Crown Central Petroleum

Corp. v. Kleppe, 14 FEP Cases 49 (D.Md. 1976) ; Holiday Inns,

Ine. v. Kleppe, 13 FEP Cases 1337 (W.D. Tenn. 1976) ; Chrysler

Corp. v. Schlesinger, 412 F. Supp. 171 (D. Del. 1976) ; Goodyear

Tire & Rubber Co. v. Dunlop, 13 FEP Cases 1734 (D.D.C, 1975) ;

Sears, Roebuck & Co. v. General Services Admin., 402 F. Supp. 378

(D.D.C. 1975) ; Robertson v. Department of Defense, 402 F. Supp.

1342 (D.D.C. 1975) ; Legal Aid Society v. Brennan, 13 FEP Cases

860 (N.D. Cal. 1975); Sears, Roebuck & Co. v. General Services

Admin., 384 F. Supp. 996 (D.D.C. 1974) ; Hughes Aircraft Co. v.

Schlesinger, 804 F. Supp. 292 (C.D. Cal. 1974); The Lawyers

Cooperative Publishing Co. v. Schlesinger, No, 1974-212 (W.D.N.Y.

July 3, 1974); Westinghouse Elec. Corp. v. Schlesinger, 392 F.

Supp. 1246 (E.D. Va. 1974) ; Legal Aid Society v. Shultz, 349 F.

Supp. 771 (N.D. Cal. 1972).

reports of government contractors in all segments of

American industry.” It has been estimated that there

are over 275,000 employers subject to Executive Order

11246 jurisdiction, and a very substantial portion of

those employers are required to file EEO-1 reports

annnally."* The decisions below and others like it di-

rectly affect each of these reporting contractors since

by holding that EEO-1 reports are subject to manda-

tory disclosure under the FOLA, these decisions allow

** The 17 Federal departments, agencies or authorities which have

been designated by the Director of the OFCCP to perform certain

compliance functions under Executive Order 11246 are:

1. Department of Agriculture (USDA)

2. Energy Research Development Administration (ERDA)

3. Department of Commerce

4. Department of Defense (DOD)

5. Environmental Protection Agency (EPA)

6. General Services Administration (GSA)

7. Department of Health, Education and Welfare (HEW)

8. Department of Interior

9. Department of Housing and Urban Development (HUD)

10. Department of Justice

11. United States Postal Service (USPS)

12. Small Business Administration (SBA)

13. Tennessee Valley Authority (TVA)

14. Department of Transportation (DOT)

15. Department of Treasury

16. Veterans Administration (VA)

17. National Aeronautics and Space Administration (NASA)

OFCCP Compliance Manual,

Section 2-202.

Any of these entities may receive FOIA requests for EEO-1

reports.

*®The Department of Labor has estimated that there are more

than 275,000 Federal noneconstruction contractors subject to its

Executive Order 11246 and that number would be even higher if

Federal construction contractors were included. Approximately

92,000 of the nonconstruction Contractors file EEO-1 reports. See

General Accounting Office Report, ‘‘The Equal Employment Op-

portunity Program For Federal Noneconstruction Contractors Can

Be Improved,’’? GAO MWD-75-63, at 31-32 (April 29, 1975).

anyone from the well-intentioned public citizen to the

unscrupulous competitor to have ready access to the

detailed information on an employer’s staffing at each

of its facilities." Clearly the Section 709(e) issue has

sufficiently broad applicability and importance to

merit resolution by this Court.

II. The Holding Below, as It Relates to the Incorporation

Within the (b)(3) Exemption of 18 U.S.C. § 1905, and Simi-

lar Rulings of the Court of Appeals for the District of Co-

lumbia Circuit Are in Direct Conflict with a Recent De-

cision of the Court of Appeals for the Fourth Circuit.

There is a clear conflict between the Courts of Ap-

peals for the District of Columbia and the Fourth Cir-

cuits on whether the (b)(3) exemption in the FOIA

incorporates 18 U.S.C. § 1905, and this conflict pre-

sents a compelling reason for review by this Court.

E.g., Rule 19(1) (b) of the Supreme Court Rules; Avco

Corp. v. Aero Lodge 735, 390 U.S. 557, 559 (1968).

In several decisions that have considered the rela-

tionship of 18 U.S.C. § 1905 to the FOTA, the Court of

Appeals for the District of Columbia Circuit has held

17 Several agencies that have made studies of the FOIA requests

they receive indicate that the majority of such requests are initiated

by corporations or law firms on behalf of corporate clients. FDA

Commissioner Alexander Schmidt has charged that such FOIA

requests support ‘‘industrial espionage—companies seeking infor-

mation about competitors—and not the publie’s right to know.’’

Lardner, Use, Abuse of Freedom of Information Act, Washington

Post, July 27, 1976, at A4; See also Silfrin, Official Claims Lawyers

Misuse Information Act, Washington Post, January 28, 1977 at D7.

KOO eee

that 18 U.S.C. § 1905 is not a statute incorporated by

the (b) (3) exemption to the FOIA." In the instant

ease, the District Court felt obliged to follow that line

of cases and the Court of Appeals, in denying petition-

ers’ motions for stay, evidenced a complete unwilling-

ness to reexamine the issue. Appendix A at 8a-9a, Ap-

pendix C at 45a and Appendix D at 49a.

But just four months ago, the Court of Appeals for

the Fourth Circuit, in Westinghouse Elec. Corp. v.

Schlesinger, 542 F.2d 1190, 1199-1203 (4th Cir. 1976),

took what the trial court euphemisticaily described be-

low as ‘ta somewhat different approach to the applica-

bility of § 1905."’ Appendix A at 10a. In fact, after a

eareful review of the District of Columbia Cireuit de-

cisions dealing with interrelationship of 18 U.S.C.

§ 1905 and the (b) (3) exemption, the Court of Appeals

for the Fourth Cireuit expressly rejected the approach

followed in the District of Columbia Cireuit. The

Fourth Cireuit held that Section 1905 had not been

modified by enactment of the FOTA, and it had been

intended by Congress to be among the statutes incor-

porated by FOIA’s (b)(3) exemption. 542 F.2d at

1202-1203. In reaching this conclusion, the Fourth Cir-

cuit was persuaded in part by the legislative history of

** National Parks & Conservation Ass’n. v. Kleppe, No. 76-1044

(D.C, Cir. November 15, 1976); Charles River Park ‘‘A’’, Ine. v.

Department of H.U.D., 519 F.2d 935, 941, n.7 (D.C. Cir. 1975) ;

Sears, Roebuck & Co. v. General Services Admin., 509 F.2d 527,

529 (D.C. Cir. 1974); Robertson v. Butterfield, 498 F.2d 1031,

1033, n.6 (D.C. Cir. 1974) rev’d on other grounds, 422 U.S, 255

(1975); Grumman Aireraft Engineering Corp. v. Renegotiation

Bd., 425 F.2d 578, 589, n.5 (D.C. Cir. 1970) rev’d on other grounds,

421 U.S. 168 (1975) ; see also Robertson v. Department of Defense,

402 F. Supp. 1342, 1347-8 (D.D.C. 1975) ; Ditlow v. Volpe, 362 F.

Supp. 1321, 1323-4 (D.D.C. 1973), rev’d on other grounds, 494 F.2d

1073 (D.C. Cir.), cert. denied, 419 U.S, 974 (1974).

the FOIA indicating an intent to preserve independent

statutory protections from disclosure, such as 18

U.S.C. § 1905, which were already part of federal law:

‘‘There are nearly 100 statutes or parts of statutes

which restrict public access to specific government

records. These would not be modified by the public

provisions of S. 1160.’’ (emphasis added H.R.

Rep. No. 1497, 89th Cong., 2d Sess. 10 (1966).

The Fourth Cireuit Court of Appeals also noted

that Section 1905 had previously been identified in a

Congressional hearing as a statute which prohibited

disclosure and that it was among the statutes listed by

the Attorney General in his memorandum opinion on

the scope and application of the FOIA as one of the

statutes incorporated by the (b)(3) exemption.” The

Fourth Cireuit’s decision in Westinghouse has been

followed in a recent District Court decision in the

Sixth Cireuit. Holiday Inns, Inc. v. Kleppe, 13 FEP

Cases 1337 (W.D. Tenn. 1976).

Following the decision of this Court in FAA Ad-

ministrator v. Robertson, 422 U.S. 255 (1975), the (b)

(3) exemption was amended, effective March 13, 1977,

by the ‘‘Government in the Sunshine Act,”’ P.L. 94-

409, 90 Stat. 1241 (September 13, 1976). As amended,

the (b)(3) exemption reads as follows:

‘*(3) specifically exempted from disclosure by

statute (other than section 552b of this title), pro-

vided that such statute (A) requires that the mat-

ters be withheld from the public in such a manner

1” See Hearings on S. 921 Before the Subcomm. on Constitutional

Rights of the Senate Comm. on the Judiciary, 85th Cong., 2d Sess.

935-987 (1958); Attorney General’s Memorandum on the Public

Information Section of the Administrative Procedures Act, June

1967, at pp. 31-32.

as to leave no discretion on the issue, or (B) es-

tablishes particular criteria for withholding or

refers to particular types of matters to be with-

held ;”’

This amendment, although designed to overrule the

precise result reached in Robertson, does not resolve

or render moot the conflict among the Circuits over the

question whether 18 U.S.C. § 1905 is incorporated in

the (b) (3) exemption. In Robertson this Court did not

address the 18 U.S.C. § 1905 question but rather con-

sidered whether a quite different statute, Section 1104

of the Federal Aviation Act of 1958, 49 U.S.C. § 1504,

was incorporated in the (b)(3) exemption. Section

1104 gives the FAA administrator discretionary au-

thority to withhold ‘‘information contained in any ap-

plication, report, or document filed pursuant to the

provisions of this chapter or of information obtained

by the Board or Administrator pursuant to the pro-

visions of this chapter.’’ By contrast, 18 U.S.C. § 1905

is a criminal statute and obviously has no discretionary

element. Moreover it refers to particular types of mat-

ters to be withheld, specifically :

‘information [which] concerns or relates to the

trade secrets, processes, operations, style or work,

or apparatus, or to the identity, confidential sta-

tistical data, amount or source of any income,

profits, losses, or expenditures of any person, firm,

partnership, corporation, or association. ...”’

Since Section 1905 plainly does not provide any dis-

cretion to disclose documents which fall within its:

scope, it satisfies proviso (A) of the amended (b)(3) ;

exemption.” Accordingly, although Section 1104 of the

2° A recent lower court decision considering the new version of

the (b)(3) exemption found its two provisos clearly disjunctive.

Federal Aviation Act of 1958 will no longer be incor-

porated within the (b) (3) exemption, the same cannot

be said of 18 U.S.C. § 1905.** Thus, the revision of the

Irons v. Gottschalk, No. 74-1365, slip. op. at 5, n. 3. (D.C. Cir.

October 21, 1976). Thus any statute, such as § 1905, falling with-

in the proviso (A) because of the absence of a discretionary ele-

ment would still remain within the (b)(3) exemption. In deter-

mining whether 18 U.S.C. § 1905 is incorporated in the new version

of the (b)(3) exemption, it therefore is unnecessary to consider

whether § 1905 also satisfies proviso (B), although petitioners be-

lieve that it clearly satisfies that test also.

21 To be sure the House Report on the Sunshine Act suggests that

18 U.S.C. § 1905 would fall outside the House version of the re-

vised (b)(3) exemption, apparently concurring with the District

of Columbia Cireuit’s views on the applicability of Section 1905

under the old (b)(3) exemption. H.R. Rep. No. 880, 94th Cong.,

2d Sess., Part I, 10 (1976). Nevertheless, this Report does not

clearly indicate that the House was attempting to codify the Dis-

trict of Columbia Circuit’s view into an amended (b) (3) exemption.

More importantly, the House amendment to the (b)(3) exemption

was not adopted. The H.R. 11656 version of the (b) (3) amendment

before the Committee when the House Report was prepared would

have revised the (b)(3) exemption to read as follows:

(b) Section 552(b)(3) of Title 5, United States Code, is

amended to read as follows:

**(3) required to be withheld from the publie by any

statute establishing particular criteria or referring to par-

ticular types of information ;’’.

There is little point in speculating whether this language, if it

had become law, would have removed 18 U.S.C. § 1905 from the

scope of the (b)(3) exemption. The House amendment was re-

jected in conference in favor of the conference substitute that was

thereafter enacted into law in P.L. 94-409. Thus, the statements in

the House Report are thoroughly unreliable indicia of the Con-

gressional intent behind the quite different amendment to (b) (3)

that was actually adopted.

The Conference Report on the Sunshine Act, which is the only

authoritative statement of the intent of the revision of the (b) (3)

exemption that the Congress adopted, states:

‘*Section 5(b) of the conference substitute amends the third

exemption in 5 U.S.C, 552(b) to inelude information spe-

cifically exempted from disclosure by statute (other than new

(b)(3) exemption does not moot the sharp conflict be-

tween circuits over the applicability of Section 1905

and there remains a pressing need for review by this

Court.

The question whether 18 U.S.C. § 1905 is ineorpo-

rated in the FOIA’s (b) (3) exemption in fact has the

broad public significance which calls for the authorita-

tive resolution that only this Court can provide. It isa

question which affects not only the disclosability of

equal employment data provided to the Government

(both EEO-1 reports and related materials such as

affirmative action plans) but also a host of other ma-

terials including commercial and proprietary data in

section 552b), if the statute either (a) requires that the in-

formation be withheld from the public in such a mavner as

to leave no discretion on the issue, or (b) establishes por-

ticular criteria for withholding or refers to particular types

of information to be withheld. The conferees intend this lan-

guage to overrule the decision of the Supreme Court in Admin-

istrator, FAA v. Robertson, 422 U.S. 255 (1975), which dealt

with section 1104 of the Federal Aviation Act of 1958 (59

U.S.C. 1504). Another example of a statute whose terms do

not bring it within this exemption is section 1106 of the Sovial

Security Act (42 U.S.C. 1306).’’

Sen. Conf. R. No. 94-1178, 94th Cong., 2d Sess. 24-25

(1976).

Both Section 1104 of the Aviation Act and Section 1106 of the

Social Security Act, which the conference report cites as illustra-

tions of the type of provision which will be excluded by the amended

(b) (3) exemption, are statutes that provide the agency concerned

with broad discretion in making disclosure decisions, but at the

same time do not identify particular types of documents to be

withheld or standards for withhholding. See Robertson v. Butter-

field, 498 F.2d 1031 (D.C. Cir. 1974) (construing Section 1104 of

the Aviation Act); Schecter v. Weinberger, 506 F.2d 1275 (D.C.

Cir. 1974) (construing section 1106 of the Social Security Act).

Thus, there is nothing in the Conference Report which in any way

suggests an intent to affect a statute, such as 18 U.S.C. § 1905, which

clearly meets one and probably both of the provisos of the amended

(b) (3) exemption.

Government contract bids, general information of the

type that might be provided in response to Labor De-

partment or Commerce Department surveys, and gen-

erally the wide spectrum of information found in the

multitude of documents which private parties are

asked or compelled under one statute or another to

supply to the Federal Government. And it is not sur-

prising that conflict exists not merely between the de-

cisions of the Court of Appeals of the District of Co-

lumbia and the Fourth Circuits but also between several

decisions in each cireuit and is spreading to other cir-

cuits as the issue arises repeatedly. See e.g., Holiday

Inns, Inc. v. Kleppe, supra, n.14; Crown Central Pe-

troleum Corp. Vv. Kleppe, supra, n.14.

Some commentators have suggested that perhaps the

issue is of little practical significance because the (b)

(4) exemption contains language comparable to 18

18 U.S.C. § 1905 so that any protection for confiden-

tiality which the (b)(3) exemption provides by reason

of incorporation of § 1905 is redundant.” But this is

not the case, as the decision below amply illustrates.

At least in the District of Columbia, the lower courts

have erected a significant barrier to successful invoca-

tion of the (b) (4) exemption. Thus, although in theory

it should protect all confidential and privileged com-

mercial and financial information, in the District of

Columbia the (b)(4) exemption is not available in the

absence of evidentiary proof that the party resisting

disclosure would suffer substantial harm to its compe-

22 The (b)(4) exemption provides:

‘*(b) This section does not apply to matters that are——

a e e

(4) trade secrets and commercial or financial information

obtained from a person and privileged or confidential ;”’

litive position. See e.g., Charles River Park, supra.™

The mere existence of the (b)(4) exemption, there-

fore, does not in any way lessen the critical need for an

authoritative resolution of the (b)(3) question.

II]. There is a Compelling Need for Issuance of a Writ of Certi-

orari Before Judgment Since this is the Only Way Petitioners

May Obtain Meaningful Review by This Court Before Dis-

closure of the Specific Documents at Issue Occurs and Since

This Court will then have an Opportunity To Review Simul-

taneously Conflicting Decisions from Different Circuit Courts.

Under Rule 20 a writ of certiorari before judgment

is plainly an extraordinary procedure. But this case

raises what we believe to be an extraordinary situation

that fully justifies invoking that procedure.

The adamant insistence of the Court of Appeals for

the District of Columbia Circuit on its highly meechani-

cal approach to the (b) (3) exemption has created a sit-

uation which cannot help but be destructive of the pos-

sibility of meaningful judicial review of issues such as

those presented by this case. Repeated refusals by the

Court of Appeals, as have occurred, even to enter a stay

order to preserve the status quo pending a preliminary

determination by this Court will inevitably encourage

unseemly forum shopping and courthouse races in

*8 Extending this bar »r to invocation of the (b)(4) exemption

to its logical absurdity, the Court of Appeals for the District of

Columbia Cireuit seems to take the position that one who has a

monopoly is by definition not ‘‘in competition’’ and therefore has

no right under the (b) (4) exemption to confidentiality for anything,

even highly personal financial data. See National Parks & Conver-

vation Ass’n v. Morton, 498 F.2d 765 (D.C. Cir. 1974); National

Parks & Conservation. Ass’n v. Kleppe, No. 76-1044 (D.C. Cir.

November 15, 1976) (suggesting that the rights to confidential

treatment of financial data of U.S. Park concessionaires will de-

pend on whether the concessionaires are located near competing

outlets).

FOIA eases. Theze seeking to compel disclosure will

rush to the District of Columbia secure in the know]-

edge that, absent a stay order by this Court, an irre-

vocable disclosure of their documents can be expected

before briefing or argument on the merits in the Court

of Appeals, and before this Court could have an oppor-

tunity to review the merits in the normal fashion. Con-

versely, those seeking to avail themselves of FOLA ex-

emptions will be forced to race to federal courts out-

side the District of Columbia in order to be accorded

an opportunity for the judicial review to which they

are entitled before the confidentiality of their docu-

ments is irretrievably lost.

While courthouse races are unfortunate and, stand-

ing alone, constitute one of the underlying reasons for

resolving conflicts among Courts of Appeals, here the

problem is compounded because in the District of Co-

lumbia one of two conflicting views becomes, as a prac-

tical matter, an ultimate rule of law. In ach ease the

issue is irreversably resolved, at least asgthe specific

documents in question, by a denial of a stay pending

appeal. Accordingly, petitioners urge that this case in-

volves sufficient public importance to warrant granting

of a writ of certiorari before judgment.

This Court frequently grants certiorari before judg-

ment in situations where similar or identical issues

were already before the Court in another case, E.g.,

United States v. Thomas, 361 U.S. 950 (1960) ; Bolling

v. Sharpe, 344 U.S. 873 (1952). It is quite likely

that Westinghouse, supra, which obviously involves

several issues identical to the issues the petitioners

seek to raise in the instant case, will be before the

Court on petition for certiorari shortly. The Govern-

ment, which has expressed concern about the Fourth

Cireuit holding relating to 18 U.S.C. § 1905, has re-

quested in Westinghouse an extension of time until

February 2], 1977, within which to file a petition for

writ of certiorari. While the petitioners cannot be cer-

tain at this time that a petition will be filed in Westing-

house, it seems likely that this will occur. Since there is

a clear conflict between Courts of Appeals, there would

be little reason for granting certiorari in one case and

not the other. Here, both cases can be considered simul-

taneously only by taking up the instant case offcertio-

rari before judgment.

Finally, one of the primary reasons (if not the prim-

ary reason) for the quite sparing use of certiorari be-

fore judgment is that this Court wishes to have the

benefit of the views of the lower court before consider-

ing the issues. Ilere, however, the Court of Appeals for

the District of Columbia Circuit has already addressed

the legal issues raised by this petition, in Sears and

other cases cited above, the Court of Appeals for the

Fourth Circuit has issued an extensive opinion in West-

inghouse addressing the same legal issues, and the lower

Court’s denial of any stay herein suggests that at least

two members of the lower court see no need, despite

Westinghouse, to reexamine the resolution of the legal

issues reached in Sears. In view of these facts the

absence of a full opinion by the Court of Appeals

below in this particular case does not weigh heavily

against granting the petition.

CONCLUSION

For these reasons, the petition for writ of certiorari

should be granted.

Respectfully submitted,

JEROME ACKERMAN

MicHAeEL S. Horne

Roperick A. DEARMENT

888 Sixteenth Street, N.W.

Washington, D.C. 20006

Attorneys for Petitioner, The Prudential

Insurance Company of America

J. Austin LYONS

Maraaret F. Keiiy

One Madison Avenue

New York, New York 10010 A p PENDIX

Attorneys for Petitioner, Metropolitan

Life Insurance Company

Wurm F. Joy

Rosert P. Joy

One Boston Place

Boston, Massachusetts 02108

Attorneys for Petitioner, John Hancock

Mutual Life Insurance Company

January 31, 1977

APPENDIX A

As Amended by the District Court’s Order of December 14, 1976,

Which Is Appended Hereto

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Civil Action No. 76-0914

Merropouitan Lire Insurance Company, Plaintiff,

Vv.

W. J. Usery, er au., Defendants.

Civil Action No. 76-0087

NATIONAL ORGANIZATION FOR Women, Plaintiff,

SoctaL Security ADMINISTRATION, ET AL., Defendants.

Memorandum

In this action three insurance companies, the John Han-

cock Mutual Life Insurance Company (‘‘ John Hancock’’),

the Metropolitan Life Insurance Company (‘‘ Metropoli-

tan’’), and the Prudential Life Insurance Company of

America (‘‘Prudential’’), seek to prevent the disclosure to

the District of Columbia Chapter of the National Orga-

nization for Women (‘‘D.C. NOW’’) of certain EEO-1

forms and affirmative action plans (‘‘AAPs’’) submitted

by the companies to the Insurance Compliance Staff of the

Social Security Administration (‘‘I1CS’’) and the Office of

Federal Contract Compliance (‘‘OFCC’’) pursuant to Ex-

ecutive Order 11246, as amended by Executive Order

11375, and 41 C.F.R. § 60-2.1 et seq. and 41 C.F.R. 60-60.1

et seq.' The companies also seek to prevent the disclosure

of certain Compliance Review Reports (‘*CRR’’) compiled

by the ICS. This Freedom of Information Act (‘‘FOIA’’)

ease is before this Court in a reverse posture. Unlike the

typical FOIA action in which a party seeks to force the

government to disclose information, in a reverse FOIA

action, a party who has submitted information to a govern-

ment agency seeks to prevent the agency from disclosing

information to a third party pursuant to a FOIA, 5 U.S.C.

§ 552(a), request.

As government contractors, each of these insurance

companies are required, pursuant to the above Executive

Orders and regulations, to file annually an EEO-1 for its

entire domestic operation and a separate EEO-1 for

each individual domestic facility and office. These reports

contain summary data on the number of women and mi-

nority group members employed by the company. The

AAPs which the companies are also required to prepare

provide much more extensive and detailed information on

the past and projected employment of women and minority

group members by the company. The AAPs are made

available to the ICS only when the ICS conducts a com-

pliance review of a particular facility.” The ICS period-

ically conducts such reviews of the companies subject to

its jurisdiction and thereafter compiles a CRR which may

incorporate portions of the AAPs.

‘The Secretary of Labor, who has the overall responsibility for

enforeing the affirmative action requirements to which federal con-

tractors are subjected, has delegated this authority to the Depart-

ment of Labor’s Director of the OFCC. The OFCC has in turn

designated various federal agencies as ‘‘compliance agencies’’ which

review and rule in the first instance on the adequacy of a con-

tractor’s affirmative action program and efforts. The ICS, a division

of the Social Security Administration, is the compliance agency

for the insurance industry.

2 The scheduling of compliance reviews is governed by 41 C.F.R.

§ 60-60.3.

Le ett ttt teal itt,

On August 9, 1975, D.C. NOW made a FOIA request to

the ICS for all current EEO-1s, AAPs, and CRRs* filed by

or relating to the three insurance companies parties to this

action and the Equitable Life Assurance Society of the

United States.* Upon being informed by the ICS of D.C.

NOW’s request, the insurance companies objected to its

disclosure, arguing that the documents were exempted

under sections (b)(3), (4), (6), and (7) of the Act’s ex-

emptions. The ICS rejected most of the companies’ con-

tentions.° The companies then appealed to the OFCC pur-

suant to the provisions of 41 C.F.R. § 60-60.4(d). On July

19, 1976, the OFCC substantially affirmed the ICS’s de-

cision. It determined to disclose the EEO-1s and substan-

tial portions of the AAPs and CRRs. Wage and salary in-

formation, the names, social security numbers, employee

identification numbers, and ‘‘other identifying informa-

tion,’’ comments revealing the closing or reorganization

* Specifically, D.C. NOW requested only the EEO-1s, AAPs, and

CRRs for 1975 on file with the ICS. Sinee AAPs are submitted to

the ICS only when a compliance review of a particular facility is

undertaken, substantially less than all of the companies’ AAPs were

on file at the time of the request.

* The equitable Life Assurance Society of the United States with-

drew its objections to disclosure of its EEO-1s, AAPs, and CRRs

after the ICS issued its decision. See letter from Werner Weinstock

to ICS, dated February 11, 1976, Attachment 1 to D.C. NOW’s

Memorandum in Opposition to Application by Insurance Company

Defendants for Temporary Restraining Order.

° The ICS determined that most of the information contained in

the documents was subject to mandatory disclosure under the

FOIA. See letter from Everett Friedman, Chief of the ICS, to

Herbert Watchell, dated February 4, 1976, Exhibit F attached to

Metropolitan’s Application for a Temporary Restraining Order,

filed July 19, 1976; letter from Everett Friedman to Robert Loeffler,

dated February 4, 1976, Exhibit I attached to Prudential’s Applica-

tion for a Temporary Restraining Order, filed July 19, 1976; and

letter of Everett Friedman to Milton Corey, dated February 4,

1976, Exhibit 2 attached to D.C. NOW’s Motion For a Preliminary

Injunction, filed February, 1976.

of a unit or units not already publicly disclosed, and train-

ing data revealing entry into a new market were deleted.’

While the administrative appeal was pending, the two

suits which have been consolidated in this action’ were

brought. On August 22, 1975, Metropolitan initiated liti-

gation in the Southern District of New York to enjoin re-

lease to D.C. NOW of its EEO-1s, AAPs, and CRRs. This

action was subsequently transferred to this Court. On

January 16, 1976, D.C. NOW filed an action pursuant to

the FOIA, 5 U.S.C. § 552, to compel disclosure of the docu-

ments which were the subject of its August 9, 1975 request

to the ICS. This Court stayed judicial proceedings in this

suit pending the final agency decision.

On July 19, 1976, the insurance companies applied for a

temporary restraining order to enjoin the release of the

documents subject to D.C. NOW’s August 9, 1975 request

pending a hearing on a motion for preliminary injunction.

After a hearing, this Court granted the companies’ motion

for a temporary restraining order.

® See letter from Lawrence Z. Lorber, Deputy Assistant Secretary

and Director, OFCC, to Robert Loeffler, dated July 13, 1976, E~-

hibit Q attached to Prudential’s Application for a Temporary

Restraining Order, filed July 19, 1976; letter from Lawrence Z.

Lorber to William F. Joy, dated July 13, 1976; and letter from

Lawrence Z. Lorber to John Creedon, dated July 13, 1976, Exhibit

I attached to Metropolitan’s Application for a Temporary Re-

straining Order, filed July 19, 1976. These letters reveal that the

OFCC based its decision to disclose the documents on a determina-

tion that none of the exemptions to the FOIA relied upon by the

companies were applicable.

? National Organization for Women, Washington, D. C. Chapter

v. Social Security Administration of the Department of Health,

Education and Welfare, et al., Civil Action No. 76-0087 (D.D.C.

1976), and Metropolitan Life Insurance Company v. Usery, et al.,

Civil Action No. 76-914 (D.D.C. 1976). The federal agencies and

officials who are the defendants in these actions are frequently

referred to hereinafter as the ‘‘federal defendants.’’

This action is now before this Court on the insurance

companies’ motion for a preliminary injunction.’ The com-

panies seek to enjoin the release by the agency of any of

the EEQ-1s, AAPs, and CRRs which are the subject of

D.C. NOW’s August 9, 1975 request to the ICS. Alterna-

tively, if this Court is unwilling to enjoin the release of

all of the foregoing material, Prudential seeks a prelimi-

nary injunction protecting certain portions of the docu-

ments. The companies take the position that the docu-

ments are exempt from mandatory disclosure under the

Act by virtue of exemptions (b)(3), (4), (6), and (7) of

the Act, 5 U.S.C. §§ 552(b)(3), (4), (6) and (7), and that

the agency abused its discretion in deciding to disclose the

documents." The companies have met the well-recognized

*The Court held evidentiary hearings on this matter on Sep-

tember 8, 10, 13 and 14, and the parties have submitted numerous

memoranda, affidavits, exhibits, and proposed findings of fact and

conclusions of law.

* Specifically, Prudential seeks, in the alternative, a preliminary

injunction protecting: 1) its DAPs; 2) the work force analyses, job

group analyses and personnel practices analyses contained in its

utilization analysis in its AAPs; 3) the Identification of Problem

Areas in its AAPs; 4) the Statement of Goals and Timetables con-

tained in its AAPs; and 5) any portions of its CRRs which consist

of attachments of Prudential documents containing the above

information.

Although only Prudential has specifically made such an alterna-

tive motion, this Court is obligated under the Act to consider on a

page-by-page basis what, if any, of the information contained in

the documents is subject to mandatory disclosure and what, if any,

of the information comes within an exemption. Therefore, the Court

has not limited its consideration to whether an injunction protect-

ing all of the information in the documents submitted by the com-

panies is warranted or not for any of the companies. Instead, the

Court has examined each of the companies’ documents on a page-

by-page basis to make the required determinations.

*°Only Prudential, of the three insurance companies, has ad-

dressed the question of whether the determination to disclose the

exempt information constituted an abuse of the agency’s discretion

standards for preliminary injunctive relief outlined by this

Circuit in Virginia Petroleum Jobbers Association v, F.P.C.,

259 F.2d 921 (D.C. Cir. 1958), with respect to certain

data contained in the AAPs and those portions of the

CRRs which incorporate this data. Specifically, this Court

has determined that the insurance companies are entitled

to preliminary injunctive relief as to the disclosure of the

work force analyses, the department lists, the statistical

and narrative data on projected promotions, the reasons

for termination contained in certain termination tables,

and certain narrative comments concerning performance

evaluations or preferences or comments of employees con-

tained in the AAPs and any portions of the CRRs which

incorporate this data. The companies have not met the

standards for preliminary injunctive relief with respect to

the disclosure of the EEO-1s or any of the other data con-

tained in the AAPs and CRRs.”

Jurisdiction and Standard of Review

The parties do not dispute this Court’s jurisdiction over

the matter. This Court has jurisdiction to review the

agency’s decision under the administrative Procedure Act,

5 U.S.C. § 701 et seq.; Pickus v. United States Board of

Parole, 507 F.2d 1107, 1110 (D.C. Cir. 1974) ; Charles River

Park ‘‘A’’, Inc. v. H.U.D., 519 F.2d 935, 939 (D.C. Cir.

1975).

in any depth. The Court has, however, considered this question

with respect to the documents of all three of the insurance com-

panies.

1 2).C. NOW urges that Metropolitan and Prudential have waived

certain objections because of the position they took at the admin-

istrative level and, with respect to Prudential, because of the

position it took in the temporary restraining order proceeding.

The Court is unpersuaded by these claims. Even assuming such

a waiver did occur, it is not relevant in light of the Court’s view

of the merits.

The parties are in dispute as to the appropriate stand-

ard of review in a reverse-FOIA case. The federal gov-

ernment and D.C. NOW argue that the Court is limited to

reviewing the agency’s decision, on the basis of the agency

record, for an abuse of diseretion."? The insurance com-

panies contend that they are entitled to de novo review in

this Court. To some extent, both positions have merit.

In a reverse-FOTA case the threshold question is

whether the documents sought are subject to mandatory

disclosure or fall within an exemption to the Act. If the

documents sought are subject to mandatory disclosure, the

lawsuit is at an end. If the documents, or portions thereof,

fall within an exemption to mandatory disclosure, the Act

does not apply and the agency’s decision to disclose the

documents is subject to reversal only for an abuse of dis-

eretion. Charles River Park ‘‘A’’, Inc. v. H.U.D., supra,

at 941-42. In determining whether any exemptions apply

to the information which the agency intends to disclose,

the Court is not confined to reviewing the agency record.

Even under APA review, the Court must hold a hearing

and determine de novo whether an exemption applies just

as if the suit were one brought to compel disclosure. Id. at

940 n. 4. However, in determining whether the agency

abused its discretion in deciding to disclose the informa-

tion, the Court must only review the administrative record.

Td. at 943.

Merits

The parties have submitted numerous EEO-1s and

AAPs, which they have stipulated to be representative of

the documents which are the subject of this action, to the

Court. No CRRs were submitted. After reviewing the docu-

ments on a page-by-page basis to determine what, if any,

of the information falls within an exemption to the Act,

% They argue that the evidence adduced at the oral hearing and

the affidavits are relevant only to the question of irreparable injury.

the Court is of the opinion that there is a substantial like-

lihood that certain portions of the AAPs fall within the

ambit of the (d)(4) and (b)(6) exemptions. To the extent

that the CRRs incorporate portions of the AAPs* which

the Court has determined to be exempt, those portions of

the CRRs are also likely to fall within these exemptions.

The EEO-1s do not come within either the (b)(4) or (b)

(6) exemption. Neither the (b)(3) nor (b)(7) exemption

is applicable to the EEO-1s, AAPs and CRRs.

Exemption (b)(3)

This exemption applies to documents ‘‘specifically ex-

empted from disclosure by statute.’’ The insurance com-

panies rely on these exemption statutes: §709(e) of the

Civil Rights Act, 42 U.S.C. § 2000e-8(e) ; 44 U.S.C. § 350c:

and 18 U.S.C. § 1905.

Section 709(e) of the Civil Rights Act concerns the dis-

closure of information collected by the Equal Employment

Opportunity Commission (EEOC) pursuant to its author-

ity under § 709 of the Civil Rights Act by employees or

officers of the EEOC. The documents involved in the in-

stant action were collected by the ICS, not the EEOC. The

contentions put forth by the insurance companies to cir-

cumvent this hurdle to the applicability of § 709(e) are

lacking in merit. The courts which have considered the

question of the applicability of 4 709(e) to EEO-1s, AAPs,

and CRRs have uniformly rejected such arguments and

held that §709(e) is not applicable to these documents.

See Sears, Roebuck and Co. v. General Services Adminis-

tration, 509 F.2d 527 (D.C. Cir. 1974); Goodyear Tire and

18 Although no CRRs were submitted to the Court for its inspec-

tion, all parties have represented that the CRRs may contain por-

tions of the AAPs. Should the parties not be able to agree as to

the extent to which the CRRs incorporate exempt portions of the

AAPs, representative CRRs will have to be submitted to the Court

at that time.

Rubber Co. v. Dunlop, C.A. No. 75-1828 (D.D.C. December

9, 1975); Hughes Aircraft Company v. Schlesinger, 384 F.

Supp. 292 (C.D. Cal. 1974) ; Legal Aid Society of Alameda

County v. Shultz, 349 F. Supp. 771 (N.D. Cal. 1972). There-

fore, the Court holds that § 709(e) does not bar disclosure

of these documents.

Only John Hancock relies on 44 U.S.C. § 3508. Section

3508 provides that when confidential information supplied

to one agency is released to another agency, the recipient

agency is subject to the same disclosure restrictions as the

original agency. John Hancock argues that since the

EEO-1s * were in effect released to the OFCC by the

EEOC, under § 3508 the OFCC is subject to the same dis-

closure restrictions with respect to this data as is the

EEOC, in particular § 709(e). The EEO-1s were released

to the OFCC by the Joint Reporting Committee (JRC),

not the EEOC. The arguments put forth by John Hancock

to circumvent this hurdle to the applicability of 4 3508 have

repeatedly met with defeat in the courts. See Sears, Roe-

buck and Co. v. General Services Administration, 509 F.2d

527 (D.C. Cir. 1974); Goodyear Tire and Rubber Co. v.

Schlesinger, supra; Lawyers Cooperative Publishing Co.

v. Schlesinger, C.A. No. 74-212 (W.D.N.Y. July 20, 1974).

Therefore, the Court holds that the disclosure of the EEO-

1s is not barred by § 3508.

The applicability of 18 U.S.C. § 1905 to these documents

presents a more difficult question.”* Section 1905 imposes

Apparently John Hancock limits its § 3508 argument to EEO-

ls. Even if the argument is addressed to the AAPs and CRRs as

well, it is equally defective.

* To a large extent this issue will soon be of historical interest

only. Congress has recently amended the (b)(3) exemption, in

Public Law 94-409, to limit its scope. The Committee reports indi-

cate that one of the purposes of this amendment is to assure that

§ 1905 is not considered to be within the ambit of exemption (b) (3).

See H.R. Rep. No, 880, 94th Cong., 2d Sess., Part I, 23 (1976) and

10a

criminal sanctions for the unauthorized disclosure of com-

mercial or financial information submitted to the govern-

ment. The insurance companies rely on the Fourth Cir-

cuit’s recent decision in Westinghouse Electric Corp. v.

Schlesinger, Nos. 74-1801, 74-1806, 74-2047, and 74-2048

(4th Cir. Sept. 30, 1976), and precedents from other dis-

trict courts to the effect that § 1905 is one of the statutes

incorporated into the (b)(3) exemption and that AAPs,

EEO-1s, and CRRs are exempt from disclosure, in part,

heeause of § 1905."°

The District of Columbia Circuit has taken a somewhat

different approach to the applicability of § 1905. In Charles

River Park ‘A’’, Inc. v. H.U.D., supra, this Cireuit indi-

cated that while the (b)(3) exemption may incorporate

§ 1905, the scope of § 1905 is no broader than the scope of

the (b)(4) exemption to the Act. Id. at 941 n. 7. Considera-

tion of 41905 was deemed to be appropriate in a reverse-

FOTA ease only after a court determined that the informa-

tion sought falls within the (b)(4) exemption. At that

point, § 1905 was seen as a check on the discretionary dis-

closure of exempt information. Jd. at 943.7 Therefore,

Conference Report, H.R. Rep. No. 1441, 94th Cong., 2d Sess., 25

(1976).

6 They rely primarily on Chrysler Corp. v. Schlesinger, 12 F.E.P.

Cases 1478 (D. Del. 1976), and Westinghouse Electric Corp. V.

Schlesinger, 392 F. Supp. 1246 (E.D. Va. 1974). However, the

court in Westinghouse expressly declined to resolve the question

of the applicability of § 1905 to EEO-1s and AAPs, although it did

view plaintiff’s argument as raising substantial questions, /d. at

1248-49.

17 The insurance companies argue that the Supreme Court's deci-

sion in F.A.A. Administrator v. Robertson, 422 U.S. 255 (1975),

sheds doubt on the merits of this Cireuit’s interpretation of the

(b)(3) exemption and § 1905. The Robertson decision was con-

cerned primarily with the question of what statutes fall within the

ambit of the (b)(3) exemption. The Cireuit’s decision in Charles

ae a ee

eee —F hee

lla

consideration of the applicability of § 1905 is premature

at this point and will be deferred until after this Court

considers the applicability of the (b)(4) exemption.

Exemption (b)(4)

This exemption applies to ‘‘trade secrets and commer-

cial or financial information’’ which is ‘‘privileged or con-

fidential.’’ Specifically, this exemption applies to confiden-

tial documents whose distlosure would cause substantial

competitive injury to the person from whom the informa-

tion was obtained or would impair the government’s ability -

to obtain information. National Parks and Conservation

Ass’n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974). The

courts which have considered the applicability of this ex-

emption to EEQO-1s, AAPs, and CRRs have reached dis-

parate results. Compare Westinghouse Electric Corp. v.

Schlesinger, 392 F. Supp. 1246 (E.D. Va. 1974), affirmed

Westinghouse Electric Corp. v. Schlesinger, Nos. 76-1802,

74-1802, 74-2047, and 74-2048 (4th Cir. Sept. 30, 1976);

U.S. Steel Corp. v. Schlesinger, 8 F.E.P. Cases 923 (E.D.

Va. 1974), affirmed Westinghouse Electric Corp. v. Schles-

inger, Nos. 76-1801, 74-1802, 74-2047, and 74-2048 (4th Cir.

Sept. 30, 1976) ; Chrysler Corp. v. Schlesinger, supra; with

Sea-Land Service, Inc. v. Morton, C.A. No. 76-161 (D.D.C.

1976) ; Sears, Roebuck and Co. v. General Services Admin-

istration, 402 F. Supp. 378 (D.D.C. 1975) appeal pending;

Goodyear Tire and Rubber Co. v. Duniop, supra; Hughes

Aircreft Company v. Schlesinger, supra; Lawyers Coop-

erative Publishing Co. v. Schlesinger, supra.

In the instant action, the companies have shown that

there is a substantial likelihood that some, but not all, of

the information concerned in these documents falls within

the (b)(4) exemption. The companies have made this

showing with respect to the work force analyses, depart-

River Park ‘‘A’’, Inc. v. H.U.D., supra, construed the scope of

§ 1905 and to that extent is not affected by the Robertson decision

12a

ment lists and projected promotions data contained in the

AAPs and any portions of the CRRs which incorporate

this data. The companies have not made this showing with

respect to the EEO-1s or any of the other information con-

tained in the AAPs or CRRs.

The testimony adduced at the hearing revealed that

the insurance industry is a highly competitive indus-

try and that the insurance companies involved in this

action are engaged in intense competition with numerous

other companies."* There are approximately 1600 to 1800

insurance companies in the United States.’® These com-

panies, including the insurance companies who are parties

to this action, compete not only with other insurance com-

panies but also with the newly emerging administrative

services companies.” These administrative services com-

panies perform only the administrative functions involved

in insurance business.”? Dr. Schwartzchild, testifying for

D.C. NOW and the federal defendants, agreed that there

was intense competition at the point of sale, although he

did not believe there was competition in other aspects of

the insurance business.** The witnesses for the insurance

8'Tr 153, 256-57, 260-61, 285, 287, 479-6, 479-7, 479-8, 487, 515,

601-02, 605, 699-70, 738, 764. In fact, no testimony was adduced

to the effect that the insurance industry was not a competitive one.

Neither D.C. NOW nor the federal defendants has seriously ques-

tioned the existence of competition in this industry, at least with

respect to competition in the sale of insurance products.

1 Tr, 257, 610.

20 'Tr 30, 285, 497-7.

Tr. 30.

22 Tr, 153, 256-57, 260-61. Dr. Schwartzchild also testified that

the price of the insurance product was an important aspect of the

competition at the point of sale. Tr. 260. Dr. Carbone testified for

John Hancock that both service and the ability to reeruit and train

employees, as well as price, were important in meeting the intense

competition in the insurance industry. Tr. 508.

13a

companies testified throughout the hearing that competi-

tion exists in all aspects of the insurance business.2* In

the case of group insurance contracts such as the one

handled by John Hancock’s Ford Group Office which is re-

newable on an annual basis, the competition at the time of

renewal is particularly intense.”

The work force analyses, department lists, and projected

promotions data contained in these documents are clearly

confidential commercial information.*® This data consti-

tutes commercial information in that it pertains to the

mode of operations, work force, policies, and employment

practices of these companies. The companies have not ecus-

tomarily released these documents to the public and have

consistently treated this information in a confidential

manner.”®

With respect to the question of whether disclosure of

these documents will cause substantial competitive harm

to the companies or impair the government’s ability to

obtain information, the companies have set forth numerous

contentions as to how such detrimental results will flow

from disclosure of these documents. The Court is not per-

suaded that there is a substantial likelihood that disclo-

28TIn addition, Dr. Rutenberg testified that because Prudential

has diversified its business into areas other than insurance, it is

competing not only against many insurance companies, but also

against mutual funds, real estate companies, and mortgage bankers.

Tr. 699.

** Tr, 29-30, 285, 287, 479-6, 479-7. In fact, John Hancock re-

ported that it was recently unsuccessful in its competition with

Aetna for the Ford Motor Company’s dental insurance contract for

its union employees. Tr. 479-6 to 479-7.

2° Other courts which have considered this question have also

determined that these documents are commercial and financial] in-

formation, See Westinghouse Electric Corp. v. Schlesinger, supra

at 684; U. 8. Steel Corp. v. Schlesinger, supra at 924.

*6 Tr. 384, 454, 520-23, 653, 663-65.

l4a

sure of these documents will impair the government’s

ability to obtain information. The Court is also not per-

suaded that all of the information contained in these docu-

ments falls within exemption (b)(4) because its disclosure

would result in substantial competitive harm” or that all

of the companies’ claims to competitive injury have merit.

The Court has determined, however, that the companies

have shown that there is a substantial likelihood that the

disclosure of the work force analyses, department lists,

and projected promotions data contained in the AAPs and

any portions of the CRRs which incorporate this data

would result in substantial competitive injury to the com-

panies.

1. Work Force ANALYSES AND DEPARTMENT LISTS

The work force analyses, or manning tables, contain

a breakdown by specific job categories of the total number

of employees in each job category and of the number of

women and minorities in each job category.** Metropoli-

tan’s Department lists also reveal the number of women,

and, in the 1975 Department List, the number of minority

group members (‘‘MGMs’’) employed in each of the Com-

pany’s specific job categories. The disclosure of this in-

formation would cause the companies substantial compe-

27 The companies do not appear to be arguing that all of the

information contained in the EEO-1s, AAPs, and CRRs comes

within the ambit of the (b) (4) exemption. They certainly have not

introduced any evidence on, or otherwise attempted to show, how

many portions of these documents, such as policy statements and

introductory comments, come within this exemption.

8 For purposes of clarity, when the Court speaks of work force

analysis or manning tables, it is referring to the computer print-

outs and tables so titled, the Utilization Analyses, and the informa-

tion contained on the line ‘‘Incumbents in job group,’’ of ‘‘B.

Annual Goals,’’ in the ‘‘Utilization Analyses, Goals and Time-

tables’? in Metropolitan’s AAPs. These documents contain the

same type of information and present the same considerations,

l5a

titive harm by increasing the companies’ vulnerability to

employee raiding.

The raiding or proselytizing of employees is a serious

problem faced by the insurance industry today,” particu-

larly for large companies with sophisticated training pro-

grams such as John Hancock, Metropolitan, and Pruden-

tial.” Proselytizing of employees is particularly prevalent

during periods when there is a sharp increase in demand

for particular labor skills or categories of employees.”

Such an increase is occurring today in the insurance in-

dustry with respect to female and minority group members

with the training and experience these companies pro-

vide.” Thus, the raiding of employees, particularly of

women and minority group members, is a distinct and

serious prospect for these companies.

Although raiding has occurred in the past without access

to these documents through the use of other sources of

information,” these alternative sources of information do

not provide as efficient and comprehensive a method for

employee raiding as the manning tables and department

* Tr. 33, 40, 479-17, 491, 519, 607-08.

* Tr. 606-612, The testimony revealed that both John Hancock

and Prudential had in the past lost valued employees to others

because of raiding. Tr. 510, 607-608, 754-55. Dr. Carbone testified

that attempts had been made to proselytize him. Tr. 510.

Tr, 607-610.

*? Id. NOW’s and the guvernment’s expert, Dr. Schwartzchild,

agreed that this raiding of minorities and females trained in in-

surance would do competitive harm to a company, Tr. 256.

Tr. 184, 186, 189, 315, 631-32, and 715-16. The alternative

sources of information referred to by D.C. NOW and the federal

defendants are personal contacts, trade and inhouse publications

on noteworthy employees, trade association membership lists, the

information on file with state insurance commissions, ‘‘head-

hunters,’’ and general knowledge in the insurance industry about

successful salespersons.

l6a

lists would provide. The licensing information on file with

the state insurance commissions is not particularly useful

since it pertains only to sales agents and does not reveal

the agent’s race or sex or whether the agent is an active,

inactive, or part-time agent.** The membership lists of

various industry associations may provide some useful

information on potential raiding targets, but not all em-

ployees belong and those that do are listed only if they

have paid their dues.** While a raider may be able to

stumble upon a trade or in-house publication about note-

worthy employees, such publications are not helpful in

locating the experienced but less visible employee. Dr.

Schwartzchild testified that a raider’s contacts within a

particular office would be an easier method than the use

of these documents to locate employees,** but this assumes

that the raider has such contacts.*’ Finally, none of these

sources provide the raider with a comprehensive picture

of the breakdown of the work force in particular offices.”

Even with the names and identification numbers of em-

ployees deleted, disclosure of the manning tables would

Tr. 307, 529, 654, 668. While Schedule G which is also filed

with state insurance commissions lists employees earning more

than $30,000 a year, it would not be of any use in locating em-

ployees paid less than $30,000. As Dr. Rutenberg testified, many

key employees in whom raiders would be particularly interested

earn less than $30,000 a year. Tr. 722. Indeed, only about 242%

of Prudential’s employees are listed on Schedule G. Tr. 616.

% Tr, 306, 654-55. Mr, Dunn testified that Prudential has found

that these membership lists are not at all accurate with respect to

its employees. Tr. 654-55.

8° Tr, 189, 315.

8? Neither D.C. NOW nor the federal defendants demonstrated

how frequently raiders had such contacts or how adequate they

were.

38 Dr. Schwartzchild admitted that he did not know of any other

source of information which would reveal the number of people

employed in a particular office. Tr. 189.

17a

significantly enhance a person’s ability to locate employees

and the companies’ vulnerability to raiding. The tables

systematically and precisely provide information which is

currently available, if at all, on a ‘‘hit-or-miss’’ basis.

Because the tables provide a breakdown of employees at a

particular location by job, grade, sex, and race, these tables

provide information on the precise location and avail-

ability of many types of employees, such as computer pro-

grammers or claims approvers, by sex and race, which does

not appear to be currently available to any significant de-

gree. Unlike the existing sources of information, these

tables provide a comprehensive picture of employees at a

particular office and identify pools of potential subjects

for raiding.” Disclosure of these tables would, therefore,

reveal to the raider which offices are particularly produc-

tive grounds for raiding different types of employees. Be-

cause these tables identify the precise job in which a per-

son is employed, and hence the person’s probable experi-

ence and training, as well as the employee’s sex and race,

they would allow a raider quickly and easily to pinpoint

the precise type of employee in which the raider is inter-

ested and that person’s specific geographic location. Dis-

closure of these tables would provide a much more accurate

and efficient method for raiding than the information cur-

rently available. Thus, the disclosure of these tables would

increase the efficiency of raiding, the vulnerability of these

companies to the raiding of individual employees, and the

impact on these companies of such raiding.

The disclosure of this information would also enhance

the efficiency of the companies’ vulnerability to what has

been called ‘‘vacuum cleaner’’ raiding. This occurs when

a party raids an entire cadre of employees,*® which is a

°° Various witnesses testified at the hearing that this data would

reveal the existence of pools of employees and that this informa-

tion would be particularly useful to potential raiders. Tr. 59-61,

492, 525-26, 546-47, 706-08, 717.

“© Tr, 700-01, 707-08, 788.

18a

common practice in the insurance industry." Because

the manning tables and department lists systematically

and comprehensively lay out the number of employees and

distribution of these employees among specific job cate-

gories at the different offices, the potential vacuum

cleaner raider could quickly and easily identify the exist-

ence and location of the precise type of team of em-

ployees in which he is interested.” As noted, this type of

information is not currently available from any other

source.” This increased susceptibility to vacuwn cleaner

raiding poses a particularly serious problem in light of

the rise of the administrative services companies who

are looking for teams of trained eraployees.“*

The increased susceptibility to more efficient raiding

which would result from disclosure of this data would

inflict substantial competitive injury on these companies.

The loss of experienced and trained employees alone is a

serious injury to these companies. It would impair their

productivity and efficiency and thereby place them in

a weaker competitive position.** The acquisition of these

trained and experienced employees from these companies

by a competitor would also, in turn, greatly strengthen

the competitor’s competitive position.“ Added to this is

41 Tr, 700-01, 707-09, 710-11. While Dr. Krantz testified that

vacuum cleaner raiding is an almost nonexistent practice, Tr. 789.

he must not have been aware that Prudential was the subject of

this practice when it lost the entire nucleus of a group insurance

office. Tr. 608.

42 Tr, 707-68.

43 See note 38 supra and accompanying text.

** Tr, 479-17, 479-18.

43 Service is an important aspect of the competition in the in-

surance industry. Tr. 508, Consequently, this impairment of the

efficiency and adequacy of their service would cause serious com-

petitive injury.

46 Tr, 479-19.

ee eee eee -

CORE eee ee

19a

the substantial cost involved in replacing only one em-

ployee.” With increased raiding, the cost of replacing

lost employees would become quite burdensome. This bur-

den would most likely be reflected in an increased price

for the companies’ products; and since price is a critical

element in meeting the competition in the insurance in-

dustry,** these companies would be placed at a disad-

vantage in meeting the competition.

The increased susceptibility to vacuum cleaner raiding

would also seriously injure these companies. A competi-

tor interested in expanding into a new area or employ-

ing a new technology but who does not have employees

trained in the new area or technology could easily shang-

hai an entire team of employees from these companies

which team would readily be revealed from these tables.

Not only would such pirating confer a great advantage

on the competitor who would thereby be able to offer

new and more challenging competition, it would also eri-

tically disrupt the operations of the raided company which

would place it at a serious disadvantage in meeting this

competition.**

= Testimony was adduced at the hearing that the cost of replac-

ing a claims adjuster is $6,000, the cost of replacing a senior ex-

aminer is about $16,000 and the cost of replacing a field examiner

is $25,000. Tr. 368-69. Mr. Thomas Kelley, an Assistant Vice Presi-

dent at Metropolitan, put the total investment in recruiting, train-

ing and developing a sales representative over three and a half

years at $75,000. Affidavit of Mr. Thomas Kelley, Metropolitan

Exhibit 2, J 3. Mr. Peter Carbone, John Hancock’s Vice President

of Sales, testified that a new sales agent receives an allowance dur-

ing training and is in effect subsidized during his initial sales

experience. The cost of the training allowance is more than $6,000

in the first year. Tr. 509. Mr. Carbone further testified that training

expense was a tremendous expense incurred by John Hancock. Id.

Dr. Hendricks also testified that the resulting cost of retraining

would add an undue expense to a company. Tr. 368.

*8 Tr, 260, 508, 510-11.

4° Tr. 699-700.

20a

Moreover, there is a danger that raiding could occur

precisely for the purpose of hurting a competitor as much

as for the purpose of gaining experienced employees.”

Dr. Rutenberg testified that enormous competitive damage

could be visited upon these companies by a competitor

intent upon doing such damage. With access to the de-

tailed information contained in the work force analyses,

a competitor could pinpoint perhaps no more than 12

critically located technical employees whose loss would

cause the companies enormous problems.”

The courts which have considered the problem of raid-

ing in connection with the disclosure of EEKO-ls, AAPs,

and CRRs have reached disparate results. In Chrysler

Corp. v. Schlesinger, supra, the court determined that the

work force analyses fell within the (b)(4) exemption in

part because of the raiding problem disclosure presented.

In both Sears, Roebuck and Company v. General Services

Administration, 402 F. Supp. 385 (D.D.C. 1975), and

Hughes Aircraft Company v. Schlesinger, supra, the courts

were unconvinced by the information suppliers’ raiding

arguments. In both of these cases the companies apparent-

ly based their raiding analysis on the somewhat similar

premises. In Sears, the companies appear to have argued

that these documents reveal disgruntled employees who

would be susceptible to raiding. Jd. at 384 n. 10. In Hughes,

the companies apparently contended that disclosure of

the information revealing employee turnover would re-

veal employee dissatisfaction, and thereby encourage raid-

ing of the company’s employees. Id. at 297. The insurance

companies here have proceeded upon entirely different,

and much sounder, premises. In the two other cases in this

district court which determined that AAPs did not fall

8° Tr, 710.

5° Tr. 710-1.

<n ne ee. oe

2la

within the (b)(4) exemption,” the raiding argument was

apparently not presented to the courts.

With respect to the companies’ other contentions as

to how disclosure of the manning tables would result in

substantial competitive harm, this Court is unpersuaded.

The companies introduced extensive testimony on how a

competitor would be able to discern their labor costs

from the use of the manning tables in conjunction with

wage surveys of the Bureau of Labor Statistics

(‘‘BLS’’).** However, the BLS salary data contains only

averages for each occupation;™ there is no direct cor-

respondence between the occupational categories of the

BLS and those employed in the tables; the wage surveys,

which are conducted only once in five years,’ would not

provide accurate, up-to-date, data in these inflationary

times except in the year of the survey; and the wage sur-

veys do not contain data on other critical elements of

labor costs, such as fringe benefits.” All of the witnesses

°? See Sea-Land Service, Inc. v. Morton, supra; Goodyear Tire

and Rubber Co. v. Dunlop, supra.

°° The OFCC determined to delete the salary data contained in

the AAPs. Consequently, a competitor would need an alternative

source of salary information to be able to compute labor costs. The

insurance companies appear to consider the BLS data as the best,

and most likely, alternative. For purposes of the companies’ mo-

tions for preliminary injunction, the Court has evaluated the

alleged effects of disclosure of these documents in light of the dele-

tion of salary data. However, D.C. NOW has indicated that it is

not withdrawing its request for the salary information and in-

tends to raise this question in conjunction with any motions for a

permanent injunction. Tr. 42.

Tr, 54-55.

5° Tr, 22. The most recent BLS data for the insurance industry

was compiled in 1971. Affidavit of Norman Samuels, an Assistant

Commissioner for Wages and Industrial Relations in the Bureau of

Labor Statistics, Department of Labor, filed October 21, 1976.

5° Tr, 54-57, 487.

22a

who testified on this subject agreed that a significant

margin of error was involved,” and the insurance com-

panies’ witnesses only testified that a competitor could

get a ‘‘good fix’’ on labor costs, which is a somewhat

imprecise characterization. The use of the manning tables

with the BLS data would provide only the roughest ap-

proximation of labor costs and not result in substantial

competitive injury.

The insurance companies also contend that the data in

these documents provide a model for the organization of

an office and the deployment of a sales force which competi-

tors would emulate if the data were revealed. This conten-

tion assumes that the office organization and sales force

deployment employed by these companies is productive

and efficient and that competitors are aware of this. The

record does not support such a finding. Further, this in-

formation would be useful only if the competitor knows the

nature and volume of the business conducted at that facil-

ity. The companies failed to demonstrate that competitors

are in possession of such information, except perhaps in

the case of establishments such as John Hancock’s Ford

Group Office. Even there, the efficiency of the office is un-

known.”

5? Dr. Rowan admitted that estimates of a company’s labor costs

based on the BLS data would involve a 5 to 10% margin of error.

Tr. 90. Dr. Schwartzchild felt that the margin of error would be

greater, about 20%. Tr. 151, 316.

88 B.g., Tr. 22, 28, 44.

5° The argument that disclosure of the AAPs for facilities serving

one contract, such as John Hancock’s Ford Group Office, would

allow competitors to establish an ‘‘efficiency index’’ which they

could use to improve their efficiency is unpersuasive for similar

reasons. This argument assumes that such offices are operating at

optimum efficiency and that competitors know this. Neither of these

assumptions is supported by the record.

ee) eS, A ee

23a

The insurance companies also introduced testimony to

the effect that disclosure of most of the companies’ AAPs

over a period of time would reveal new products and tech-

nologies and expansion into or the withdrawal from dif-

ferent markets. These arguments assume that most of the

AAPs for a period of years will be disclosed, which ques-

tions are not before this Court.” The AAPs subject to the

FOIA request are substantially less than most of the com-

panies’ AAPs and are only those for the year 1975. Even

so, changes in the work force composition or distribution

opinion that this data is, and has been treated by the in-

technology, or product expansion.”

2. Data on Prosectep PRromorTiIons

At the outset, D.C. NOW and the federal defendants

have questioned whether the statistical and narrative data

on projected promotions contained in the AAPs and CRRs

are confidential information. They argue that employees are

counseled in general terms concerning their promotion

prospects, this counseling is done in general terms and

does not involve specific projections or timetables con-

tained in the AAPs.” Consequently, the Court is of the

opinion that these data are, and have been treated by the in-

surance companies as, confidential information.

The companies have shown that there is a substantial

likelihood that disclosure of the statistical and narrative

°° Accord, Sears, Roebuck and Company v. General Services Ad-

ministration, 402 F. Supp. 378, 383-84 (D.D.C. 1975). See note 3

supra and accompanying text for a discussion of what documents

are currently at issue.

* For example, such changes could simply reflect employee turn-

over. The witnesses testified on this point only in general terms

and never precisely explained what would be revealed and how.

® Tr, 384, 398, 400, 407-08, 454, 460, 561-63.

24a

data on projected promotions “ would cause them to suffer

serious competitive injury through its effect on employee

morale and productivity.“ From this data, a substantial

number of employees could ascertain the plans for their

promotion, or the lack thereof.® The insurance companies’

witnesses testified that, as a result of such perceptions, em-

ployees’ morale and productivity would be adversely af-

fected.” Employees who ‘‘know’’ they will be promoted

will conclude that little further effort is required since

their promotion is ‘‘assured.’’? The morale and productiv-

ity of employees who perceive no chance of promotion in

3 By the phrase ‘‘projected promotions,’’ the Court is referring

to data on intended future promotions, not promotions which have

already oceurre:'.

** The affidavit of Dr. John R. Heinrichs, President of Manage-

ment Decision Systems, Inc., dated July 14, 1976, explains in

detail the psychological theory, known as the expectancy theory,

of how disclosure of this data will affect employee morale.

6 Tr, 350-62, 388, 433, 556. For example, from Metropolitan’s

1976 Law Department AAP, 66% of the employees will know

whether or not there are plans to promote them in the next year,

and 58% of the employees that they will not be promoted for

the next two years. Tr. 359. From Metropolitan’s 1975 Law De-

partment AAP, 73% of the employees will know whether or not

there are plans to promote them, Tr. 360. —

After reviewing the documents and evaluating the testimony, it

appears to the Court that in most, although not all, instances,

employees can deduce their promotion plans or the lack thereof

from the projected promotions data. This is a sufficient showing

by the insurance companies at this stage of the proceedings. How-

ever, because of the possibility that certain portions of the pro-

jected promotions data do not reveal promotion prospects | with

sufficient certainty, a more detailed analysis of this data will be

required if any motions for a permanent injunction are brought.

6 Tr, 348-50, 361-65, 396, 553-55. D.C. NOW and the federal

defendants stress that the companies do not intend these projec-

tions as guarantees or hard facts. While the companies may not

intend these projections to be so interpreted, this does not change

the fact that employees will so interpret this data. Tr. 401, 462.

eee

25a

the near future will deteriorate because they will ‘‘know”’

that however hard they work, they will not be promoted.

Dr. Krantz, who testified for D.C. NOW and the federal

defendants, admitted that these data require careful han-

dling.”

The insurance companies have shown that this deteriora-

tion in morale and productivity will cause them substantial

competitive injury. Demoralized employees are likely to

leave their jobs,* which would result in the loss of the in-

vestment of the companies in these employees and the addi-

tional expense of recruiting and training new employees.”

Those employees who do not leave will be less committed

to their jobs,” and this loss of productivity would also be

quite costly." These additional expenses would seriously

impair the companies’ ability to be effective competitors

in terms of the price of their products. Further, managerial

employees would have to devote more time and energy to

employee counseling and handling morale-related prob-

lems.” Finally, the quality of the service provided by these

companies, which is so critical to successful competition,”

would deteriorate. Employees suffering from a morale

crisis would provide less effective service to customers.”

This would place these companies in a seriously handi-

* Tr. 786.

°° Tr. 366-68, 554-55.

*° See note 47 supra concerning the cost of training employees.

Tr. 365-68, 554-55.

™ With a decline in productivity, these companies would have to

hire additional personnel to compensate for this decline. See note

47 supra for the costs of training such new personnel.

Tr. 370.

8 Tr. 37-38, 349, 508, 510-11.

Tr. 349-50, 365-7.

26a

capped position vis-a-vis service competition with other

companies.

8. OrueR INFORMATION CONTAINED IN THE DocuMENTS.

The companies have failed to show that disclosure of any

other information in the documents which are the subject

of this suit would result in substantial competitive injury.

Many of the companies’ contentions as to how disclosure

of the EEO-ls and other portions of the AAPs will cause

them competitive harm were also raised with respect to

the manning tables. Those claims which the Court found

unpersuasive with respect to the manning tables are also

unpersuasive when applied to the EEO-ls and other por-

tions of the AAPs for the same reasons.

Disclosure of the EEO-ls would not cause the companies

to suffer any competitive injury. Since these reports do

not contain any data on projected promotions, no adverse

effect on employee morale would result from the:~ is

closure. Their disclosure would also not increase the com-

panies’ vulnerability to raiding. The job categories em-

ployed in the EEO-ls are much less specific than the job

categories contained in the manning tables. Consequently,

they would be of little use in pinpointing the existence of

particular employees or teams of employees.

The agency has agreed to delete data on training pro-

grams which reveals the entry of a company into a new

market or with respect to new products or processes and

has done so.” Consequently, the agency has adequately

dealt with many of the companies’ objections to disclosure

of this data.

The testimony with respect to the training data in the

AAPs was in general terms, and the witnesses did not

explain how this data would reveal new processes and

™> See letter of Lawrence Lorber, Director of the OFCC, to Wil-

liam F. Joy, dated July 13, 1976.

27a

products or how disclosure would otherwise result in com-

petitive injury. Many of the training programs are com-

mon training programs which any major insurance com-

pany would be expected to have.” Further, the fact that a

large or small number of employees is enrolled in a par-

ticular training program is susceptible to several interpre-

tations, such as high or low employee turnover in those

jobs or that the program has been made available to all

empioyees. The training data would not be particularly

useful to a potential raider since it does not reveal the

specific job held by the trainee or the total number of em-

ployees who have taken a particular course.

The companies have also failed to demonstrate how a

competitor could use the information contained in the ap-

plication logs, the other information contained in the ter-

mination logs or the list of recruiting sources to inflict sub-

stantial competitive injury upon them. Certainly the termi-

nation logs are useless to a raider; and the application logs,

like the training data, lack the specificity and comprehon-

siveness of the manning tables. Most of the reeruiting

sources are ones commonly used by employers,” and the

names of individual contacts within a source would be of

little use to a competitor unless it knew how helpful that

source was and went to the trouble of cultivating that par-

ticular source itself.

4. IMPAIRMENT OF THE GOVERNMENT’S ABILITY TO

OsTaIn INFORMATION.

The insurance companies have failed to demonstrate a

substantial likelihood of success on the merits with respect

to their claim that disclosure of the AAPs will impair the

government’s ability to obtain information. Title VII of

** For example, local community colleges and the local chapter

of the NAACP are such common sources.

28a

the Civil Rights Act of 1964, 42 U.S.C. §§ 2000d, et seq.,

the Executive Orders, and the agencies’ regulations pro-

mulgated thereunder require the companies to report much

of the information contained in the AAPs. However, testi-

mony was adduced to the effect that these reports contain

more information than the companies are required to pro-

vide and that if they were publicly available, in the future,

the quantity and quality of information provided would

decline.”* By agreeing to disclose most of the information

contained in the AAPs, the ICS must have felt that dis-

closure would not impair its ability to obtain information.

Further, the threat of compliance actions and/or refusing

to enter into contracts with these companies, should enable

the ICS to obtain the information it desires. Accord, Na-

tional Parks Conservation Ass’n v. Morton, supra at 770;

Hughes Aircraft Company v. Schlesinger, supra at 296.

Exemption (b)(6)

This exemption applies to personnel, medical, or similar

files the disclosure of which would constitute a ‘‘clearly

unwarranted invasion of personal privacy.’’ 5 U.S.C. § 552

(b)(6). In this Cireuit, the information must satisfy a

three-part test for this exemption to be applicable: (1) the

information must constitute personnel, medical or similar

files; (2) the disclosure of the information must constitute

an invasion of personal privacy; and (3) the severity of

the invasion of personal privacy must outweigh the public

interest in disclosure. Rural Housing Alliance v. United

States Department of Agriculture, 498 F.2d 73, 76-77 (D.C.

Cir. 1974); Getman v. N.L.R.B., 450 F.2d 670, 674 (DL.

Cir. 1971. In the instant action, the government has agreed

to delete employees’ names, social security numbers, em-

ployee identification numbers, and other identifying infor-

mation. The government has not made clear what it means

78 Tr, 31-33, 99, 100, 378, 381-82, 559. Affidavit of Thomas C.

Kelley, dated September 7, 1976, at {| 12, filed September 15, 1976;

affidavit of Colby Tibbetts dated September 7, 1976, at {[ 21, filed

September 15, 1976.

29a

by the phrase ‘‘other identifying information.’ * Since

this Court finds that even with names and identification

numbers deleted from these documents, individual employ-

ees can still be identified in certain portions of the AAPs,

that in certain contexts such identification would result in

a clearly unwarranted invasion of personel privacy, and

that the government’s statement concerning ‘‘ other identi-

fying information’’ is nebulous at best, this Court is of the

opinion that certain portions of the AAPs which the gov-

ernment has not clearly determined to delete may well

come within the (b)(6) exemption to the Act. These por-

tions are: (1) the statistical data or narrative data on

projected promotions or the lack of promotion prospects; *

(2) the Department Lists contained in Metropolitan’s

AAPs; (3) ‘he reasons for termination contained in the

Termination Tables contained in John Hancock’s AAPs; ™

and (4) the narrative comments in the AAPs involving per-

formance or job evaluations or the preferences, goals, or

comments of employees where there is a reasonable possi-

bility that the employee could be identified by other per-

sons.

*® At the hearing D.C. NOW waived any right to any personal,

identifiable, negative information concerning employees. Tr. 114.

D.C. NOW did not waive any right to any other personal informa-

tion about an identifiable individual.

*° The Court is referring to the same statistical and narrative data

on projected promotions which was found to be within the (b) (4)

exemption, See pages 24-26, supra.

81 Metropolitan’s and Prudential’s termination tables do not con-

tain the detail provided in John Hancock’s termination logs, Con-

sequently, employees could not be identified from the data con-

tained in their termination tables, whereas such identification is

possible with John Hancock’s log because of the extensive informa-

tion contained therein. For a case in this District Court also order-

ing the deletion of the reasons for an employee’s termination, see

Sea-Land Services, Inc. v. Morton, supra.

30a

For purposes of clarity, some further comments on oe

type of narrative comments this Court has determined fal!

within exemption (b)(6) are in order. Such comments most

frequently occur in the ‘‘Problem Areas’’ or ‘‘Goals and

Timetables’? portions of the AAPs. This Court does not

mean to imply, however, that all narrative comments in

these two sections are exempt or that only the comments

in these two sections are exempt. The following examples

are intended to illustrate the types of narrative comments

this Court finds fall within the (b)(6) exemption:

a) A comment that an MGM ina particular unit or

department who was hired six months ago is doing very

well and shows management potential ;

b) A comment that a female in a particular unit or

department who was recently promoted is training for a

particular job;

c) A comment that the MGMs in a particular unit or

department do not show much potential;

d) A comment that no promotions are anticipated in

a particular unit or department in the next year, or two

years; and

e) A comment that in a unit or department with ap-

proximately thirty employees only one or two promo-

tions is anticipated in the next year or two.

More general narrative comments, as illustrated below,

do not fall within the ambit of the (b)(6) exemption:

a) A comment that there is a low turnover in a par-

ticular unit or department;

b) A comment concerning the number of persons

hired, promoted, or transferred in the last year;

c) A comment that the company intends to hire or

recruit more women or MGMs for a particular job or unit;

and |

3la

d) A comment that a certain unnamed woman in a

unit employing 20 women is well suited to her job.

Much of the information contained in the AAPs does

not constitute a personnel, medical, or similar file within

the meaning of (b)(6). However, those portions of the

AAPs which contain data on promotions, job performance,

job evaluations, and personal preferences and goals do

constitute ‘‘similar files’’ in that they reflect highly per-

sonal details about company employees. Rural Housing

Alliance v. United States Department of Agriculture,

supra, at 77.

Much testimony was adduced at the hearing to the effect

that individual employees being referred to in the AAPs

could be identified by their fellow workers.*? After review-

ing the representative AAPs, this Court is also of the

epinion that such identification is possible with respect

to John Hancock’s termination logs, Metropolitan’s de-

partment lists, the projected promotion tables and cer-

tain narrative comments.“ These portions of the AAPs,

even with names and identification numbers deleted, still

contain sufficient information, such as dates of hire and

termination, job title, race, and sex, to enable a co-worker

or other person in possession of this information to ree-

* Tr. 44, 351, 372-75, 556, 624-25. Consideration of the possibility

that persons particularly familiar with the information will be

able to identify individuals, even though the general publie could

not, is appropriate in determining whether disclosure will result in

an invasion of privacy. Department of the Air Force v. Rose, 96

S. Ct. 1592, 1608 (1976).

“8 After reviewing the documents and evaluating the testimony,

it appears to the Court that while identification is possible in most

instances, it may not be possible in all instances. This is a sufficient

showing to warrant a preliminary injunction, A more discriminat-

ing analysis of this data to pinpoint precisely when identification is

and is not possible would be required before any permanent in.

junctive relief would be warranted.

32a

ognize the employee to whom the tables or comments per-

tain.™

The disclosure of information concerning an employee’s

promotion prospects, lack of promotion prospects, job-

performance evaluations, and personal preferences and

goals and the reasons for an employee’s termination con-

tained in these portions of the AAPs would constitute

a substantial invasion of the companies’ employees’ per-

sonal privacy. The disclosure of negative comments or

information about an employee on these subjects could be

quite embarrassing and painful to the employee. While

many of the comments and much of the information =

favorable or neutral, the (b)(6) exemption was designe

to protect individuals from a wide range of crease

disclosures, not just the disclosure of derogatory infor-

mation.** Indeed, the disclosure of favorable information

could place the employee in a very embarrassing position

with other, possibly jealous, employees.”

oe i ion supplier’s claim to a (b) (6) exemption in

Pty Aer po Penta v. General Services respi arn

402 F. Supp. 378 (D.D.C. 1975), appears to have been reje ted in

large part because the Court did not feel that individual aoe

could be identified. Jd. at 384. As the AAPs submitted to this —

reveal, the AAPs vary greatly in the amount and — _—

sentation of the information contained in these oe . ; an

it may be that Sears’ AAPs did not contain the same kind of de

as those presented to this Court. |

= i rsuaded by the companies’ claims that dis-

Pg pag face ’s sex aan marital status would result 7

an invasion of privacy. An employee’s sex must be a . :

marital status is almost as equally well known to co-workers, ~ ws

extent that any invasion of privacy would result from diselosu

of an employee’s marital status, it would be quite slight.

86 Rural Housing Alliance v. United States Department of Agri-

culture, supra at 77.

87 Tr. 559.

33a

To determine whether the invasion of privacy is ‘‘clearly

unwarranted,’’ this Court must de novo balance the se-

verity of the invasion of personal privacy with the pub-

lic interest in disclosure, with a “tilt”’ in favor of dis-

closure. Rural Housing Alliance v. United States Depart-

ment of Agriculture, supra; Getman v. N.L.R.B., supra.

In the instant action, the invasion of the employee’s pri-

vacy which would result from the disclosure of this infor-

mation would, as discussed, be substantial. D.C. NOW

asserts that the public interest will be served by disclo-

sure in that D.C. NOW intends to use the information

to further the goals of equal employment opportunity

and elimination of discrimination in employment. D.C.

NOW also claims that it has no alternative sources for

securing this information. While the interest asserted by

D.C. NOW is one which has been considered by the courts

in determining whether an invasion of personal privacy

is clearly unwarranted® and D.C. NOW probably has

no other source fur this information, the severity of the

potential invasion outweighs the factors favoring disclo-

sure in this case. Much of the information, such as that

concerning the employee’s personal preferences and goals

and job performance evaluations, has little, if any, rele-

vance to the public interest asserted. Thus, deletion of

such information will have no effect on the public interest

asserted. Some of the information may be relevant to this

public interest. However, the information the disclosure

of which this Court feels would result in a substantial

invasion of personal privacy constitutes only a very small

portion of the information contained in the APPs. Dele-

tion of this small amount of information should not sig-

nificantly impair the achievement of D.C. NOW’s goals.

To the extent that any impairment may result from non-

disclosure, the severity of the invasion outweighs such

an impairment to the achievement of the public interest.

88 See Sears, Roebuck and Company v. General Services Admin-

istration, 402 F. Supp. 378, 384 (D.D.C. 1975).

. 34a

Exemption (b)(7)

The insurance companies contend that these documents

are investigatory records compiled for law enforcement

purposes within the meaning of exemption (b)(7), and,

as such, are exempt from mandatory disclosure under the

Act. In light of recent cases by this District Court and

the United States Court of Appeals for the District of

Columbia Circuit, the Court is of the opinion that the

companies have not shown a substantial likelihood of

success on the merits with respect to this contention.

Unlike the present case, in the cases relied upon by the

companies to support their position, the government was

raising the (b)(7) exemption. In both Goodyear Tire and

Rubber Company, supra and Sears, Roebuck and Com-

pany v. General Services Administration, 384 F. Supp.

966 (D.C.C. 1974), this District Court refused to apply

exemption (b)(7) in reverse-FOIA actions. In Sears, the

Court determined that this exemption was designed to

protect the interests of the government, not private par-

ties, and therefore held that where, as here, the govern-

ment determines to disclose information, a private party

lacks standing to assert the government’s interests under

exemption (b)(7). 7d. at 1004.

Although this Circuit has not affirmed the position taken

by the District Court, it has held that the (b)(7) exemp-

tion does not apply to AAPs and EEO-1s for other rea-

sons. Distinguishing between reports compiled as part

of a routine monitoring process and reports compiled

as part of an investigafon focusing directly on specifically

alleged illegal acts, the Court determined that the AAPs

and EKO-1s which a government contractor was required

to supply in order that its compliance with executive

orders could be monitored were not ‘‘investigatory files”’

and were not exempt under (b)(7). Sears, Roebuck and

Company v. General Services Administration, 509 F.2d

527, 529-30 (D.C. Cir. 1975). In the instant action, the

35a

insurance companies’ AAPs and EEO Is w i

i ‘ - ere submitted

in connection with the OFCC’s general monitoring proc-

ess and not in connection with an investigation of speci-

fic illegal actions of the companies. The CRRs were com-

piled by the agency as part of thi

few seeseen, p is Same routine monitor-

Agency Discretion

The fact that certain portions of the AAPs and CRRs

contain exempt information does not alone prevent their

disclosure. In this circuit, the disclosure of exempt infor-

mation is discretionary with the agency, and can onl

be reversed for an abuse of discretion. Charles River

Park ‘A » Inc. v. H.U.D., supra at 943. Once the court

determines that the information sought falls within an

exemption, it must then determine whether the agenc

abused its discretion. In determining whether the aa

abused its discretion, the court must determine first eed

ther the disclosure of the exempt information would be

a violation of § 1905 and if not, whether disclosure would

otherwise be an abuse of discretion. Jd. at 943. In the

instant case, some of the exempt information the agency

determined to disclose comes within the ambit of § 1905

and, in addition, the agency abused its discretion in deter.

mining the disclose the exempt information.

Section 1905 imposes criminal penalties on government

employees who disclose any information coming to them

in course of their employment which relates to, inter alia

processes, operations or styles, if such disclosure is not

authorized by law. If the disclosure of exempt informa-

tion would constitute a criminal offense, such disclosure

would be clear abuse of the agency’s discretion. Charles

River Park ‘‘A’’, Inc. v. H.U.D., supra at 943. In the in-

stant case, the disclosure of certain portions of the in-

formation the Court has determined to be exempt would

constitute a criminal offense under § 1905. Hence, the agen-

36a

cy’s decision to disclose this information was a clear abuse

of its discretion.

The agency officials obtained the information in the

APPs and CRRs in the course of their employment. The

manning tables, department lists, and projected promo-

tions * contained therein constitute information pertain-

ing to processes, operations, and styles of work within

the meaning of § 1905.” The disclosure of this information

is not authorized by law. The federal defendants argu-

ment that disclosure is authorized by the regulations im-

plementing the FOIA, 41 C.F.R. §§ 60-40.1 et seq. ignores

the fact that the Act is not a source of authority for pro-

mulgating regulations on information exempt under the

Act. The release of exempt information cannot be justi-

fied on the basis of such regulations. Charles River Park

“«4’’, Inc. v. H.U.D., supra at 942.

from § 1905, the agency also abused its disere-

on owl em to disclose the exempt information.

The ICS and the OFCC failed to exercise any discretion

with respect to the exempt information and to give pond

meaningful consideration to whether discretionary =

closure was appropriate. In addition, the disclosure of the

exempt information in the face of government representa-

Pa ly only by virtue of Seetion (b) ( 6) _ do =

also come within the (b)(4) exemption, are not within the —

of § 1905. That information does not constitute information rel

ing to processes, operations or styles of work within the on

§ 1905 is, at best, coextensive with the scope of the a “~< ‘vf

tion. Charles River Park ‘‘A’’, Inc. v. H.U.D., supra at 941 n. 7.

i i ieability of § 1905

- ourts which have considered the applicability a)

to nate ext Cale have reached similar conclusions. See Chrysler

Corp. v. Schlesinger, supra at 1483 ; see also, Westinghouse Electric

Corp. v. Schlesinger, supra at 1248-49.

—

37a

tions of confidentiality was, on the facts presented here,

an abuse of discretion.

The administrative record, primarily letter rulings ad-

dressed to the insurance companies, reveals that both the

ICS and OFCC considered only the applicability of the

FOLA exemptions to the information sought by D.C. NOW.

Having determined that the information did not fall with-

in an exemption to the Act, they never reached the ques-

tion of discretionary disclosure of the data. As a result,

the record reflects no meaningful consideration of whe-

ther it would be an appropriate exercise of their discre-

tion to disclose the exempt information. Such a failure

to exercise any discretion, and the resulting failure to

engage in any meaningful consideration of this question,

constitutes an abuse of that discretion.

The Court must also consider the public interest in dis-

closure in determining whether the agency abused its dis-

cretion in determining to disclose the exempt information.

Charles River Park ‘‘ A’’, Inc. v. H.U.D.. supra at 943. The

public interest in disclosure asserted by D.C. NOW is that

D.C. NOW intends to use the documents to monitor the

companies’ compliance with the equal employment oppor-

tunity laws. Much of the information D.C. NOW seeks has

been determined not to be exempt information. With ac-

_ cess to this information, D.C. NOW should be able sub-

stantially to achieve its public interest goals, even though

some portions of the documents would not be disclosed.

Balanced against the public interest is the insurance com-

panies’ interest in protecting their competitive position

and the employees’ interest in their privacy. Disclosure

of the exempt information would seriously impair these

interests. On the balance, the slight harm to the publie in-

terest from non-disclosure of these documents is out-

weighed by the serious harm to the employees and the com-

panies which would result from the disclosure of these

documents.

38a

The companies also claim that the representation of con-

fidentiality allegedly made by the government when the

companies submitted these documents somehow prevent

their disclosure. As to those portions of the documents

which are subject to mandatory disclosure under the Act,

any such representations would not preclude their disclo-

sure. A government agency cannot evade the requirements

of the FOIA simply by representing to an information

supplier that the information will be kept confidential. See

Legal Aid Society of Almeda County v. Shultz, supra at

776; Lawyers Cooperative Publishing Company v. Schles-

inger, supra at 4."

With respect to those portions of the documents contain-

ing exempt information, the alleged representations of con-

fidentiality present a more difficult question of whether the

agencies abused their discretion in determining to disclose

this information in light of such representations. Initially,

the parties are in dispute as to whether any such repre-

sentations were made. Dr. Whitman of the ICS testified

for the government that to the best of his knowledge the

ICS did not give assurances of confidentiality.** However,

Dr. Whitman, when questioned as to whether he was sure

such assurances had not been made, only stated that the

ICS had been instructed not to give such assurances.” The

insurance companies adduced testimony to the effect that

*! The companies’ claims with respect to assurances of confiden-

tiality as to the EEO-1s must fail for an additional reason. The

statement on the EEO-1 forms supplied by the government relied

upon by the companies provides: ‘‘All reports and information

obtained from individual reports will be kept confidential as re-

quired by Section 709(e) of Title VII.’’ This assurance of con-

fidentiality is limited by its terms to the requirements of § 709(e)

of the Civil Rights Act. The Court has already determined that

this provision does not apply to EEO-1s submitted to the ICS.

* Tr.464.

% Tr. 472-73.

ee ee

39a

the company understood that the data they submitted would

be treated confidentially." The Court is persuaded, after

evaluating the testimony on this matter, that the com-

panies were led to believe that the documents submitted by

them would be accorded confidential treatment.

The information contained in the AAPs ist much more

extensive than it need be under the applicable Executive

Orders and regulations. It appears that such extensive in-

formation was included by the companies in reliance on

these assurances of confidentiality. The agencies did not

investigate the companies’ claims about representations of

confidentiality or consider whether the discretionary dis-

closure of information was appropriate in light of such

assurances. Under these circumstances, the disclosure of

the exempt information was an abuse of discretion.** While

it may be that it is not always an abuse of discretion to

disclose after assurances of confidentiality have been

made,” the agency must at least give some meaningful con-

sideration to whether disclosure under such circumstances

is appropriate.

Pursuant to 41 C.F.R. §§ 60-40.8 et seq., the insurance

companies were permitted to file written objections to the

disclosure of these documents with the ICS and OFCC.

They were not given an oral hearing on their claims of

exemption. Metropolitan claims that the agencies abused

their discretion and denied it due process by failing to

* Tr. 469, 475, 559, 576, 577-78, 653.

°° This Circuit has indicated that the fact that information is

submitted to an agency in confidence does not alone render the

agency’s decision to disclose such information an abuse of disere-

tion, if the publie interest favors disclosure. Charles River Park

**A’’, Inc. v. H.U.D., supra at 943. As has already been discussed,

disclosure of the exempt information in the instant case will not

serve any public interest which cannot be adequately achieved by

the disclosure of the non-exempt information in these documents.

% See Charles River Park ‘‘A’’, Inc. v. H.U.D., supra at 943.

40a

hold such a hearing. Similar allegations have met with de-

feat in the courts. See Chrysler Corporation v. Schlesinger,

supra at 1483; Lawyers Cooperative Publishing Company

v. Schlesinger, supra at 3. This Court is also of the opinion

that the failure to hold an oral hearing did not constitute

an abuse discretion or a deprivation of due process.

Irreparable Injury

The disclosure of those portions of the documents con-

taining exempt information would irreparably injure the

insurance companies. Once disclosed, such information

would lose its confidentiality forever. As has been already

noted in the discussion of the merits, there is a strong like-

lihood that disclosure will cause substantial injury to the

companies and their employees. Since the confidentiality of

this information can never be regained, the above injuries

would indeed be irreparable.

Neither D.C. NOW nor the federal defendants will suffer

any substantial harm from nondisclosure. D.C. NOW com-

plains that it will be seriously injured by the grant of a

preliminary injunction because the delay in disclosure will

cause the data to become increasingly stale.” It is noted

that most of the information contained in the documents

does not fall within the terms of the preliminary injunction.

To the extent that D.C. NOW will suffer any injury from

the grant of a preliminary injunction, such injury is clearly

outweighed by the serious and irreparable injury to the

** D.C. NOW also claims that the grant of a preliminary injunc-

tion will cause it injury by requiring it to expend additional time

and expense in litigation. This is true whenever a court issues a

preliminary injunction, and, hence, does not warrant any special

consideration. Further, a corresponding injury would be suffered

by the insurance companies should this court deny injunctive relief.

In any event, it would appear to this Court from the nature of

the lawsuit and the representations of the parties that neither the

grant nor denial of a preliminary injunction will end this litigation

here.

ae eee

{

;

4la

insurance companies which would result from a denial of

injunctive relief.

The public interest will not be harmed but will be

served by the grant of injunctive relief with respect to the

exempt information. The public interest in disclosure of

this information through its use to monitor the companies’

compliance with equal employment opportunity laws and

to remove informational barriers to equal employment and

the fear of rejection suffered by potential job applicants

will not be impaired by the grant of injunctive relief. The

information which will be disclosed, which amounts to a

substantial portion of the information sought by D.C.

NOW, should be sufficient to foster these goals. Addition-

ally, the public interest in protecting the privacy of the

companies’ employees and in insuring that the agencies

fulfill their responsibilities under the Act will be served.

/s/ Outver Gascu

Judge

Date: December 6th, 1976.

42a

(Caption OMITTED IN PRINTING)

Order

It is by the Court this 14th day of December, 1976,

OrpverEeD that the Court’s Memorandum in the above-

captioned cases, issued on December 6, 1976, be, and hereby

is, amended as follows:

1. On page 1, footnote 1, the last word in the footnote

is changed from ‘‘agency”’ to ‘‘industry’’;

2. On page 3, line 2, the word ‘‘Insurance is changed

to ‘‘ Assurance’’;

3. On page 3, line 1 of footnote 4, the words ‘‘Insur-

ance Company”’ are changed to ‘‘ Assurance Society

of the United States’’;

4. On page 25, line 10, the word ‘‘employers”’ is

changed to ‘‘employees’’;

5. On page 25, line 1 of footnote 64, the word ‘‘ Hen-

ricks’’ is changed to ‘‘Hinrichs’’; and

6. On page 42, line 19, the word ‘‘disclosure’’ is

changed to ‘‘nondisclosure’’.

/s/ Ovtver GascH

Judge

43a

APPENDIX B

(Caption OmirTEeD IN PRINTING)

Order

Upon consideration of the motions for a preliminary

injunction brought by the John Hancock Mutual Life In-

surance Company, the Metropolitan Life Insurance Com-

pany, and the Prudential Life Insurance Company of

America, the opposition thereto, and the entire record

herein, and for the reasons set forth in the Memorandum

attached hereto, it is by tue Court this 6th day of December,

1976,

OrpereED that the motions for a preliminary injunction be,

and hereby are, granted with respect to work force analy-

ses, the department lists, the statistical and narrative data

on projected promotions, the reasons for an employee’s

termination contained in John Hancock Mutual Life In-

surance Company’s termination logs, the narrative com-

ments concerning an employee’s performance, preferences

or comments where there is a reasonable possibility that

the employee could be identified contained in the AAPs

and any portions of the CRRs which incorporate this data

from the AAPs; and it is further

OrperED that the motions for a preliminary injunction

in all other respects be, and hereby are denied.

/s/ Ovrver Gascu

Judge

44a

APPENDIX C

(Caption Omirrep In Printine)

(Firep Decemser 16, 1976)

Order

This Freedom of Information case is before the Court

on the motion of three insurance companies, Metropolitan

Life Insurance Company, Prudential Life Insurance Com-

pany of America, and John Hancock Mutual Life Insurance

Company, for stay pending appellate review. The respond-

ents to this motion are W. J. Usery [sic] as Secretary of

the Department of Health, Education and Welfare, and the

National Organization for Women. The objective of the

stay is to maintain the status quo ante until these movants

can be heard at the appellate level on their motion to stay

that portion of this Court’s ruling which denied their mo-

tion for preliminary injunction. It is noted that the ob-

jective of the insurance companies’ motion for preliminary

injunction at the District Court level was to prevent the

Secretary from turning over to the National Organization

for Women certain information submitted by the companies

to the Secretary, which submission was required of them as

government contractors. After a four-day hearing in Sep-

tember, the Court granted on December 8, 1976, the motion

for preliminary injunction to the extent that the companies

were able to satisfy the Court that the release of this ma-

terial would cause the companies substantial competitive

injury and invade the privacy of the companies’ employees.

Other material submitted by the companies was ruled not

subject to this preliminary injunction. Respecting this lat-

ter category of material, the companies John Hancock and

Metropolitan are seeking this stay pending appeal. Pru-

dential seeks a stay pending appeal on a more restricted

basis concerning divulgence of its EEO-ls.

atti.

45a

This Court recognizes that there are substantial issues

for resolution on this appeal. Since this Court felt bound

by the decision of the United States Court of Appeals in

Sears, Roebuck and Co. v. General Services Administration.

509 F.2d 527 (D.C. Cir. 1974), it may be that the companies

will seek to take their appeal to the Supreme Court of the

United States.

Accordingly, for these reasons the Court concludes that

under the criteria established for this Circuit in Virginia

Petroleum Jobbers Association v. F.P.C., 259 F.2d 921

(D.C. Cir. 1958), a stay pending appea! wherein the com-

panies would be afforded the opportunity of presenting and

having considered their motion in the United States Court

of Appeals should be granted. The Court recognizes that

the date of this Order is December 16, 1976, and that many

of the Judges at the Circuit level may have made plans for

the Holiday Season. The Court expresses the hope, how-

ever, that the matter can be heard as expeditiously as

possible.

Wherefore, it is by the Court this 16th day of December,

1976,

OrvereED that the Federal defendants, their agents, offi-

cers and employees be, and hereby are, enjoined from dis-

closing any of the portions of the affirmative action pro-

grams or compliance review reports not prohibited from

disclosure by the preliminary injunction issued on Decem-

ber 6, 1976, and the EEO-| reports or related documents

of John Hancock Mutual Life Insurance Company and of

Metropolitan Life Insurance Company; and it is further

Orperep that the Federal defendants, their agents, offi-

cers and employees be, and hereby are, enjoined from dis-

closing the EEO-1 reports or related documents of Pru-

dential Life Insurance Company of America; and it is

further

46a | 47a

OrpeRED that this stay shall continue in effect pending APPENDIX D

hearing and decision on movants’ motion for stay in the UNITED STATES COURT OF APPEALS

United States Court of Appeals for the District of Colum- FOR THE DISTRICT OF COLUMBIA CIRCUIT

bia Cireuit, provided that movants proceed expeditiously

for stay in the United States Court of Appeals.

/s/ Ovtver Gascu No. 76-2119

. Judge Civil Action 76-0087

NATIONAL ORGANIZATION FOR WoMEN

Wasurinoton, D.C. CHAPTER

SEPTEMBER TERM, 1976

Vv.

SoctaL Security ADMINISTRATION OF THE DEPARTMENT

. or Heattu, Epucation aNnpD WELFARE, ET AL

PrupenTIAL INsuRANCE CoMPANY oF AMERICA,

Appellant

No. 76-2120

Civil Action 76-0914

MetrRopoutitaAN Lire Insurance CoMPANY

W. J. Usery, Secretary or Lasor, &T ab

PRUDENTIAL INSURANCE CoMPANY OF AMERICA,

Appellant

No. 76-2128

MerropoutitaN Lire Insurance CoMPany,

Appellant

Civil Action 76-0914

W. J. Usery, Secretary or Lapor, ET AL

48a

No. 76-2129

Civil Action 76-0087

NATIONAL ORGANIZATION FOR WoMEN

Wasuineton, D.C. CHapTer

Vv.

SoctaL Security ADMINISTRATION OF THE DEPARTMENT

or Heatta, Epucation aNnpD WELFARE, ET AL

MertrorouitaN Lire Insurance Company, Appellant

No. 76-2163

NatrionaL ORGANIZATION FOR WoMEN

Wasuineoton, D.C. CHAPTER

Vv.

SociaL Securtry ADMINISTRATION OF THE DEPARTMENT

or Heattu, Epucation aNnD WELFARE, ET AL

Jonn Hancock Mutua Lire Insurance Company,

Appellant

No. 76-2164

Civil Action 76-0914

MerTrRopouitaN Lire InsuRANCE COMPANY

Vv.

W. J. Usery, Secretary or Lasor, ET AL

Joun Hancock Mutvuau Lire Insurance Company,

Appellant

Berore: Wright and Leventhal, Circuit Judges

(Firep January 19, 1977)

Order

Ir Is OrpereD by the Court, sua sponte, that the above

captioned cases are consolidated for consideration on the

49a

merits, and on consideration of the motions for stay filed

va the above captioned cases, and of the oppositions there-

0, it is

OrverRED by the Court that the aforesaid motions for

stay are denied.

Per Curiam

50a

APPENDIX E

Statutory Provisions Involved

5 U.S.C. § 552, Known as THE FREEDOM OF INFORMATION

Act PRovipEs:

§ 552. Public information; agency rules, opinions, orders,

records, and proceedings

(a) Each agency shall make available to the prbiie in-

formation as follows:

(1) Each agency shall separately state and currently

publish in the Federal Register for the guidance of the

public—

(A) descriptions of its central and field organiza-

tion and the established places at which, the employees

(and in the case of a uniformed service, the members)

from whom, and the methods whereby, the public may

obtain information, make submittals or requests, or

obtain decisions;

(B) statements of the general course and method

by which its functions are channeled and determined,

including the nature and requirements of all formal

and informal procedures available ;

able or the places at which forms may be obtained,

and instructions as to the scope and contents of all

papers, reports, or examinations;

(D) substantive rules of general applicability

adopted as authorized by law, and statements of gen-

eral policy or interpretations of genera] applicability

formulated and adopt. d by the agency; and

(E) each amendment, revision, or repeal of the

foregoing.

Except to the extent that a person has actual and timely

notice of the terms thereof, a person may not in any man-

5la

ner be required to resort to, or be adversely affected by, a

matter required to be published in the Federal Register

and not so published. For the purpose of this paragraph,

matter reasonably available to the class of persons affect-

ed thereby is deemed published in the Federal Register

when incorporated by reference therein with the approval

of the Director of the Federal Register.

(2) Each agency, in accordance with published rules,

shall make available for public inspection and copying—-

(A) final opinions, including concurring and dis-

senting opinions, as well as orders, made in the adjudi-

cation of cases;

(B) those statements of policy and interpretations

which have been adopted by the agency and are not

published in the Federal Register; and

to staff that affect a member of the public;

unless the materials are promptly published and copies

offered for sale. To the extent required to prevent a clearly

unwarranted invasion of personal privacy, an agency may

delete identifying details when it makes available or pub-

lishes an opinion, statement of policy, interpretation, or

staff manual or instruction. However, in each case the

justification for the deletion shall be explained fully in

writing. Each agency shall also maintain and make availi-

able for public inspection and copying current indexes pro-

viding identifying information for the public as to any mat-

ter issued, adopted, or promulgated after July 4, 1967, and

required by this paragraph to be made available or pub-

lished. Each agency shall promptly publish, quarterly or

more frequently, and distribute (by sale or otherwise)

copies of each index or supplements thereto unless it de-

termines by order published in the Federal Register that

the agency shal] nonetheless provide copies of such index

on request at a cost not to exceed the direct cost of dupli-

d2a

cation. A final order, opinion, statement of policy, interpre-

tation, or staff manual or instruction that affects a member

of the public may be relied on, used, or cited as precedent

by an agency against a party other than an agency only

if—

(i) it has been indexed and either made available

or published as provided by this paragraph; or

(ii) the party has actual and timely notice of the

terms thereof.

(3) Except with respect to the records made available

under paragraphs (1) and (2) of this subsection, each

agency, upon any request for records which (A) reasonably

describes such records and (B) is made in accordance with

published rules stating the time, place, fees (if any), and

procedures to be followed, shall make the records promptly

available to any person.

(4)(A) In order to carry out the provisions of this

section, each agency shall promulgate regulations, pursuant

to notice and receipt of public comment, specifying a uni-

form schedule of fees applicable to all constituent units of

such agency. Such fees shall be limited to reasonable stand-

ard charges for document search and duplication and pro-

vide for recovery of only the direct costs of such search

and duplication. Documents shall be furnished without

charge or at a reduced charge where the agency determines

that waiver or reduction of the fee is in the public interest

because furnishing the information can be considered as

primarily benefiting the general public.

(B) On complaint, the district court of the United

States in the district in which the complainant resides, or

has his principal place of business, or in which the agency

records are situated, or in the District of Columbia, has

jurisdiction to enjoin the agency from withholding agency

records and to order the production of any agency records

improperly withheld from the complainant. In such a case

53a

the court shall determine the matter de novo, and may ex-

amine the contents of such agency records in camera to

determine whether such records or any part thereof shall

be withheld under any of the exemptions set forth in sub-

section (b) of this section, and the burden is on the agency

to sustain its action.

defendant shall serve an answer or otherwise plead to any

complaint made under this subsection within thirty days

after service upon the defendant of the pleading in which

such complaint is made, unless the court otherwise directs

for good cause shown.

(D) Except as to cases the court considers of greater

importance, proceedings before the district court, as au-

thorized by this subsection, and appeals therefrom, take

precedence on the docket over all cases and shall be as-

signed for hearing and trial or for argument at the earliest

practicable date and expedited in every way.

(E) The court may assess against the United States

reasonable attorney fees and other litigation costs reason-

ably incurred in any case under this section in which the

complainant has substantially prevailed.

(F) Whenever the court orders the production of any

agency records improperly withheld from the complainant

and assesses against the United States reasonable attorney

fees and other litigation costs, and the court additionally

issues a written finding that the circumstances surround-

ing the withholding raise questions whether agency person-

nel acted arbitrarily or capriciously with respect to the

withholding, the Civil Service Commission shall promptly

initiate a proceeding to determine whether disciplinary ac-

tion is warranted against the officer or employee who was

primarily responsible for the withholdiag. The Commis-

sion, after investigation and consideration of the evidence

submitted, shall submit its findings and recommendations

54a

to the administrative authority of the agency concerned

and shall send copies of the findings and recommendations

to the officer or employee or his representative. The admin-

istrative authority shall take the corrective action that the

Commission recommends.

(G) In the event of noncompliance with the order of

the court, the district court may punish for contempt the

responsible employee, and in the case of a uniformed serv-

ice, the responsible member.

(5) Each agency having more than one member shall

maintain and make available for public inspection a record

of the final votes of each member in every agency proceed-

ing.

(6)(A) Each agency, upon any request for records

made under paragraph (1), (2), or (3) of this subsection,

shall—

(i) determine within ten days (excepting Saturdays,

Sundays, and legal public holidays) after the receipt

of any such request whether to comply with such request

and shall immediately notify the person making such

request of such determination and the reasons there-

for, and of the right of such person to appeal to the

head of the agency any adverse determination; and

(ii) make a determination with respect to any ap-

peal within twenty days (excepting Saturdays, Sun-

days, and legal public holidays) after the receipt of

such appeal. If on appeal the denial of the request for

records is in whole or in part upheld, the agency shall

notify the person making such request of the provi-

sions for judicial review of that determination under

paragraph (4) of this subsection.

(B) In unusual circumstances as specified in this

subparagraph, the time limits prescribed in either clause

(i) or clause (ii) of subparagraph (A) may be extended

by written notice to the person making such request setting

forth the reasons for such extension and the date on which

5da

a determination is expected to be dispatched. No such notice

shall specify a date that would result in an extension for

more than ten working days. As used in this subparagraph,

‘‘unusual circumstances’? means, but only to the extent

reasonably necessary to the proper processing of t

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.