without the existing union referral system, as he shall determine. The contractor's obligation is phrased primarily in terms of goals; the choice of methods is his, provided only that he does not discriminate against qualified employees or applicants. Unless it can be demonstrated that the hiring goals cannot be achieved without unlawful discrimination," I fail to see why the Government is not permitted to require a pledge of good faith efforts to meet them as a condition for the award of contracts. The Comptroller General argues that inasmuch as Title VII does not require labor organizations to achieve a racial balance in their membership or in referrals (§ 703 (j)), Executive Order 11246 cannot be used to require an employer "to abandon his customary practice of hiring through a local union" even though experience has demonstrated that the union refers very few members of minority groups. I confess I find this argument difficult to follow. Since, as stated above, the obligation of affirmative action comprehends more than bare compliance with Title VII and may under proper circumstances include an obligation on the part of the employer to broaden his recruitment base, the order would be an exercise in futility if the employer may evade this obligation by contracting away his power to perform it. Whether or not the law permits him to accept referrals only from unions which are or may be discriminating, the law does not require him to do so. To comply with his affirmative action obligation an employer may be forced to depart from his customary reliance on union referrals (though this will depend to a great extent on the unions' own response to the Plan), but since the law permits an employer to obtain employees from additional sources, I see no reason why the Government is not free to bargain for his assurance to do so. In other words, the employer may have a right to refuse to abandon his customary hiring practices, but he has no right to contract with the Government on his own terms. Perkins v. Lukens Steel Co., 310 U.S. 113 (1940); Copper Plumbing & Heating Co. v. Campbell, 290 F. 2d 368, 370-71 (C.A. DC. 1961). Accordingly, I conclude that the Philadelphia Plan is not inconsistent with any provision of Title VII of the Civil Rights Act. Another argument might be urged against the legality of the Philadelphia Plan. Let it be conceded, this argument runs, that the Government may lawfully require a contractor to take certain forms of affirmative action to increase employment of members of minority groups, and conceded further that on its face the Philadelphia Plan requires no more than legally permissible forms of affirmative action to achieve the goals set by the contractor in response to the bidding invitation. Nevertheless, by stating the contractor's primary obligation in terms of a numerical result, by failing to specify what "good faith efforts" will be acceptable in lieu of the achievement of such result, and by placing upon the contractor who has failed to achieve his "goal" the burden of proving that, in effect, he did all that was legally permissible to meet it, the Government so weights the procedural scales against the nonachieving contractor as to coerce him in fact, if not in law, into discriminating. In other words, although the substance of the contractor's obligation under the Philadelphia Plan may be permissible, the Plan does not provide a fair method for resolving questions regarding compliance. Cf. Speiser v. Randall, 357 U.S. 513, 520-26 (1958). This argument appears to me to be premature and speculative at this time. It is true that the Philadelphia Plan might be clearer if it were to state what good faith efforts are expected of contractors. But the general requirements of affirmative action, particularly in the area of recruitment, have been stated elsewhere in regulations, 41 C.F.R. 5-12.805-51(b), (c), and other publications, and there is no reason to believe that the Department of Labor officials administering the Plan would be unwilling to describe to any interested contractor the kind of actions expected of him. In short, I cannot assume that any contractor who desires to participate in good faith in the Philadelphia Plan will be forced, as a practical matter, to choose between noncompliance with his affirmative action obligation and violation of Title VII. If unfairness in the administration of the Plan should develop, it cannot be doubted that judicial remedies are available. Cf. Copper Plumbing & Heating Co. v. Campbell, supra. 5 The Plan provides that the goals will be determined with particular attention to the factual situation in each affected trade. Accordingly, there is every reason to assume that the goals will represent an informed administrative judgment of what an effective affirmative action plan may be expected to achieve. On the facts before me it is impossible to determine whether the present practices of the unions affected by the Philadelphia Plan are in violation of Title VII and such a determination is not necessary to the resolution of the question of the legality of the Plan, Finally, the Comptroller General appears to suggest that although Title VII contemplated the continued operation of the contract compliance program under Executive orders, nevertheless the substantive provisions of Title VII somehow limit and preempt those of the order. The basis for this conclusion is nowhere explained. There is no question that the Executive order cannot require what Title VII forbids, but as has been pointed out above, the Philadelphia Plan does not seek to do so. The Comptroller General argues further, in effect, that the Executive order can neither require nor forbid actions or practices which Title VII declines to interfere with. This is the inference which must be drawn from the Comptroller General's references to expressions in the legislative history of the Civil Rights Act regarding what Title VII would not do." But Title VII is not and was not understood by Congress to be the exclusive remedy for racially discriminatory practices in employment, Local Union No. 12 v. NLRB, 368 F. 2d 12, 24 (C.A. 5, 1966), cert. denied, 389 U.S. 837 (1967), rehearing denied, 389 U.S. 1060 (1968) Nothing in the language or legislative history of that statute suggests that "affirmative action" may not be required of Government contractors under the Executive order above and beyond what the statute requires of employers generally. It is, therefore, my view that the Revised Philadelphia Plan is legal and that your Department is authorized to require Federal contracting and administering agencies to implement the Plan in accordance with its terms in the award of contracts in the Philadelphia area. E.O. 11246, §§ 201, 205. Where a contractor submits a bid which does not comply with the invitation for bids issued pursuant to the Plan, such a bid may be rejected as not responsive. 38 Ops. A.G. 555 (1937); Graybar Electric Co. v United States, 90 C. Cls. 232, 244 (1940). I hardly need add that the conclusions expressed herein may be relied on by your Department and other contracting agencies and their accountable officers in the administration of Executive Order 11246. 28 U.S.C. 512, 516; 37 Ops. A.G. 562, 563 (1934); 38 Ops. A.G. 176; 178-81 (1935); Smith v. Jackson, 241 Fed. 747, 773 (S.A. 5, 1917), aff'd, 246 U.S. 388 (1918). Sincerely, JOHN W. MITCHELL, Supplemental Materials [From Congressional Record, Feb. 4, 1969] THE FEDERAL GOVERNMENT'S PROGRAM FOR EQUAL JOB OPPORTUNITIES IN PRIVATE INDUSTRY Mr. DIRKSEN. Mr. President, on December 23 and January 20 Barron's published two parts of a three-part series of articles written by Shirley Scheibla dealing with the Federal Government's attempts to provide equal job opportunities in private industry. These articles are most revealing and lend substance to many allegations in recent months that employers are being forced to comply with reckless and conflicting orders issued by a number of Government departments under the threat that their Federal contracts will be withdrawn if they do not knuckle under. The primary departments responsible are the Equal Employment Opportunity Commission and the Office of Federal Contract Compliance. These administrators appear to be intent on interpreting and administering the law according to their own notions of what it should be, regardless of what the Congress intended. In the final analysis it is up to the Congress, in performing its oversight functions, to see to it that the law is administered as the Congress intended. In this regard, I believe an examination of the practices of the EEOC and OFCC is of the first order. A similar type of examination was undertaken last year with respect to one of the independent agencies. The Senate Subcommittee on Separation of Powers held extensive hearings on the National Labor Relations Board in an attempt to ascertain whether the Board in interpreting and administering "On the view I take of the question before me, it is not necessary to consider the correctness of all the Comptroller General's conclusions regarding the scope of Title VII, and my failure to do so implies neither agreement nor disagreement with such conclusions. 8 In the one instance where the statute deals with the overlap of Title VII and the Executive order, reporting requirements, it is the order and not the statute which is accorded priority. § 709 (d). the labor law had adhered to the expressed will and intent of Congress in the original legislation. The great weight of opinion was that the will of Congress is often ignored and subverted by those charged with its implementation. In thelight of these conclusions and the articles in Barron's, I believe the subcommittee should give the OFCC and the EEOC a good looking over. It is my strong impression that the orders and requirements flowing out of these offices exceed the authority granted to them by Congress and are beyond any reasonable interpretation which can be given to the intent of Congress in the enabling legislation. An additional separation of powers problem exists in connection with the OFCC since it was established by Executive order, and it may well be that this entire matter should have been dealt with by the Congress in the first place. Mr. President, these articles are indeed informative and worthy of attention, and I ask unanimous consent that they be inserted in the RECORD. There being no objection, the articles were ordered to be printed in the RECORD, as follows: "[From Barron's, Dec. 23, 1968] "GENTLEMEN'S AGREEMENT?"-GOVERNMENT IS MAKING BUSINESS ITS UNWILLING PARTNER IN BIAS "(By Shirley Scheibla) "WASHINGTON.-'I'm no crusader' the worried executive told a reporter recently, 'but I'm no bigot either. All I am is a businessman trying to operate my company the best way I know how-which means bidding successfully for contracts I can deliver on, and hiring qualified workers I know can get the job done for me.' This employer, however, like thousands of others in the U.S. today, is dependent for most of his business on federal contracting agencies, and Uncle Sam is determined to wipe out racial discrimination in private employment-at any cost. Because of the way Washington has been going about it, the cost can come high. 'If I don't sign a commitment to hire a certain number of nonwhites in each job category,' explained the businessman, 'the government threatens to deal me out. I face formal complaints by the Equal Employment Opportunity Commission and possible lawsuits by the Justice Department. I stand to lose millions of dollars in contracts-which means that dozens or even hundreds of workers' jobs. are placed in jeopardy too, affecting blacks and whites alike. Yet I have no way to guarantee that I can find the people to meet these quotas, particularly in high-skill classifications. And the irony of it is, if I do go all-out with such reverse discrimination in my hiring and firing, I run the very real risk of all-out trouble with organized labor.' "BLOCKBUSTER APPROACH "There's little doubt that the government's blockbuster approach to the centuries-old problem of employment bias may be creating as many ills as it has cured. Not surprisingly, Parkinson's Law holds sway here in a chaotic proliferation of policy-making bureaucrats, acting under one or the other of two edicts: the 1964 Civil Rights Act and President Johnson's Executive Order 11246 of 1965, which combine to blanket any employer of at least 50 persons as well as any contract of $10,000 or more involving federal funds. Enforcers include not only the Equal Employment Opportunity Commission (EEOC), but also the Justice Department, the Labor Department's Office of Federal Contract Compliance (OFCC) and each of some 17,000 contracting officers representing 28 other U.S. agencies. Although racial considerations are predominant, incidentally, they by no means exhaust the government's purview as defined by statute, proclamation and regulatory fiat. "Beyond administrative confusion, however-not to say a clear lack of either coordination or consistency-are problems far more serious. Some official actions, for example, appear to constitute inexcusable abuse of unquestioned authority. Worse still, others may well be illegal if not unconstitutional. Employers have been denied due process; firms have been placed arbitrarily in financial jeopardy. In the name of fair employment, finally, both the National Labor Relations Act and the Civil Rights Act itself plainly seem to have been violated. "UNDUE PROCESS? "The most glaring instances of action without due process have occurred underthe aegis of OFCC. Ward McCreedy, acting director of the agency, admits that contracting officers have been holding up awards virtually on a daily basis, because of non-compliance with OFCC regulations. 'Across the board,' he said recently, 'this experience has resulted in the company's submitting a program which does effect compliance. None of these people can demonstrate that they have suffered any financial loss owing to such delays on their bids.' But the affected firms tell a different tale: many claim convincingly that the compliance procedure has caused substantial monetary losses. Since several of OFCC's regulations are, to say the least, of dubious legality, the risks to which such employers are exposed would seem to entitle them-before and not after the action has been taken to their day in court. "What's more, OFCC's parent Labor Department, in determining which contracts are to be held up, appears to be applying a double standard. One notorious, case in point involves New York's Neighborhood Youth Corps. As long ago as last May, several agencies were investigating criminal charges against this child of the poverty program. Alleged was the theft of millions of dollars which had been freely parceled out by the Labor Department. On September 13, with the charge still pending, the NYC was awarded an additional $367,000. Michael Aun, information specialist for Labor, explained at the time that the purpose was to keep the Corps going, ‘until matters could be straightened out.' (As it happens,. they still haven't been.) "While doling out money to those facing criminal charges, in short, the Department doesn't flinch from interfering with the money-making ability of others whose only sin is the failure to comply instantly with questionable regulations. Mr. McCreedy goes so far as to say that OFCC can (though it hasn't done so yet) suspend all government business with a company while a 'discrimination' case is pending. "CREATIVE COMPLIANCE "The businessman's plaint, quoted at the outset, reflects the widespread frus tration and anger over Washington's imprecise terms for compliance. Specifically, each contractor now is required to promise in writing that he will hire a certain number of Negro workers for each of the major job categories on his payroll. To begin with, the Civil Rights Act prohibits racial quotas in employment-a coin which, presumably, has two sides. But the government does not set the quotas; it tells private industry to do so, in effect, by applying a curiously vague formula. "Here's how that formula has been expressed: an employer must initiate 'affirmative action programs' designed to avoid discrimination. The programs, businessmen are advised by way of clarification, will be expected to utilize the 'creativity and ingenuity of American enterprise' in attaining this social goal. But if such a program then fails to win official approval, the company submitting it becomes subject of federal sanctions. That probably makes this the first time in American history that Washington has demanded 'creativity' in order to comply with law; the concept has not been spelled out in plain English, much less tested in court. Indeed, the National Association of Manufacturers, after reviewing an OFCC regulation which attempted a broad definition of 'affirmative action' characterized it as 'difficult to summarize, hard to understand, beyond interpretation. . . .' "NO EASY WAY "It's clear, however, that the government wants detailed, written commitments for the hiring of nonwhites, virtually in every job category. Employers who don't sign such commitments don't get approval of their 'affirmative action programs.' Those who do sign, meanwhile, soon find that life isn't all that easy. Nobody can be sure about such projected figures, and government officials make a point of not publicly demanding specific quotas-which would, of course, blatantly violate the Civil Rights Act. The employer, then, must come up with numbers which satisfy the federal regulators. However, what suits one agency may not find favor with another; even the bureaucrats within a given agency are likely to disagree. Not least, 'quotas' deemed acceptable today may not be so tomorrow, since 'affirmative action' is expected to be progressive. "To illustrate, three construction companies in Philadelphia all were low bidders on different U.S.-aided projects. One, Joseph L. Farrell, Inc., got approval from the Department of Health, Education and Welfare (HEW) for its 'affirmative action' program. The other two each submitted essentially the same plan, but HEW rejected the program of Harold E. Irwin Co., and the Department of Housing and Urban Development (HUD) the one submitted by Perry J. Goldman Construction Co. When Irwin revised its plan, and won HEW's approval, Goldman duplicated it—but again was turned down. After six months of post-bid negotiations, the Goldman concern finally managed to come up with one acceptable to HUD. "NOT BY NUMBERS? "Adding to the confusion, public statements by government officials, even in the same agency, often are contradictory. Thus, OFCC's McCreedy says it's impossible to deal with people without dealing in numbers, but that job assignments by race merely are 'goals' not 'quotas'-and he emphasizes that OFCC does not dictate any such numbers. Last May, however, Charles Doneghy, an OFCC area coordinator, told Columbus, Ohio's Carl M. Geupel Construction Co. that before it could qualify for a $5 million road-building contract involving federal funds, it would have to hire something on the order of 15 Negro oper ating engineers, 13 journeymen and two apprentices. "Earlier this year in Philadelphia, OFCC area coordinator Bennett Stalvey warned the aforementioned Irwin Co. that a contract would be awarded to the second bidder unless Irwin agreed to hire a representative number of minoritygroup members. 'We want to see,' declared Mr. Stalvey, ‘a manpower table listing the trades, total workers and how many will be minority, Negroes...' Last January, the Philadelphia Bulletin quoted Mr. Stalvey as warning contractors that 'if they fail to hire a representative number of Negro workers, they face the possible loss of $100 million in federal contracts to be awarded in six months.' "That Philadelphia story ran about a month after Labor Secretary W. Willard Wirtz told the AFL-CIO's Building & Construction Trades convention: 'I think it is an error to approach this problem . . in terms that mean a number of Negroes or whites or anybody else, as being required on every single situation.... (That) involves quotas in one form or another, and as far as I am concerned... that is simply the wrong approach to that problem, and we have got to find a better one.' "EEOC QUOTAS "Secretary Wirtz' OFCC apparently is not alone in forcing racial quotas. Last May, Senator Paul J. Fannin (R., Ariz.) told Congress about a letter sent to an employer by EEOC Chairman Clifford Alexander Jr., accusing the businessman of committing unfair employment practices, based on a statistical disparity be tween the minority composition of the employer's workforce and that of his community's population. 'Despite a provision in the (Civil Rights) Act against using ratios or racial balance,' Senator Fannin declared, 'the (EEOC) does, in fact, use such ratios as one of its preliminary tests to determine whether there has been a violation.' "In any case, as more and more companies sign these commitments, finding the necessary job applicants has become increasingly difficult. Both OFCC and EEOC contend it is up to the firms to recruit and train black workers. The written agreements include lists of the sources employers are advised to use for such recruitment. (Sample sources: the Congress of Racial Equality, Neighborhood Youth Corps and Workers Defense League-all active in militant causes but, according to several employers, not much help as job recruiters as well as more cooperative groups like the Urban League and the National Association for the Advancement of Colored People.) At best, however, productivity is bound to suffer during the apprenticeship period. 'Training is a fine idea,' says one executive, 'but how am I supposed to fill my written commitment in the meantime?' "BROTHERHOOD DAYS "Making matters still more difficult for all concerned is the obstinacy within much of organized labor. Inevitably, a vast amount of government contract work involves construction projects, and the construction industry is burdened with the tradition of union hiring halls-through which the union, not the employer, selects the workforce. Accordingly, an employer may find himself signing a fed |