OVERSIGHT HEARINGS ON FEDERAL ENFORCEMENT OF EQUAL EMPLOYMENT OPPORTUNITY LAWS Part 1 TUESDAY, JULY 8, 1975 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON EQUAL OPPORTUNITIES OF THE COMMITTTEE ON EDUCATION AND LABOR, Washington, D.C. The subcommittee met, pursuant to notice, at 9:45 a.m., in room 2261, Rayburn House Office Building. Hon. Augustus F. Hawkins (chairman) presided. Members present: Representatives Hawkins and Buchanan. Staff members present: Susan D. Grayson, staff director; William Higgs, legislative assistant; Carole Schanzer, clerk; and Charles W. Radcliffe, minority counsel. Mr. HAWKINS. The Subcommittee on Equal Opportunities of the House Education and Labor Committee is called to order. The other members of the subcommittee will be appearing later in the course of the hearing. In order to accommodate the witnesses who have been invited, I think we should begin so as to give them full time. Both majority and minority legal counsels are present and will, of course, participate in the question period. I have a brief statement concerning the nature of the hearing. We are holding this hearing today in continuation of our series of hearings on the enforcement of the Equal Employment Opportunity laws by the various agencies of the Federal Government, including the Equal Employment Opportunity Commission, the Civil Service Commission, and the Office of Federal Contract Compliance of the Department of Labor. On Wednesday, July 25, the Supreme Court of the United States decided the case of Albemarle Paper Co. v. Moody, which apparently holds great significance in the area of equal employment opportunity with respect to the back pay and employee testing issues. Since the Equal Employment Opportunity Coordinating Council is currently considering the adoption of uniform employee testing guidelines, consideration of the impact of the Albemarle case is particularly timely. Moreover, recent backpay guidelines of the Office of Federal Contract Compliance seem to make back pay merely discretionary rather than a matter of course as the Albemarle decision would indicate to be proper. Since Albemarle appears to fully contemplate the extensive use of class action type remedies, what is the present validity of the Civil Service Commission's position against the use of class actions in its administrative proceedings? These are just some of the issues that the subcommittee hopes will be addressed in this hearing today. [Court cases referred to follow:] SUPREME COURT OF THE UNITED STATES NOS. 74-389 AND 74-428 ALBEMARLE PAPER COMPANY ET AL., PETITIONERS (74–389) v. JOSEPH P. MOODY ET AL ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE MR. JUSTICE BLACKMUN. June 25, 1975 I concur in the judgment of the Court, but I do not agree with all that is said in the Court's opinion. The statutory authority for making awards of backpay in Title VII cases is cast in language that emphasizes flexibility and discretion in fashioning an appropriate remedy: "If the court finds that the respondent has intentionally engaged 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 backpay . . . or any other equitable relief as the court deems appropriate." 42 U.S.C. § 2000e-5 (g) (emphasis supplied). Despite this statutory emphasis on discretion, the Court of Appeals in this case reasoned by analogy to Newman v. Piggie Park Enterprises, 390 U.S. 400 (1968), that once a violation of Title VII had been established, "[back pay] should ordinarily be awarded. . . unless special circumstances would render such an award unjust." 474 F. 2d 134, 142 (CA4 1973). Today the Court rejects the "special circumstances" test adopted by the Court of Appeals and holds that the power to award backpay is a discretionary power the exercise of which must be measured against "the purposes which inform Title VII." Ante, pp. 8-10. With this much of the Court's opinion I agree. The Court goes on to suggest, however, that an employer's good faith is never a sufficient reason for refusing to award backpay. Ante, pp. 15-16. With this suggestion I do not agree. Instead, I believe that the employer's good faith may be a very relevant factor for a court to consider in exercising its discretionary power to fashion an appropriate affirmative action order. Thus, to take a not uncommon example, an employer charged with sex discrimination may defend on the ground that the challenged conduct was required by a State's "female protective" labor statute. See e.g., Kober v. Westinghouse Electric Corp., 480 F. 2d 240 (CA3 1973); Manning v. International Union, 466 F. 2d 812 (CA6 1972), cert. denied, 410 U.S. 946 (1973); Schaeffer v. San Diego Yellow Cabs, Inc., 462 F. 2d 1002 (CA9 1972); LeBlanc v. Southern Bell Telephone & Telegraph Company, 460 F. 2d 1228 (CA5), cert. denied, 409 U.S. 990 (1972). In such a case, the employer may be thrust onto the horns of a dilemma: either he must violate Title VII or he must violate a presumptively valid state law. Even though good-faith reliance on the state statute may not exonerate an employer from a finding that he has intentionally violated Title VII, see, e. g., Kober v. Westinghouse Corp., supra, compare, ante. p. 16 nn. 17-18, surely the employer's good-faith effort to comply with Title VII to the extent possible under state law is a relevant consideration in considering whether to award backpay. Although backpay in such a case would serve the statutory purpose of making the discriminatee whole, it would do so at the expense of an employer who had no alternative under state law and who derived no economic benefit from the challenged conduct. I also agree with the decision of the Court to vacate the judgment of the Court of Appeals insofar as it appeared to require an injunction against all testing by Albemarle. I cannot join,however, in the Court's apparent view that absolute compliance with the EEOC Guidelines is a sine qua non of pre-employment test validation. The guidelines, of course, deserve that deference normally due agency statements based on agency experience and expertise. Nevertheless, the guidelines in question have never been subjected to the test of adversary comment. Nor are the theories on which the guidelines are based beyond dispute. The simple truth is that pre-employment tests, like most attempts to predict the future, will never be completely accurate. We should bear in mind that pre-employment testing, so long as it is fairly related to the job skills or work characteristics desired, possesses the potential of being an effective weapon in protecting equal employment opportunity because it has a unique capacity to measure all applicants objectively on a standardized basis. I fear that a too rigid application of the EEOC Guidelines will leave the employer little choice, save an impossibly expensive and complex validation study, but to engage in a subjective quota system of employment selection. This, of course, is far from the intent of Title VII. SUPREME COURT OF THE UNITED STATES Nos. 74-389 and 74-428 ALBEMARLE PAPER COMPANY ET AL., PETITION ERS, (74–389) v. HALIFAX LOCAL No. 425, UNITED PAPERMAKERS AND PAPERWORKERS, AFL-CIO, PETITIONER, (74-428) v. JOSEPH P. MOODY ET AL. ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT June 25, 1975 MR. JUSTICE MARSHALL, concurring. I agree with the opinion of the Court. I write today only to make the following observations about the proceedings in the District Court on remand relative to the backpay issue. As the Court affirms, there is no legal bar to raising a claim for backpay under Title VII at any time in the proceedings, even "indeed after a trial on [the] complaint [for injunctive relief] has been had." Ante, at 17. Furthermore, only the most unusual circumstances would constitute an equitable barrier to the award of makewhole relief where liability is otherwise established. The bar of laches, predicated on the prejudice to a defendant's case from the tardy entry of a prayer for compensation, should be particularly difficult to establish. Backpay in Title VII cases is generally computed, with respect to each affected employee or group of employees, by determining the amount of compensation lost as a direct result of the employer's discriminatory decision not to hire or promote. In a case such as this, where the plaintiff class is limited to present and former employees of petitioner who were denied promotions into the more lucrative positions because of their race, there is no need to make additional findings and offsetting computations for wages earned in alternative employments during the relevant period. The information needed in order to compute backpay for nonpromotion is contained in the personnel records and pay schedules normally maintained by an employer, some under compulsion of law. These data include the time at which an employee in the favored group was promoted over an otherwise more senior member of the disfavored class, and the wage differential that the promotion entailed. Rarely, if ever, could an employer plausibly invoke the doctrine of laches on the usual ground that the passage of time has put beyond reach evidence or testimony necessary to his case. The prejudice on which the District Court relied in this case was, indeed, of a different and more speculative variety. The court made no findings of fact relevant to the subject, but found it "apparent" that prejudice would accrue because "[t]he defendants might have chosen to exercise unusual zeal in having this court determine their rights at an earlier date had they known that back pay would be at issue." App. 498. This indulgent speculation is clearly not an adequate basis on which to deny the successful Title VII complainant compensatory back pay and surely even less of a reason for penalizing the members of the class that he represents.* In posing as an issue on remand "[w]hether the petitioners were in fact prejudiced, ante, at 17 (emphasis added), the Court recognizes as much. Although on the record now before us I have no doubt that respondents' tardiness in asserting their claim to backpay was excusable in light of the uncertain state of the law during the first years of this case, agree that the District Court should be the first to pass upon the issues as the Court has posed them. Doubtful though I remain about their ability to do so, petitioners are entitled at least to an opportunity to prove that respondents' delay prejudiced their defense so substantially as to make an award of compensatory relief oppressive. SUPREME COURT OF THE UNITED STATES Nos. 74-389 and 74-428 ALBERMARLE PAPER COMPANY ET AL., PETITIONERS, (74-389) v. HALIFAX LOCAL No. 425, UNITED PAPERMAKERS AND PAPERWORKERS, AFL-CIO, PETITIONER, (74-428) v. JOSEPH P. MOODY ET AL. ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE June 25, 1975 MR. CHIEF JUSTICE BURGER, Concurring in part and dissenting in part. I agree with the Court's opinion insofar as it holds that the availability of backpay is a matter which Title VII commits to the sound equitable discretion of the trial court. I cannot agree with the Court's application of that principle in this case, nor with its method of reviewing the District Court's findings regarding Albemarle's testing policy. With respect to the backpay issue, it must be emphasized that Albermarle was not held liable for practicing overt racial discrimination. It is undisputed that it voluntarily discontinued such practices prior to the effective date of Title VII and that the statute does not-and could not-apply to acts occurring before its passage. The basis of Albermarle's liability was that its seniority system perpetuated the effects of past discrimination and, as the District Court pointed out, the law regarding an employer's obligation to cure such effects was unclear for a considerable period of time. Moreover, the District Court's finding that Albermarle did not act in bad faith was not simply a determination that it thought its seniority system was legal but, rather, a finding that both prior to and after the filing of this lawsuit it took steps to integrate minorities into its labor force and to promptly fulfill its obligations under the law as it developed.1 In light of this background, the Court's suggestion that the District Court "conditioned" awards of backpay upon a showing of bad faith, ante, at 16 is incorrect. Moreover, the District Court's findings on this point cannot be disregarded as irrelevant. As the Court's opinion notes. one of Congress' major purposes in giving district courts discretion to award backpay in Title VII actions was to encourage employers and unions "to self-examine and to self-evaluate their employment practices and to endeavor to eliminate, so far as possible, the last vestiges of an unfortunate and ignominious page in this country's history." Ante, at 11. By the same token, if employers are to be assessed backpay even where they have attempted in good faith to conform to the law, they will have little incentive to eliminate marginal practices until bound by a court judgment. *Even the District Court's formulation, if founded upon proof that the defendants would have "chosen to exercise unusual zeal," would only justify a limitation on the award of backpay to reflect the earlier date at which the court would have awarded it; in no event would it support the denial of all backpay relief. 1 The District Court concluded that Albemarle was entirely justified in maintaining some type of seniority system which insured that its employees would have "a certain degree of training and experience." Its findings regarding the absence of bad faith were as follows: "It appears that the company as early as 1964 began active recruitment of blacks for its Maintenance Apprenticeship Program. Certain lines of progression were merged on its own initiative, and as judicial decisions expanded the then existing interpretations of the Act, the defendants took steps to correct the abuses without delay." App., at 498. |