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# 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 towhich State and its agencies are required to enforce antidiscriminatory laws offederal and state governments in contracting with outside entities. Dear Senator Mauzy:

The Senate Education Committee has requested **our** opinion onthe following matter:

Inview ofExecutive Order 11246, the regulations sent down bythe Office ,ofFederal Contract Compliance and by the Equal Employment Commission, the 1972Amendments 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 ofthis contract, the Contractor agrees as follows: The Contractor will not discriminate against any employee because ofrace, creed, color, sex or national origin. ’ Itwould be greatly appreciated ifyour opinion would encompass the circumstances under which such a statement would be permissible, advisable, or necessary,

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

the particular political subdivision affected in each case, and the precise nature ofthe statement in each case. Your question specifically encompasses three separate issues as it is phrased to cover the permissibility, the advisability and the necessity ofthe inclusion ofsuch a contract clause. Two ofthese issues require little discussion.

We know ofnolaw, state or federal, which would preclude anagency from including anon-discrimination clause in acontract. Itis therefore our conclusion that an agency may include such a clause in its contracts and bid specifications. Whether use ofthe clause is advisable is essentially a question ofpolicy which is outside the **statutory** opinion process ofthis office. The cases inwhich a non-discrimination clause must be used depend on relevant federal law.

Executive Order 11246ofSeptember 24, 1965, is a statement bythe President concerning federal procurement and financial assistance policy. The Order requires all federal agencies to condition the award offederal contracts and federally assisted construction contracts upon the inclusion of an equal employment opportunity clause ofthe type you describe. The clause is enforced bythe Secretary .ofLabor through the Office ofFederal Contract Compliance. The Secretary ofLabor has promulgated rules which explain the Executive Order in great detail. See, 41C.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. 41C.F.R. Sec. 60-l. 5. As anapplicant for federal assistance, the State must agree toinclude 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 toinclude such a clause in contracts, bids or purchase orders that are financed wholly from state funds.

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The authority ofthe President to condition federal assistance to state construction contracts upon inclusion ofthe clause has been considered and upheld in Contractors Association ofEastern Pennsylvania v. Secretary of Labor, 442 F. 2d159 (3rd Cir. 1971), cert. denied, 404 U.S. 854 (1971). The court reasoned:

When the Congress authorizes an appropriation for aprogram offederal assistance, and authorizes the Executive branch toimplement the program byarranging for assistance to specific proj.ects, in the absence of specific statutory regulations it must be deemed tohave granted to the President a general authority toact for the protection offederal interests. (442 F. 2dat 171) Consequently, our opinion is that the State, its agencies and political subdivisions are required bythe 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 ofnon-discrimination in employment are imposed bythe Equal Employment Opportunity Act of 1972, 42U.S. C. 52000e, which amended in part Title VII ofthe 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)tofail or refuse tohire or todischarge any individual, or otherwise to discriminate against any individual with respect tohis compensation, terms, conditions, or privileges or employment, because of such individual’s race, color, religion, sex, or national origin;
. . .

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Section 2000e-2 applies not only to State employment practices, but to the practices ofany employer of 15or more persons in an industry which affects interstate commerce.

As a result, many private employers with whom the State deals are already required byfederal law to prbvide equal employment opportunity.

However, Title VII does not require the State to enforce its guarantee ofequal 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 byfiling of complaint with the Equal Employment Opportunity Commission. The Commission, ifit finds reasonable cause to believe aviolation has occurred, will endeavor through informal negotiations to settle the complaint through a voluntary conciliation agreement. Ifnecessary, the Commission may file a civil action enjoining violation ofthe Act bythe 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 tothe Commission, initially, and afterwards to the courts.

Itis not an unlawful employment practice for the State torefuse 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 ofothers.

The possibility remains that the State or apolitical subdivision may enter into aconciliation agreement with’:the Commission which by its terms requires the State or a political subdivision to include a non-discrimination

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

clause in all contracts, bids or purchase orders. Ifsuch an obligation exists, it is byvirtue ofthe voluntary agreement and not due toany express requirements of Title VII.

Therefore, our opinion is that the State is not required by the Equal Employment Opportunity Act to include anon-discrimination clause in its contracts, bids or purchase orders.

Finally, Title VI ofthe 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, onthe ground ofrace, 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.
. Itis incumbent upon federal agencies toinsure that recipients of federal assistance administer program benefits onanon-discriminatory basis. Ifnecessary, a recipient must be directed to take affirmative action to correct discrimination infederally assisted programs. However, 42 U.S. C. Sec. 2000d-3 clearly limits the authority ofafederal agency under Title VI toinfluence the employment practices ofa recipient. It provides: Nothing contained in this subchapter shall be construed

toauthorize action
. . . byany department or agency with respect to any employment practice ofany employer, employment agency, or labor organization except where aprimary objective ofthe Federal financial assistance is toprovide employment. Federal regulations interpreting Title VI now prohibit employment discrimination where either the primary purpose ofagrant is to provide employment or vihere ~dSscriminabjiy.empl~yme~. practices tend to result in unequal treatment ofpersons who are, or should be, benefiting from the

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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. ofTransportation Title VI regulations).

Conceivably, afederal agency may under some circumstances require the State, as applicant or recipient offederal assistance, toinclude 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 anactivity which provides benefits to the public “through employees ofthe recipient ofFederal financial assistance or provided by others through contracts or other arrangements with the recipient” 45 C.F. R. Section 80.13 (9). Ifa contractor under acontract with the State is aparticipant in afederally assisted program, and if “discrimination onthe ground of race, color, [sex] or national origin in the employment practices ofthe 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, anagency, or apolitical subdivision may be required by Title VI toinclude an equal employment opportunity clause int:ho:s’e .federally assisted contracts, bids or purchase orders. Otherwise Title VI does not require the clause in aState contract, bid or purchase order. Itis impossible, given the variety offederal grant-in-aid program objectives, toanswer your question more specifically under Title VI. See also, N.A.A. C.P., Western Region v. Brennan, 360F. Supp. 1006 (D.C. 1973). SUMMARY States, state agencies, and political subdivisions are required byfederal law to include an equal employment opportunity clause infederally-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)

byfederal 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 tobe included inall State contracts, bids or purchase orders, though in our opinion such aclause is always permissible. Very truly yours,

APPR$?.jVED:

DAVID M. KENDALL, Chairman Opinion Committee

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