Niagara Mohawk Power Corp. v. F.P.C., 379 F.2d 153 (C.A.D.C. 1967), held that the Federal Power Commisison has statutory authority to assign an effective date earlier than the date of the issuance of the license when the project involved was one constructed or maintained without a license in violation of an applicable law. This case only involved the project in question, not the general practices of the licensee. None of the cited cases which involved the Federal Power Commission related to employment practices or civil rights in any manner. Without supporting authority, the September 17 letter, in paragraph 4 on page 6, stated that the Commission has authority to regulate the equal employment practices of the entire electric company which holds a hydroelectric plant license, but implies that the Commission's regulatory authority in the case of large integrated companies may be limited to the natural gas subsidiary or natural gas operations of the corporation. I perceive no more legally defensible reason to limit the application of an equal employment regulation to the natural gas operations of a large integrated corporation than to expand the applicability of such a regulation beyond the licensed hydroelectric facilities to the entire operations of an electric company. Mr. GORDON GOOCH, General Counsel, Federal Power Commission, GORDON GOOCH. DEPARTMENT OF JUSTICE, Washington, September 17, 1971. DEAR MR. GOOCH: You requested this Department's views as to the Federal Power Commission's jurisdiction over the employment practices of licensed or regulated companies. We apologize for our long delay in responding to your request. In our opinion, under the relevant statutes, the Commission has ample authority to issue regulations barring employment discrimination by natural gas companies regulated by the Commission and by electric companies holding hydroelectric plant licenses.' The authority to issue such a rule is less clear with respect to electric companies not holding hydroelectric plant licenses but whose wholesale interstate rates are regulated. The applicability of a rule to the natural gas and electric power industries, as well as the other issues raised in your letter, are discussed below. 1. In determining whether to grant a certificate of public convenience and necessity under the Natural Gas Act, the Commission is invested with discretion, California Gas Producers Ass'n v. FPC, 383 F.2d 645 (C.A. 9, 1967) and must evaluate all factors bearing on the public interest. FPC v. Transcontinental Gas Pipeline Corp., 365 U.S. 1 (1963); Atlantic Refining Co. v. Public Service Comm'n., 360 U.S. 378 (1959). Such factors include matters of fundamental national policy, City of Pittsburgh v. FPC 237 F.2d 741 (C.A.D.C., 1956); National Coal Ass'n. v. FPC, 191 F.2d 462 (C.A.D.C., 1951); FPC v. Transcontinental Gas Pipeline Corp., 365 U.S. 1 (1963); Consolidated Edison Co. v. FPC, 271 F.2d 942 (C.A. 3, 1959), and the Commission, in making its determination has considered, for instance, government antitrust policy, City of Pittsburgh v. FPC, 237 F.2d 741 (C.A.D.C., 1956), national defense concerns National Coal Ass'n. v. FPC, 191 F.2d 462 (C.A.D.C., 1951) and air pollution, Consolidated Edison Co. v. FPC, 271 F.2d 942 (C.A. 3, 1959). Since the elimination of discrimination in employment is a national policy of high priority, [see, e.g., United States v. Gustin-Bacon Div. Certain-Teed Products Corp., 426 F.2d 539 (C.A. 10, 1970)] an applicant's employment policies are relevant to the Commission's determination. Title VII of the Civil Rights Act of 1964 makes it unlawful for private employers with twenty-five or more employees to engage in employment practices which discriminate on account of race, color, religion, sex or national origin. In California v. FPC, 369 U.S. 482 (1961), the Supreme Court held that an applicant's compliance or non-compliance with the laws of the United States is relevant in deciding whether the public convenience and necessity would be served by the issuance of a certificate to a company engaged in the production 1 Other federal regulatory agencies have considered the adoption of rules to require equal employment practices. Based on considerations similar to those discussed hereinthe scope of regulatory authority, the importance of the national policy against discrimination and the public interest standard of its enabling statute the Federal Communications Commission promulgated a rule prohibiting job discrimination by broadcasters subject to FCC jurisdiction. 33 Fed. Reg. 9960 (1968); 34 Fed. Reg. 9284 (1969); 35 Fed. Reg. Reg. 8825 (1970). The Interstate Commerce Commission is presently considering issuing a similar regulation applicable to carriers subject to ICC jurisdiction. 36 Fed. Reg. 10741 (1971). or transmission of natural gas. Thus it seems clear that the FPC may consider a company's employment policies in making a decision concerning the issuance of certificates. Co-relatively, under 16 U.S.C. § 717f(e) the Commission may issue a regulation requiring regulatees to comply with an equal employment policy as a reasonable term and condition required by the public convenience and necessity. Thus, in our opinion, the Commission has the authority under the Natural Gas Act to issue an equal employment regulation. Cf. Reports and Orders of the Federal Communications Commission, 33 Fed. Reg. 9960 (1968); 34 Fed. Reg. 9284 (1969); 35 Fed. Reg. 8825 (1970). As a constitutional matter, in analogous situations, courts have held private businesses subject to Fifth and Fourteenth Amendment obligations because of the extensive governmental regulation of their activities. Public Utilities Comm'n. v. Pollack, 343 U.S. 451 (1952); Washington Gas Light Co. v. Virginia Electric Power Co., 438 F.2d 248 (C.A. 4, 1971). Further, where the government is a joint participant in an activity with private persons, courts have held that there is an affirmative obligation on the part of the government to insure compliance with constitutional provisions. Burton v. Wilmington Parking Authority, 365 U.S. 715 (1961); Ethridge v. Rhodes, 268 F. Supp. 83 (D. Ohio 1967); United States v. Frazer, 297 F. Supp. 319 (M.D. Ala. 1968). 2. In our opinion the Commission has the authority under the Federal Power Act to issue equal employment regulations with respect to those companies licensed by the Commission to operate hydroelectric plants. Electric companies holding licenses to operate hydroelectric plants have been granted an exclusive right to use part of the public domain. United States v. Appalachian Power Co., 311 U.S. 377 (1940); Udall v. FPC, 387 U.S. 428 (1967). The license is a privilege granted on the theory that there will be a resulting benefit to the public in the licensee's use of the waters. Alabama Power Co. v. FPC, 128 F.2d 280 (C.A.D.C.), cert. denied, 317 U.S. 652 (1942) The Commission's duty in a licensing case is to expiore all issues relevant to the public interest and determine whether the grant of a license is in the public interest. Udall v. FPC, 387 U.S. 428 (1967). Compliance with public policies of high priority and with legal requirements is relevant in determining what action is in the public interest. California v. FPC 369 U.S. (1961): City of Pittsburgh v. FPC, 237 F.2d 741 (C.A.D.C., 1956). Under the Commission's statutory power to impose conditions upon the grant of licenses, a power which gives the Commission broad authority to effect the public interest, Niagara Mohawk Power Corp. v. FPC, 379 F.2d 153 (C.A.D.C., 1967), the Commission may require that electric companies follow nondiscriminatory employment practices. Cf. Reports and Orders of the Federal Communications Commission, 33 Fed. Reg. 9960 (1968); 34 Fed. Reg. 9284 (1969); 35 Fed. Reg. 8825 (1970). An equal employment regulation may be made applicable to present licensees as well as to applicants seeking a license. In fulfilling a continuing obligation to comply with the Act, a licensee may be required to comply with rules and regulations made subsequent to the issuance of the license. See, e.g.. 32 Fed. Reg. 11640 (1967). 3. With respect to electric companies whose wholesale interstate rates are regulated but which have no hydroelectric license, the authority for issuing a regulation regarding equal employment is less clear. As with the companies engaged in natural gas activities, the Fourteenth Amendment may apply to these electric companies because of the extensive governmental regulation of their activities, Public Utilities Commission v. Pollack, 343 U.S. 451 (1952), Washington Gas Light Co. v. Virginia Electric Power Co., 438 F.2d 248 (C.A. 4, 1971), but since the companies are regulated primarily by state and local rather than federal authorities, the existence of a duty on the part of the federal government to insure the companies' compliance with its constitutional obligations is unclear. We defer to your judgment and that of the Commission in this matter. 4. In our opinion the Commission has authority to regulate the equal employment practices of pipeline companies and producers and electric companies holding hydroelectric plant licenses, and is not limited to regulating equal employment practices at facilities which are themselves licensed. Pipeline companies and producers must obtain certificates of public convenience and necessity in order to transport or sell natural gas in interstate commerce. Since it is a company that applies for and receives a certificate, and since the Commission's determination is that it is in the public interest for the particular company to engage in the activity, the Commission has authority to regulate the employment activities of the entire company. We would think it proper, however, in the case of large integrated corporations for the Commission, if it sees fit, to limit the application of a regulation to the natural gas subsidiary or the natural gas operations of the corporation. Regarding electric companies holding hydroelectric plant licenses, we believe it would be an unduly narrow interpretation of authority to limit the applicability of an equal employment regulation to licensed facilities. Since an electric company must apply for a license and the Commission, before granting a license, must find it in the public interest for the particular utility company to hold a license, the entire company's equal employment practices may be regulated. Cf. Exec. Order 11246, § 202, 30 Fed. Reg. 12319 (1965). 5. In reply to your question on FPC's jurisdiction to compel consumers to pay increased rates, Title VII of the Civil Rights Act of 1964 made it unlawful for any employer with twenty-five or more employees to engage in discriminatory employment practices. The companies which you regulate have had equal employment obligations for some time and we see no reason why the promulgation of an equal employment regulation should result in any increase in consumer rates. 6. Concerning the question of termination of services or denial of a license, there are a variety of means of enforcing an equal employment regulation which accommodate both proper implementation of a regulation and your Commission's other responsibilities. See, e.g., Exec. Order 11246, § 209 (a), 30 Fed. Reg. 12319 (1965). For instance, where there is competition for a license, the license may be awarded to the company that has demonstrated a willingness to comply with an equal employment policy. Where denial of a license or certificate may have severe adverse effects on the public, the Commission might refer the case to the Department of Justice to compel compliance with the regulation through civil litigation. I hope that these views will be of assistance to you. If we can be of any further assistance, please feel free to call on us. Sincerely, DAVID L. NORMAN, Assistant Attorney General, Civil Rights Division. SEPTEMBER 29, 1971. Mr. DAVID L. NORMAN, Assistant Attorney General, Civil Rights Division, DEAR MR. NORMAN: Your opinion letter dated September 17, 1971 in response to my request for an informal opinion on the question of whether the Federal Power Commission has jurisdiction over the employment practices of regulated companies was received in our offices on September 21, 1971. My memorandum requesting this informal opinion from your predecessor was forwarded on January 27, 1970. At the time of my request, proceedings were pending before the Federal Power Commission in Project Nos. 2687 and 2699 in which the applicant, Pacific Gas and Electric Co. (PG&E), sought licenses for two "constructed” hydroelectric projects. The California Rural Legal Assistance (CRLA) had filed petitions to intervene in these proceedings, alleging that PG&E appeared to be engaging in discriminatory hiring policies. My memorandum of January 27, 1970 was occasioned by my responsibility for establishing a staff position and giving legal advice to the Commission in these proceedings. Subsequent to my memorandum requesting an informal opinion, on November 6, 1970 the Commission issued orders in Projects Nos. 2687 and 2699. In its order in Project No. 2687, the Commission noted that CRLA sought ultimate remedies which would require the FPC to act in an area in which it has no statutory basis for jurisdiction. The Commission stated that it did "not find that the issues raised by intervenor are sufficiently related to a legitimate regulatory purpose as expressed in the Federal Power Act that we can proceed as requested by CRLA.” A copy of the Commission's order in Project No. 2687 is enclosed for your information. Petitions to review the Commission's order were filed by both CRLA and PG&E. After these petitions were consolidated in the U.S. Court of Appeals for the Ninth Circuit, both petitioners, apparently realizing the validity of the Commission's order, requested voluntary dismissal of the petitions. Since the motion to dismiss has been granted by the court, the decision has now become the law of the Commission for decisions in future proceedings. While I appreciate your views concerning the authority of the Commission to issue regulations barring employment discrimination in some instances, by request for an informal opinion was made in the context of Commission jurisdiction to regulate the employment practices of companies which have pending before the Commission applications for licenses, certificates or rate increases. As I indicated, the Commission has, subsequent to my request, made moot the need for such an informal opinion by its determination that such jurisdiction does not exist, at least insofar as hydroelectric project licenses are concerned. At page 7 of your opinion letter you indicated that the Commission might refer cases of discriminatory employment practices to the Department of Justice. Our present practice is to refer all such complaints to the Equal Employment Opportunity Commission for investigation. This procedure should result in even better results if the EEOC is given the power to issue cease and desist orders and other enforcement authority such as is contained in proposed legislation before Congress in H.R. 1746. However, we shall be happy to consider referring future complaints to the Department of Justice, particularly in severe cases. Very truly yours, GORDON GOOCH, Enclosure: Order issued on November 6, 1970 in Project No. 2687 APPENDIX D FEBRUARY 29, 1972. Memorandum to: The Chairman. From: Chief, Bureau of Power. Subject: Minority Employment Practices of Six Regulated Electric Utilities. A survey was made of six regulated electric utilities to determine the current status of their minority employment practices. (Reports to the Equal Employment Opportunity Commission include four recognized minority groups: Blacks, Spanish surnames, Orientals and American Indians.) In summary, all six utilities have active programs to increase minority employment, with goals for employment percentages approximately equal to the minority percentage of the areas they serve. However, some are doing better than others. Also, all are attempting to improve the minority percentages in the nine classifications established by the Equal Employment Opportunity Commission. Data were obtained from the companies giving minority employment percentages at two years intervals from 1964, or when available, the service area percentage of minorities, the goals the companies are trying to attain and the 1971 distribution of the nine EEO classifications. Individual survey results are as follows: 1. The Boston Edison Company This electric utility serves Boston and its immediate surroundings, an area with a relatively small minority population, only 5.5 percent of the total population. From negligible minority employment in 1963, Boston Edison has increased its employment of minorities and in 1971 attained its goal of the same 5.5 percent minority representation found in the population as a whole. The company did not have readily available the percentage of its minority employment in the nine EEO classifications. Consolidated Edison serves more customers than any other electric utility, and is also the gas distributor. Its service area is virtually all urban, being limited to New York City and the adjacent Westchester area. The percentage of minorities in this area is a high 34.2 percent, with large groups of black Americans and Puerto Ricans. Consolidated Edison's minority employment goal is the same 34.2 percent as the area percentage of minorities. In 1971 it passed the halfway point toward this goal, attaining an 18.0 percent minority employment. The percentage of minority employment in the EEO classifications show an outstanding 14.5 percent in the Officials and Managers category. Detroit Edison serves Detroit and the immediate surrounding area. The area percentage of black minorities is approximately 16 percent. As with other utilities, the goal of the Detroit Edison equal employment opportunity program is to have a minority percentage of employees equal to the minority percentage of the area. By 1971 the company had increased its minority employment to 7.6 percent. The highest percentage of minority employment is in EEO classification 9, Service Workers. Even though Detroit Edison has improved their percentage of minority employed they are involved in a civil suit regarding employment practices. This utility serves a large part of Arizona, including the Phoenix metropolitan area. Major minority groups include Mexican-Americans and American Indians. The area percentage of minorities is approximately 18 percent, and the Arizona Public Service goal for minority employment is also 18 percent. The company is increasing its minority percentage employment by about one point per year and has presently attained the level of 14.0 percent. However, it has the highest percentage of minority employment in EEO classification 9, Service Workers. |