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Mr. ALEXANDER. Thank you, Mr. Chairman.

Senator KENNEDY. Our next witness is Mr. Edward Sylvester, formerly the Director of the Office of Federal Contract Compliance. I want to welcome you, Mr. Sylvester.

TESTIMONY OF EDWARD C. SYLVESTER, JR., FORMER DIRECTOR OF THE OFFICE OF FEDERAL CONTRACT COMPLIANCE

Mr. SYLVESTER. Thank you very much, Mr. Chairman, and members of the committee. I was Director of the Office of Federal Contract Compliance from its inception in October of 1965 until I left to assume another position in the Department of Health, Education, and Welfare in 1968. And I am now a private citizen and have been out of the Government since late January.

I have, however, maintained a continuing interest in the program, and it is for that reason that I am here and hopeful of being of some assistance in whatever review might take place.

Before Secretary Wirtz left the Department of Labor, in one of his final interviews, he indicated that the greatest contribution of the Department had been in the field of equal employment opportunity.

Though the Secretary spoke broadly, I take some pride in the fact that the Office of Federal Contract Compliance made some contribution to that determination. I will try to avoid repeating some of the history as contained in the chairman's opening statement and in the statement of Mr. Alexander.

After the initial Executive Order No. 10925 which introduced affirmative action and the possibility of sanctions, the Government spent the period from early 1961 to late 1965 in a broadly based program of voluntary compliance and education regarding equal employment opportunity. It was during this period that the plans for progress program was initiated and developed under which employers were asked to sign voluntary affirmative action programs. And that was the basic thrust of Federal activities involving its contracts during that period.

Studies by the Equal Employment Opportunity Commission indicate in spite of the voluntary effort of the plans for progress companies, that there was no significant difference in the employment patterns of those companies during that period, and that it was impossible to tell a plans for progress company from a non-plans for progress company when it came down to an analysis of employment statistics. There was no meaningful change or improvement. And in fact white-collar employment hearings held by the Commission in New York disclosed that those companies which were in plans for progress had worse employment statistics insofar as race is concerned than other white-collar employers.

In October of 1965, President Johnson issued Executive Order 11246, in which he combined the previous Executive orders, and assigned the responsibility for implementation to the Secretary of Labor. At that time I was named Director of the newly created Office of Federal Contract Compliance.

We then shifted the program from an educational voluntary one to one of contract enforcement. And during the next 2 years we had three main objectives in the program. One was to really spell out and

define the true nature of discrimination as a structural thing and not merely a matter of happenstance or refusal at the hiring gate. There are structural barriers to employment upgrading and improvement such as seniority systems which maintain the discriminatory patterns of the past; tests that are unrelated to job performance and effectively filter out a lot of people who are in fact capable of performing; and personnel systems that continue to assign people on a discriminatory basis.

Another area of emphasis was getting the contracting agencies who under the Executive order have the primary responsibility for contract enforcement to respond to their responsibilities under the order and to develop the necessary capability to carry out that responsibility. And the third was creating enough models of successful resolution of difficult discrimination problems to serve as guidelines for Government contractors and the Federal agencies.

The Office had initiated a number of industry programs including steel and paper. And of course the textile program was just another that was in keeping with the policies of the Office.

Mr. Alexander has accurately given the background of how that program was developed. I might say that the relationship that existed between the Office of Federal Contract Compliance, the Equal Employment Opportunity Commission, and the Department of Defense was almost ideal. The textile program was a major coordinated Federal effort.

At the time of the development of the textile program, statistics revealed that in the State of North Carolina 22 percent of all people who were employed were Negroes, and 39 percent of all employed in South Carolina were Negro, yet only 4 and 5 percent respectively were employed in the textile industry. In addition, 50 percent of all textile employment was female, of which 2.7 percent were Negro.

This does not suggest that statistics alone determine that there was discrimination, but there certainly was reason for a good hard and careful look, and it has subsequently been demonstrated that there was in fact discrimination.

I have already mentioned the close cooperation and coordination between the three agencies in developing the textile program.

We met with the officers of the 10 major firms, the Deputy Assistant Secretary for Civil Rights and Labor Management Relations in the Department of Defense, and one of the Commissioners of the Equal Employment Commission. We went over in detail with them just exactly what the program was all about and what they could expect of it and what were the requirements of industry at that time. The meeting went along amicably. We were assured that we would have cooperation from the textile manufacturers.

The actual compliance reviews began first at Dan River in January of 1968, and have proceeded on through.

During the same period-and I cite this to point out the level of activity in the Office of Federal Contract Compliance, and the direction and nature of the program-notification of opportunity for formal hearing which could lead to a debarment or cancellation of Government contracts was served on five major contractors. They were the Bethlehem Steel Co., the Allan-Bradley Co., the Timken Roller Bearing Co., Pullman Co., Inc., and B & P Motor Express.

These actions followed several months of intense negotiations which failed to achieve compliance. And then we took the step to initiate formal hearings.

In keeping with the needs of the enforcement program we then developed new rules and regulations which were circulated in late 1967 and finally promulgated by the Secretary of Labor in May of 1968 to be effective July 16, 1969. These new rules increased the overall coverage of the Executive order mainly through eliminating the second tier requirement on subcontractors, so that the Executive Order reached all types of subcontractors of $10,000 or more. The rules also required the agency heads, subject to approval of the Director of the Office of Federal Contract Compliance, to establish a program and procedure to carry out the agencies responsibilities for contract enforcement, and required contractors of $50,000 or more and 50 or more employees to have available a written affirmative action program based on a study of the utilization of minority group employees and the setting of goals and timetables for correcting any equal employment opportunity deficiencies.

The major emphasis of the Office of Federal Contract Compliance program at my departure was to improve the responsiveness of the contracting agencies and have them develop and in effect carry out the necessary procedures and administrative arrangements to insure that contracts were dealt with on a mass and collective basis rather than on an ad hoc and individual approach.

I think that it is important to note that the number of facilities estimated to be covered by the Executive Order including those in construction, was in the neighborhood of 225,000, with approximately 75,000 contractors. To cover that vast an area requires detailed administrative procedures within the Federal agencies as well as the desire and the determination and the priority to meet their responsibilities. Senator KENNEDY. How many years were you with the Office of Federal Contract Compliance?

Mr. SYLVESTER. I was with that Office since 1961, and I stayed until July of 1968.

Senator KENNEDY. How would you characterize the textile industry in terms of compliance with Executive Order 11246?

Mr. SYLVESTER. At the time of our analysis and the decision to develop a program it was fairly clear from the statistics that the textile industry had, probably, one of the worst records in the field of equal employment opportunity.

Senator KENNEDY. Can you think of any other industry that would be worse?

Mr. SYLVESTER. I cannot.

Senator KENNEDY. During the time that you were with OFCC, were you in contact with the other agencies, like the EEOC?

Mr. SYLVESTER. Oh, yes. There was a continuing communication and contact between the Office of Federal Contract Compliance located in the Department of Labor, and the Equal Employment Opportunity Commission, as well as the Defense Department.

Senator KENNEDY. And were their conclusions concerning compliance in the textile field about the same as yours?

Mr. SYLVESTER. Yes.

Senator KENNEDY. Were there any negotiations with the textile industries themselves during this period of time?

Mr. SYLVESTER. Yes; there had been negotiations and discussions with the textile industry, and I think some who will come after will be able to give much more detail as to just exactly how that timetable did proceed.

Senator KENNEDY. Was there any requirement developed by OFCC with regard to the need for written affirmative action plans?

Mr. SYLVESTER. Yes. The policy of OFCC was that any commitment had to be in writing and a part of the record. The new rules and regulations speak specifically to that: all Government contractors are required to have at their facilities a written affirmative action program identifying any deficiencies with goals or timetables for correction within 120 days after the signing of a contract.

Senator KENNEDY. Why does it have to be written?

Mr. SYLVESTER. So that it is possible for both the employer and the Government to analyze and see what the commitments were, and to make the necessary corrections and changes if such are required, so that the employer also knows what he is supposed to do or is expected to do and has committed himself to do. And, of course, the Government then has a basis for judgment.

Senator KENNEDY. And these are regulations 60-1.20, 60-1.40, is that correct?

Mr. SYLVESTER. Yes.

Senator KENNEDY. These will be inserted in the record.

*

[From the Federal Register, Vol. 33, No. 104-Tuesday, May 28, 1968]

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SUBPART B-GENERAL ENFORCEMENT; COMPLIANCE REVIEW AND COMPLAINT

PROCEDURE

$60-1.20 COMPLIANCE REVIEWS

(a) The purpose of a compliance review is to determine if the prime contractor or subcontractor maintains nondiscriminatory hiring and employment practices and is taking affirmative action to ensure that applicants are employed and that employees are placed, trained, upgraded, promoted, and otherwise treated during employment without regard to race, creed, color, or national origin. It shall consist of a comprehensive analysis and evaluation of each aspect of the aforementioned practices, policies, and conditions resulting therefrom, Where necessary, recommendations for appropriate sanctions shall be made.

(b) Where deficiencies are found to exist, reasonable efforts shall be made to secure compliance through conciliation and persuasion. Before the contractor can be found to be in compliance with the order, it must make a specific commitment, in writing, to correct any such deficiencies. The commitment must include the precise action to be taken and dates for completion. The time period alloted shall be no longer than the minimum period necessary to effect such changes. Upon approval of the Contract Compliance Officer, appropriate Deputy or the agency head of such commitment, the contractor may be considered in compliance, on condition that the commitments are faithfully kept. The contractor shall be notified that making such commitments does not preclude future determinations of noncompliance based on a finding that the commitments are not sufficient to achieve compliance.

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$60-1.40 AFFIRMATIVE ACTION COMPLIANCE PROGRAMS

(a) Requirements of programs. Each agency or applicant shall require each prime contractor who has 50 or more employees and a contract of $50,000 or more and each prime contractor and subcontractor, shall require each subcontractor

who has 50 or more employees and a subcontract of $50,000 or more to develop a written affirmative action compliance program for each of its establishments. A necessary prerequisite to the development of a satisfactory affirmative action program is the identification and analysis of problem areas inherent in minority employment and an evaluation of opportunities for utilization of minority group personnel. The contractor's program shall provide in detail for specific steps to guarantee equal employment opportunity keyed to the problems and needs of members of minority groups, including, when there are deficiencies, the development of specific goals and time tables for the prompt achievement of full and equal employment opportunity. Each contractor shall include in his affirmative action compliance program a table of job classifications. This table should include but need not be limited to job titles, principal duties (and auxiliary duties, if any), rates of pay, and where more than one rate of pay applies (because of length of time in the job or other factors) the applicable rates. The affirmative action compliance program shall be signed by an executive official of the contractor.

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Senator KENNEDY. Are the OFCC regulations binding on all the departments?

Mr. SYLVESTER. Yes, they are.

Senator KENNEDY. And so it is quite clear from the regulations that any agreements must be made in writing?

Mr. SYLVESTER. That is correct.

Senator KENNEDY. Why do you think a company ought to set goals for itself? Why do you think that is important?

Mr. SYLVESTER. It is consistent with the way companies and employers and industry operate in almost any other activity that is of importance to them. Any manpower program. The development of new skills, the changes of machinery and all of that really is part of a plan; a plan of action. We feel that in the area of equal employment opportunity there ought to be a plan of action just as you have in any other area of importance. And my experience is very clear that in those areas and with those companies that did in fact set out objectives for themselves the change was marked and visible. And in those areas where there was no objective, then the changes have been nominal if at all.

Senator KENNEDY. Did you have a number of written agreements with industry in the period that you served from 1963 to July of this past year?

Mr. SYLVESTER. Yes.

Senator KENNEDY. About how many did you have?

Mr. SYLVESTER. Every employer that we had in hearings, informal discussion or conciliation conferences, or what have you, signed a written agreement. And it would be hard for me to say how many there are actually in the Government. I am sure that there are written agreements that cover practically every kind of employment discrimination problem, and a suitable remedy and resolution as part of a written package.

Senator KENNEDY. Have you felt from your involvement in these negotiations that there have been companies that have felt harassed by this kind of procedure?

Mr. SYLVESTER. I find this industry harassment problem difficult. There are, as I said, somewhere in the neighborhood of 75,000 contractors, 225,000 facilities. And with current Federal resources allocated to the total program of equal employment opportunity, I am

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