. . 

THE ATTORNEY GIENEPEAB, 

OF TEXAS 

AUSTIN. TEKAS 78711 

June 27. 1974 

The Honorable Oscar H. Mauzy 

Senate Chamber 

Opinion No. H- 337 

Austin, ‘Texas 78711 Re: Extent to which State and 

its agencies are required to 

enforce antidiscriminatory 

laws of federal and state 

governments in contracting 

with outside entities. 

Dear Senator Mauzy: 

The Senate Education Committee has requested our opinion on the 

following matter: 

In view of Executive Order 11246, the regulations sent 

down by the Office ,of Federal Contract Compliance and by 

the Equal Employment Commission, the 1972 Amendments to 

the Equal Employment Opportunity Act, and other pertinent 

federal and state law, under what circumstances could, 

should, or must the State of Texas or its agencies or’pblitical subdivisions, in particular the Board of Control, and 

School Districts, include the following or a similar statement in its or their requests for bids, contracts, purchase 

orders, etc. ? 

‘During the performance of this contract, 

the Contractor agrees as follows: The 

Contractor will not discriminate against 

any employee because of race, creed, 

color, sex or national origin. ’ 

It would be greatly appreciated if your opinion would 

encompass the circumstances under which such a statement would be permissible, advisable, or necessary, 

p. 1552 
The Honorable Oscar H. Mauzy page 2 (H-337) 

the particular political subdivision affected in each 

case, and the precise nature of the statement in 

each case. 

Your question specifically encompasses three separate issues as it 

is phrased to cover the permissibility, the advisability and the necessity 

of the inclusion of such a contract clause. Two of these issues require little 

discussion. 

We know of no law, state or federal, which would preclude an agency 

from including a non-discrimination clause in a contract. It is therefore 

our conclusion that an agency may include such a clause in its contracts and 

bid specifications. Whether use of the clause is advisable is essentially a 

question of policy which is outside the statutory opinion process of this 

office. 

The cases in which a non-discrimination clause must be used depend 

on relevant federal law. 

Executive Order 11246 of September 24, 1965, is a statement by the 

President concerning federal procurement and financial assistance policy. 

The Order requires all federal agencies to condition the award of federal 

contracts and federally assisted construction contracts upon the inclusion of 

an equal employment opportunity clause of the type you describe. The clause 

is enforced by the Secretary .of Labor through the Office of Federal Contract 

Compliance. The Secretary of Labor has promulgated rules which explain 

the Executive Order in great detail. See, 41 C. F. R. Chapter 60. 

Generally the Order will only concern the State of Texas, its agencies, 

or political subdivisions when application is made for federal assistance to a 

state construction contract which exceeds $10,000. 41 C. F.R. Sec. 60-l. 5. 

As an applicant for federal assistance, the State must agree to include the 

clause in the construction contract, bid or purchase order which is financed 

in whole or in part with federal funds. The Executive Order does not require 

the State to include such a clause in contracts, bids or purchase orders that 

are financed wholly from state funds. 

p. 1553 
The Honorable Oscar H. Mauzy page 3 (H-337) 

The authority of the President to condition federal assistance to 

state construction contracts upon inclusion of the clause has been considered 

and upheld in Contractors Association of Eastern Pennsylvania v. Secretary 

of Labor, 442 F. 2d 159 (3rd Cir. 1971), cert. denied, 404 U. S. 854 (1971). 

The court reasoned: 

When the Congress authorizes an appropriation for 

a program of federal assistance, and authorizes the 

Executive branch to implement the program by arranging 

for assistance to specific proj.ects, in the absence of 

specific statutory regulations it must be deemed to have 

granted to the President a general authority to act for 

the protection of federal interests. (442 F. 2d at 171) 

Consequently, our opinion is that the State, its agencies and political 

subdivisions are required by the Executive Order, and regulations adopted 

pursuant thereto, to include an equal employment opportunity clause in those 

state construction contracts, bids or purchase orders, which are federally 

assisted and which exceed $10,000. 

Additional responsibilities in the field of non-discrimination in 

employment are imposed by the Equal Employment Opportunity Act of 

1972, 42 U.S. C. 5 2000e, which amended in part Title VII of the Civil 

Rights Act of 1964, by prohibiting the states, their agencies and political 

subdivisions from engaging in certain unlawful employment practices. 

Section 2000e-2 provides: 

(a) It shall be an unlawful employment practice for an employer -- 

(1) to fail or refuse to hire or to discharge any 

individual, or otherwise to discriminate against 

any individual with respect to his compensation, 

terms, conditions, or privileges or employment, 

because of such individual’s race, color, religion, 

sex, or national origin; . . . 

p. 1554 
The Honorable Oscar H. Mauey page 4 (H-337) 

Section 2000e-2 applies not only to State employment practices, 

but to the practices of any employer of 15 or more persons in an industry 

which affects interstate commerce. 

As a result, many private employers with whom the State deals are 

already required by federal law to prbvide equal employment opportunity. 

However, Title VII does not require the State to enforce its guarantee 

of equal employment opportunity through its contracts with private employers, 

nor does Title VII prohibit any employer, including the State, from having 

business dealings with other employers who engage in unlawful employment 

practices. 

Instead the usual remedy for violation of Title VII is by filing of 

complaint with the Equal Employment Opportunity Commission. The 

Commission, if it finds reasonable cause to believe a violation has occurred, 

will endeavor through informal negotiations to settle the complaint through a 

voluntary conciliation agreement. If necessary, the Commission may file a 

civil action enjoining violation of the Act by the employer, and seek other 

remedies which are appropriate. See 42 U.S. C. Sec. 2000e-5. 

The statutory scheme demonstrates that the State is responsible for 

assuring equal employment opportunities in state employment. Each political 

subdivision, as an employer, is responsible for its own employment practices. 

Private employers, absent general state legislation, are not answerable to the 

State for their employment practices, but only to the Commission, initially, 

and afterwards to the courts. 

It is not an unlawful employment practice for the State to refuse to 

include an equal employment opportunity clause in contracts which it has 

with private employers. Each employer under Title VII is responsible 

only for its own employment practices, not for the practices of others. 

The possibility remains that the State or a political subdivision may 

enter into a conciliation agreement with’:the Commission which by its terms 

requires the State or a political subdivision to include a non-discrimination 

p. 1555 
The Honorable Oscar H. Mauzy page 5 (H-337) 

clause in all contracts, bids or purchase orders. If such an obligation 

exists, it is by virtue of the voluntary agreement and not due to any 

express requirements of Title VII. 

Therefore, our opinion is that the State is not required by the Equal 

Employment Opportunity Act to include a non-discrimination clause in its 

contracts, bids or purchase orders. 

Finally, Title VI of the Civil Rights Act of 1964, 42 U.S. C. Sec. 

2000d, directs federal departments and agencies to enforce the general 

requirement that: 

No person in the United States shall, on the ground 

of race, color, or national origin, be excluded from 

participation in, be denied the benefits of, or be 

subjected to discriminationmder any program or 

activity receiving Federal financial assistance. . 

It is incumbent upon federal agencies to insure that recipients of 

federal assistance administer program benefits on a non-discriminatory 

basis. If necessary, a recipient must be directed to take affirmative 

action to correct discrimination in federally assisted programs. However, 

42 U.S. C. Sec. 2000d-3 clearly limits the authority of a federal agency 

under Title VI to influence the employment practices of a recipient. It 

provides: 

Nothing contained in this subchapter shall be construed 

to authorize action . . . by any department or agency 

with respect to any employment practice of any employer, 

employment agency, or labor organization except where 

a primary objective of the Federal financial assistance 

is to provide employment. 

Federal regulations interpreting Title VI now prohibit employment 

discrimination where either the primary purpose of a grant is to provide 

employment or vihere ~dSscriminabjiy.empl~yme~. practices tend to result in 

unequal treatment of persons who are, or should be, benefiting from the 

p. 1556 
The Honorable Oscar Mauzy page 6 ( H - 337) 

grant-aided activity. See, for example, 45 C. F. R. Section 80.3 (HEW 

Title VI regulations); 49 C. F. R. Section 21. 5 (c) (Dept. of Transportation 

Title VI regulations). 

Conceivably, a federal agency may under some circumstances 

require the State, as applicant or recipient of federal assistance, to include 

an equal employment opportunity clause in State contracts, bids or purchase 

orders which are financed in part with federal funds. 

For instance, regulations by HEW define “program” for purpose of 

Title VI to include an activity which provides benefits to the public “through 

employees of the recipient of Federal financial assistance or provided by 

others through contracts or other arrangements with the recipient” 45 

C. F. R. Section 80.13 (9). If a contractor under a contract with the State 

is a participant in a federally assisted program, and if “discrimination 

on the ground of race, color, [sex] or national origin in the employment 

practices of the recipient or other persons subject to the regulations tends 

* . . to exclude individuals from participation in, to deny them the benefits 

of, or to subject them to discrimination under any program . . . ” (45 C. F. R. 

Sec. 80. 3 (c) (3)) then the State, an agency, or a political subdivision may 

be required by Title VI to include an equal employment opportunity clause 

in t:ho:s’e .federally assisted contracts, bids or purchase orders. Otherwise 

Title VI does not require the clause in a State contract, bid or purchase 

order. It is impossible, given the variety of federal grant-in-aid program 

objectives, to answer your question more specifically under Title VI. See 

also, N.A.A. C. P., Western Region v. Brennan, 360 F. Supp. 1006 (D. C. 

1973). 

SUMMARY 

States, state agencies, and political subdivisions 

are required by federal law to include an equal employment opportunity clause in federally-assisted construction contracts which exceed $10,000. Title VI may 

require a similar clause in contracts financed in part 

p. 1557 
. . 

The Honorable Oscar H. Mauzy page 7 (H-337) 

by federal grant-in-aid funds, but the Equal 

Employment Opportunity Act with 1972 

amendments, does not, nor does any other 

State or fede~ral law, require the clause to be 

included in all State contracts, bids or purchase 

orders, though in our opinion such a clause is 

always permissible. 

Very truly yours, 

APPR$?.jVED: 

DAVID M. KENDALL, Chairman 

Opinion Committee 

p. 1558