Appendix — American Cast Iron Pipe Co. v. Pettway

82-1074

Office -Sunreme Court, U.S.

ViLei

IN THE DEC 23 1982

SUPREME COURT OF THE UNITED STATES, °°

October Term, 1982 ~

RS nesses

AMERICAN CAST IRON PIPE COMPANY,

Petitioner,

vs.

RUSH PETTWAY, et al.,

Respondents

APPENDIX TO

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

J. FrReperic INGRAM

1600 Bank for Savings Building

Birmingham, Alabama 35203

(205) 251-3000

Counsel of Record for Petitioner,

American Cast Iron Pipe Company

D. Frank Davis

JoserpH W. LETZER

F. A. Flowers, III

1600 Bank for Savings Building

Birmingham, Alabama 35203

(205) 251-3000

Attorneys for Petitioner,

American Cast Iron Pipe Company

OF COUNSEL:

THOMAS, TALIAFERRO, FORMAN,

BURR & MURRAY

1600 Bank for Savings Building

Birmingham, Alabama 35203

(205) 251-3000

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1982

SG vanieidareadeandioncs

AMERICAN CAST IRON PIPE COMPANY,

Petitioner,

vs.

RUSH PETTWAY, et al.,

Respondents

PETITION FOR A WRIT OF CERTIORARI

APPENDIX TO

TO THE UNITED STATES COURT OF APPEALS

Appendix

Appendix

Appendix

Appendix

Appendix

Appendix

FOR THE ELEVENTH CIRCUIT

TABLE OF CONTENTS

A — Opinion of U.S. Court of Appeals,

5th Cir., dated April 29, 1974

(“Pettway III’)

B — Opinion of U.S. Court of Appeals,

5th Cir., dated July 24, 1978

(“Pettway IV") .

C — Order of Referral to Special Master,

dated July 20, 1981

D — Order of U.S. Court of Appeals,

5th Cir., dated August 19, 1981 ___...

F. — Opinion of U.S. Court of Appeals,

11th Cir., dated July 15, 1982

F — Order of U.S. Court of Appeals,

11th Cir., dated September 27, 1982

Page

A-l

A-93

A-208

_A-209

A-211

A-229

APPENDIX A

Opinion of U.S. Court of Appeals, Sth Cir., dated

April 29, 1974 (“Pettway IIT”)

Ael

Rush PETTWAY et al., etc., Plaintiffs-Appellants,

v.

AMERICAN CAST IRON PIPE COMPANY,

Defendant-Appellee,

United States Equal Employment Opportunity

Commission, Intervenor.

No. 73-1163.

United States Court of Appeals, Fifth Circuit.

April 29, 1974.

Rehearing and Rehearing En Banc Denied

May 22, 1974.

Black employees of a manufacturer of cast iron and ductile

iron pipe and fittings brought a class civil rights action for

equitable relief and damages, including back pay, for various

allegedly discriminatory employment practices. The United

States District Court for the Northern District of Alabama, at

Birmingham, Seybourne H. Lynne, J., ordered and approved

a plan for desegregating a governing board of the employer,

332 F.Supp. 811, but, in a separate opinion, denied all other

requested relief except attorney fees and costs, and the em-

ployees appealed. The Court of Appeals, Tuttle, Circuit Judge,

held inter alia, that testing and educational requirements which

had been imposed by the employer in the past for hiring, pro-

motion and transfer and entry into the employer's apprentice

and on-the-job training programs had been discriminatory as

having an adverse effect upon the employment opportunities

of blacks; that the consequences of such past discrimination

were currently being carried forward by otherwise neutral prac-

tices of departmental seniority and bidding and posting pro-

cedures which determined promotion, age requirements for

entry into the company’s apprentice programs and departmen-

tal bidding utilized for selection of on-the-job trainees; and

that both injunctive relief and the award of back pay were

therefore justified.

A-2

Reversed and remanded for further proceedings.

Bell, Circuit Judge, concurred specially and filed opinion.

Before TUTTLE, BELL and GOLDBERG, Circuit Judges.

TUTTLE, Circuit Judge:

This complex, class action employment discrimination suit

was filed on May 13, 1966 under the provisions of Title VII

of the Civil Rights Act of 1964, 42 U.S.C.A. § 2000e et seq.,

and 42 U.S.C.A. § 1981. The racial discrimination charges are

derived from complaints filed on November 22, 1965 with the

Equal Employment Opportunity Commission.

Introduction

Although the path of this law suit is strewn with the corpses

of intermediate decisions,’ the posture of the present cases on

appeal will hopefully allow final resolution. In order to accom-

plish this the opinion must unfortunately be long and complex.

On July 22, 1969 plaintiffs requested a restraining order to

prevent the defendant from vacating the offices of several black

employees on the Auxiliary Board, a company governing board

composed of black employees, and a declaratory judgment that

segregation of black and white employees on two governing

boards is in violation of Title VII, 42 U.S.C.A. § 2000e et seq.

The district court agreed with the plaintiffs and directed the

defendant to prepare a plan to eliminate the racial restrictions

on the Board of Operatives, the Board of white employees, and

to disestablish the separate black Auxiliary Board. The court

adopted the defendant's reorganization plan, overruling the ob-

1In addition to the suits under discussion, the following actions have

evolved. The district court dismissed the initial complaint on March 10,

1967 because the EEOC had failed to attempt conciliation prior to the

filing of the case with the district court. On appeal with several other

actions, we reversed. Dent v. St. Louis-San Francisco Railway Co., 406 F.2d

$99 (5th Cir. 1969). During the pendency of appeal, the defendant dis-

charged one of the named plaintiffs. After the district court denied relief

to this plaintiff, we reversed, directing the district court to order that this

plaintiff be reinstated, back pay be awarded, and any necessary protective

orders be issued. Pettway and Wrenn v. American Cast Iron Pipe Co., 411

F.2d 998 (5th Cir. 1969).

A:3

jections filed by the plaintiffs. 332 F.Supp. 811 (N.D. Ala.

1970).

When the emplovee discrimination charges were tried in

October, 1971, the district court held that the testing conducted

by the company did not pass muster under Griggs v. Duke

Power Company, 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158

(1971), and had an adverse impact on the employment oppor-

tunities of black employees. The district court, nevertheless.

then denied all requested relief, except for an award of attor-

ney's fees and costs.

The plaintiffs-appellants appeal from these two decisions on

the following grounds: (1) refusal to enjoin the company from

requiring improper test and educational requirements, (2) fail-

ure to require restructuring of the departmental seniority sys.

tem and the posting and bidding procedure for job vacancies

based on the departmental seniority system, (3) failure to or-

der red circling and advance entry for discriminatees,? (4) re-

fusal to require changes in the apprenticeship and on-the-job

training in the crafts programs, (5) refusal to remedy unlaw-

ful exclusion of blacks from supervisory positions, (6) granting

inadequate relief in desegregating the company’s employees

management board, and (7) failure to award back pay.

Defendant-appellee, American Cast Iron Pipe Co., incorpo-

rated under the laws of the State of Georgia with its principle

place of business in Birmingham, Alabama, is engaged in the

production of cast iron and ductile ironpipe and fittings and

various other miscellaneous cast iron and steel products. As of

August 12, 1971, the company emploved 2,551 persons of whom

927 were black.*

Plaintiffs-appellants have brought this action on their own

2The terms “red circling” and “advance entry” will be defined in the

discussion infra.

*The company employed 1,792 persons in 1965, approximately equally

divided between blacks and whites. The total employment for the com-

pany enjoyed continual increase up to 1970. The number of blacks em-

ployed, however, decreased until 1969 and in August, 1971 only slightly

exceeded the 1965 level, while the number of white employees had almost

doubled.

\4

behalf and on the behalf of other persons similarly situated

pursuant to Federal Rules of Civil Procedure 28 (b) (2) 4 The

class of persons represented by plaintitfs-appellants are “those

negro employees of defendant emploved as of May 13, 1966 and

negro persons who have been emploved subsequent to May 13,

1466 who have been, continued to he. or in the future will be

denied equal employment opportunities by defendant on the

ground of race or color.’

As discussed supra, appellants are requesting extensive relief

from the present impact of past intentional discrimination and

illegal testing and educational requirements utilized by the

company-defendant from December. 1964 until March 25, 1971,

relief from certain present discriminatory practices, and relief

from the inadequate remedy granted by the district court de-

segregating the employee management boards. The district

court demied their requests. We reverse in part, affirm in part,

and remand.®

I. COMPANY ORGANIZATION AND EMPLOYMENT

PRACTICES

A. Company Organization

1. Departments. The company’s operations are organized

into various departments. There are five primary production

departments, each having separate and distinct functions from

the other. They consist of: (1) the mono-cast department con-

taining three pipe shops for the production of cast iron and

ductile iron pipe; (2) the fittings foundry which produces be-

tween 35,000 to 40,000 different accessories to complement the

‘In their original complaint. plaintiffs had filed their class action pur-

suant to Rule 23(b) (3). Under an order of the district court requiring

that the class alleged be defined clearly and particularly, the plainuffs

amended their complaint to allege a Rule 23(b) (2) class action and

presented a list of names of the members of the class, to the best of their

knowledge, to the district court.

5From this statement from plaintiffs’ amended complaint defining the

class represented, it is clear that we are not concerned with discriminatory

hiring procedures and their remedy.

*Our holdings and the relief directed are granted both under Title VII

and section 1981 unless otherwise stated.

A5

pipe produced in the pipe shops; (3) the steel foundry which

produces steel tubes and castings of various alloys and shapes:

(4) the melting department which melts all of the hot metal

required by the mono-cast department, the fittings foundry,

and the steel foundry; (5) the steel pipe foundry which pro-

duces steel pipe from steel skelp. In addition, there is a ma-

chine shop which performs all the labor required on items pro-

duced in the steel foundry, the fittings foundry, and the mono-

cast department, as well as replacement maintenance on all

machinery. Four of these departments—all except the steel pipe

foundry and the machine shop—have emploved the majority of

black employees within the company between 196% and 1971.

The company also has service departments consisting of the

general yards department, central stores, the shipping depart-

ment, electrical department, maintenance department, inspec-

tion department, and the construction department. These de-

partments perform services in the receipt of raw materials, the

shipment of finished products, and various maintenance func.

tions in the company’s operations. Of these departments, the

general yards, shipping, and construction departments have had

substantial numbers of black emplovees.”. The machine, electri.

cal, maintenance, and inspection departments consist principal:

ly of the higher skilled jobs and craft positions with a small

turnover in personnel. Fewer blacks have been employed in

these departments.®

2. Wage progression and advancement. The method of ad-

vancement within these departments is a wage progression

schedule, a ladder cf pay groups, embracing one or more jobs.

The company alleges that these are job-to-job sequences with

functional relationship. The appellants argue that the com-

pany admitted that no formal, functional lines of job progres.

sions have ever been maintained, Until 196% the company

maintained twenty-three pay groups, but on February 19,

1968, the structure was consolidated into fifteen pay groups:

(a) groups .-8 include the unskilled and semi-skilled functions;

"See chart B infra.

"See chart B infra.

A-6

(b) groups 9 and 10 contain the more sembskilled positions,

(©) group I) is the skilled non-craft, technical and clerical po-

sitions; (d) groups 12 and 13 are the skilled craft and tec hnical

jobs; (e) group 14 includes the secondary supervisory, and

group 15, the primary supervisory positions (leadmen and fore

men). The district court found that “the overwhelming ma

jority of the black emplovees historically were and continue to

be employed in the pay groups 1-8 jobs in the various depart.

ments and particularly in the mono-cast 1, 2, and %, and foun.

dry.” (Emphasis added) .*

lh. EF m ploy ment Practtoes

1. Intentional discrimination, Untl 1961) the company

formally maintained exclusively black jobs and exclusively

white jobs? Departments were not totally segregated, but

there were predominantly black and predominantly white de-

partments. When Presidential Fxecutive Order No, 10925

made such a policy unlawful in 1961, the company terminated

this practice. The resulting employment segregated profile,

however, was preserved until 1963 by economic conditions re-

quiring lay-offs and subsequent rehiring of laid-off workers.

The process of lay-off and rehiring meant that any movement

of black employees into traditional white jobs would come to

Plaintiffs’ exhibit 6, “total number of employees by race within each

pay group as of August 15, 1971" (two months before trial), indicates pay

group stratification along racial lines. Over 95°) of the company's black

employees work in pay groups 1-8 jobs, while only $0%, of white employees

hold these positions. See chart C infra.

Discrimination prior to the effective date of Title VII, July 2, 1965,

can be considered under two theories. Since the appellant's allegations

are also made under 42 US.C.A. § 1981, employment practices prior to

1965 may be examined. Secondly, this court specificaily explained in

United States v. Jacksonville Terminal, 451 F.2d 418, 441 (5th Cir, 1971),

cert. denied, 1406 U.S, 906, 92 8. Cr. 1607, $1 L.Ed.2d 815 (1972), and

affirmed in Burns ¥. Thiokol Chemical Corp., 483 F.2d $00 (5th Cir, 1973),

that preact discriminatory conduct is highly relevant, especially, when

considering neutral practices under Tithe VII alleged to carry forward

past discriminatory effects. See United States v, Dillon Supply Co, 429

F.2d 800 (4th Cir, 1970)

AZ

an end. As lay-offs occurred, the emplovees with the least de-

partmental seniority, ¢. g. the newly hired, promoted, or trans:

ferred black employees, would be either (1) furloughed, if

newly hired, or (2) dropped back into the department from

which they transferred, as they retained former departmental

seniority in that department for lay-off purposes.’ As produc:

tion increased in 1964, and re-employment of blacks might

normally be expected to increase, the company instituted its

illegal testing and educational requirements. As of 1963 black

emplovees constituted about half the work force of the com.

pany, but only three blacks earned more than any white pro-

duction workers, and few if any jobs had racially mixed staffing.

2. Hiring. Sometime prior to 1960, the company had insti-

tuted a hiring requirement of a high school education or its

equivalent for all white applicants. By 1960 white applicants

were also required to pass a screening test battery and a physi-

cal examination. Black applicants employed prior to 1964 were

only required to pass the physical examination. In 1964, after

a compliance review under Order No. 10925 by the Department

of Army and Office of Federal Contract Compliance, the com-

pany was informed that to be eligible for federal contracts it

could no longer maintain different standards for hiring black

and white applicants. The company at that time extended the

testing and education criteria to black applicants. These stan-

dards for /aring remained in effect until 1971. However, the

company eliminated test requirements as well as the criterion

of a high school education or its equivalent for hiring into pay

groups 1-4 on July 14, 1969"? The failure of blacks successfully

to hurdle these qualifying barners had resulted, between 1965

and 1964, in the decrease in the number of black employees in

''We note that in Rowe v. G. M. C., 457 F.2d 348, $57.958 (5th Cir

1972), this court rejected this as an ameliorating variable justifying a

seniority system which, during the “ebb and flow” of lay-offs and rehiring.

required black employees to once again “go to the foot of the line.”

The company thought it would be in a better position, as a participant

in the national program, to employ persons among the hard core un-

employed.

A-8

the plant from 869 to 791, while the number of white em-

ployees increased from 923 to 2,162."

4. Promotion and transfer, In December, 1964, the company

initiated a testing requirement for promotion within or be-

tween any pay groups and for transfer between departments."*

Achievement levels (test cutoff scores) were established using

the California Survey of Mental Maturity Tests. To be eligible

for position in a particular pay group, an employee had to ob-

tain a test score corresponding to the specified achievement

level. The company determined that the tests’ recommended

national norms were too high for the company's purposes.

Therefore, the company in an effort to establish its own stan-

dards of norm selected 100 average performers from its em-

ployees to take the test. This was used to determine what

achievement levels to assign to various jobs within the com-

pany's pay grades. Ninety-eight of the 100 selected employees

took the test. Seventy-five were black: and twenty-three were

white. This testing program for promotion was reviewed by

Dr. Brimm of the Department of Army and Office of Federal

Contracts Compliance and praised as one of the best systems in

the companies he had visited on compliance reviews.

On February 19, 1968, the company eliminated the testing

criterion for promotion within the first eight pay grades.’® In

addition to employee complaints concerning these testing re-

quirements, the company determined that ability of employees

to perform functions in these pay grades could be established

by on-the-job observation without detriment to the company.

Requisite achievement levels for hiring and for promotion or

transfer within or without a department to positions in pay

'SThe black/white ratio went from just under 50/50 to about 25/75.

“The testing program for promotion was carefully explained to all

employees. It was solely voluntary. And employees were allowed to retake

the test every twelve months to attempt to improve their achievement

level. In addition to the testing, departmental seniority was a factor in

determining promotion.

‘The company, however, continued to require testing for new hirees

in pay groups 1-8 until July 14, 1969, as well as the requirement of the

high school educational or its equivalent.

AY

groups %15 were retained, however. The company eliminated

all testing in March, 1971. Currently, the company simply tries

the person, selected under the bidding procedure on the basis

of departmental seniority or plant seniority and ability, on the

job and evaluates his performance in determining the promo-

tion.

4. Testing and educational requirements, A testing prereq-

uisite was required for hiring, promotion and transfer, and

entry into the apprentice and on-the-job training programs. A

high school education or its equivalent was a criterion, as well,

for being hired or entry into the apprentice program.

Concerning the testing conducted by the company, the dis-

trict court concluded:

The history of the testing, as they existed and were admin-

istered by defendant from July 2, 1965,'® to March 25,

1971, recorded in the findings of fact, supra, is convincing

that they were not discriminatorily applied to defendant

black employees. Thetr adverse impact on the employ-

ment opportunities of blacks is equally clear. Judged by

the standard established by Griggs v. Duke Power Com-

pany, 401 U.S, 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971),

they could not pass muster. (Emphasis added) .”

The Supreme Court in facing a high school education and

testing requirement in Griggs v. Duke Power Co., 401 U.S. 424,

91 S.Ct. 849, 28 L.Ed.2d 158 (1971), stated:

... The Act [Title VII} proscribes not only overt discrimi-

nation but also practices that are fair in form, but dis-

criminatory in operation. The touchstone is business ne-

cessity. If an employment practice which operates to

exclude Negroes cannot be shown to be related to job per-

formance, the practice is prohibited.

'®We note that although the district court specifies July 2, 1965, it also

stated that the testing for promotion purposes began in December, 1964.

Discriminatory employment practices prior to the effective date of Title

VI, July 2, 1965, are relevant in determining allegedly present effect from

past discrimination. See note 10, supra at 7.

‘It is unclerr whether the district court meant both the testing and

educational requirements or just the testing. The EEOC guidelines define

testing to include an educational requirement. 29 C.F.R. § 1607.2.

A-10

On the record before us, neither the high school com-

pletion requirement nor the general intelligence test is

shown to bear a demonstrable relationship to successful

performance of the jobs for which it was used. Both were

adopted, as the Court of Appeals noted, without meaning:

ful study of their relationship to job-performance ability.

. [Bjut good intent or absence of discriminatory in-

tent does not redeem employment procedures or testing

mechanisms that operate as “built-in headwinds’ for mi-

nority groups and are unrelated to measuring job capabil-

ity.

The Company's lack of discriminatory intent is sug-

gested by special efforts to help the undereducated em-

ployees through Company financing of two-thirds the cost

of tuition for high school training. But Congress directed

the thrust of the Act to the consequences of employment

practices, not simply the motivation, More than that, Con-

gress has placed on the employer the burden of showing

that any given requirement must have a manifest relation-

ship to the employment in question, 401 U.S. at 431-432.

The appellees do not challenge the district. court's con-

clusions under Griggs concerning their testing. We affirm and

will discuss more fully the grounds supporting the court's de-

cision. The testimony both by appellants’ witnesses and the

company's witnesses indicated that the testing and educational

requirements had resulted in fewer black employees being em-

ployed between 1965 and 1969 and fewer black employees be-

ing promoted between 1965 and 1971. The statistics from these

periods depict the same prima facie pattern, and support the

district court's conclusion of adverse effect."* This dispropor:

tionate impact on black applicants and employees shifts the

burden of demonstrating job-relatedness to the company under

Griggs.

The company made no attempt to validate any of the num-

We discuss extensively the testimony and the statistics infra. Charts

A, B, C, D, and E, infra should be examined.

All

ber of tests utilized,'® except the California Test of Mental

Maturity. The trial court found this showing inadequate under

Griggs. We concur,

In United States v. Georgia Power Co., 474 F.2d 906° (Sth

Cir, 19735), this Court passed specifically on the proper valida-

tion procedure for employment tests. Although recognizing

that ‘a test is not valid or invalid per se, but must be evaluated

in the setting in which it is used" (/d. at 912), we note that

the company has at no time attempted to validate its tests un-

der the FEOC guidelines, 29 C.F.R, 1607, CCH Employment

Practices © 4010, which we found mandatory in Georgia

Power.” The company’s efforts to establish achievement levels

which have a relationship to job performance are less accept:

able than the procedure held inadequate in Georgia Power?!

Td, at 912-918.

Although it is unclear whether the district court ruled on

the high school education standard for /iring purposes? we

‘For promotion and transfer purposes, beginning in 1964, the district

court found that the company utilized the California Test of Mental

Maturity. The record indicates that this test or a shortened excerpt from

it was also used as one of the primary determinants for hiring and entry

into the apprentice and on-the-job training programs, An aptitude test was

additionally required for a craft rate (pay groups 12 and 13) or equivalent

job, ¢. g. apprentice and on-the-job training programs.

20This Court stated:

“This requirement to treat the guidelines as expressing Congressional

intent obviously was intended as an answer to the question at issue in

Griges—When can tests, which are shown to have discriminatory results,

be used? .. . Nevertheless, these guidelines undeniably provide a valid

framework for determining whether a validation study manifests that a

particular test predicts reasonable job suitability. Their guidance value

is such that we hold they should be followed absent a showing that some

cogent reason exists for noncompliance.” 474 F.2d at 913.

21We recognize that the validation procedure of the California Test of

Mental Maturity set forth at trial by the company was conducted in 1964,

before the Griggs or the Georgia Power decisions. However, the company

asserted at trial that this procedure and the approval of Dr. Brimm of the

Office of Federal Contract Compliance satisfied the legal standard for

employment testing. Since Griggs and Georgia Power are the legal

standards, we cannot agree that they have been met.

22Since the high school education, or its equivalent, criterion for entry

into the apprentice program is an open issue on this appeal, we will post-

pone analysis until 11(B) (1) and III(A).

A-12

think that this educational requirement cannot “pass muster”

under Griggs, either. Johnson v. Goodyear Tire & Rubber

Co., 5 Cir. 491 F.2d 1364 [No. 73-1712 March 27, 1974]; United

States v. Georgia Power Company, 474 F.2d at 918-919; United

Staies v. Consolidated Copper Co., 6 EPD © 8918 (D. Ariz.

1973).

Given the adverse effect, the company had the burden of

showing job relatedness. As we stated in Georgia Power:

There [in Griggs], the court explicitly held that the use

of a high school requirement which has a disproportionate

racial impact and has not been proven to be a predictor of

ultimate job success controverts the congressional mandate

of Title VII.4 As with Georgia Power's testing program,

supra, the issue here is whether or not the company has

made a sufficient showing to manifest a relationship be-

tween its educational requirement and its job characteris-

tics. 474 F.2d at 918."

The company offered no evidence to satisfy this burden.

Lastly, we wish to point out here, as was true also in Georgia

Power a large percentage of the current employees (August

12, 1971), 56°, of the black employees and 12% of the white

employees, are enjoying job success without a high school di-

ploma.” See Griggs v. Duke Power Co., 401 U.S. at 431-432.

23The Supreme Court in Griggs stated:

“History is filled with examples of men and women who rendered

highly effective performance without the conventional badges of accom-

plishment in terms of certificates, diplomas, or degrees. Diplomas and

tests are useful servants, but Congress has mandated the commonsense

proposition that they are not to become masters of reality.” 401 U.S. at

433.

24In note 14, the Court pointed out that such an educational require-

ment, also, ran afoul of the Equal Employment Opportunity Commission's

guidelines. The EEOC defines “testing” to include an educational criterion

and requires similar validation. 29 C.F.R. §§ 1607.2, 1607.4.

25474 F.2d at 918-919.

26For example, there are seventy-five white employees who without

completion of a high school education make over $4.00 an hour. As chart

E infra, indicates, $4.00 an hour is well above the average pay rate in

most departments.

A-13

The company ended its formal policy of segregation of black

and white jobs in 1961, although its immediate effect lingered

until 1963. The improper testing for hiring, promotion and

transfer, and admittance into the apprentice and on-the-job

training programs, as well as the educational criterion for

hiring were terminated on March 31, 1971. We have affirmed

the district court's holding that the testing. and ourselves have

found that the educational criterion, fail under the standards

of Griggs. We agree with the district court that these discrimi-

natory practices had an “adverse impact on the employment

opportunities of blacks.” The issues are now threefold:

(1) Did the district court err in denying an injunction against

the future imposition of testing and educational standards?

(2) If there is present effect in the company’s neutral employ-

ment practices as a result of the past discrimination, what re-

lief is required? and (3) Are there continuing, present dis-

criminatory practices?

II. PRESENT ADVERSE EFFECT AND PRESENT

DISCRIMINATION

Appellants assert that the consequence of the past intentional

exclusion and of the illegal testing and educational standards

is currently carried forward by: (1) the neutral practices of the

departmental seniority and the bidding and posting procedure

which determine promotion; (2) the age requirement for entry

into the apprentice program, which black employees who were

denied this opportunity in the past cannot now meet; and

(3) the departmental bidding utilized for the selection of on-

the-jcs trainees. In addition, the continued educational pre-

requisite for entry into the apprentice program and the purely

subjective criteria to be applied by all-white department super-

intendents for selection of supervisory personnel are challenged

as present discriminatory practices.

\-l4

\. Promotion=—The Seniority System and

Posting and Bidding Procedure

1. Effect of present neutral practices. Beginning January 1,

1971, the company instituted a policy of posting vacancies above

pas group 3 and adopted a bidding procedure for filling these

vacancies.” The job vacancies are first posted for bidding for

three days within the department. Basic qualifications, 1.e.

ability, and departmental seniority control the selection from

the bidders. If no qualified employee within the department

bids, then the company posts the vacancy plant-wide. A trans-

ferring employee retains his former seniority for purposes of

returning to his former department in case of lay-off within

the new department. But he does not carry over any of his

accumulated seniority for purposes of departmental promotion

— a basic unit or job seniority type.2* See Note, Title VII,

Seniority Discrimination, and the Incumbent Negro, 80 Harv.

L. Rev. 1260, 1263-66 (1967) .

Because of the company’s wage progression structure, a trans-

ferring emplovee may move from a higher to a lower paying

position.?® In fact, an employee who has progressed substan-

tially within pay groups in one department and then transfers

to a different department to enhance his chances for eventual

advancement. higher pay, or better working conditions will

usually be required to endure a loss of seniority and a wage

cut as a condition of transfer.

27Before 1971 the company did not have a systematic written procedure

for filing vacancies. Promotions within a department went to the senior

department employee in the pay group at the immediately lower level.

Departmental superintendents, who were all white, determined which

employee got the promotion. Evidently, the company discouraged transfers

between different departments. Promotions within a department and

transfers to pay group 9 or above, of course, were still subject to the

testing standards until March 25, 1971.

2*T he district court stated that a tranferring employee is given one year's

credit for wage progression purposes, and, also, permitted credit for any

(raining or past experience for a job within the higher pay group which

he has now obtained.

29See note $0, infra at 223.

Ald

\ppellants assert that invidious discrimination prior to 1963,

and the illegal testing and educational requirements from 1964

through 1971, have resulted in racial stratification between de-

partments and jobs within departments (and consequently in

salary). This stratification is a manifestation of these past prac:

tices which have (1) excluded the majority of black workers

from positions in predominantly white departments thereby

absolutely preventing their obtaining of seniority there; and

(2) if not excluded, deferred initial entry into these depart:

ments, thereby curtailing the seniority of black employees in

these departments and hampering their promotion to higher

paying positions, Therefore, appellants’ argument is that this

stratification of black employees into the lower paying depart.

ments and jobs, caused by past discriminatory practices, is

presently effectuated through the departmental seniority system

and bidding and posting procedure.

The departmental seniority system has this locking-in effect

because the black transferee would have to forfeit seniority and

pay rate” in order to transfer and because the black transferee

to a predominantly white department would be unable to com-

pete equally for promotion based on departmental seniority

with a white employee, in the department at the time of the

transfer, of equal or less plant seniority. Black employees with-

in predominantly white departments, who were unable to gain

entry into the department prior to 1971, because of their race,

as swiftly as white workers, would also be harmed in greater

proportion by lay-offs or reductions in force."

For purposes of wage rate progression only, a transferee is allowed

one year's credit. For promotion, lay-offs, or reductions in force, a trans

feree is treated within the department as a “new man.”

The retention of one year's credit for pay group purposes does not

reduce substantially the deterrence to transfer of this class of black em-

plovees because their employment with the company extends over a long

period of time. For example, a list of 623 class members was submitted

to the district court in 1969. Even then, four years ago, these employees

had substantial plant-wide seniority, Further, every employee has to serve

a six month probation period before being eligible for a promotion.

"The court in United States v. Bethlehem Steel Corp., 446 F.2d 652

(2d Cir. 1971), aptly described these hurts:

A-16

Under the bidding and posting procedure, only if no quali-

fied employee within a department bids after three davs is a

vacancy posted plant-wide. This process continues to freeze in

the stratification in two ways. First, those black employees pre-

viously excluded from the higher paying departments because

of their race will be denied these promotion opportunities in

favor of those white employees in the department, Secondly,

those black workers, who, although deterred because of their

race, have obtained a foothold in a predominantly white de-

partment cannot compete equally on the basis of departmental

seniority with white employees, who were able to gain entrance

to the department earlier.

Therefore, conclude appellants, the departmental seniority

system deters black employees from transferring because of the

inhibitors of losing seniority and pay grade while the bidding

and posting procedure most often prevents even the considera.

tion of the majority of black workers for a position within a

predominantly white department. And both practices operate

to handicap black employees in intra-departmental promotion

“In order to transfer to a formerly ‘white’ department these employees

were required to suffer an economic penalty, forfeiture of seniority

rights and pay levels earned in the ‘black’ department. The former was

due to the use of departmental seniority, the latter to the fact that the

transferee'’s new job was at a low paid entry level in the new depart:

ment. Thus, to obtain an opportunity that had been denied them be-

cause of race, these employees had to be willing to give up what was

already theirs because of service in the plant. Second, a transferee to a

‘white’ department would never be able to reach the level of a white

employee already there. For example, if a black and a white employee

had been hired at the same time and the latter had been assigned to

the more desirable ‘white’ department, but the black had not been so

assigned, the white started to accumulate department or unit seniority

in that department but the black did not. Even if the black was given

the chance years later to transfer into the ‘white’ department, the earlier

discriminatory job assignment had denied him the chance to earn

seniority up to that time in the ‘white’ department. Therefore, the use

of departmental or unit seniority for purposes of promotion in the

formerly ‘white’ department continued the effect of the earlier dis-

criminatory practice.” /d. at 658.

See United States v. N. L. Industries, Inc., 479 F.2d $54, $58-366 (8th Cir.

1973); United States v. Jacksonville Terminal Co., supra, 451 F.2d at 453.

Al7

for the higher paving, skilled jobs.? We agree with appellants

that if past discriminatory employment practices have resulted

in racial stratification in pay, jobs, and departments, the present

effect is to lock in, as discussed above, black employees.®

2. Effect of past discriminatory practices. The next step

is to determine whether there was racial segregation along pay,

job, and department lines. While there was substantial viva

voce evidence on the issue of the impact of past discriminatory

practices, the appellants primarily relied on statistical evidence.

Introducing black white comparative employment statistics

from 1963, 1965, 1969, and 1971, dealing with salary, jobs, and

departments, the appellants demonstrated a pattern of racial

stratification between departments and within departments by

the derogation of black employees into the lower paying, non-

skilled pay groups. This statistical pattern considered in light

of the past intentional] discrimination and the illegal testing re-

quirement, coupled with the hurdles to black employees pre-

sented by the departmental seniority system and the handicaps

under the bidding procedure, present a prima facie case of pres-

ent effect of past discrimination in the company’s promotion

and transfer process.* Cf, McDonnell Douglas Corp. v. Green,

324 unit seniority system, by its nature, allows the most advantages to

employees with the greatest unit seniority, See Cooper and Sobol, Seniority

and Testing Under Fair Employment Laws: A General Approach to

Objective Criteria of Hiring and Promotion, 82 Harv.L.Rev. 1598, 1603

(1969) .

MJohnson v. Goodyear Tire & Rubber Co., supra, 491 F.2d 1364; Bing

v. Roadway Express, Inc., 485 F.2d 441 (5th Cir, 1978); Head v. Timken

Roller Bearing Co., 486 F.2d 870, 875-876, n. 7 (6th Cir. 1978); United

States v. N. L. Industries, Inc., supra, 479 F.2d at $58-366; United States

v. Georgia Power Co., supra, 474 F.2d 906, 926-927; United States v.

Jacksonville Terminal Co., supra, 451 F.2d 418; Long v. Georgia Kraft

Co., 450 F.2d 557 (5th Cir. 1971); Robinson v. Lorillard Corp., 444 F.2d

791, 795-800 (4th Cir. 1971), cert. dismissed, 404 U.S, 1006, 92 S.Ct. 573,

$0 L.Ed. 2d 655 (1971); Local 189, United Papermakers & Paperworkers

v. United States, 416 F.2d 980 (5th Cir, 1969); Stamps v. Detroit Edison

Co., 365 F.Supp. 87 (E.D.Mich.1973); United States v. Virginia Electric

and Power Company, $27 F.Supp. 1084 (E£.D.Va.1971); Quarles v. Philip

Morris, Inc., 279 F.Supp. 505 (E.D.Va.1968)

“Statistical evidence in Title VII cases has often been given critical

weight in this Circuit, Johnson v. Goodyear Tire & Rubber Co., supra,

A-l8

111 U.S. 792, 800-807, 93 S.Ct. 1817, 36 L.Fd.2d 668 (1973).

In relying on this method of statistical proof, we first examine

the total black white employment figures for the years 1963,

19] F.2d at 1871-1873; Ochoa v. Monsanto Co., $35 F.Supp 58 (S.D.Tex.

1971), aff'd per curiam, 473 F.2d $18, 319 (5th Cir, 1973) (“Accord

statistical evidence great and oft-times decisive weight’); Rowe v. General

Motors Corporation, supra, 457 F.2d at 356-358 (statistics have “critical,

if not decisive, significance—certainly at least in putting on the employer"

the burden of justifying the disparity); United States v. Hayes Inter:

national Corp., 456 F.2d 112, 120 (5th Cir. 1972) (‘these lopsided ratios

are not conclusive proof of past or present discriminatory hiring practices;

however, they do present a prima facie case.) , United States v. Jackson:

ville Terminal Co., supra, 451 F.2d at 424-486, 441-442 (5th Cir, 1971)

(‘although the statistics do not establish a prima facie case of discrimi:

nation, .. . absent explanatory evidence in testimony, the statistics indi.

cated that officials have impliedly equated job qualifications with race.’) ;

United States v. Hayes International Corp., 415 F.2d 1088, 1048 (5th Cir.

1969, (‘the employment statistics discussed, supra, . . . amply demon-

strated a preliminary showing that the company’s hiring practice violated

Title VIE"). Other circuits agree, Brown v. Gaston County Dyeing

Machine Co., 457 F.2d 1877, 1882 (4th Cir, 1972), cert. denied, 409 U.S.

82, 93 8.Ct. $19, $4 L.Ed.2d 246 (1972); Carter v. Gallagher, 452 F.2d $15

(8th Cir, 1971), cert. denied, 406 U.S, 950, 92 $.Ct, 2045, $2 L.Ed.2d $98

(1972); United States v. Ironworkers Local 86, 448 F.2d 544, 550 (9th

Cir), cert. denied, 404 U.S. 984, 92 S.Ct. 447, $0 L.Ed.2d $67 (1971) ;

United States v. National Lead Co,, 438 F.2d 985 (8th Cir, 1971); Parham

\. Southwestern Bell Telephone Co, 198 F.2d t2h, 426 (8th Cir, 1970);

Jones v. Lee Way Motor Freight, Inc., 491 F.2d 245, 247 (10th Cir, 1970),

cert. denied, 401 U.S, 954, 91 §.Ct, 972, 28 L.Ed.2d 287 (1971). But see,

Heard v. Mueller Co., 464 F.2d 190 (6 Cir, 1972); Russell v. American

Tobacco Co., $74 F.Supp. 286, 5 EPD © 8447 (M.D.N.C.1973). See gener

ally, Fiss. A Theory of Fair Employment Laws, $8 U.Chi.L.Rev, 235, 268-81

(1971).

The courts have most often utilized this empirical proof in discrimina:

tory hiring situations. The courts have based a finding of adverse impact

on data showing the percentages of blacks and whites hired as compared

to the percentages of each in the available population. The statistical

disparity is held to create a prima facie showing of discriminatory impact

and thus invokes a requirement that the job relatedness of the overall

selection process be established. FE. g., United States v. Hayes International

Corp., supra, 456 F.2d at 120; United States v. Ironworkers Local 86,

supra. Some courts have gone a statistical step further. The Eighth Circuit

in Parham, supra, ruled that a gross disparity between the number of

minority workers in an employer's work force (less than 2%), and the

number in the overall population (21% of the state population) can prove

discrimination “per se.” See Rios v. Enterprise Association Steamfitters,

Local 638, $26 F.Supp. 198 (S.D.N.Y.1971).

A-19

1965 through 1971. Between 1965 and 1969, the period when

the testing and educational requirements were prerequisites for

all pay groups, the number of black workers decreased from

approximately one-half to one-third of the company's work

force, correspondingly the number of white employees in-

creased. The company admitted and the district court® found

that this decrease resulted from the impact of the testing and

Chart A: Employment Totals by Race

YEAR BLACK WHITE

1963 878 797

1965 869 923

1966 B45 1606

1967 820 1766

1968 798 1878

1969 781 2162

1970 112) 2115

1971 927 1624

educational requirements.” It was not until 1969-70, when the

company dropped its testing and educational requirements for

jobs in the 1-8 pay groups, that the percentage of black em-

ployees for the company began to increase. By 1970, 1971 the

company’s work force again was approximately 50° black.

Testimony by company officials and a finding by the district

court establish what the empirical proof clearly reveals, a sub-

stantial disparity in the number of blacks hired between 1964

and 1969 when testing and educational standards were required

for all pay grades. Since the same test, California Test of Men-

The district court stated:

“During the 1964-69 period, when all applicants were subject to the

educational and testing standards, more whites than blacks were em-

ployed because a greater percentage of black applicants were unable to

meet these requirements.”

%*There was no allegation that this resulted from fewer black applicants.

We take judicial notice of the substantial black population of Jefferson

County, Alabama and Birmingham, Alabama from whence the company

draws most of its work force.

A-20

tal Maturity, was employed both in the determination for hir-

ing and for promotion, its adverse impact on black applicants

is highly relevant in weighing its adverse impact on the promo-

tional opportunities of black employees.

Hiring statistics indicate that black applicants fared substan-

tially worse than white applicants on the testing. So too the

actual achievement of black workers on the mental maturity

test reveal lower scoring than white employees of the company

as of September, 1971. For example, in the five departments”

Chart B: Employees By Department And Race

1/1/63 1/27/65 919 69 8/15/71

Department B OW B OW a, B OW

Mono-Cast $59 104 $11 138 $43 338 $69 310

Fittings Foundry 234 185 242 234 222 344 245 296

Melting 60 26 67 70 74 «107 77 =108

Maintenance 9 67 9 74 6 87 9 90

Technical Division 6 25 6 51 6 60 - =

Bolt Department $021 2418 2738 29 «(37

Shipping Department $5 21 40 #19 22. = «8 30.034

General Yards 156 12 1418 7? 19 20

Construction 20 25 19 33 26 42 27 3=«56

Steel Foundry $5 28 $4 65 $2 58 36S 5

Plant Protection 0 13 a. 1 15 = _

Engineering 0 2 0 3 0 2 0 2

Finance Division 4 16 4 6 3 5 3 4

Personnel 19 2 20 2 19 7 18 28

Storage 0 5 0 6 1 17 3: 62

Medical 5 0

Research 2 6

Lab 4 q

Shopping Center 2 4 | 3 0 1 - -

Machine Shop $9 201 - - $8 318 49 379

Electrical 1 41 1 47 1 54 4 73

Inspection 1 34

Steel Pipe 2 4! 1 69 1 $5

Production Control 0 8

0 2

Purchasing

37These departments were mono-cast ($70 black, 314 white), foundry

(245 black, 304 white), melting (77 black, 112 white), machine shop (50

black, $80 white), steel foundry (36 black, 55 white) .

A-2]

Chart C: Employees By Race Within Each Pay

Group as of August 15, 1971

%, of % of

Pay No. of ”%, of Total No. of ™, of Total

Group Blacks Blacks In Plant Whites Whites In Plant

l 54 (3.68) (1.35) 134 (8.42) (5.33)

2 $6 (3.89) (1.43) 22 (1.37) (875)

5 $36 (36.31) (13.36) 185 = (11.64) (7.36)

4 122 = (138.19) (4.85) 44 (2.76) (1.75)

5 B4 (9.09) (3.34) 26 (1.63) (1.08)

6 125 = (13.51) (4.96) 55 ($.46) (2.19)

7 110s (11.89) (4.57) 55 (3.46) (2.19)

8 $5 (3.79) (1.39) 52 (3.27) (2.07)

9 25 (2.49) (.904) 278 = (17.49) (11.06)

10 2 (.216) (.079) 49 (3.07) (1.95)

1 9 (.971) (.358) 104 (6.67) (4.13)

12 7 (.757) (.278) 436 (28.43) (17.38)

13 0 24 (1.51) (.959)

14 0 60 (3.77) (2.89)

15 0 61 (3.81) (2.42)

16 0 ] (.039)

17 (other) 2 (.216) (.079) 5 (186)

TOTAL 925 1,589

’

containing 80°, of the black workers, the black employees’

scores averaged in the 0-9, 10-19, or 20-29 percentile while white

employees scores averaged in either the 40-49 or 50-100 per-

cenule in every department.

Having observed that black employees performed less well

on the tests than white employees, we must make a comparison

of the black white employment data by departments and within

departments by pay rate to discover if the impact of the illegal

testing (scoring lower) was to lock black workers into lower

paying, non-skill departments and lower paying jobs in all de-

partments. The statistics from 1963 to 1965 indicate almost

complete stratification of black employees within the non-craft

departments, mono-cast, fittings foundry melting, bolt, ship

ping, steel foundry, and general yards, and white employees in

the more craft oriented, highly skilled departments, mainte-

nance, machine shop, electrical, inspection, and steel pipe.

A-22

Within departments, black employees occupied predominantly

the 1-8 pay groups and white employees the 9-15 pay groups.”

Between 1965 and 1969, the data indicates less black white

stratification, but the district court found that this was not due

to advancement by black into previously predominant white

employee positions. Rather, as the total black white hiring

figures indicated, the increased hiring of whites and decrease

in the number of blacks led to the placement of whites into

the previous lower paying, predominantly black departments

and positions. The district court further pointed out that the

black employees during this period could not qualify under the

testing for transfer or promotion.

Between 1969 and 1971, the statistics demonstrate a rise in

the number of black employees in the pay givups 1-8. It was in

February, 1968 that the testing requirement for positions in

these pay ranges was removed; and in March, 1971 testing for

all purposes was halted by the company.

These statistical showings are corroborated by the testimony

of Mr. Phelps, the Employment Manager and Administrator of

the tests, who stated:**

Q. I said are you familiar with the fact that in taking the

tests blacks score less favorably than whites?

Yes.

In all departments, is that correct?

I can't answer that positively.

What is your best judgment?

. Yes.

This historical, statistical summary indicates a discriminatory

pattern against black employees — (1) assignment to lower pay-

ing non-skill departments and (2) assignment to lower paying

jobs within all departments. As of August 15, 1971 the tradi-

tional predominantly black departments, monocast, fittings

>OrOQ>

38See the district court's findings infra at 227.

%Every other company official who testified, the Vice-President and

Works Manager and the Superintendents of the Pipe Foundry, Machine

Shop, and Steel Foundry, agreed that black employees scored less well

than white employees.

A-25

foundry, melting, bolt, shipping, steel foundry, and general

yards, contained approximately 81°; of the black workers of

the company.” The higher paying, traditionally white depart-

ments, maintenance, machine shop, electrical, inspection, and

steel pipe, contained only 7° of the black employees although

17.6°) of the total white work force was employed in these

departments.

While the extreme stratification by pay rate along racial lines

of 1963" was blurred by the influx of large number of white

employees into the traditionally lower paying black positions

from 1965 to 1969, there was no sign of movement of blacks

into higher paying jobs.” The district court's findings reflect

this fact. The district court examined eight key departments

to demonstrate that job types were segregated with blacks occu-

pying the lower paying positions. The court concluded:

The number of all black jobs decreased through 1969 as

the number of mixed jobs increased due to the movement

of whites into lower paying black jobs. From 1963 through

1969, the number of all white jobs remained approximate-

“In 1963 when racial stratification was present because of the formal

discriminatory policy of the company prior to 1961, these departments

also contained 61% of the company’s black employees. While this can be

somewhat explained by the newly hired blacks between 1969 and 1971, this

does not explain the absence of blacks from the higher paying depart:

ments and higher paying jobs.

"In 1963, jobs in all departments were segregated on a racial basis with

whites holding only the higher paying jobs and blacks holding only the

lower paying jobs. For example, in the mono-cast department, where $59

of 869 black employees work, no black employee earned over $2.65 per

hour, while no white employee earned less than $2.65 per hour. In the

fittings foundry, only three of the 254 blacks earned above $2.31 per hour

while the lowest rate paid to any of the 185 white employees was $2.65

per hour. In the machine shop, every white employee (201 total) earned

at least $41 more than the highest of the thirty-nine blacks. The other

departments reflected the same pattern.

“The comparative earnings charts submitted by appellee to contradict

appellants’ empirical assertions that black employees were derogated to

the lower pay groups suffers from this variable. The newly hired white

employees during this period were placed into the lower paying previously

black jobs. Since they received low annual salaries, the greater earnings of

white employees than black employees of comparable seniority was masked.

Ald

ly constant. Promotion of blacks to the higher paying

white jobs, for reasons suggested above [testing and educa

tional requirements}, was not being accomplished.

The chart drawn up by the court reflects that in 1963 not a

single type of job in any of the eight key departments was held

by both white and black employees; 213 positions were totally

segregated. The data from 1969 indicates that there were fifty:

Chart D: Segregation By Types Of Jobs

a 2

Department Year All B AlW #B/W_~ Total

Foundry 1963 38 34 0 72

1965 37 $0 6 73

1969 18 29 21 68

197] 19 24 22 65

Melting 1963 20 18 0 53

1965 1] 16 1] 38

1969 9 17 16 42

197) 6 14 18 $8

Steel Foundry 1963 18 19 0 $7

1965 14 22 4 40

1969 i) 23 1 48

1971 9 20 12 41

Machine Shop 1963 5 19 0 24

1965 - - - ~

1969 5 1] 4 20

1971 5 26 4 56

Construction 1963 2 9 0 1

1965 $ 1 0 14

1969 6 15 0 21

1971 7 21 0 28

Shipping 1963 6 6 0 12

1965 9 6 0 15

1969 7 10 $ 20

1971 8 1] 5 22

Personnel 1963 9 2 0 1}

1965 9 2 0 11

1969 8 4 0 12

1971 - _ - -

Technical 1963 4 0 0 18

1965 5 10 0 18

1969 5 5 0 6

1971 1 ! 0 2

A-25

Chart F: The Racial Distribution and Salary of Employees

By Department As Of August 12, 1971°

Blacks whites

Accumu- Accumu-

Ave Avg. lating % Ave. lating %

Wage ~ 8 Wage Of Blacks Wage Of Whites

In In of in Work of In Work

Department Dept 5-3 Dept Blacks Force 2 Whites Force

Inspection $3.83 l 29% $2.78 0.1% $4.0 $3.86 231%

Maintenance $79 9 XM $.29 | 93 5.84 78

Machine Shop $.65 50 =«11,7 $.08 65 $79 $.72 $1.1

Electrical 5.63 4 51 2.98 69 74 $67 35.6

Steel Pipe $638 l 29 $.28 7.0 33 $64 376

General Stores $57 2 8.7 $.38 72 21 $59 $89

Construction $43 27 «31.8 $.01 10.1 58 $63 425

General Yards 5.38 i9) «475 $22 122 21 $52 438

Shipping 5.36 $0 469 $06 155 34 $63 459

Steel Foundry §.$2 $6 = 396 $16 194 55 $453 493

Foundry $28 247 44.7 $03 462 $05 $48 680

Melting $.27 75 399 $14 544 118 $35 749

Monocast $16 $71 542 $08 94,7 $14 $.26 942

Bolt $1) 20 345 291 %9 $8 $22 %65

Personnel, 5.04 18 38.1 295 984 23 $09 979

Gen. Plant

Total 905 1595

*All of ACIPCO's departments are included in this chart except those depart:

ments having less than 15 employees: Industrial Engineering, Production Con-

trol, Medical, Research, Laboratory, Purchasing, Finance and Engineering de-

partment. In total, 33 whites and 15 blacks are employed in these departments.

five racially mixed positions and 177 all white or all black

positions. But the pertinent indicium for the period 1965-1969

is that the previous all black positions were being integrated by

the influx of white personnel rather than any upward move-

ment by black employees. In 1965 there were eighty-six all

black jobs; in 1969 these were reduced to sixty jobs.” A total

of thirty-four positions were integrated during this period. In

other words, twenty-six of the thirty-four jobs were integrated

by the movement of white employees or applicants into previ-

ously all black jobs. As late as 1971, only fifty-nine of 232 jobs

were integrated — only 25% of the total.

The district court had earlier pointed out that black em-

ployees were placed into positions in the lower paid groups:

“The machine shop figures were eliminated from this computation be-

cause of the missing 1965 data.

A-26

Although there were and continued to be blacks in sub-

stantially all the departments, the overwhelming majority

of the black employees historically were and continued to

be employed in the Pay Group 1-8 jobs in the various de-

partments and particularly in the Mono-Cast 1, 2 and 3,

Foundry.

This finding coupled with plaintiff's chart comparing the aver-

age wage of blacks and average wage of whites in all the de-

partments firmly establish that black workers were forced into

lower paying positions within the company. For example, just

in terms of gross comparisons, 95.35°) of the black employees

and 36.03°7, of the white employees were in pay groups 1-8,

while 63.91% of the white employees and only 4.65°7 of the

black employees were in pay groups 9-16.

The district court, while agreeing that appellants’ statis-

tics revealed racial stratification, found that this resulted from

factors other than past discriminatory employment practices.“

The district court sifted out the following variables which were

held to undermine appellants’ empirical conclusions that black

employees were locked in the lower paying jobs and depart-

ments:*

“The district court stated:

“Understandably, plaintiffs rely heavily upon statistics to support an

inference of invidious discrimination. But this is not a voter registration,

jury selection, or school desegregation case. Thus the familiar platitude:

‘In the problem of racial discrimination, statistics often tell much, and

courts listen,’ Alabama v. United States, 304 F.2d 583, 586 (5th Cir.

1962), is not an unmitigated evidentiary windfall. In the area of em-

ployment, with its complexities and variables, statistics must be analyzed

with careful attention both to supportive and opposing facts.”

While we reject the district court's conclusion that statistics have a

lesser role in employment discrimination cases than these other types of

litigation (see note 34, supra at 225) we do agree that complexities and

variables require close scrutiny of empirical proof. Johnson v. Goodyear

Tire & Rubber Co., supra, 491 F.2d 1364.

Specifically in regard to the locking-in issue, the district court declared:

“Black employees cannot be heard to complain that they were locked

in a particular job when they were not qualified to perform a job in a

higher pay group. The record is replete with evidence of black em-

ployees who have refused promotions, requested demotions, declined

training opportunities, and failed or refused to bid on higher paying

jobs, thus voluntarily freezing themselves in the lower paying ones.”

A-27

(1) Voluntary refusal of training opportunities which are

prerequisite to promotion;

(2) Voluntary refusal of promotions;

(3) Lack of requisite qualifications;

(4) The failure to request promotions;

(5) Poor job performances which have defeated promotion

or resulted in demotion:

(6) Voluntary transfers to lower job classifications;

(7) Availability or a lack of job vacancies: and

(8) Lack of motivation.

The variables suggested by the district court, when examined

in light of our own and the appellants’ critical analysis, do not,

however, weigh heavily enough to lessen the appellants’ empiri-

cal conclusions. The district court points to the refusal of 573

black employees to accept promotions from 1965 to 1971. But

554 black employees accepted offered promotions.” In addi-

tion, the testimony concerning the promotions offered indi-

cated that these positions were often less desirable than the

employee's current position, being more physically menial and

paying little more with limited future advancement opportuni-

ties. Also, for employees who had substantial seniority, and

had consequently reached the top of their pay groups, a pro-

motion involving transfer to a higher paying department would

result in a cut in pay and beginning as a new man in the de-

partment. See United States v. N. L. Industries, supra, 479 F.

2d at 362.

For the court to state that the black emplovees were unquali-

fied is inconsistent with its conclusion that the testing was ille-

gal under Griggs. For the testing and seniority were the only

objective criterion utilized for promotion and transfer. Before

January 1, 1971 (the date of the initiation of the posting and

bidding procedure) , the department superintendents utilized

“During this period 854 white employees accepted promotions. There

was no information breakdowns on how many refused promotions.

Without information on the percentage of white employees refusing

promotions and the types of promotions offered white employees, we

think the district court's statistic inconclusive.

A-28

their subjective judgment in determining which qualified

testing and departmental seniority) employees filled job va-

cancies. We note that these supervisory positions are held by

all-white employees.

We considered this type of subjective evaluation in Rowe v.

General Motors Corp., supra, 457 F.2d at 359, stating:

All we do today is recognize that promotion transfer

procedures which depend almost entirely upon the subjec-

tive evaluation and favorable recommendation of the im-

mediate foreman are a ready mechanism for discrimination

against Blacks. ... We and others have expressed a skepti-

cism that Black persons dependen: directly on decisive rec-

ommendations from Whites can expect non-discriminatory

action.

A similar view to the trial court's was put forward by the dis-

trict court in United States v. Jacksonville Terminal Co., supra,

451 F.2d 418, which had rejected the government's statistics be-

cause of their failure to evaluate competing black and white

employees upon individual qualifications and accepted un-

adorned statements by the employer that they hired or pro-

moted the best qualified persons available. We stated:

The trial judge's pronouncement cannot function as a

general rule. It becomes valid only when the employer or

union evidentially demonstrates that objective criteria per-

tinent to the particular job are the determinants of who is

“best qualified.” Jd. at 442.

The employee make up of the steel pipe department also

belies this conclusion. It is the highest paying primary produc-

tion department (mono-cast, foundry, steel foundry, melting,

and steel pipe) but has very few black workers, one as compared

to thirty-five white employees. (See chart B, supra at 227).

Since there are only a few craft positions in this department,

the logical conclusion is that black workers were excluded by

discriminatory practices.

The court cites a lack of requests for promotions, and yet,

until January 1, 1971 when the formal posting and bidding

A-29

procedure was initiated, there was no method by which black

employees (or any employee) could request promotion.” Dur-

ing this period, promotion was, in effect, determined by all

white supervisors; a practice we noted in Rowe which could

have racial emphasis. This is particularly of importance con-

sidering the testimony reflecting a number of promotion re-

quests by black employees which were never acted upon by the

white foremen and department superintendents. Moreover, we

deem appropriate the court's holding in United States v. N. L.

Industries, Inc., supra, 479 F.2d 354:

National Lead’s contention that the reason black em-

ployees were not promoted to supervisory positions was be-

cause they did not “ask” to be promoted is without merit.

Nothing in the record indicates that white employees were

required to make such a request. In any case, a black em-

ployee with knowledge of the nominal number of black

foremen, the Company's past discriminatory policies, and

the current practice of promotion via the recommendation

of an incumbent foreman could hardly be expected to

make a meaningless request indicating his willingness to

be promoted. Sheet Metal Workers [United States v. Sheet

Metal Workers], supra [8 Cir.), 416 F.2d [123] at 132; Car-

ter, supra, 452 F.2d at 331; see Parham, supra, 433 F.2d at

427. Id. at 369.

"Courts have condemned procedures for promotion and job assignment

which are not objective and uniform. F.g., Brown v. Gaston County

Dyeing Machine Corp., supra, 457 F.2d 1377; United States v. Dillon

Supply Corp., 429 F.2d 800 (4th Cir. 1970).

In Brown the court stated:

“Here, in the absence of objective criteria applied to all workers alike,

the statistics indicate that race is the only identifiable factor explaining

the disparity between the jobs held by white employees and those held

by black employees... .

“Moreover, the record discloses that notices of vacancies are not

posted, and news of them is passed along by word of mouth. When

job classifications are as segregated as they are in this company, delay in

learning about a vacancy in an all white category may in itself dis-

criminate against a black employee who hears of it only after it has been

filled. This practice resembles the lack of a formal transfer system which

we criticized in Dillon. 429 F.2d at 802, 804." 457 F.2d at 1383.

A-30

Further, there was testimony at trial by a department superin-

tendent™ that after the passage of the Civil Rights Act of 1964

(Tithe VII) the company received a “flood” of requests from

black employees for more skilled positions. Of course, most

were rebuffed by their failure to qualify under the illegal test-

ing. In addition, during the first ten months in which the

formal posting and bidding procedure operated, the testing and

educational requirements having been terminated for the last

six of these months, 41°, (107) of the 251 jobs bid for depart-

mentally and plant-wide were won by black employees.”

The single foundation for the district court's conclusion that

black employees were performing poorly on the job is the fig:

ures that from July 5, 1965 through October 1, 1971, seventy-

six black employees were demoted. But during the same period

143 white employees were demoted.” In addition, the testi:

mony at trial indicates that demotions were often due to work

cut backs rather than poor job performance.’ This demotion

statistic concerning black employees is at the least nebulous

and at the most negative in support of the court's conclusion.

The only mention in the record of a voluntary transfer to a

lower job classification was in reference to physical disabilities

which required the employee to request a less physically wear-

ing job. It was stated, however, that the company had a prac-

tice of allowing older employees, black and white, to accept

“The superintendent of the mono-cast department gave this testimony.

The mono-cast department is the largest of the company's departments -

with 651 employees. It has always contained the majority of black em-

ployees in the plant (currently 40.3%) .

“There are no totals on how many of the 1,854 bidders were black

employees.

“Black employees composed approximately just over one-third of the

total employees of the company during this period.

"The superintendent of the melting department, 118 white employees

and 101 black, stated that between July, 1965 and October 1, 1971, twenty-

five white and twenty-nine black employees were demoted because of

curtailment of operations. Under a departmental seniority system, the

employees with the smallest amount of time would be laid off and the

employee above him dropped down into his position. These twenty-nine

were included in the total number of seventy-six blacks demoted.

A-SI

Chart F: Class Enrollment By Race

White Black

Emplovees Emplovees

1964° 116 134

1965 $2 22

1966°° - _

1967 134 12

1968 92 19

1969 109 10

* In 1964 the classes were conducted on a segregated basis.

**The district court did not provide statistics for 1966.

lower paving, less physically demanding positions without a re-

duction in pay rate.

As to the unavailability of job vacancies contention, the dis-

trict court, itself, pointed out that between 1965 and 1970 em.

ployment at the company increased by 1.444 jobs, not including

turnovers, Advancement opportunities were correspondingly

increased during this period of rapid economic development.

The sole ground for the district court's conclusion of lack of

motivation on the part of black workers appears to be lack of

black enrollment in classes conducted by the company to aid

in achieving higher scores in the testing.? But the statistics for

these classes indicate that it was not until 1967 that black en-

rollment began to fall off. In light of the discriminatory impact

of this illegal testing, it may be that blacks simply realized that

the testing was stacked against them. This lack of motivation

conclusion also comes in the face of the testimony by a company

management employee concerning the ‘ flood” of black appli-

cants for more skilled jobs after the passage of Title VII. Fur-

This conclusion by the district court also conflicts with a finding of

initiative on the part of some black employees. ‘The court stated, “Some

black employees who failed to score well on the test exercised initiative to

take further training with the defendant's assistance, and subsequently

improved their test scores and advanced into higher paying jobs.”

A-32

ther, the intense organization of black employees” and contin-

ued interest in this and past litigation’ demonstrates that the

black employees of the company are interested in opportunities

for better pay and more highly skilled jobs.

In brief, the district court held that the statistical demonstra-

tion of the derogation of black employees to lower paying jobs

and departments resulted from black employees’ refusal of pro-

motion and training opportunities, lack of qualifications, fail-

ure to request promotions, poor job performance, transfer to

lower pay groups, lack of job vacancies, and lack of motivation,

We find that this holding was “clearly erroneous.” Humphrey

v. Southwestern Portland Cement Co., 5 Cir. 488 F.2d 691

(1974). Not only are these variable too numerally diminutive

to rebut the distinct disparity in the black white employment

data.’ but analysis and the evidence have disclosed that these

variables have no substantial validity.”

S3Manvy of the employees in the class of plaintiffs, here, are members

of the Equal Employment Opportunity Committee. This was a committee

formed by a majority of black employees of the company in 1965. And

718 charges from class members have been filed with the Equal Employ-

ment Opportunity Commission,

‘This is the third time in five years that the plaintiffs have been before

us.

$5C/. Ochoa v. Monsanto Company, supra, 473 F.2d at 320 (“But the

smallness of the numbers demonstrates that the Court was not compelled

to allow such statisti¢al showing to set in train the usual presumptions or

to make a finding of preference thereon.”).

“In reviewing the trial court's determination, we are bound by the

standard of Rule 52(a) of the Federal Rules of Civil Procedure: “Findings

of fact shall not be set aside unless clearly erroneous, and due regard shall

be given to the opportunity of the trial court to judge the credibility of

the witnesses.” Although Judge Learned Hand was correct in stating, “It

is idle to try to define the meaning of the phrase ‘clearly erroneous,’ ”

(United States v. Aluminum Co., 148 F.2d 416, 498 (2d Cir. 1945)) this

Court aptly phrased a workable formula in Chaney v. City of Galveston,

$68 F.2d 774 (5th Cir. 1966) :

“A finding is clearly erroneous when, although there is evidence

to support it, the reviewing court on the entire evidence is left with a

definite and firm conviction that a mistake has been committed. . . .

It is well settled that in order for a reviewing court to set aside findings

of fact by a trial court sitting without a jury, it must be clearly demon-

strated that such findings are without adequate evidentiary support in

ASS

% Conclusion concerning the promotion procedure, The

statistical prcture drawn here is similar to that which this Court

found persuasive in United States ¥. Jacksonville Terminal,

supra, 491 b.2d 418, Under attack by the government there

was 4 promotion system with a bidding procedure based on a

rigid craft or class seniority similar to the bidding and depart-

mental seniority systems at issue here.”

This Court stated:

.. » [T)hey [statistics] do prove that employment at the

facility is approximately equally divided between whites

and blacks, that whites generally occupy the higher paying

positions and that blacks hold the lower paying jobs. ld,

at 441.

Similarly, the work force here is approximately 50% black with

the black employees occupying the lower paying jobs and de-

partments. Likewise, the jobs and departments here and in

Jacksonville Terminal have been segregated both by prior for-

mal discrimination and present effect.

the record, or were induced by an erroneous view of the law, and the

burden of showing that the findings are clearly erroneous is on the one

attacking them.” Jd. at 776,

See United States v. United States Gypsum Co., $33 U.S. $64, 68 S.Ct.

525, 92 L.Ed. 746 (1948); Baggett v. Richardson, 473 F.2d 863, 865 (5th

Cir. 1973); Hodgson v. American Bank of Commerce, 447 F.2d 416, 419

(5th Cir, 1971). See generally, 5A Moore's Federal Practice © 52.08 [1)

(2d Ed. 1969).

The findings reviewed here do not involve conclusions based on the

credibility of witnesses giving conflicting testimony. Dillon v. M. S,

Oriental Inventor, 426 F.2d 977 (Sth Cir.), cert. denied, 400 U.S, 905, 91

§. Ct. 140, 27 L.Ed.2d 140 (1970). Rather at issue is the weight of evidence

supporting the trial court's findings. We have determined that these find.

ings are “without adequate evidentiary support” and therefore are “left

with a definite and firm conviction” that the district court was mistaken.

The Terminal maintained thirty-five seniority craft romers. Within

each roster jobs were broken down into classes which differed in pay and

function, Ordinarily collective bargaining agreements precluded use of

seniority acquired on one roster to bid for a job vacancy on another roster,

In some cases, the same was true for interclass transfers. Vacancies were

posted within the particular craft or class, and craft seniority primarily

determined the winning bidder. /d. at 427.

AM

The statistics also show that almost all Terminal jobs were

held exclusively either by whites or by blacks before July

2, 1965, and that this division has continued, with few ex-

ceptions, after that date... . Teiminal records disclosed

that the persistence of “black” and “white jobs — what-

ever their formal denotation — has not been caused by

failure to hire new personnel... . Moreover, as noted ear-

lier, all blacks hised dusing this period, have become Por-

ters. Promotions too have occurred, Blacks have gained a

few supervisory positions in the Baggage and Mail Depart-

ment and two Helper jobs in other departments. “In racial

discrimination cases, statistics often demonstrate more than

the testimony of many witnesses, and they should be given

roper effect by the courts.” Jones v. Lee Way Motor

reight, Inc., supra, 431 F.2d at 247; accord, Bing v. Road-

way Express, Inc,, 5 Cir, 1971, 444 F.2d 687 [1971]; Lea

v, Cone Mills Corp., M.D.N.C, 1969, 301 F.Supp. 97, 102

aff'd., 4 Cir, 1971, 438 F.2d 86, Jd. at 442.

The district court there also rejected the statistical showing,

finding that the employer had simply “hired or promoted the

best qualified persons available for the particular jobs.” This

Court reversed.

We cannot accept the assumption that the Government's

statistics have no probative force: 1. ¢., “[t}he Government's

failure or refusal to undertake a comparative evaluation of

the entitlement to job vacancies of competing Negroes and

whites, upon the basis of individual qualifications, leaves

the record without probative evidence to support [the con-

tention that black employees were not even considered for

jobs to which whites were promoted or for which they were

hired].”” 316 F.Supp. at 581. The trial judge's pronounce.

ment cannot function as a general rule. It becomes valid

only when the employer or union evidentially demon-

strates that objective criteria pertinent to the particular

job or the determinants of who is “best qualified.” Jd. at

442.

This Court then went on to strike down the craft and seniority

system because it restricted te “transfer and promotion oppor-

tunities of incumbent black employees.” Jd. at 453.

ASS

We have condemned similar promotion systems based on job

seniority which operated to perpetuate past discrimination in

Johnson v. Goodyear Tire & Rubber Co., supra, 491 F.2d at

1375-1874; United States v. Georgia Power Co., supra, 474 F.2d

906; Long v. Georgia Kraft Co., supra, 450 F.2d 557; Local 189,

United Papermakers & Paperworkers v. United States, supra,

416 F.2d 980. Likewise, other courts have found tainted de-

partmental or job-type seniority systems, utilized for promotion

purposes, which effectuated discrimination. United States v.

N. L. Industries, Inc., supra, 479 F.2d at 358-360; United States

v. Bethlehem Steel Corp., 446 F.2d 652 (2d Cir. 1971) ; Robin-

son v. Lorillard Corp., supra, 444 F.2d at 795-800; Griggs v.

Duke Power Co., 420 F.2d 1225, 1286-1237 (4th Cir, 1970),

rev'd on other grounds, 401 U.S. 424, 91 $.Ct. 849, 28 L.Ed.2d

158 (1971); United States v. Virginia Electric and Power Com-

pany, supra, $27 F.Supp. 1087; Clark v. American Marine

Corp., $04 F.Supp. 60% (E.D. La. 1969) .

The appellants have made a strong showing (1) that the

company had a formal policy of discrimination prior to 1961

which lingered until 1963; (2) that the company maintained

illegal testing and educational requirements from 1964 to 1971;

and (3) that the employment statistics from 1963 until 1971

reflect that black employees have been derogated to the lower

paying, non-skill departments and to the lower paying positions

in all departments because of these past discriminatory employ-

ment practices. As we demonstrated above these variables cited

by the trial court to explain the statistics, do not, on analysis,

undermine the large statistical disparity between black/white

employees’ departments, positions, and pay rate. We have ob-

served that the departmental seniority system deters black em-

ployees, by their loss of seniority and pay rate, from transfer-

ring and that the posting and bidding procedure, requiring

initial consideration of persons within the department, often

may prevent even the application of the majority of black em-

ployees for a job vacancy in the higher paying, predominantly

white departments. In addition, both practices operate to hand-

icap black employees in intradepartmental promotion because

A-36

past discrimination was an impediment to black employees ac-

quisition of seniority in these departments. Therefore, the neu-

tral practices of the departmental seniority system and the post-

ing and bidding procedure carry forward into the present the

stratification of black employees into lower paying, non-skill

departments and jobs resulting from past discrimination. Neu-

tral employment practices perpetuating past discrimination

were condemned by the Supreme Court in Griggs v. Duke

Power Co., 401 U.S. at 430. Affirmative relief is mandated by

our decisions in Johnson v. Goodyear Tire & Rubber Co.,

supra, 491 F.2d at 1371, n. 34; United States v. Georgia Power

Co., supra, 474 F.2d at 927; and Local 189, United Papermakers

& Paperworkers v. United States, supra, 416 F.2d at 990-991."

B. Apprentice Program and On-The-Job Training

The company provides its employees an opportunity to train

for the highly skilled, higher paying craft jobs through an ap-

prentice program or on-the-job training (journeymen). The

company maintains these programs for the following crafts:

mechanic, machinist, electrician, carpenter, molder, pattern

maker, welder, scale mechanic, brick layer, plumber, and tin-

smith. The departments in which most of the craft jobs are lo-

cated are the machine shop, electrical department, construction

department, and maintenance department.

1. Apprenticeship. Only incumbent employees are eligible

Full enjoyment of Title VII rights sometimes requires that the court

remedy the present effects of past discrimination. See Louisiana v.

United States, $80 U.S. 145, 154, 85 S.Ct. 817, 18 L.Ed.2d 709 (1965).

This includes both redressing the continuing effects of discriminatory

seniority systems, Local 189, United Paperworkers v. United States, 416

F.2d 980 (5th Cir. 1969); United States v. Jacksonville Terminal Co.,

supra; United States v. Hayes International Corp., supra (5 Cir., 456

F.2d 112}, and affirmative action to alter a seniority system which is

not discriminatory on its face. If the present seniority system in fact

operates to lock in the effects of past discrimination, it is subject to

judicial alteration under Title VII. Local 53, International Association

of Heat and Frost Insulators and Asbestos Workers v. Vogler, 407 F.2d

1047, 1052 (5th Cir. 1969); Local 189, supra, at 991 of 416 F.2d." 474

F.2d at 927.

A-37

for the apprentice program. Applicants are required to have

the following qualifications: (1) a high school education or its

equivalent, (2) employment in the same department and/or

trade for a minimum of six months, (3) prior to March 31,

1971, achievement of the fiftieth percentile on the California

Test of Mental Maturity and a passing score on all aptitude

tests for the particular skill or craft, (4) under twenty-six years

of age or under thirty years of age for those applicants having

served in the military. Once selected for an apprenticeship, the

trainee has to complete an 8,000 hour course, approximately

three and one-half to four years. During this time, the em-

ployee receives a starting salary at a pay rate 3, but works up

to the higher rate of 11. After finishing the apprenticeship and

after being placed into a craft position, the employee is eligible

for a pay rate 12 or 13.

Appellants assert (1) that the continued high school educa-

tion or its equivalent requirement constitutes a present dis-

criminatory practice and (2) that the past intentional exclusion

of black employees from craft jobs and the illegal testing has a

continuing adverse impact under current neutral practices.

Concerning the apprentice program, the district court de-

clared: “Defendant has practiced no invidious racial discrimi-

nation in the administration of its apprenticeship and journey-

man programs.” We reverse this finding as “clearly erro-

neous.’

We agree with appellants that the educational requirement

is not neutral This standard, itself, is a present discrimi-

natory practice if it has a disproportionate impact on black

applicants. Griggs v. Duke Power Co., supra; United States v.

Georgia Power Co., supra, 474 F.2d at 918-919; United States

v. Inspirational Consolidated Copper Co., supra, 6 EPD § 8918.

From 1915 until the time of the trial, only one black em-

ployee had ever participated in the apprentice program, while

208 white employees have done so. Moreover, from 1915

until 1961, the total exclusion of black employees from craft

WSee note 56, supra at 254.

A-38

jobs was a culpable company policy. We have previously dis-

cussed the district court's finding that the large majority of

black employees have historically and continue to be within

the lowest pay groups, 1-8. This educational criterion must

continue to have an adverse impact on black employees because

56%, do not have a high school diploma.” Because of this dis-

proportionate impact, the burden shifts to the company to dem-

onstrate that their high school education or equivalent require-

ment for entry into the apprentice program is “job related.”

Griggs v. Duke Power Co., supra; United States v. Georgia

Power Co., supra; United States v. Inspirational Consolidated

Copper, supra.”

The company's response was that their educational standard

was not a high school diploma or its equivalent, rather a cri-

terion used to select applicants who had obtained a sufficient

educational level to successfully complete the International

Correspondence courses relating to the craft for which they

were entering an apprenticeship. The district court's finding

that a high school education or its equivalent was a prerequi-

site for the apprentice program rebuts this assertion. Moreover,

the company's own policy statement defining their apprentice

program states as a qualification — “high school graduate or

equivalent.” We do, however, construe this argument as both

an attempt to show “job relatedness” and “business necessity.”

In order to show job relatedness, Griggs stated that a re-

quirement must “bear a demonstrable relationship to success-

ful performance of the jobs for which it was used.” 401 U.S. at

431. Here, we understand the company to mean that a certain

reading level and familiarity with study techniques is necessary

to participate in the course work of the apprentice program.

Of the white employees, 12% do not have a high school diploma.

*'Under the EEOC guidelines, 29 C.F.R. § 1607.2, an educational re-

quirement is defined as a test. The company made no attempt to validate

this requirement under these guidelines which we mandated in Georgia

Power, supra, 474 F.2d at 913.

®We will postpone our analysis of business necessity until II] (A), deal-

ing with the required remedial changes in the apprentice program.

A-39

This cannot be equated with a requirement for a high school

education or its equivalent. This Court, in fact, affirmed a

district court's condemnation of a similar rationale for a high

school educational criterion in Georgia Power:

The justification offered at trial for the requirement was

very weak. As the district court observed:

“At best, the only justification for this requirement is the

obvious eventual need for above-average ability to read

and comprehend the increasingly technical maintenance

manuals, the training bulletins, operating instructions,

forms and the like demanded by the sophisticated indus-

try.... In such a context, the high school education re-

quirement cannot be said to be reasonably related to job

performance. This is not to say that such requirements are

not desirable .. . it simply means that the ‘diploma test’

cannot be used to measure the qualities. Many high school

courses needed for a diploma (history, literature, physical

education, etc.) are not necessary for these abilities. A new

reading and comprehension test . . . might legitimately be

used for this job need.” 474 F.2d at 918,

Here just as in Georgia Power, there are employees who have

had substantial job success and advancement without a high

school education.” For example, there are seventy-five white

employees,™ without a high school education, receiving over

$4.00 an hour. Of the approximate fifty foremen and forty to

fifty leadmen in the plant, twelve foremen and eight leadmen

are among this seventy-five. Sixteen of this group are machin-

ists in the machine shop, a highly skilled, craft department;

and two are electricians. The high proficiency level established

by this standard not only precludes qualified employees but

®In Georgia Power we observed:

“Many employees without high school displomas have mastered the

technical literature and many of the highest-ranking personnel in the

company did not pass the ‘diploma test,’ including 47 of 100 foremen,

supervisors, and chief division operators in the Atlanta and Macon

operating division.” 474 F.2d at 918-919.

“There is only one black employee in the whole plant whose pay rate

exceeds $4.00 an hour.

A-40

also is not refined sufficiently to measure the ability sought by

the company. As the Supreme Court promulgated in Griggs

and this Court stated in Georgia Power, “the use of a high

school requirement which has a disproportionate racial impact

and has not been proven to be a predictor of ultimate job suc-

cess controverts the congressional mandate of Title VII." 474

F.2d at 918.

Assuming past discrimination has illegally denied present

employees training opportunities, the question becomes: do

present neutral prerequisites for entry into and completion of

the apprentice program continue to deny these injured em-

ployees rightful benefits. The neutral prerequisites challenged

by appellants are the age requirement and the length of the

apprenticeship.” Appellants argue that the application of the

age requirement has the consequence of continuing to exclude

from the apprentice program all black employees who are em-

ployed and reached the age of twenty-five or twenty-nine before

the company cc sed its official segregation in 1961. Addition-

ally excluded are those blacks barred by the testing program,

who reached the age of twenty-five or twenty-nine before the

company ceased its testing program in 1971. Therefore, appel-

The question whether the educational criterion operated, independ-

ently with the testing, to produce this disparity can be answered in the

affirmative. The inferences on this issue are unlike the question of the

consequences, independent of the testing, of the subjective discretion of

the white department superintendents who did all the selecting of super-

visory personnel infra. The fact that this criterion is objective and acts

automatically to eliminate non-high school graduates, coupled with the

large percentage of blacks without a high school education and the

implication that white employees without high school educations have

advanced into responsible and skilled positions in all departments, are

sufficient to refute this objection.

Appellants also challenge the six month prerequisite service within

the craft department. They argue that because of the long exclusion of

black employees from craft departments, this selection criterion perpetu-

aes past discrimination. We agree with this conclusion. However, the

record and finding of fact by the district court reflect that employees are

selected from throughout the plant and then evaluated for six months on

the job within a craft department; rather than being selected only from

employees within the craft department.

A-41

lants conclude that this age requirement perpetuates into the

present effects of past discrimination and is unlawful.”

Appellants deduce that the impact of past discriminatory

practices in the apprentice program is blatant from the histori-

cal and statistical showing, recited above. In addition, appel-

lants point to the testimony by company officials, stating that

the effect of the tests and educational requirement was to screen

out blacks from the apprentice program. The historical formal

exclusion and the statistical and testimonial evidence demon-

strating disproportionate exclusion of blacks by the testing and

educational requirements, when combined with the continuing

use of the high school education or its equivalent standard and

the present age requirement and lengthy apprenticeship term,

constitutes not merely a prima facie case, but conclusive proof®

of present effect from past discrimination.”

2. On-the-job training. Prior to March, 1971, to qualify

for on-the-job training for journeyman status in a craft posi-

tion, an applicant had to (1) meet the specified testing require-

ments, the same mental maturity test and aptitude test required

for the apprentice program, (2) have three year’s experience in

a craft department or related craft job, and (3) be selected by

the (all-white) supervisory employee group for the program.

The company currently relies on a bid system for entry into the

on-the-job training program. Under this procedure bids are

taken within the craft department and the senior qualified man

is selected. Only if no bids from qualified men are received

from within the departments are employees from outside the

®See note 38 and accompanying text, supra at 224.

That a holding of conclusive proof is warranted, we cite our statement

in United States v. Jacksonville Terminal Co., supra, 451 F.2d at 442:

“Absent explanatory evidence and testimony, the statistics indicate

that officials have impliedly equated job qualification with race. See id.

(United States v. Sheet Metal Workers Local 36, supra 416 F.2d) at 127;

Lea v. Cone Mills Corp., M.D.N.C.1969, 301 F.2d 97, 102. In a Title

VII case, such implications are important. When combined with other

evidence and testimony, they may be conclusive.” (Emphasis added) .

"See note 34, for the proposition that some courts have held that

statistics alone may demonstrate conclusive proof of discrimination.

A-42

department allowed to compete. In either case the final selec-

tion is determined by the all-white supervisory group. After

the trainee has had six years’ experience and if his departmen-

tal superintendent recommends him to the apprentice commit-

tee, the trainee is eligible for the intermediate craft salary rate.

After an additional year’s experience, the trainee is eligible for

the craft rate (pay group 12 or 13).

Appellants argue that the present bidding system and the

length of the training program lock in black employees dero-

gated to lower paying, unskilled jobs by past discrimination.

The district court, as quoted above, held that the defendant

had not violated Title VII or section 1981 in administering its

journeyman program. We reverse this holding as “clearly er-

roneous.”’”°

We accepted, supra II(A), the court's and appellants’ statis-

tical conclusion that black employees had been restricted to

jobs in non-craft departments and in the 1-8 pay groups con-

taining no craft or craft related positions, first by the formal

exclusion prior to 1961 and then by the testing requirement

from 1964 until 1971. To focus even further on this finding,

appellants cite the employment data for pay groups 12 and 13,

encompassing craft and technical positions. This data compiled

two months before trial indicated only seven blacks, .76% of

black employees, had reached pay group 12; none had obtained

a group 13 position. At this time, 436 white employees, 28.4%

of the total, occupied group 12 jobs, and twenty-four, 1.5% of

the total, held group 13 jobs. An additional factor relied on by

appellants is the selection on the subjective evaluation by the

all-white supervisory force, both a past and a present prerequi-

site to entry into the training program. Rowe v. General Mo-

tors Corp., supra, 457 F.2d at 359 (“we and others have ex-

pressed a skepticism that Black persons dependent directly on

decisive recommendations from Whites can expect non-discrim-

inatory action.’’) ”

See note 56, supra at 234.

"Appellants do not challenge this subjective judgment by all-white

supervisory group as an independent, present discriminatory practice.

A438

The intentional discrimination by the company from 1915

until 1961 totally excluded black employees from the on-the-

job training program, From 1964 until 1971, the testing con-

tinued to restrict black employees from craft departments and

from craft jobs and craft related positions. We also recognize

the discriminatory potential of subjective evaluation of blacks

by the all-white supervisory groups.” Therefore, we are com-

pelled again to find that past discrimination has had an adverse

impact upon black employees’ employment opportunities which

is carried forward by neutral, current practices. The bidding

procedure presently in effect would require black employees

long denied this training opportunity in the past, to suffer a

loss of seniority and cut in salary for admittance and participa-

tion in this training program. The requirement that bids from

within the craft departments be given initial, primary consid-

eration must fail in light of the proof demonstrating that a

large majority of black employees have been excluded from

these departments. In addition, a lengthy training program of

six years will continue to exclude black eimployees from craft

positions for an unnecessarily longer period. Appellants have

presented prima facie evidence of the present effect of past dis-

crimination, thus requiring affirmative relief.” Cf. McDonnell

Douglas Corp. v. Green, supra, 411 U.S, at 800-807.

C. Supervisory Positions

The appellants question the absence of black employees

from the supervisory positions of leadmen and foremen. The

district court made the following finding of fact concerning

this absence:

Out of a rer mony | fifty leadmen, only three have

been black. Defendant has never had a black foreman.

Rather it is a factor used to bolster their conclusion as to the impact of

neutral practices resulting from past discrimination.

"For a detailed discussion of the use of subjective criteria in judgment,

see text and accompanying footnotes infra at 240-242.

See note 58, supra at 236.

A-44

However, the court drew no specific conclusion of law on the

issue of discrimination, other than a general recital at the end

of its opinion” that the plaintiffs were not entitled to any other

relief.

The leadman is the worker who sets the pace for his unit of

workers, The general practice is to choose the foreman from

the ranks of the leadmen. Prior to March, 1971, there were

two qualifications for the positions of leadmen and foremen.

First, the candidate had to have obtained the requisite testing

achievement. Secondly, the department superintendents, who

have always been white, then selected the “best qualified” of

these individuals, This selection was based on their subjective

judgment rather than objective criteria, The testimony at trial

indicated that there were approximately forty to fifty leadmen,

of which one was black. Of the approximate fifty foremen

none were black.

The statistical disparity presented in this case combined with

the illegal testing and a subjective standard applied by all-white

department supervisors would normally present a conclusive

showing of present discrimination, The company, however, ter-

minated their testing requirement for these positions in March,

1971, which was six months prior to the trial in October, 1971.

The question for us is whether selection on the basis of sub-

jective judgment of all-white superintendents operates inde-

pendently of the testing to discriminate and helped produce

this disparity.

In Rowe v. General Motors Corp., supra, 457 F.2d 340, this

Court admonished an employer for allowing possible discrimi-

natory subjective evaluation by all-white supervisors in the pro-

motion of black employees. This Court cautioned:

... [HJad to acknowledge that the methods for promotion /

transfer at GMAD would enable an individual foreman, if

™The statistical finding by the district court of three black employees

as leadmen is an overstatement as the record and the briefs on appeal of

all parties indicate that only one black employee has been advanced into

a supervisory position as a leadman.

A-45

he were so inclined, to exercise racial discrimination in his

selection of candidates for promotion/transfer, and that,

under the social structure of the times and place, Blacks

may very well have been hindered in obtaining recommen-

dations from their foremen since there is no familial or so-

cial association between these two groups. All we do today

is recognize that promotion transfer procedures which de-

pend almost entirely upon the subjective evaluation and

favorable recommendation of the immediate foreman are

a ready mechanism for discrimination against Blacks much

of which can be covertly concealed and, for that matter,

not really known to management, We and others have ex-

pressed a skepticism that Black persons dependent directly

on decisive recommendations from Whites can expect non-

discriminatory action. 457 F.2d at 359,

In the past, this Court has ordered the development of objective

criteria in order to eliminate the possible discrimination inher-

ent within subjective employment determinations.” Local 53

of the International Association of Heat and Frost Insulators

and Asbestos Workers v. Vogler, 407 F.2d 1047 (5th Cir, 1969) .

In cases involving similarly alleged racial discrimination for

promotions to supervisory positions, courts have acted on a

See Browr v. Gaston County Dyeing Machine Co., supra, 457 F.2d at

1382-1983 (“klusive, purely subjective standards must give way to

objectivity if statistical indicia of discrimination are to be refuted.” ;

United States v. Bethlehem Steel Corp., supra, 446 F.2d at 655.

Subjective discretion by all-white supervisory personnel is comparable to

that found suspicious in jury discrimination suits. In Turner v. Fouche,

396 U.S. $46, 90 S.Ct. 532, 24 L-Ed.2d 567 (1970), the Supreme Court con-

cluded:

“In sum, the appellants demonstrated a substantial disparity between

the percentages of Negro residents in the county as a whole and of

Negroes on the newly constituted jury list. They further demonstrated

that the disparity originated, at least in past, at the one point in the

selection process where jury commissioners invoked their subjective

judgment rather than objective criteria. The appellants thereby

made out a prima facie case of jury discrimination, and the burden fell

on the appellees to overcome it.” Jd. at 360.

This Court had earlier found jury commissioners’ subjective judgment

failing in Pullum v. Greene, 396 F.2d 251, 257 (5th Cir. 1968). See gener-

ally, Jury Discrimination In the South: A Rv uedy?, 8 Colum.]. of L-Soc.

Prob.589 (1972).

A-46

showing equal to that made by the appellants here.”* In United

States v. N. L. Industries, supra, 479 F.2d 354, the court stated;

The inference of discrimination provided by the statis-

tics is reinforced by the Company's method of selecting

foremen, The Company's promotional plan is very similar

to that used by General Motors Corporation in Rowe,

supra, 457 F.2d 348. In that plan the foreman’s recom-

mendation was the indispensible, single most iniportant

element in the promotional process; there were no written

instructions to foremen as to the qualifications desired;

standards that were set were vague and subjective; hourly

si were not notified of promotional opportunities;

and there were no safeguards in the procedure to prevent

discrimination.

We think evidence indicating that out of about 100 fore-

men only three are black, that these three black foremen

are in charge of only Labor department emplovees, that a

biack foreman has never been in charge of white employees

in this bargaining unit, that one of thirty-six employees

promoted to foreman since 1965 was black, that a pool of

qualified black employees exist, and that white employees

with less qualifications have been promoted to foreman

positions presents a prima facie case of racial discrimina-

tion that has not been rebutted by the Company.

Id. at 368.

And in Russell v. American Tobacco Co., supra, 5 EPD € 8447,

the court pointed to the holdings of Brown v. Gaston County

Dyeing Machine Company, supra, 457 F.2d 1377, and Rowe v.

General Motors Corp., supra, 457 F.2d 348, condemning the

lack of objective criteria in the face of a statistical disparity in

job promotion as discrimination. The court then concluded:

6In addition to the cases discussed herein, see Stamps v. Detroit Edison

Co., supra, 365 F.Supp. at 112-118; Young v. Edgcomb Steel Co., 363

F.Supp. 961, 969-970, 971 (M.D.N.C.1973). The Equal Employment Op-

portunity Commission has entered findings of discrimination in promotion

to supervisory positions where a highly subjective promotion system has

had a disproportional impact on minority group employees CCH EEOC

Decisions € 6252, ¢ 6228 (1973).

A47

In the instant case, the figures from the Leaf operation

can hardly be surpassed. Of 63 white employees in Leaf

(60 regular, 3 seasonal) , 27 are foremen. Only 23 regular

white employees are not supervisors. Therefore, 45 per

cent of all regular whites are supervisors. In considering

the same figures for blacks, there are 3 supervisors (76

regular, 124 seasonal). Out of 76 blacks, 3 are su isors.

Even figuring it out to one decimal point, only 3.9 per cent

of the regular blacks are supervisors. There figures would

chafed the conscience of this Court, even if objective cri-

teria were fully in use, which has not been demonstrated.

This lack of objective guidelines and written criteria are

some indicia of discrimination. 5 EPD € 8447 at 7191-92.

The record reveals evidence of at least two black employees

who, prior to March, 1971, had the requisite qualifications for

leadmen or foremen but had been denied promotion.” In ad-

dition, the record reflects that while many whites had been

appointed as “relief leadmen,’* no black employees have had

such an opportunity. Testimony by two department super-

visors, however, indicated that since the testing qualification

was dropped, black employees in these departments, steel foun-

dry and mono-cast, are qualified and are under consideration

for these supervisory positions. We are uncertain whether the

Booker T. Powell had made the highest posible sore on the qualify-

ing test, had a high school and one and one-half years college education,

had worked for the company since 1954, and had extensive experience in

many of the jobs in the cleaning shed (the mono-cast department). More:

over, he had even requested consideration for a leadman position.

Further testimony also implied that Willie Dunn was qualified. He had

obtained the prerequisite scores, had taught at the company's night

school, had attended metallurgy courses on off hours, and was deemed

qualified by company officials. Evidently, although the record is con-

fusing on this point, pressure from both white employees and

and black employees, concerning his upgrading, caused a mental treak-

down. He is now on medical pension.

While there is no formal training for these supervisory positions, testi-

mony demonstrates that, at least in the mono-cast department, temporary

vacancies occur because of vacation, sickness, business and other reasons

every week. “Relief” leadmen are appointed from those under considera-

tion for permanent promotion to these positions

A-48

consideration of black employees since the testing was termi-

nated, stems from awareness, stimulated by this and other law

suits, by the company of possible legal sanctions, or whether

the illegal testing alone had created this discriminatory barrier,

and now qualified black employees are being considered.

Therefore, we are remanding this issue, the independent effect

of subjective evaluation by all-white superintendents, to the dis-

trict court.”

On remand, we point out three indicia, among others, which

the district court should examine, First, as to whether there

are more examples of black employees who were able to hurdle

the illegal testing barriers to these supervisory positions, but

then were disqualified under the subjective criteria utilized by

the department superintendents.” Secondly, the court should

note whether less qualified white employees have been ap-

pointed leadmen or foremen both prior to March, 1971 and

since that time. Finally, the court should obtain evidence of

the operation of this subjective standard applied by white su-

pervisors since the trial."

III. ELIEF

In fashioning an appropriate remedy for employment dis-

crimination, Congress has granted courts plenary equitable

power under both Title VII, 42 U.S.C.A. § 2000e-5(g) (Supp.

By remanding, we do not mean to close off any back pay award for a

black employee, like Booker T. Powell, who might be able to put forward

a back pay claim for a supervisory position.

"We note that because of the nature of these supervisory positions there

is a slow turnover. Consequently, only a few cases of discretionary

over may constitute sufficient proof considering the statistical disparity

already existing.

"The district court should make specific findings on the assertion in

appellee's brief, stating:

“While outside the record, the Company feels it appropriate to advise

the Court that currently the Company has two black foremen and five

black leadmen.”

Appeliee's Response to the Brief of United States Equal Employment

Opportunity Commission as Amicus Curiae at 8. "

AAY

1973). and section 1981." Most courts, and expecially our

Circuit, have applied this equitable relief within the framework

of the “rightful place” theory.’ In Georgia Power, this Court

explained: “Most courts, in molding appropriate remedies,

have adhered to the ‘rightful place’ theory, according to which

blacks are assured the first opportunity to move into the next

vacancies in positions which they would have occupied but for

wrongful discrimination and which they are qualified to fill.

Note, Title VII, Seniority Discrimination and the Incumbent

Negro, 80 Harv. L. Rev. 1260, 1268 n. 2 (1967) ."" 474 F.2d at

927. We agree that: ‘This is the theory which should be ap-

plied here.” Jd.

Before moving to the necessary corrective measures, there is

need to define the class of employees to whom these remedies

"This provision states, in part:

“(g) If the court finds that the respondent has intentionally en-

gaged in or is intentionally engaging in an unlawful employment

practice charged in the complaint, the court may enjoin the respondent

from engaging in such unlawful employment practice, and order such

affirmative action as may be appropriate, which may include, but is not

limited to, reinstatement or hiring of employees, with or without back

pay (payable by the employer, employment agency, or labor organiza-

tion, as the case may be, responsible for the unlawful employment

practice), or any other equitable relief as the court deems appropriate.

Back pay liability shall not accrue from a date more than two years

prior to the filing of a charge with the Commision.”

See Local 189, Papermakers & Paperworkers v. United States, supra, 416

F.2d at 996-997.

This Court has always recognized the importance of granting full relief

in Tithe VII cases. E. g., United States v. Georgia Power Co., supra, 474

F.2d at 927; Vogler v. McCarty, 451 F.2d 1236, 1238-1239 (5th Cir. 1971).

"See Boudreaux v. Baton Rouge Marine Contracting Company, 437

F.2d 1011 (5th Cir. 1971); Sanders v. Dobbs Houses, Inc., 451 F.2d 1097

(Sth Cir. 1970), cert. denied, 401 U.S, 948, 91 S.Ct. 935, 28 L.Ed.2d 231

(1971); Lazard v. Boeing Company, 322 F.Supp. 343, 345-546 (E.D.La.

1971); Tolbert v. Western Electric, 56 F.R.D. 108, 115-116 (N.D.Ga.1972).

“This theory of relief for employment discrimination was explicated

in Note, Tithe VII, Seniority Discrimination and the Incumbent Negro, 80

Harv.L.Rev. 1260 (1967), first applied by our Circuit in United States v.

Local 189, United Papermakers & Paperworkers, 50! F.Supp. 906 (E.D.La.

1969), aff'd, 416 F.2d at 988, and recently endorsed in Bing v. Roadway

Express, Inc., spre, 485 F.2d at 450-451; and United States v. Georgia

Power Co., supra, 474 F.2d at 926-927.

A-50

are applicable. The district court, before trial, approved this

suit as a class action within Rule 28(b) (2). This class in-

cludes black employees, both named and unnamed, who have

filed or not filed complaints with the Equal Employment Op-

portunity Commission, Caldwell v. National Brewing Co., 443

F.2d 1044 (5th Cir. 1971), cert. denied, 405 U.S. 916, 92 S.Ct.

931, 30 L.Ed.2d 785 (1972) (section 1981); Jenkins v. United

Gas Corporation, 400 F.2d 28 (5th Cir. 1968) (Title VII);

Oatis v. Crown Zellerbach Corp., 398 F.2d 496 (5th Cir. 1968)

(Title VII). Specifically, this class is composed of black em-

ployees of the company employed prior to March 8, 1971, ter-

mination date of the testing and educational requirements for

pay groups 9-16, and also embraces those black ereployees hired

after March 8, 1971 harmed by present discriminatory practices.

A. Enjoining the Testing and Educational Requirements

The district court recognized that the testing and edu-

cational criteria had a detrimental impact on black applicants

and employees as a class. An injunction against the resumption

of such practices was denied because the company had elimi-

nated the educational hiring requirement and all testing in

March, 1971. We find no abuse of discretion in the district

court's refusal to grant such an injunction. Cf. Parham v.

Southwestern Bell Telephone Co., supra, 433 F.2d at 429-430.

However, the high school educational criterion for ad-

mittance to the apprentice program remains in use. It was ear-

lier held violative of Title VII and section 1981. At that point

we reserved the discussion of the “business necessity’ justifica-

tion. This doctrine has evolved to except those few employ-

ment practices, which are non-intentionally discriminatory or

neutral, but perpetuate the consequences of past discrimina-

“See note 4 and accompanying text, supra at 217.

See 11(C) (1), supra. The appellants are not challenging job-related-

ness of the course work required by the apprentice program, only the high

school educational or equivalent requirement. See Buckner v. Goodyear

Tire and Rubber Co., 389 F.Supp. 1108, 1122-1125 (N.D.Ala.1972) .

A5l

tion, because of their overriding business necessity.” See Griggs

¥. Duke Power Co., supra, 401 U.S, at 431-432; United States

v. N. L. Industries, supra, 479 F.2d at 364-366; Robinson vy.

Lorillard Corp., supra, 444 F.2d at 797-798, Once a discrimi-

natory result is demonstrated, the defendant has the burden to

justify a practice under a “business necessity." The nature

and requirements of this burden were correctly outlined in

Robinson v. Lorillard Corp., supra, 444 F.2d at 798:

Collectively these cases conclusively establish that the ap-

plicable test is not merely whether there exists a business

purpose for adhering to a challenged practice. The test is

whether there exists an overriding legitimate business pur-

pose such that the practice is necessary to the safe and effi-

cient operation of the business. Thus, the business pur-

se must be sufficiently compelling to override any racial

impact; the challenged practice must effectively carry out

the business purpose it is alleged to serve; and there must

be available no acceptable alternative policies or practices

which would better accomplish the business purpose ad-

*7In United States v. St. LouisSan Francisco Railway Co., supra, 464

F.2d $01, the Eighth Circuit Court of Appeals, en banc, explained:

“However, this doctrine of business necessity which has arisen as an

exception to the amenability of discriminatory practices, ‘connotes an

irresistible demand.’ The system in question must not only foster safety

and efficiency, but must be essential to that goal. United States v.

Bethlehem Steel Corp., 446 F.2d 652, 662 (2d Cir. 1971); United States

v. Jacksonville Terminal Co., 451 F.2d 418 (5th Cir. 1971), cert. denied,

406 U.S. 906, 92 S.Ct. 1607, $1 L.Ed.2d 815 (1972). In other words,

there must be no acceptable alternative that will accomplish that goal

‘equally well with a lesser differential racial impact.’ Robinson v.

Lorillard Corp., 444 F.2d 791, 798 (4th Cir.), cert. dismissed, 404 U.S.

1006, 92 S.Ct. 573, 30 L.Ed. 2d 655 (1971); accord United States v. Beth-

lehem Steel Corp., supra, 446 F.2d at 662.” Id. at $08.

“Rowe v. G. M. C., supra, 457 F.2d at $55 nm. 14; United States v. Jack-

sonville Terminal Co., supra, 451 F.2d at 451; Long v. Georgia Kraft Co.,

supra, 450 F.2d at 562, Bing v. Roadway Express, Inc., supra, 444 F.2d at

690-691; Local 189, United Papermak. & Paperwork. v. United States,

supra, 416 F.2d at 989-990.

"The determinants under the Robinson formulation have essentially

been applied by this Court, dressed in different wording, in United States

¥. Jacksonville Terminal Co., supra, 451 F.2d at 451; and Local 189,

United Papermak. & Paperwork. v. United States, supra, 416 F.2d at 989.

A-52

vanced, or accomplish it equally well with lesser differen-

tial racial impact.

As our holding supra makes clear, a high school diploma

or equivalent criterion does not effectively measure the read-

ing and study skills necessary for the course work required

by the apprenticeship. There are also alternative methods, such

as a validated reading test suggested by the district court in

Georgia Power,” which would have a lesser racial impact.

Moreover, since there is a large demonstration of successful em-

ployee achievement without a high school diploma, a discrimi-

natory standard, by definition, cannot be a ‘‘business necessity.”

We, therefore, conclude that the district court should enjoin

the continued use of a high school educational requirement for

entrance into the apprentice program.

B. Restructuring and Promotion Procedures

1. Business necessity. The company argues “business ne-

cessity” to justify the continued use of its promotion prac-

tices — seniority and the posting and bidding procedures. The

company insists that its jobs are functionally related, so that

service in each position provides necessary training for the next

higher job in a line of progression within a department. In

United States v. Jacksonville Terminal Co., supra, 451 F.2d

418, this Court explained the heavy nature of the defendant's

burden to justify a discriminatory seniority system:

.. . We have no doubt that the seniority systems and re-

strictions currently enforced at the Terminal contributed

to its safe and efticient operation. Nevertheless, as the

Second Circuit most recently explained, “the ‘business ne-

cessity’ doctrine must mean more than that transfer and

seniority policy serve legitimate management functions.

Otherwise, all but the most blatantly discrimina plans

would be excused even if they perpetuated the effects of

past discrimination. * * * Necessity connotes an irresistible

demand. To be preserved, the seniority and transfer sys-

tem must not only directly foster safety and efficiency of

474 F.2d at 918.

A-53

a plant, but also be essential to those goals. * * * If the

legitimate ends of safety and efficiency can be served by a

reasonably available alternative system with less discrimi-

natory effect, then the present policies may not be contin-

ued.” United States v. Bethlehem Steel Corp., 2d Cir.

1971, 446 F.2d 652, 662 [1971]. In other words, manage-

ment convenience and business necessity are not synony-

mous. Thus the Terminal was required to prove not only

that the seniority systems and restrictions promote safe and

efficient operation but also that they are essential to these

goals. Jd. at 451.

Under the three prongs of the Robinson standard,” the busi-

ness purpose, training to insure safe and efficient plant opera-

tion, must be “sufficiently compelling to override any racial

impact;" the department seniority system must effectively and

efficiently carry out its training purpose; and there must be no

alternate acceptable practice of accomplishing this training. In

an industry involving sophisticated machining processes such as

many of the operations of this company, training of employees

for skilled positions is a necessary function for the continued

economic life of the business. However, a departmental senior-

ity system is effective and efficient as an instruction program

only as to those positions in a line of progression where the jobs

below them on the ladder serve as prerequisite training steps.™

91444 F.2d at 798, n. 6 and 7.

“In Robinson v. Lorillard Corp., supra, the company justified their

departmental seniority system by asserting “that employees will perform

a job more efficientlyy if they have prior experience in other jobs within

the same department.” /d. at 799. In rejecting it, the court made the

following caveat:

“Finally, it is difficult to imagine how even the necessity for job pro-

gression could constitute the business necessity which would justify a

departmental seniority system that perpetuated the effects of prior dis

criminatory practices. For, after all, seniority is necessarily an inefficient

means of assuring sufficient prior job experience. It may take only six

months to learn a job well and become qualified for advancement. Yet

the vagaries of chance may present an opportunity for advancement in

only six weeks or not for six years. When some employees have been

discriminatorily denied entry to the department, an alternate promo-

tion system could advance the employee who has been discriminated

against if he has the greatest employment seniority and has served the

A-54

Thus, in a departmental line of progression where the positions

do not require specific training® or where on-the-job experi-

ence in another department qualifies an employee,™ a depart-

mental seniority system is not efficient and it is certainly not

the best training method.”

The company has evidence in the record that significant por-

tions of its operations require skillful craftsmanship, but it has

failed to demonstrate that every position at the plant is so com-

plex or specialized as to require, without exception, step by

step job progression within each department. The record dis-

closes no proof by the company that positions in other than

craft or technical lines of progression are functionally related.

The plaintiffs themselves admit that craft positions require spe-

cific prerequisite training and experience. But we read the dis-

necessary minimum time in his present job or has satisfactorily estab-

lished his capacity to handle the job. Such an alternate plan would

accomplish the business purpose ‘equally well with a lesser differential

racial impact.’” Jd. at 799-800.

In pointing out the inability of a departmental seniority system to

meet the business necessity test because it was ineffective and inefficient

in furthering promotion by ability into jobs requiring no specific train-

ing, the court in United States v. N. L. Industries, supra, 479 F.2d at 366,

observed:

“In regard to the alleged need for prior experience within a depart-

ment, we again point out that National Lead mzintains no lines of

progression within departments or between departments. The sole

determinant for job selection is seniority and only seniority—not ability.

Thus, as in St. Louis-San Francisco Railway, supra, 464 F.2d at $09,

‘length of service becomes synonymous with qualified.’ ”

See Robinson v. Lorillard Corp., supra, 444 F.2d at 799-800.

*Courts have refused the business necessity rationale and ordered carry

over of employment seniority instead of job seniority where blacks have

been excluded from a certain line of jobs and where by their prior ex-

perience, they are qualified for these positions. E. g., Bing v. Roadway

Express, Inc., supra, 485 F.2d at 449-452; 444 F.2d at 689-691; United

States v. St. LouisSan Francisco Railway Co., supra, 464 F.2d at 308-309.

In Railway, the court allowed black train porters to carry over their

seniority into formerly all white brakemen positions because of their train-

ing in performing braking functions as porters. This occurred even though

there was a separate training line of progression for brakemen. /d.

See note 92, supra, at 246.

A-55

trict court's findings® and the record” as providing no showing

by the company that other lines of progression are functionally

related.* Robinson v. Lorillard Corp., supra, 444 F.2d at 799.

The district court's findings appear to be inconsistent. The court

states at finding #13:

. The jobs in the lines of progression as practiced in each depart-

ment are functionally related, one to the other, to afford training and

experience to the incumbent necessary to advance and perform pro-

ficiently the higher rated jobs, and are functionally related to the per-

formance of the department as a whole.”

But then at finding #34, the court states:

“The defendant does not maintain formal lines of progression in any

of its departments. Pay groups or wage progression schedules govern

the advancement of employees.”

The answer to this apparent riddle is the conclusion of law drawn by the

district court on the issue of business necessity:

“Alternately, the second question [business necessity], on this record,

is deserving of an affirmative answer. The efficiency of defendant's

operations is not only promoted by, but it also requires, service in a

lower job qualification as a condition to promotion to a higher, func-

tionally related one.” (Emphasis added) .

We think this clearly marks out that only to those jobs in lines of pro-

gression shown by the company fo be functionally related does this finding

of »usiness necessity attach. The record thus far clearly reveals that only

the craft positions are functionally related.

©The testimony of the vice president and works manager and the de-

par ment superintendents at trial indicates that in the mono-cast and pipe

fou .'ry employees within and without the department moved freely in

the tines of progression; that in the mono-cast, inspection, and pipe

foundry departments there is often jumping of positions in the lines of

progression; that .o the mono-<ast, inspection, pipe foundry, fittings

foundry, and steel foundry departments there are jobs which are similar

to positions within other departments (ec. g., forklift operator, crane

operator, welder) from whic.. skills can be transferred without training on

the other departments’ lines of progression; and that the machine shop

has very few positions able to utilize skills learned in other parts of the

plant. The plaintiffs’ expert witness noted even more examples of where

skills acquired in other department could be transferred to a job in an-

other department, positions where no specific prerequisite training was

necessary and places where jumping within the line of progression was

ee a Lee ne ee ee

put down on paper two months prior to trial.

"We do not mean that on remand the company is precluded from

presenting further evidence of positions requiring specific prerequisiie

A-56

The company here attempts what this Court found unsuc-

cessful in United States v. Jacksonville Terminal Co., supra,

451 F.2d at 451-453. There the terminal sought to use a finding

that “a few jobs at the Company provide training for other

jobs,” to establish functional lines of progression to legalize

unit seniority under the business necessity rationale. This

Court stated:

. The [craft seniority] systems and their concomitant

promotion and transfer restrictions protect those with work

experience in particular crafts and classes but do not ascer-

tain whether these are the only individuals qualified or the

“best qualified” to hold positions in those crafts and

classes. Jd.

In essence, we believe our instructions infra to the district court

and the court's ability to shape appropriate equitable relief is

comparable to the situation in Local 189, United Papermak. &

Paperwork. v. United States, supra, 416 F.2d at 990, where: “In

place of job security the court ordered the institution of a mill

seniority system carefully tailored to assure that no employee

would have a right to a job that he could not perform prop-

erly.”

2. Injunctive relief. The appellants ask that the district

court be directed to require that vacancies be posted ini-

tially for plant-wide bidding and filled by a qualified employee

with the greatest plant wide seniority. In addition, red cir-

cling® and advance entry’ are requested.

Under the “rightfu! place theory” we agree:

"Red circling is a standard remedy for eliminating past discrimination

which prevented employees from reaching higher jobs and is recognized

pays more than the new job, where the new job is in a department where

the top wage rate is greater than the rate of the old job, the employee is

paid the wage rate of the old job, until he advances to a job paying paying more

than that rate or until he voluntarily freezes himself in at the new job.

Advance entry would allow a transferring black employee to by-pass

the entry level positions in a department to take a position higher in the

line of progression cither which does not require training or for

which his experience in another department him.

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Under that theory [rightful place theory] blacks are assured

“the first opportunity to move into the next vacancies and

positions which they would have occupied but for wrongful

discrimination and which they are qualified to fill.”

United States v. Georgia Power Co., 5 Cir. 1973, 474 F.2d

906. Thus blacks confined by discrimination to certain

positions must be given the opportunity to transfer into

the formerly “white” positions as vacancies occur in order

to assume their ‘rightful place." A complete decree must

give enough relief to insure that the transferred discrimi-

natees are able to maintain their rightful place. Thus the

rightful place theory dictates that we give the transferring

discriminatee sufficient seniority carryover to permit the

advancement he would have enjoyed, and to give him the

protection against layoffs he would have had, in the ab-

sence of discrimination, Bing v. Roadway Express, Inc.,

supra, 485 F.2d at 450.

Therefore, the district court should issue an injunction requir-

ing: (1) the posting of vacancies plant-wide;' (2) the selec-

tion of “qualified” personnel for the vacancies on the basis of

plant-wide seniority;'* (3) transferring members of the class

shall retain their plant-wide seniority for all purposes including

promotion, lay-off, reduction-in-force, and recall;'* (4) ad-

11See Head v. Timken Roller Bearing Co., supra, 486 F.2d at 878-879;

Stamps v. Detroit Edison Co., supra, $65 F.Supp. at 116-117.

102See Bing v. Roadway Express, Inc., supra 485 F.2d at 451; United

States v. Georgia Power Co., supra, 474 F.2d at 926-927; United States v.

Jacksonville Terminal Co., supra, 451 F.2d at 451-453; Griggs v. Duke

Power Co., 420 F.2d 1225, 1286-1287 (4th Cir. 1970), rev'd on other

grounds, 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971); Long v.

Georgia Kraft Co., 328 F.Supp. 681, 689 (N.D.Ga.1970), rev'd on other

grounds, 450 F.2d at 559; Robinson v. Lorillard, $19 F.Supp. 835 (N.D.

N.C.1970) , aff'd. in part, 444 F.2d 791.

%8This Court is conscious of the testimony to the effect that part of the

plant was to be reconstructed to update the company's method of pipe

production, and that this would cause substantial changes, especially in

the mono-cast department, resulting in the layingoff of employees. We

have observed that past discrimination may penalize black employees in a

reduction-in force situation, and think that affirmative relief is necessary

to remedy such effects. United States v. Hayes International Corp., 456

F.2d at 119. Cf., United States v. Jacksonville Terminal Co., supra, 451

F.2d at 445-446, 449-450. See Williams v. Bethlehem Steel Corp., 468 F.2d

1201 (2d Cir 1972), cert. denied, 411 U.S. 981, 98 S.Ct. 1898, 96 L.Ed. 2d

A-58

vance entry into jobs for which an employee in the class is

“qualified” or for which no specific training is necessary;'*

(5) red circling of members of the class:'® (6) establishment

of specific residency periods in lines of progression where the

company has established prerequisite training as a “business

necessity." By the term “qualified” we mean ability which

is not to be determined solely by reference to experience in the

line of progression of a department, ¢. g. a forklift operator in

the mono-cast department should be able to transfer to a fork-

lift operator position in the fittings foundry or some other de-

partment, or an employee in a grinder position transferring to

the inspection department. This has specific application in the

advance entry situation. Assume a member of the class requests

$90 (1973); United States v. Bethlehem Steel Corp., supra 446 F.2d at

664, 666. The district court should be mindful of this consideration in

granting complete affirmative relief.

14United States v. Hayes International Corp., supra, 456 F.2d at 116-

119; Long v. Georgia Kraft Co., supra, 450 F.2d at 562; Local 189, United

Papermak. & Paperwork. v. United States, 301 F.Supp. at 917, aff'd, 416

F.2d 980.

1SUnited States v. Bethlehem Steel Corp., supra, 446 F.2d at 660, 665;

Uniter States v. N. L. Industries, supra, 479 F.2d at 375-376; Local 189,

United Papermak. & Paperwork. v. United States, supra, 301 F. Supp. at

917, 923, aff'd., 416 F.2d 980; Robinson v. Lorillard, supra, 319 F.Supp.

835, 839, 843, aff'd. in part, 444 F.2d 791; Clark v. American Marine Corp.,

$04 F.Supp. 603, 608 (E.D.La.1969) .

106As the author of one article commented:

“On the other hand, where the line of progression technique has been

adopted simply to channel and rationalize job movements in a depart-

ments, other techniques for demonstrating qualifications such as testing

or the use of ‘probation periods’ could be utilized and the ‘rightful

place’ approach applied. Even where the transferring Negroes must

follow the established cursus honorum of the line of progression, a

minimum period of occupancy for each job should be defined, so that

Negroes who had worked in a job for the designated period could be

presumed to have acquired the skills necessary to be eligible for the

next vacancy in the following job.” Note, Tithe VIL, Seniority Discrimi-

nation and the Incumbent Negro, 80 Harv.L.Rev. 1260, 1279 (1967).

See note 92, supra at 246.

See Local 189, United Papermak. & Paperwork. v. United —

301 F.Supp. at 917, 925-950, aff'd., 416 F.2d at 990; Robinson v.

Corp., supra, 444 F.2d at 799-800.

A-59

transfer to or bids for a position in another department above

the entry level in the line of progression. If by his prior ex-

perience or because no training is necessary, he is qualified,

advancement from entry level up the line of progression should

be by-passed in order to insure this employee his “rightful

place."

By eliminating the initial preference given employees within

the department under the posting procedure and by requiring

selection on plant-wide seniority, the prior discrimination

which denied entrance and accumulation of seniority in the

better paying departments to the majority of black employees

wil] be tempered. For those members of the class who obtained

entry but were denied accumulation of seniority within a

higher paying department, plant-wide seniority will equalize

competition for promotion. This restructuring of the bidding

and seniority systerns and the allowance of advance entry for

transfers by black employees will assure the injured class mem-

bers the opportunity “to move into the next vacancies and po-

sitions which they would have occupied but for wrongful dis-

crimination.”*”

However, this does not aid the members of the class denied

training and access to higher paying positions because of non-

qualification. The red circling is designed for this remedial

purpose. Black employees who were earlier blocked but now

desire transfer to a department where the top pay grade and

advancement opportunities are greater than in their former de-

partment, are handicapped by their lack of training for the po-

sitions in the new department. Therefore, where a job from

which the black employee transfers pays more than the new job

in a department where the top pay grade is greater than the

rate of the old job, a member of the class shall be paid the wage

rate of the old job until he advances to a position paying more

See Bing v. Roadway Express, Inc., supra, 485 F.2d at 449-452, 444

F.2d at 689-691. United States v. St. LouisSan Francisco Railway Co.,

sepra, 464 F 2d at 308-309. See note 94, supra at 246.

"United States v. Georgia Power Co., supra, 474 F.2d at 927.

A-60

than that rate or until he voluntarily freezes himself in at

the new job.

C. Changes in the Apprentice and On-The-Job

Training Programs

While restructuring the promotion procedures will substan-

tially aid the advancement of previously excluded class mem-

bers into non-craft departments and jobs, the necessary line of

progression training will continue to delay obtaining of craft

positions by black employees. For that reason changes are nec-

essary in the programs, apprenticeship and journeyman, de-

signed to provide training for craft positions.

The age requirement, twenty-five years or twenty-nine for

those having served in the military, for entry into the appren-

tice program is an unnecessary dilatory barrier. The company

does not attempt to overcome its racial impact under a ‘“‘busi-

ness necessity” rationale.’ Therefore, the district court should

enjoin the continuance of the age prerequisite for the appren-

tice program. On remand, the company may present evidence

that another limit other than the thirty-five years endorsed by

plaintiffs’ expert should bé established, but this would require

a compelling interest of the company.’

Likewise, the training periods for the apprenticeship and on-

the-job training, given the exclusion of black employees, are

unnecessarily long. The company has made no showing that

the three and one-half to four years for apprenticeship or seven

1The company argues that the age and educational qualifications had

little or no detrimental effect on black employees because the on-the-job

training was available without these prerequisites. insicad of supporting,

this argument undermines the company's position. Under the “business

necessity” standard an acceptable alternative is prima facie proof that

such age requirement is not necessary for effective and efficient plant

operation.

Carter v. Gallagher, 452 F.2d 315, $26 (8th Cir. 1972) (en banc),

cert. denied, 406 U.S. 950, 92 S.Ct. 2045, $2 L_Ed.2d 338 (1972) (employ-

ment discrimination under section 1981, maximum age limit raised to

A-61

years for journeymen are periods required by “business neces-

sity.” Cf., Local 189, United Papermakers & Paperworkers v.

United States, supra, 301 F.Supp. at 917, aff'd, 416 F.2d 980.

On remand, either by agreement of the parties or order of the

court after a hearing, if necessary, the length of the apprentice-

ship should be shortened with varying periods allowed accord-

ing to each craft's requirements, and the three years qualifying

experience on a craft related job and the length of the on-the-

job training, itself, should be shortened." In addition, con-

sideration should be given to broadening the qualifying expe-

rience on a craft related job to include comparable experience

on jobs outside craft departments. The court should examine

for adverse impact the use of subjective selection criteria, since

the trial, in the journeyman program.

On remand, the company may advance reasoning that the

present length of the apprenticeship and journeyman are, for

training purposes, a ‘business necessity.’ However, the district

court should pay heed to the conclusions in Moody v. Albe-

marle Paper Co., 474 F.2d 134, 140 (4th Cir. 1973). In that

case, the company hired all employees into a pool. From the

pool employees were moved into lines of progression as vacan-

cies occurred. Since the company did not know in advance in

which line a vacancy would occur, it required all employees in

the pool to be qualified for all the lines. The court, in con-

sidering a business necessity argument, held that:

Albemarle has not shown that hiring all employees into a

pool is necessary for the safe and efficient operation of the

business, nor has it shown that hiring employees for spe-

cific lines of progression is not an acceptable alternative.

This they were required to prove to justify their policies

under the business necessity test. Jd.

Similarly, the record here reveals that a craft-trainee for the

machine shop is required to operate all machines proficiently.

An alternative might be to require a shorter training period

NUnited States v. Operating Engineers, 4 EPD € 7944 at 6507-08

(N.D.Calif.1972) .

A-62

and to train an employee to operate a particular machine. We

recognize, however, that a “‘jobbing machine shop” is different

from a paper factory. The business necessity rationale exists

to take into account such situational differences.

D. Back Pay

The appellants request back pay for members of the class,

arguing that the district court abused its discretion in refusing

such an award. The district court had ruled:"™

Alternately, in the exercise of discretion, LeBlanc v.

Southern Bell T & T Company, 460 F.2d 1228 (5th Cir.

1972) , and Johnson v. Georgia Highway Express, 417 F.2d

1122 (5th Cir. 1969), the Court declined to award back

pay in view of the demonstrated good faith compliance by

defendant with Title VII, LeBlanc v. Southern Bell T & T

Company, supra, and Parham v. Southwestern Bell Tele-

phone Company, 433 F.2d 421 (8th Cir. 1970), and be-

cause such an award is not necessary to insure future com-

pliance therewith. Phelps Dodge Corporation v. NLRB,

313 U.S. 177, 61 S.Ct. 845, 85 L.Ed. 1271 (1941).

These bases are improper for denying back pay. The district

court should structure a back pay decree to conform with the

analysis below.

1. Abuse of discretion. The standard of review for an ap-

pellate court in determining whether a district court has

abused its discretion by failing to fully remedy employment

discrimination by denying back pay was suggested by the Su-

preme Court in Newman v. Piggie Park Enterprises, 390 U.S.

400, 88 S.Ct. 964, 19 L.Ed.2d 1263 (1968). The statute there,

Title II of the Civil Rights Act of 1964, 42 U.S.C.A. § 2000a-

3(b) , provided that ‘‘the prevailing party” is entitled to a “‘rea-

sonable attorney's fee’’ in the court's “discretion.” The Supreme

Court determined that Congress’s purpose for enacting this

provision limited the scope of discretion which a district court

111The district court, secondarily, relied on a finding that a back pay

award would be inequitable. This will be discussed infra.

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had in denying attorney's fees.? Likewise, the parameters of

discretion, within which a district court may deny back pay in

employment discrimination cases, are defined by the purpose

for which Congress enacted, and the courts have interpreted,

the statutory back pay provisions.’ Congress in authorizing

courts, expressly under Title VIi'* and impliedly under sec-

tion 1981,"** to grant equitable relief to persons harmed by em-

ployment discrimination, included the discretion to award back

pay. This Court'’® and commentators'’? have noted that the

112The Supreme Court outlined how this discretion should be exercised:

“It follows that one who succeeds in obtaining an injunction under that

Title should ordinarily recover an attorney's fee unless special circum-

stances would render such an award unjust.” 390 U.S. at 402.

13In applying the standard of review modeled after Piggie Park, the

court in Moody v. Albemarle Paper Co., supra, 474 F.2d 134, stated:

“Where a district court fails to exercise discretion with an eye to the

purposes of the Act, it must be reversed. Wirtz v. B. B. Saxon Co., 365

F.2d 457 (5th Cir. 1966); Shultz v. Parke, 413 F.2d 1364 (5th Cir. 1969) .”

Id. at 141.

14See 42 U.S.C.A. § 2000e-5 (g) (Supp. 1973).

Although this provision speaks in terms of relief awarded because of

“intentional” discrimination, this has consistently been construed by this

Court and others to read that “the defendant meant to do what he did,

that is, his employment practice was not accidental.” Local 189, United

Papermakers & Paperworkers v. United States, supra, 416 F.2d at 996. See

Schaeffer v. San Diego Yellow Cabs, 462 F.2d 1002, 1006 (9th Cir. 1972) ;

United States v. Jacksonville Terminal Co., supra, 451 F.2d at 442-443;

Robinson v. Lorillard Corp., supra, 444 F.2d at 796-797; Sprogis v. United

Air Lines, 444 F.2d 1194, 1201 (7th Cir. 1971), cert. denied, 404 U.S. 991,

92 S.Ct. 536, $0 L.Ed.2d 543 (1971); Jones v. Lee May Motor Freight, Inc.,

supra, 431 F.2d at 250. But see, Dewey v. Reynolds Metals Co., 429 F.2d

$24, $31 (6th Cir. 1970), aff'd. per curiam, 402 U.S. 689, 91 S.Ct. 2186, 29

L.Ed.2d 267 (1971) (equally divided court) .

"5Johnson v. Goodyear Tire & Rubber Co., supra, 491 F.2d at 1375-

1380; Head v. Timken Roller Bearing Co., supra, 486 F.2d 874-875; Brown

v. Gaston County Dyeing Machine Co., supra, 457 F.2d 1377; Caldwell v.

National Brewing Co., supra, 443 F.2d 1044; Sanders v. Dobbs Houses,

supra, 431 F.2d at 1101; Lazard v. Boeing Co., supra, $322 F.Supp. 345-346.

Cf. Sullivan v. Little Hunting Park, supra, 396 U.S. at 238-240.

16Johnson v. Goodyear Tire & Rubber Co., supra, 491 F.2d at 1377 n.

$7, 1380, nn. 52-53; United States v. Georgia Power Co., supra, 474 F.2d at

921, n. 19.

NTDavidson, “Back Pay” Awards Under Title VII of the Civil Rights

Act of 1964, 26 Rutgers L.Rev. 741, 741-42 (1973) (hereinafter cited as

A-64

provision for back pay in Title VII was modeled on the similar

provision in the National Labor Relations Act, 29 U.S.C.A. §

160 (c), whose object is “designed to vindicate the public pol-

icy of a statute by making the employees whole for losses suf-

fured on account of an unfair labor practice.”""'* Nathanson v.

NLRB, 344 U.S. 25, 27, 73 S.Ct. 80, 97 L.Ed. 23 (1952). An

award of back pay has been recognized by this Court as not a

“mere adjunct of some more basic equity” but as an “integral

part of the whole relief which seeks, not to punish the respon-

dents but to compensate the victim of discrimination.” United

States v. Georgia Power Co., supra, 474 F.2d at 921. Johnson v.

Goodyear Tire & Rubber Co., supra, 491 F.2d at 1375; Johnson

v. Georgia Highway Express, supra, 417 F.2d 1122. Under

Title VII and section 1981 the injured workers must be re-

stored to the economic position in which they would have been

but for the discrimination — their “rightful place."""* Because

of the compensatory nature'”® of a back pay award and because

Back Pay); Comment, Developments in the Law—Employment Discrimi-

nation and Title VII of the Civil Rights Act of 1964, 84 Harv.L.Rev. 1109,

1259 n. $49 (1971).

'8The rationale for a back pay award under section 1981 is similar, but,

of course, other types of damages might also be possible under section 1981.

Lazard v. Boeing Company, supra, $22 F.Supp. at $45-346. Cf. Sullivan v.

Little Hunting Park, supra, 396 U.S. 229, 90 S.Ct. 400, 24 L.Ed.2d 386;

Head v. Timken Roller Bearing Co., supra, 486 F.2d at 874-875.

"9T his rationale that back pay is compensatory in nature and necessary

in order to grant full relief in employment discrimination suits has been

recognized by other courts, also. See Head v. Timken Roller Bearing Co.,

supra, 486 F.2d at 876-878; Moody v. Albemarle Paper Co., supra, 474 F.2d

at 141-142; Bowe v. Colgate-Palmolive Co., 416 F.2d 711, 720 (7th Cir.

1969) ; Stamps v. Detroit Edison Co., supra, $65 F.Supp. at 119, 121-122;

Tidwell v. American Oil Co., $32 F.Supp. 424, 437 (D.Utah 1971).

120From the employer's viewpoint back pay may be a punishment. But

just as the National Labor Relations Act, Title VII was written to protect

the employee. Not only has the company violated a strong public policy

against racial discrimination here, but it has substantially injured this

class of black workers. “As between the obviously innocent discriminatee

and the employer who may have some equities on his side (good faith], it

seems fairer to require the employer with his usually superior resources to

bear the loss. This generous approach with an emphasis on compensation

of the employee is found in the NLRA cases and in several noteworthy

Title VII decisions.” Back Pay, supra note 117, at 745, nn. 33, 34.

A-65

of the “rightful place” theory, adopted by the courts, and of the

strong congressional policy, embodied in Title VII, for remedy-

ing employment discrimination, the scope of a court s discretion

to deny back pay is narrow. Head vy. Timkes Roller Bearing

Co., supra, 486 F.2d at 876; Moody v. Albemarle Paper Co.,

supra, 474 F.2d at 141-142. Once a court has determined that

a plaintiff or complaining class has sustained economic loss

from a discriminatory employment practice, back pay should

normally be awarded unless special circumstances are present.'®*

The district court's reasons for denying back pay must next

be exam.ned for evidence of “special circumstances." The

primary contentions relied on by the court were (1) that the

company had demonstrated good faith compliance with Title

VII and (2) that a back pay award was not necessary to insure

future compliance by the company. As expounded earlier the

raison d'etre of a back pay award is to compensate victims of

discrimination for economic loss, not to punish the discrimi-

nating employer or insure future compliance. Neither the past

good faith of the company nor the possibility of future viola-

tions of Title VII is relevant. Whether black workers were

economically injured by unlawful discrimination and require

a back pay award to make them whole is the issue.

As to an assertion of good faith, the Supreme Court in Griggs

pointed to consequences not motives. 401 U.S. at 432. Like-

wise, this Court has specifically reiected good faith as a defense

to a back pay award in Johnson v. Goodyear Tire & Rubber

121Both the Fourth Circuit and Sixth Circuit Courts of Appeal have

adopted this standard. Head v. Timken Roller Bearing Co., supra, 486

F.2d at 876; Moody v. Albemarle Paper Co., supra, 474 F.2d at 142.

122Courts, in the past, have denied back pay for a variety of reasons: (1)

the unsettled nature of the law concerning a particular practice, compare

United States v. St. Louis-San Francisco Railway Co., supra, 464 F.2d at

$11, $13, with United States v. N. L. Industries, supra, 479 F.2d at 378-

$80; (2) the good faith of an employer, United States v. St. Louis-San

Francisco Railway Co., supra; Baxter v. Savannah Sugar Refining C~rp.,

supra, $50 F.Supp. at 146; (3) a state statute conflicting with Title VII

(see the cases cited at note 125, infra at 254); (4) and impossibility of

determining the period for which back pay is to be awarded, United States

v. St. Louis-San Francisco Railway Co., supra.

A-66

Co., supra, 491 F.2d at 1375-1377, n. 37. In rejecting good faith

as a proper legal basis for denying back pay here, we adopt the

reasoning of the court in Robinson v. Lorillard, supra, 444 F.2d

791:'%

Next it is argued that back pay should not be awarded

in the absence of specific intent [good faith] to discrimi-

nate. A corollary argument is that the award was improper

in light of the unsettled state of the law. The principal

answer to both points is that back pay is not a penalty im-

posed as a sanction for moral turpitude; it is compensation

for the tangible economic loss resulting from an unlawful

employment practice. Under Title VII the plaintiff class

is entitled to compensation for that loss, however benevo-

lent the motives for its imposition. /d. at 804.

See Head v. Timken Roller Bearing Co., supra, 486 F.2d at

877; Moody v. Albemarle Paper Co., supra, 474 F.2d at 141.

But see, United States v. St. Louis-San Francisco Railway Co.,

supra, 464 F.2d at 311, 313; Baxter v. Savannah Sugar Refining

Corp., supra, 350 F.Supp. 146. Compare United States v. St.

Louis-San Francisco Railway Co., supra, with United States v.

N. L. Industries, supra, 479 F.2d at 378-380.

The issue of future compliance is of course pertinent in de-

ciding whether or not to provide equitable relief against future

discriminatory practices, ¢. g. a permanent injunction. Back

pay, however, is an equitable award for past economic injury.

The district court, secondarily, relied on a finding’ as to

13This Court in Rowe v. GMC, supra, 457 F.2d 348, set out with

particularity the good faith of General Motors. /d. at 355-356. Nevertheless,

the case was remanded with instructions for the district court to, “of

course include the appropriate remedy, back pay, limited or full, etc.,

as needed to effectuate the Act.” Jd. at $60. Compare the good intent of

the employer in Griggs. 401 U.S. at 432.

124In finding #31, the court stated:

“Any award of back pay would penalize those black employees, as

well as white employees, who strove to improve themselves and their

job performance during the period in question. Due to the laudable

and unique ‘extra compensation’ plan whereby no earnings are paid

outside the company and the employees, both black and white alike,

share in the earnings of the defendant, any award of back pay would

reduce the earnings of the company available for distribution to the

employees, and would penalize all employees of the company. An award

A-67

the “inequity” of granting back pay. The discretion a court

has under the “special circumstances” standard encompasses a

denial of back pay on the grounds of substantial injustice.

Moody v. Albemarle Paper Co., supra, 474 F.2d at 142. Cf.

Newman v. Piggie Park Enterprises, supra, 390 U.S. at 402.

The “special circumstances” where an unjust result has pre-

vented an award of back pay have been narrow. The most nu-

merous are sex discrimination suits where conflicting state leg-

islation, which limit work hours or impose weight lifting

limits or the like for women employees, require a practice in

violation of Title VII. In these cases the courts have properly

declined to award back pay because “‘state statutes, like federal

ones, are entitled to the presumption of constitutionality until

their invalidity is judicially declared." Davies Warehouse Co.

v. Bowles, 321 U.S. 144, 153, 64 S.Ct. 474, 479, 88 L.Ed. 635

(1944). However, a back pay decree is appropriate in those

cases where a limitation is not imposed by a state statute but

by the employer,'** or where the employer is put on notice of

a judicial or definitive administrative determination of the in-

validity of the state law.'*”

of back pay to black employees who were passed over for better jobs for

a lack of appropriate test score, when there were also white employees

who were not promoted for the same reason, would be an inequitable

and unconscionable result. An award of back pay to black employees

who were passed over for better jobs for a lack of appropriate test

scores, when the job vacancy was awarded a black employee with the

appropriate ‘est score would likewise be an inequitable and un-

conscionable result, and unauthorized by Title VII since no racial over-

tone can be attributed by the selection of one black over another black.”

125F. g., Kober v. Westinghouse Electric Corp., 480 F.2d 240, 246-250

(3rd Cir. 1973) ; United Steel Workers of America, Local 1104 v. United

States Steel Corp., 478 F.2d 1255 (6th Cir. 1973) ; Manning v. International

Union, 466 F.2d 812 (6th Cir. 1972), cert. denied, 410 U.S. 946, 93 S.Ct.

1366, $5 L.Ed.2d 613 (1973) ; Weeks v. Southern Bell T & T Co., 408 F.2d

228 (5th Cir. 1969) ; LeBlanc v. Southern Bell T & T Co., $83 F.Supp. 602

(E.D.La. 1971), aff'd. per curiam, 460 F.2d 1228 (5th Cir.) , cert. denied,

409 U.S. 990, 93 S.Ct. $20, $4 L.Ed.2d 257 (1972).

126Bowe v. Colgate-Palmolive Co., supra, 416 F.2d 711 (weight lifting

limitation) .

127Compare Rosenfeld v. Southern Pacific Co., 444 F.2d 1219 (9th Cir.

1971) with Schaeffer v. San Diego Yellow Cabs, supra, 462 F.2d 1002.

A-68

In this case, except for the “extra compensation” plan

the district court clearly erred in its conclusions regarding in-

justice to the company.’** Even the argument that distributions

to employees out of earned surplus (the extra compensation

plan) would be reduced, penalizing all employees, is hyperbolic

and misleading. Since the workers are, in essence, the stock-

holders of the company,'” they, like any stockholders, should

help bear the burden of a back pay award. Any injustice re-

sults from the fact that this class of black workers will again be

penalized economically. Moreover, a majority of white em-

ployees have enjoyed swifter job advancement with consequen-

tial salary increases because qualified black workers have been

discriminatorily hampered in competition for promotion. At

the same time a majority of black employees endured substan-

tial economic losses. To assert now that reductions in the dis-

tribution from earned surplus which all employees will suffer

can somehow defeat an award of back pay is peculiarly unper-

suasive.

The present suit offers an additional situation falling with-

in “special circumstances.’ Since the plaintiffs allege viola-

tions of 42 U.S.C.A. § 1981, as well as Title VII, a back pay

award might be thought to extend to a period prior to July 2,

1965, the effective date of Title VII, under section 1981, sub-

Since the Supreme Court indicated in Griggs (401 U.S. at 443-444) that

administrative interpretations by the EEOC, as the enforcing agency, are

entitled to great deference, a definitive administrative ruling on a con-

flicting state statute may be sufficient notice. 29 C.F.R. §§ 1604.1 (b),

1604.2 (b). See Schaeffer v. San Diego Yellow Cabs, supra, 462 F.2d at

1007-1008; Manning v. International Union, supra, 466 F.2d at 816. Cf. 42

US.C.A. § 2000e-12 (b) .

128Since promotion continues to be determined by plant-wide seniority

and ability, no employees are hurt because they improved their position

during this period of discrimination. The testing had a discriminatory

effect on black employees as compared to white workers. In other words,

these tests were probably accurate measuring devices as applied to white

employees but not as applied to black employees. Qualified black workers

were not being promoted with their white co-w

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