# Amicus Brief — Furnco Construction Corp. v. Waters

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Brief
- **Published:** January 1, 1978
- **Citation:** 438 U.S. 567

## Text

Ir Supreme Court, U, S

FILED

MAR 16 1978

| MICHAEL RODAK, JR., CLERK

No. 77-369

Gu the Supreme Gourt of the Wnited States

Octoser TERM, 1977

Furnco CoNnstTRUCTION CORPORATION, | PETITIONER
v.
WILLIAM WATERS, ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES AND THE EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION AS AMICI CURIAE

WADE H. McCREE, Jr.,
Solicitor General,
DREW 8S. DAYS, III,
Assistant Attorney General,
BRIAN K. LANDSBERG,
ROBERT J. REINSTEIN,
Attorneys,
Department of Juatice,
Washington, D.C. 205380.
ABNER W. SIBAL,
General Counsel,
Equat Rmployment Opportunity Commission,
Washington, D.C. 20506,

INDEX

Interest of the United States and the Equal Employment — page
Opportunity Commission._........----.------------- 1

Brateses onc canccnccecacencescceccccccesccceccccese 2
Summary of argument........--.--.----------.-------- 8
D Sedicdiiddinddoumbincionhnsntimenaatiibnin 12

The judgment of the court of appeals should be affirmed

as to respondents Smith and Samuels but reversed.
as to respondent Nemhard......-.......-------- 12

A. Furnco failed to show a legitimate non-dis-

criminatory reason rebutting the inference

of racial discrimination arising from the

exclusion of all black bricklayers from its

hiring supervisor’s list and the resulting

failure to offer employment to Smith and
Bees <cccnvodbicattinnennccnetnaneny 13

B. Furnco’s practice of hiring only by supervisor's

reference was properly found on this record

to be a legitimate non-discriminatory policy

rebutting the inference of discrimination

raised by its refusal to accept the applica-

tion of Nemhard at the gate_............. 19
Cent acancccndritapuiilttnclindithibecnsnbbeiidetann 26
CITATIONS
Cases :
Albemarle Paper Co. vy. Moody, 422 U.S. 405_..... 12, 24, 25
Batiste v. Furnco, 503 F, 2d 447, certiorari denied, 420
Wath Ceicnddcoducndtintistinbbattisivebnetantiniens 3
Baumgartner v. United States, 322 U.S, 665.......... 19
Baxter v. Savannah Sugar Refining Corp., 495 F. 2d
437, certiorari denied, 419 U.S, 1088............._. 15
Brown v. Gaston Country Dyeing Machine Co., 457 F.
2d 1377, certiorari dénied, 409 U.S. 982... 15
Castaneda y. Partida, 430 U.S, 482.......0..0- . 9,14, 16,18
te)

257—305—77—-1

II

Causey v. Ford Motor Co., 516 F, 2d 416_.....------. 19, 21
Dothard v, Rawlinson, 433 UB, S81....nnnqnvocceees 23, 24
Equal Employment Opportunity Commission v. Detroit
Edison Co., 515 F, 2d 301, vacated and remanded on
other grounds, IO 15
Franks v. Bowman Transportation Co,, 424 U.S, 747... 23, 24
Gates v. Georgia-Pacific Corp., 492 F. 2d 292......... 12, 23
Griggs v. Duke Power Co., 401 U.S, 424........-..... 12, 24
Holthaus v. Compton & Sons, Inc., 514 F, 2d 651.....- 21
International Brotherhood of Teamsters v. United
Piates, GA OB. Gb. .caccccoccesscseccus 9, 14, 20, 21, 24
MeDonald v. Santa Fe Trail Transportation Co., 427
a A ee 10, 16
MeDonnell Douglas Corp. vy. Green, 411 U.S. 702_...-. 7,

11, 19-20, 21, 25
Nashwille Gas Co. v. Satty, No. 75-536, decided Decem-

CERI NES FS Ra Senet Ce rye A 23
Norris v. Alabama, 294 U.S. 587.....-....-..-..-...-. 19
Ostapowies v. Johnson Bronze Co., 541 F. 2d 394... 21
Reed v. Arlington Hotel Co., Inc., 476 F. 2d 721, certio-

rari denied, 414 U.S, 854......................... 15
Robinson v. Lorillard Corp., 444 F, 2d 791, certiorari

denied, 404 U.S. 1006............................ 25
Rowe v. General Motors Corp., 457 F. 2d 348_.......- 15

United States v. Bethlehem Steel Corp., 446 F. 2d 652_. 15, 25
Villiage of Arlington Heights v. Metropolitan Housing
Development Corp., 429 U.S. 262...........-...--. 14
Vulcan Society of the New York City Fire Department,
Ine, v. Civil Service Commission of New York, 490

re OD Goi canctintheteerocinnstanitincinntnbdng tiene ds: 21
Waters v. Wisconsin Steel Works of International Har-
vester Co., 502 F. 24 1300... 11, 21, 23
Yick Wo v. Hopkine, 159 UG, 906... cccccaccncecccecs 14
Statutes :
42 U.S.C. (Supp. V) 2000e-5(f) (1) ...-----------.-. 1
42 U.S.C. (and Supp, V) 2000e-6_...............-.. 2
Miscellaneous :

B, Schlei & P. Grosnnan, Employment Diseriminetion
Law, Ch. 6 (1976)...-..--- w os

TT

Yn the Supreme Gourt of the Vinied Sates

OctToseR TERM, 1977

No. 77-369

Furnco Construction CORPORATION, PETITIONER
Vv.
WirLiaAM WATERS, ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES AND THE EQUAL EMPLOYMENT
- OPPORTUNITY COMMISSION AS AMICI CURIAE

INTEREST OF THE UNITED STATES AND THE EQUAL
EMPLOYMENT OPPORTUNITY COMMISSION .

Federal enforcement of Title VII of the Civil
Rights Act of 1964 has been vested by Congress in the
Equal Employment Opportunity Commission, the De-
partment of Justice and the Civil Service Commission.
The Equal Employment Opportunity Commission has
authority to bring civil actions against private em-
ployers under 42 U.S.C. (Supp. V) 2000e-5(f) (1).
The. Attorney General has enforcement responsibility
when the employer is a state government, govern-

Se

2

mental agency, or political subdivision, 42 U.S.C.
(and Supp. V) 2000e-6. This case raises questions
eoncerning the substantive reach of Titlé VII, the
resolution of which may affect federal administration
and enforcement of the Act.

STATEMENT

Furneco Construction Corporation (“Furnco”) is a
large contractor specializing in steel mill and blast
furnace relining. In August 1971, Furnco entered into
a contract with Interlake, Inc., to reline the larger of
Interlake’s two blast furnaces. Furnco’s superintend-
ent, Joe Dacies, had authority to hire bricklayers for
the Interlake job. The choice of which bricklayers to
hire was committed totally to Dacies’ discretion (Pet.
3; Tr. 668-669, 693, 769). Dacies had worked in the
bricklaying trade since 1946 and had been a job super-
intendent for Furnco since 1965 (Tr. 768). His gen-
eral practice is to hire bricklayers from a list which
he maintains of men he considers competent based
upon their work with him on prior relining jobs
(known in the trade as “firebrick’’ work). Dacies de-
acribed his hiring method as follows (Tr. 769) :

Well, I have a list of bricklayers. There are
various notes, I don’t have a direct file system,
but it is people, prior to even working with
Furnco, I had worked with bricklayers all over
the country, and in this area. I have kept
their telephone numbers, because they were

good mechanics. So when I have a job, I try
to contact them.

‘“Tr,” refers to the transcript of proceedings in the district
court.

3

Dacies “[o]nce in a while” accepts recommendations
from. foremen or other superintendents (Tr. 770),

‘but he does not accept or consider written or job-site

applications from bricklayers because he always has
enough men “on [his] list” to fill the jobs (Tr. 771).
Dacies justifies his practice, which is common in the
firebrick industry (Tr. 35-38),’ primarily as a meas-
ure to.ensure the hiring of competent firebrick workers
(Tr. 71-772).

_ Although he had worked with black bricklayers
on firebrick jobs (Tr. 343-344, 309-360, 773, 873),
Dacies’ list consisted entirely of white persons (Tr.
777-778). * But before the Interlake job started,
Dacies was advised by Furnco’s general manager,
John Wright, that he should try to have at least 16
percent of the work done by competent black brick-
layers (Tr. 675, 777-778). The company adopted this
‘affirmative action” goal in response to a suit by
black bricklayers who had not been hired for a 1969
Furnco job (the Batiste litigation) (Tr. 673-674).* The

* Furnco expects its superintendents to hire bricklayers known
by them and they generally do so (Tr. 669-672). If this method
does not produce enough workers for the job, superintendents are
expected to seek recommendations from other superintendents and
workers (Tr. 671). On several occasions, some of Furnco’s super-
intendents hired bricklayers who applied at the jobsite and also
hired bricklayers who had no prior experience in firebrick work
(Tr. 234-236, 314-315, 324-335, 509-510, 516, 561-563).

* Petitioner characterizes Dacies’ list as “various notes,” but con-
cedes that “the names contained on such notes were of white
bricklayers” (Pet. Br, 34, n, 29).

* See Batiste v. Furnco, 503 F. 2d 447 (C.A.7), certiorari denied,
420 U.S. 928,

4

goal was intended to preclude additional lawsuits and
was limited to Cook County where the company had
been sued. (Tr. 674-675).

Since Wright had stated that Furneo “would like
to have black people on the job” (Tr. 777) and there
were no blacks on Dacies’ list, Dacies obtained refer-
ences of black bricklayers from another Furnco super-
intendent in the area.’ Between August 26 and Sep-
tember 27, 1971, Dacies hired four blacks who had
been recommended to him and 37 whites from his
list (Joint Exh. 1; Tr. 781-786). These 41 bricklayers
were hired on a staggered basis. The first four brick-
layers ‘hired (between August 26 and September 8)
were white, then a black was hired on September 9;
15 bricklayers were hired between September 10 and
18, of whom two were black; and 21 were hired be-
tween September 21 and 27, including one black
(Joint Exh. 1). While this hiring was taking place,
Furnco was in settlement negotiations with the
Batiste plaintiffs (Tr. 677). The negotiations broke
down in late September 1971, and Wright advised

* Dacies testified that he contacted the other superintendent “to
see if he had black bricklayers that could do parts of this job in
the blast furnace work. He said he thought thai he had a few
that could make it. He subsequently gave me some names and
telephone numbers and I called them” (Tr. 778). When asked
whether Interlake was the first job for which Dacies had ever
hired black bricklayers, Dacies said: “I thought maybe it was the
South Works job that I started to run * * * I thought there was
two of them. I don’t recall exactly, because I quit the job subse-
quently, very shortly after” (Tr. 875). Petitioner cites no other
authority for its statement that Dacies hired “several” blacks on
this earlier job (Pet. Br. 8 n. 8, citing Tr. 875).

Dacies to consider the Batiste plaintiffs when hiring
resumed (Tr. 677-678, 778-779). Between October 12
and 27, 1971, Dacies hired 14 more bricklayers, includ-
ing seven blacks involved in the Batiste case (Joint
Exh. 1; Tr. 781-786). Overall on the Interlake job,
55 bricklayers were hired, 44 whites selected from
Dacies’ list and 11 blacks recommended to him by
Wright and another Furneo superintendent. The work
of the black bricklayers constituted 13.3 percent of
the total man-days expended on the job (Joint Exh.
1). :

Willtam Smith, Donald Samuels and Robert Nem-
hard are three black bricklayers who unsuccessfully
sought employment on the Interlake job (Pet. App.
A17). Smith, a bricklayer for 30 years, had worked
on many firebrick jobs; Furneo conceded his quali-
fications (Tr. 311-314). Before the Interlake job,
Smith had worked with Dacies four times—1958, 1962,
1969 (for Furnco) and 1970-1971 (for Furnco) (Tr.
343-346, 359-360). On one of these jobs, Smith super-
vised Dacies (Tr. 785). Smith’s mame did not, howev-
er, appear on Dacies’ list. Samuels was a bricklayer
for 17 years (Tr. 227), and had worked on 6-8 fire-
brick jobs (Tr. 229), including one for Furneo in
1969-1970 on which Dacies also worked (Tr. 234,
874).* Samuels’ name also did not appear on Dacies’
list. Memhard had been a bricklayer for 29 years; he
had worked on one firebrick job for about two years,
but not with Dacies or Furnco (Tr. 66-69, 72).

© Although Smith and Samuels had worked on certain Furnco
jobs with Dacies, they had been hired by other superintendents
(Tr. 235-236, 314-316).

257—303— 77-2

Since neither Smith nor Samuels was included on
Dacies’ list, they were not among the past Furnco
bricklayers whom Dacies called using his normal pro-
cedures. If any black bricklayers had been on Dacies’
list, they would have been called by him and offered
employment (Tr. 777-778). Smith and Samuels as
well as Nemhard each applied for work at the Inter-
lake job by going to the job-site in August 1971, be-
fore construction began (Tr. 73-74, 250, 327). Each
returned to the job-site on a number of occasions dur-
ing construction (Tr. 74-77, 251-259, 328-331). They
applied “at the gate” because this is how they had
been hired on earlier firebrick jobs (Tr. 72, 229-236,
311-316, 327). Nemhard also sent a written appli-
eation to Furnco (Tr. 77-78).

Samuels and Nemhard were never hired on the
Interlake job. Smith’s attempt to obtain work by
applying at the gate was also unsuccessful; but on
October 12, 1971 (Tr. 350), he was hired at Wright’s
suggestion as one of the Batiste plaintiffs. After ex-
hausting their administrative remedies before the
Equal Employment Opportunity Commission, Smith,
Samuels and Nemhard brought suit against Furnco
under Title VII of the 1964 Civil Rights Act. Sam-
uels and Nemhard claimed that they were not hired
because of their race; Smith claimed that he was dis-
criminatorily denied employment until the job was
near completion.

Following an evidentiary hearing, the district court

entered judgment for Furnco (Pet App. C). Focus-
ing solely upon Furnco’s refusal to consider respond-

7

ents’ applications at the job-site and in writing, the
court held that this practice was racially neutral,
was not a pretext for excluding black bricklayers, did
not have a disproportionate effect on black brick-
layers,’ and was justified as a business necessity (Pet.
App. A16-A18).*

The court of appeals reversed (Pet. App. A), hold-
ing that Smith, Samuels and Nemhard had each es-
tablished a prima facie case of discrimination under
McDonnell Douglas Corp. v. Green, 411 U.S. 792, and
that the company’s policy of hiring only bricklayers
known by or recommended to its superintendent was
neither legitimate nor non-discriminatory. The court
viewed the practice as fraught with the potential for
arbitrary and discriminatory decisions especially in
light of the alternative of accepting applications in
writing and checking references, The court held that
because of historical discrimination against blacks,
‘it is prima facie racial discrimination to refuse
to consider the qualifications of a black job seeker
before hiring from an approved list containing

' The district court found that 5.7 percent of the bricklayers in
the relevant labor force were minorities, relying on 1969 data in
the “Chicago plan” which includes the five counties surrounding
Cook County (Pet. App. A16). The court excluded respondents’
evidence that the bricklayers’ local union in Cook County was
13-14 percent black in 1973, and stated that, even if accepted,
this figure would not be probative evidence of racial discrimina-
tion because 13.8 percent of the work at the Interlake job was
performed by blacks (Pet. App. A16 and n. 1).

* Five other black bricklayers joined this lawsuit. The district
court held that their claims were without merit (Pet. App. A16-
A18), and the court of appeals affirmed (Pet. App. A3-A5).

257—303—-77 ——-3

8

only the names of white bricklayers’’ (Pet. App.
A7). Responding to the company’s argument that
there was no racial imbalance on the Interlake job,
the court stated that respondents had no chance to be
considered for most of the jobs, which ‘‘were fore-
ordained to be filled by white bricklayers” from Dacies’
all-white list (Pet. App. A8). The court concluded:
“[V ]is-a-vis the white bricklayers employed in 84-87
percent of the jobs, racial discrimination is established
under the principle of McDonnell Douglas” (Pet. App.
A8-A9).°
SUMMARY OF ARGUMENT

Both the district court and the court of appeals
erred in treating the claims of the three respond-
ents as identical. Although each respondent is a black
bricklayer with proven competence, and each was
unable to secure employment on the Interlake job
by applying at the gate, a crucial factual difference
distinguishes Smith’s and Samuels’ claim from Nem-
hard’s. Smith and Samuels had each worked with

* The court of appeals held that the district court erred in ex-

cluding plaintiffs’ evidence that the labor force was 13-14 percent
black (Pet. App. A9). But the court of appeals concluded that
this error was not prejudicial inasmuch as black representation
on the Interlake job compared favorably with this statistic (ibid.).
The court of appeals noted that it did not rely on any alleged
statistical imbalances in finding that Furnco had discriminated
against the plaintiffs (ibid.), because (Pet. App. A8) :
“Where the percentage of minority members in a workforce is
lower than the group considered, that fact may well indicate the
operation of racial discrimination, Absence of such discrimina-
tion is not proved by the percentage in the workforce being highe~
than the percentage in the group considered.”

Dacies on earlier Furnco jobs but were excluded
from his (all-white) hiring list; Nemhard had never
worked with Dacies or Furnco. An analysis taking
into account this factual difference shows that Smith
and Samuels suffered racial discrimination in viola-
tion of Title VII but Nemhard did not. —

A. Respondents Smith and Samuels established a
prima facie case of racial discrimination based upon
their exclusion from Dacies’ list of qualified brick-
layers with whom he had previous working experi-
ence, Smith and Samuels had both worked with Dacies
on prior Furnco jobs. Both had demonstrated their
competency, and Smith had even supervised Dacies
on a prior job. Nevertheless, neither Smith nor Sam-
uels was on Dacies’ list, which contained only the
names of white persons. Bricklayers whose names ap-
peared on Dacies’ list were called directly to work by
the superintendent. Since Smith’s and Samuels’ names
did not appear, they did not have the same employ-
ment opportunity afforded to similarly situated white
bricklayers who had worked with Dacies, The all-
white composition of Dacies’ hiring list, particularly
when coupled with the totally subjective process by
which it was compiled, is prima facie evidence of in-
tentional discrimination against black bricklayers, in-
eluding Smith and Samuels, who had worked with
Dacies and Furnco. International Brotherhood of
Teamsters v. United States, 431 U.S. 324, 337-342 and
n. 23; Castaneda v. Partida, 430 U.S. 482, 494-499.

Furnco presented no evidence to rebut this prima
facie case. No explanation was offered why Smith and

lak

10

Samuels or other competent black bricklayers were
omitted from the supervisor’s hiring list, and from
the employment opportunity that concededly would
have followed from inclusion on the list. Furnco’s
refusal to take applications at the gate, while perhaps
a legitimate nondiscriminatory policy, is not disposi-
tive of the claims of Smith and Samuels, whose ap-
plications at the gate merely emphasize their avail-
ability to accept the employment opportunities offered
to white bricklayers who had worked with Dacies.
Nor is the individual injury which they suffered as
a result of discrimination negated by Furnco’s hiring
of other black bricklayers through other mechanisms.
Both Smith and Samuels are entitled to Title VII
relief because they presented an unrebutted prima
facie case based upon their discriminatory exclusion
from the supervisor’s list and the resulting failure of
Furnco to *ffer them early employment at the Inter-

job. fee McDonald vy. Santa Fe Trail Trans-
portation Co., 427 U.S. 273, 281-283.

B. The claims of respondent Nemhard have a com-
pletely different factual basis and require a separate
disposition under Title VII. Unlike the claims of
Smith and Samuels, the claim of Nemhard has no
connection with the racial composition of Dacies’
hiring list. Nemhard never worked with Furneco or
Dacies and could not possibly have appeared on
Dacies’ list of persons with whom he had previously
worked. Nemhard’s claim of discrimination is based
upon the alleged illegality of Furnco’s refusal to take
applications at the gate.

11

By demonstrating that he was qualified, applied,
was rejected, and that other bricklayers were hired
in his stead, Nemhard made out a prima facie case of
racial discrimination. McDonnell Douglas Corp. v.
Green, 411 U.S. 792, 802. Furnco proved that it did
not consider any written or job site applications for
the Interlake job, but hired only bricklayers known
by or recommended to its job superintendent. An em-
ployer of highly skilled craftsmen may reasonably
assume that a hiring by reference policy will enhance
the overall quality of its workforce. Firsthand knowl-
edge of an employee’s past performance is a reasonable
measure of future performance, and employers of
skilled craftsmen may understandably weight their
employment decisions in favor of their own knowledge
of the past performance of individuals rather than
depend on the recommendations of strangers. See
Waters v. Wisconsin Steel Works of International
Harvester Co., 502 F. 2d 1309, 1320 (C.A. 7). Here,
in findings that are not clearly erroneous, the district
court found Furnco’s reasons for rejecting applica-
tions at the Interlake job justified by the evidence.
Thus, on this record, Furneo met its burden of rebut-
tal under McDonnell Douglas v. Green, supra.

Our conclusion that Title VII does not as a per
se matter require employers to abandon a “hiring
from within’’ policy, does not mean that such policies
are insulated from Title VII serutiny in their appli-
cation. As with subjective hiring practices generally,
such a policy is unlawful if it is discriminatorily ap-

12

plied or has an exclusionary effect on minorities. See
Gates v. Georgia-Pacific Co., 492 F. 2d 292 (C.A. 9).
Furnco’s hiring policy was not discriminatorily ap-
plied against Nemhard because he had never worked
for Dacies or Furneo and because no outside appli-
cant, of any race, was hired on the Interlake job.
Similarly, Nemhard failed to prove that the rejection
of outside applicants was a pretext for racial dis-
crimination. Blacks were hired on the Interlake job
in a proportion at least comparable to their apparent
representation in the labor force. Of course, even if
applied neutrally, a “hiring from within” policy would
be vulnerable under Title VII if it had an exelu-
sionary effect on minorities. See Griggs v. Duke Power
Co., 401 U.S. 424, 429-431. However, such a challenge
must be premised on a showing that the practice did
exclude minorities disproportionately. See Albemarle
Paper Co. v. Moody, 422 U.S. 405, 425. Minorities
were not shown to have been disproportionately ex-
eluded from the Interlake job. Since Nemhard has
not shown that Furneo’s hiring practices were inten-
tionally discriminatory against him or had an ex-
clusionary effect on minorities as a class, his rejec-
tion was not shown to be the product of unlawful
discrimination.
ARGUMENT

THE JUDGMENT OF THE COURT OF APPEALS SHOULD BE
AFFIRMED AS TO RESPONDENTS SMITH AND SAMUELS
BUT REVERSED AS TO RESPONDENT NEMHARD

All three respondents are blacks who have worked
as bricklayers from between 17 and 30 years, who have

13

prior experience in firebrick work, and who took every
reasonable step to make known their desire to work
at Furnco’s Interlake job. Although the applications
of all three were rejected, the district court and the
court of appeals were in error in treating their claims
as identical. The respondents are not similarly situ-
ated. Smith and Samuels had worked with Dacies on
Furneo jobs, but were omitted from his list of com-
petent bricklayers with whom he had previously
worked and thereby denied otherwise virtually certain
employment on the Interlake job. Nemhard never
worked for a Furnco supervisor and his sole claim is
that the refusal to take his application at the gate was
the result of discrimination.

A. FURNCO FAILED TO SHOW A LEGITIMATE NON-DISCRIMINATORY
REASON REBUTTING THE INFERENCE OF RACIAL DISCRIMINATION
ARISING FROM THE EXCLUSION OF ALL BLACK BRICKLAYERS FROM
ITS HIRING SUPERVISOR'S LIST AND THE RESULTING FAILURE TO
OFFER EMPLOYMENT TO SMITH AND SAMUELS
Respondents Smith and Samuels established a prima

facie case of discrimination based upon their exclu-

sion from Dacies’ list of qualified bricklayers with
whom he had previous working experience. Smith had

been a bricklayer for 30 years, while Samuels had 17

years’ experience. Both had extensive experience in

firebrick work, Both had worked on prior Furnco jobs
with Dacies, and Smith had even supervised Dacies.

Both bricklayers had therefore demonstrated their

competence in service with the Furnco supervisor

charged with the hiring for the Interlake job.

14

Bricklayers who had worked competently on earlier

firebrick jobs with Furnco’s superintendents did not
have to apply for work when a new job began. Under
the company’s hiring policy, they were called directly
by the superintendent, who maintained a hiring list
for that purpose. On the Interlake job, the list was
compiled and utilized by Dacies, who determined ac-
cording to his own personal judgment which of his
prior employees would be called to work. Such a hir-
ing system, controlled by the unreviewable and sub-
jective judgment of one man, is susceptible of dis-
eriminatory abuse. Castaneda vy. Partida, 430 U.S.
482, 497. The potential for discriminatory application
has been realized in this case; for although Dacies
had concededly worked with Smith and Samuels as
well as other black bricklayers in the past, his hiring
list consisted only of white persons.

The all-white composition of Dacies’ hiring list,
particularly when coupled with the totally subjec-
tive process by which it was compiled, is prima facie
evidence of intentional discrimination against black
bricklayers, including Smith and Samuels, who had
worked with Dacies and Furnco. International Broth-
erhood of Teamsters v. United States, 431 U.S. 324,
337-342 and n. 23; Castaneda vy. Partida, supra, 430
U.S. at 495-499. See Village of Arlington Heights v.
Metropolitan Housing Development Corp., 429 U.S.
252, 266; Yick Wo v. Hopkins, 118 U.S. 356, 369-

15

374." Furneo presented no evidence to rebut this
prima facie case. Although Dacies testified, he did
not attempt to explain why. his hiring list was all-
white or why Smith and Samuels were omitted from
¥.*

It is undisputed that Dacies had worked with black .
bricklayers on firebrick jobs; nd,claim has been made,
let alone proven, by Dacies o1\ Furneo that every
black bricklayer with whom Dacljes worked was less
competent than the whites on his \list. Indeed, given
the conceded qualifications of S (who actually

*° The courts of appeals have repeatedly
subjective evaluations of supervisors are not
under Title VII, they provide “a ready mechani
nation.” Rowe v. General Motors Corp., 457 F. 2d
5). See also, e.g., Reed v. Arlington Hotel Co., Ind, 476 F, 2d

signidcant racial prraberAe there is prima roy evi

Brown v. Gaston County Dyeing Machine Co., 457 F.2d 137, 382
(C.A, 4), certiorari denied, 409 U.S. 982; United States v. Beth-
lehem Steel Corp., 446 F, 2d 652, 655 (C.A. 2); Equal E'mplo,
ment Opportunity Commission vy, Detroit Edison Co., 515 F, 2d
301, 313 (C.A. 6), vacated and remanded on other grounds, 431
U.S. 951; Bawter v. Savannah Sugar Refining Corp., 495 F. 2d 437
(C.A. 5), certiorari denied, 419 U.S. 1033. See generally B. Schlei &
P. Grossman, Employment Discrimination Law, Ch. 6 (1976).

"' It appears from Dacies’ testimony that the exclusion of blacks
from his hiring list was his standard procedure, Before the In-
terlake job, Dacies had called at most two black bricklayers for
work during his entire career as a firebrick superintendent (see
n. 5, supra).

16

supervised Dacies on one job) and Samuels, such a
claim would have been frivolous. The burden was on
Furnco “to dispel the inference of intentional. dis-
crimination” (Castaneda v. Partida, supra, 430 U.S.
at 497-498), and that burden was not met.

Thus, Smith’s and Samuels’ claims do not turn on
the legitimacy of Furnco’s refusal to accept appli-
eations at the gate. While Smith and Samuels. did
appear at the Interlake job site and did request em-
ployment, their efforts at the gate are merely evidence
of their availability to accept the employment oppor-
tunities offered to competent white bricklayers who
worked with Dacies, but withheld from similarly
situated black bricklayers. Both black bricklayers
were similarly situated to white bricklayers who had
worked with Dacies and Furnco and who did not have
to apply for the Interlake job but were called di-
rectly. If Dacies had not discriminated on racial
grounds in compiling the hiring list, that list would
have contained the names of competent black brick-
layers including Smith and Samuels and, as Dacies
acknowledged, those black bricklayers would have
been hired for the Interlake job. Smith and Samuels
have therefore made out an unrebutted prima facie
case that they were denied the opportunity to be hired
from Dacies’ list because of their race. See McDonald
v. Santa Fe Trail Transportation Co., 427 U.S. 273,
281-283.

Furneo is not exonerated from liability to Smith
and Samuels because its overall hiring of black brick-
layers on the Interlake job compares favorably with

17

the available labor pool. This is not a class action in
which it is contended that blacks as a group were
treated worse than whites as a group. The question
is whether two blacks, as individuals, were treated
differently from similarly situated whites because of
their race. Smith and “Samuels were denied the op-
portunity to be hired at the beginning of the Inter-
lake job because of Dacies’ discrimination against
black bricklayers who had worked with him and
Furneo. This overt discrimination suffered by two
individuals did not disappear simply because Dacies,
having been instructed to hire some blacks on the
Interlake job, obtained the names of other black
bricklayers and hired them.

Our conclusion that Smith and Samuels are the
victims of purposeful discrimination is not impaired
by the district court’s finding that Furnco’s hiring
practices at the Interlake job were racially neutral
and were not applied pretextually against black brick-
layers (Pet. App. A18). The district court disposed
of the claims of all three respondents in a unitary
fashion without regard to the factual differences that
distinguished their claims or their differing posture
with respect to Furnco’s hiring processes. Thus the
district court held that Smith’s and Samuels’ claims
were sufficiently answered by the legitimate policy of
refusing to take applications at the gate even though
similarly situated white bricklayers were hired with-
out any application whatsoever (Pet. App. A17—A18).
The district court overlooked entirely the all-white
composition of Dacies’ hiring list and did not con-

18

sider Smith’s and Samuels’ right to be treated the
same as white bricklayers who had worked with
Dacies and Furnco,

Although the error of both the district court and
the court of appeals in failing to analyze the Title
VII claims of Smith and Samuels in light of their
special posture with respect to Dacies’ all-white hir-
ing list may in part be attributable to respondents’
emphasis on the alleged illegality of Furnco’s prac-
tice of rejecting applications “at the gate,’ we do not
believe that this is an appropriate case for a remand.
Respondents did argue in the courts below that Dacies
discriminatorily excluded blacks such as Smith and
Samuels from his list of past qualified employees.”
This issue was fully litigated and all of the facts
necessary for an appropriate determination have been
elicited.” We therefore believe that the question
should be decided by this Court. Whether there was
purposeful discrimination against these respondents
is a question of ultimate fact to be determined by an
evaluation of evidentiary facts according to govern-
ing legal standards. See, e.g., Castaneda v. Partida,

'* See Brief for Plaintiffs-Appellants 21-26; Reply Brief for
Plaintiffs-Appellants 5 n. 5.

'* Dacies testified that his hiring list was all white (see p- 3,
supra). He did not offer any legitimate explanation for this fact
and conceded that he had worked with competent black brick-
layers. Petitioner has never suggested that the white bricklayers
on Dacies’ list were more competent than every black bricklayer
with whom he worked. This is not surprising in light of Smith’s
qualifications (see p. 5, supra). If there is any plausible non-

racial hypothesis for the total exclusion of blacks from the list,
Furnco has not advanced it.

19

supra; Norris v. Alabama, 294 U.S. 587; Causey V.
Ford Motor Co., 516 F. 2d 416 (C.A. 5). Cf. Baum-
gartner v. United States, 322 U.S. 665, 670-671. The
evidentiary facts relating to Smith’s and Samuels’
claims have been found and are not disputed on this
record; the conclusion of disparate treatment based
on race follows as a matter of law.

B. FURNCO’S PRACTICE OF HIRING ONLY BY SUPERVISOR'S REFERENCE
WAS PROPERLY FOUND ON THIS RECORD TO BE A LEGITIMATE NON-
DISCRIMINATORY POLICY REBUTTING THE INFERENCE OF DISCRIMI-
NATION RAISED BY ITS REFUSAL TO ACCEPT THE APPLICATION OF
NEMHARD AT THE GATE
Unlike the claims of Smith and Samuels, the claim

of Nemhard is unrelated to the racial composition of

Dacies’ hiring list. Because Nemhard never worked

with Furneco or with Dacies, Nemhard’s name could

not have appeared on Dacies’ list of bricklayers who
had demonstrated their competence in prior work with
him. As a result, Nemhard’s claim was wholly de-
pendent upon the alleged illegality of refusing to
take the applications of either white or black brick-
layers “at the gate.’’ While we believe that Nemhard’s
claim of rejection at the gate established a prima
facte ease of discrimination, we have concluded that

Furneo successfully rebutted the inference of racial

discrimination with respect to Nemhard.

Nemhard established a prima facie case of discrim-
ination within the meaning of McDonnell Douglas

* There is no evidence in the record that Nemhard had at-
tempted to secure employment with Dacies or Furnco before he
applied for the Interlake job.

Corp. v. Green, 411 U.S. 792, 802, by demonstrat-
ing that he was a qualified firebrick worker, had
applied at the Interlake job for employment, was
rejected, and other persons of similar qualifica-
tions in firebrick work were hired instead. In a
private, non-class action such as this, proof that a
qualified minority applicant was denied employment
when there were available vacancies will, absent ex-
planation from the employer, create an inference that
race was a motivating factor in the rejection. McDon-
nell Douglas, supra, 411 U.S. at 802. Furneo’s re-
fusal to hire Nemhard was demonstrably not based
on a laek of qualifications or of vacancies. See In-
ternational Brotherhood of Teamsters v. United
States, 431 U.S. 324, 358 n. 44. Nemhard had made
his threshold prima facie showing as petitioner ac-
knowledges (Pet. Br. 17), and the burden there-
fore shifted to Furnco “to articulate some legitimate,
nondiscriminatory reason for [Nemhard’s] rejection.”’
McDonnell Douglas Corp. v. Green, supra, 411 U.S.
at 802.

In response, Furneo proved that it did not consider
any written or job-site applications for the Interlake
job but hired instead only bricklayers known by or
recommended to its job superintendent. An employer
of highly skilled craftsmen may reasonably assume
that a hiring by reference policy will enhance the
overall quality of its workforce. Firsthand knowledge
of an employee’s past performance is a reasonable, if
not infallible, measure of future performance; and
such employers may understandably weight their deci-
Sions in favor of their own knowledge of past per-

21

formance rather than depend on the recommendations
of strangers. A policy which favors prior employees
over new applicants is not per se unlawful under ‘Title
VII. See Waters v. Wisconsin Steel Works of Inter-
national Harvester Co., 502 F. 2d 1309, 1320 (C.A. 7)
Here, the district court found that such factors as the
special skills required at the Interlake job, the speed
at which the job was to be done, and the cost to Furnco
if the work was faultily completed, prevented Furnco
from hiring persons not known by it to be “experi-
enced and highly qualified” or from engaging in “on-
the-job training” (Pet. App. Al4-A15). While these
findings may be subject to dispute, they are not clearly
erroneous. Thus, on the record here, Furnco met its
burden of rebuttal under McDonnell Douglas.” The

18 McDonnell Douglas does not identify the precise nature of
the burden which is shifted to the employer to rebut the individ-
ual’s prima facie case. We believe that the employer has the
burden of showing both what its reasons are for rejecting the
application and that those reasons are legitimate, i.c., that they
grow out of the needs of its business, The employer, in our view,
bears the burden of persuasion on both issues. Here, the com-
plainant has proven that the two most common legitimate rea-
sons for rejection (lack of vacancies and qualifications) do not
apply. See 7eamsters, supra, 431 U.S. at 358 n. 44. If there is a
legitimate reason, it rests within the employer’s knowledge; and
the employer also possesses the evidence to support that reason
factually. Cf. id. at 359 n. 45. The courts of appeals have cor-
rectly construed McDonnell Douglas as placing on the employer
the burden of production and the risk of non-persuasion on the
articulated reason for rejection. See, ¢.g., Ostapowicz v. Johnson
Bronze Co., 541 F. 2d 394, 399 (C.A. 3); Causey v. Ford Motor
Co., 516 F. 2d 416, 422-423 (C.A. 5); Holthaus v. Compton &
Sons, Ine., 514 F. 24 651 (C.A. 8); Vulcan Society of the New
York City Fire Department, Inc. y. Civil Service Commission of
New York, 490 F. 2d 387, 393 (C.A. 2).

22

court of appeals therefore erred in holding that
Furneo did not establish a legitimate reason, unrelated
to race, to justify Nemhard’s rejection.

Furneo’s facially legitimate policy is not immune
from scrutiny in its application. The facially neu-
tral policy of hiring only by supervisor’s reference
would be unlawful if applied with racially discrimi-
natory purpose or effect. But the facts of this. case
do not support the apparent view of the court of ap-
peals that Furnco’s policy of not considering written
or job-site applications was applied discriminatorily
against black applicants. No applicant “at the gate,”
white or black, was considered for employment at
Interlake. The refusal to accept applications does not
appear to have been motivated by a desire to maintain
an all-white work force. Indeed, hiring was not re-
stricted to the all-white list; Dacies also hired black
bricklayers who were recommended to him, and black
representation on the job compares favorably with that
in the apparently available labor force.** Respondents

** The court of appeals correctly held that the district court
erred in excluding respondents’ evidence concerning the racial
composition of the available labor force but that this error was
not prejudicial, Blacks were not under-represented on the Inter-
lake job whether the available labor force is 5.7 percent black, as
contended by petitioner, vr 13-14 percent black, as contended by
respondents. As we have noted (supra, p. 4), three blacks were
among the twenty bricklayers hired during the first three weeks of
the Interlake job. We would view Nemhard’s claims very differ-
ently if Dacies had filled all of the early positions with whites,
while at the same time rejecting new applicants, and then hired
blacks ouly during the tail-end portion of the job. Under those cir-
cumstances, it could be concluded that Furnco’s policy of rejecting

applicants was designed to reserve the best long-term jobs for
whites.

23

did not prove that the company placed an artificial
ceiling on the number of blacks it would hire. Re-
spondents thus did not show that Furnco’s policy of
rejecting new applications was a pretext for racial
discrimination against black applicants without prior
experience. Thus, while experienced black bricklayers
like Smith and Samuels were the victims of disparate
treatment based upon race, black applicants without
prior experience with Dacies or Furnco were not.
See Waters v. Wisconsin Steel Works of Interna-
national Harvester Co., 502 F. 2d 1309, 1321-1322
(C.A. 7).

Irrespective of motivation, a policy of “hiring from
within” may lead to discriminatory results if minori-
ties are under-represented in a company or indus
See Gates v. Georgia-Pacific Corp., 492 F. 2d 292
(C.A. 9). The use of a policy that has a disproportion-
ately adverse impact on minorities or which per-
petuates the effects of past discrimination violates
Title VII unless it is justified by business necessity.”
a Congress “intended to prohibit all practices in whatever form
which create inequality in employment opportunity due to dis-
crimination on the basis of race, religion, sex, or national origin.”
Franks vy. Bowman Transportation Co., 424 U.S. 747, 763. See
also, e.g., Nashville Gas Co. v. Satty, No. 75-536, decided Decem-
ber 6, 1977; Dothard v. Rawlinson, 433, U.S. 321, 328-329.

18 In contrast, an individual who suffers purposeful discrimina-
tion need not prove that other members of the group to which
he belongs were also the victims of discrimination. Of course, one

method of establishing purposeful discrimination against individ-

uals is by proving that the employer engaged in a pattern of
(Continued)

24

But this is not an industry-wide lawsuit, and re-
spondents did not challenge Furnco’s hiring policy
at any job except Interlake. On that job, there
has been no showing that Furnco’s policy of re-
jecting applications resulted in the disproportionate
exclusion of black bricklayers or perpetuated the ef-
feets of past discrimination.”* Nemhard did not demon-
strate, for example, that at the time of the Interlake
job, unemployed black bricklayers constituted sub-
stantially more than 13 percent of the pool of com-
petent bricklayers available to work for Furneo. The
record therefore does not disclose that the facially
neutral employment practice of hiring only by super-
visor’s reference in fact had any disparate effect on
a group of which Nemhard is a member. See Albe-
marle Paper Co. v. Moody, 422 U.S. 405, 425; Dothard
Vv. Rawlinson, 433, U.S. 321, 328-331.”

(Centinued)

class-wide discrimination, Such proof creates a rebuttable pre-
sumption that individual members of the class were in fact vic-
tims of discrimination, Teamsters, supra, 431 U.S. at 358-362 ;
Franks v. Bowman Transportation Co., supra, 424 U.S. at 772.
"* The potential impact of a reference system of hiring in per-
petuating past discrimination is emphasized by the experience of
Nicholas Popovic, the president of the bricklayers’ local which
covers Cook County, who worked in the bricklaying industry for
35 years before becoming a union official (Tr. 22-25). Mr. Popovic
was & supervisor on many jobs, and his standard hiring practice
was to call directly experienced firebrick workers from a list which
— (Tr. 47-49). Mr. Popovic never worked with a
cklayer on a firebrick job either as a supervi
Bra (Tr. 57). ' are
*° See J'eamsters, supra, 431 U.S. at 348-350; Gri
US. at 420-481. a

In the absence of proof of discriminatory treatment
or effect, the availability of alternative hiring .prac-
tices. does not render Furnco’s policy of rejecting
applicants at the gate unlawful. The court of appeals
concluded that a policy of accepting written applica-
tions and checking recommendations is both ‘‘reason-
able” ‘and “‘feasible” (Pet. App. A6), a conelusion
that would be highly relevant, and perhaps disposi-
tive, if Furnco had the burden of justifying its ex-
isting practice as a business necessity. See, e.g., United
States v. Bethlehem Steel Corp., 446 F. 2d 652, 662
(C.A. 2); Robinson v. Lorillard Corp., 444 F. 2d 791,
799-800 (C.A. 4), certiorari denied, 404 U.S. 1006.
But the business necessity defense arises only upon
a showing that the challenged practice has an adverse
impact on racial or other prohibited grounds; that
showing has not been made.” Furnco’s only burden
was to demonstrate that the alternative it chose was
legitimate and nondiscriminatory. McDonnell Douglas
v. Green, supra, 411 U.S. at 802. That burden was
met, and in these circumstances, the availability of a
feasible alternative did not require, or in itself per-
mit, the district court to find a Title VII violation.”

"1 For this reason, it is unnecessary to determine whether the
district court erred in concluding that Furnco’s practices “were
justified as a business necessity in that they were necessary for
the safe and efficient operation of Furnco’s business” (Pet. App.
A20-A21).

2 Respondents did not show that the alternative practice advo-
cated by the court of appeals would have resulted in a greater
representation of blacks on the Interlake job—a showing which
might indicate that Furnco’s practice of rejecting applicants was
a pretext for discrimination. See Albemarle Paper Co. v. Moody,
supra, 422 U.S, at 425. -

26
CONCLUSION

The judgment of the court of appeals should be
affirmed as to respondents Smith and Samuels and
reversed as to respondent Nemhard.

Respectfully submitted.

Wave H. McCrer, Jr.,
Solicitor General.
Drew S. Days, ITI,
Assistant Attorney General.
Brian K. Lanpssero,
Rosert J. REINSTEIN,

Attorneys.
ABNER W. Srmat,

General Counsel,

Equal Employment Opportunity
Commission.

Marcu 1978.

©. 8. COVEREREET PRintine OPricE, isTe

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_2501%3A8. Public record. Not legal advice.