Opinion ID: 343271
Heading Depth: 1
Heading Rank: 3

Heading: Liability and Back Pay Rulings.

Text: 18 A. Seniority Provisions as a Basis for Union Liability. UPIU, IAM and IBEW Locals contend that the district court erred in finding the collectively bargained seniority system to be an element of the impenetrable barrier to black employees seeking transfer into traditionally all-white lines and in finding the unions equally responsible with the company for the perpetuation of past racial discrimination. 392 F.Supp. at 419, 423-24. These unions insist that the evidence failed to show that the neutral seniority system in any way caused blacks to remain in the traditionally black lines. Further, UPIU argues that even if the seniority system was a causative factor in the failure of blacks to transfer, the evidence showed that UPIU had a business necessity defense peculiar to unions. Finally, the unions contend that the allocation of responsibility and liability between the company and unions conflicts with settled labor law principles of apportioning damages. 19 The district court found that three factors contributed to the inability of blacks to transfer: the failure of the company to post notices of job vacancies, the general practice of the company to disallow transfers of workers experienced in a line of progression, and the job seniority system as implemented by the collective bargaining agreements. 392 F.Supp. at 420, 423. The unions contend that the company had a no transfer policy or practice which was the sole cause of there being no transfer opportunities for blacks. If the company did indeed have such a policy, the unions are correct in arguing that they cannot be held liable, for both the statute 5 and our cases require a nexus between a defendant's behavior and the injuries for which back pay is sought from him. E.g., United States v. Georgia Power Co., 474 F.2d 906, 922 (5th Cir.1973); Jinks v. Mays, 464 F.2d 1223, 1226 (5th Cir.1972). 20 Although the company retained the right to grant or to deny transfers as a management prerogative and would generally deny transfer requests from workers deemed proficient in particular lines of progression, it is undisputed that the company granted at least 20 transfer requests from black employees between 1965 and 1972. 6 None of the parties produced clear evidence of the number of requests for transfer before 1972, but there was evidence that numerous new and renewed requests for transfer were made after the supplemental labor agreements took effect and that requests before that time might have been deterred by the system of line seniority. On this evidence the court could find that blacks were partially or wholy deterred by the seniority provisions from even requesting transfer; some of the requests would have probably been denied, but some would undoubtedly have been granted. The court therefore, did not clearly err in finding the seniority provisions to be a concurrent cause of perpetuation during the period 1965-72 of the company's past discrimination. In this circuit such a finding exposes defendant unions to back pay liability. Sagers v. Yellow Freight System, Inc., supra at 728; United States v. T.I.M.E.-D.C., Inc., supra at 316; Johnson v. Goodyear Tire & Rubber Co., 491 F.2d 1364, 1373 (5th Cir.1974). 21 UPIU insists that the district court erred in holding that UPIU had not proven a business necessity defense. But UPIU does not contend that there was a business necessity for the seniority system to be based on departmental lines. Rather, it says that it signed the collective bargaining agreements out of business necessity, having unsuccessfully attempted to prod the company into Title VII compliance. What UPIU seeks might more appropriately be called a union function defense rather than a business necessity defense. The latter speaks to the immediate and compelling economic need for maintaining a particular policy or collectively bargained provision. Franks v. Bowman Transportation Co., 495 F.2d 398, 415 (5th Cir.1974), rev'd on other grounds, 424 U.S. 747, 96 S.Ct. 1251, 47 L.Ed.2d 444 (1976); Jones v. Tri-County Elect. Co-op., Inc., 512 F.2d 1 (5th Cir.1975); Pettway v. American Cast Iron Pipe Co., 494 F.2d 211, 245-46 (5th Cir.1974). UPIU is here arguing for a defense based upon a union's role in the employer/union relationship. UPIU reasons as follows: the employer owns the plant and manages it; accordingly, the employer possesses the unilateral power--unless surrendered in collective bargaining--to determine where a newly-hired employee will be assigned, how he will be paid, whether he will be allowed to transfer, and what rules will govern his opportunities for promotion. In contrast to this direct role exercised by the employer, a union's role is reflexive: it seeks to influence the resolution of those questions for the benefit of the employees. Unless the union succeeds in getting an employer's agreement on these questions, the employer retains the same unilateral power it would possess if the plant were unorganized. See United Steelworkers v. Warrior and Gulf Co., 363 U.S. 574, 583, 80 S.Ct. 1347, 4 L.Ed.2d 1409, 1418 (1960). UPIU contends that given this limited union role, a union has a good defense to back pay liability where it has urged the employer to comply with Title VII and has taken a bargaining position to achieve compliance yet lacks sufficient bargaining power to obtain employer agreement. This argument is not relevant to the primary issue below--whether a defendant is or has engaged in conduct that discriminates on the basis of race or that perpetuates past discrimination. Rather, the argument is germane as to which defendant should bear primary responsibility for the illegal conduct. The court did not err in holding that UPIU had no business necessity defense. 22 In their briefs the parties on appeal have argued at length over the district court's holding that [b]ecause the Unions are equally responsible, with the Company, for the perpetration [sic] of past racial discrimination, they must bear liability equally with the Company. Accordingly, the Unions shall be liable for 50% of the economic loss suffered by each individual class member. 392 F.Supp. at 423-24. The UPIU and IBEW Local indicate that this ruling disposed of their cross-claims against the company and saddled them with ultimate liability for 50% of the back pay awards. 7 The record and court's order, however, are at most ambiguous on the cross-claim issue. In the first paragraph of its order the court stated that it was faced with only one substantial issue--the liability of the IBEW. Further, the court noted that because of the settlement between the plaintiffs and the company, focus during the trial of the liability phase ... shifted primarily to the acts and omissions of the defendant Unions. Gilman's practices are placed in issue by the Unions' cross-actions only as far as they affect the Unions' liability. 392 F.Supp. at 417 (emphasis added). At the end of its order the court observed that soon after the plaintiffs presented back pay claims to the unions it would set the remaining issues down for hearing and that the unions would be liable in the proportions set forth in the order unless they could show that other factors would have prevented an individual's transfer. Moreover, neither the court's order setting the trial date nor the plaintiffs' pretrial statement of the Stage I issues referred to the cross-claims. It therefore appears that the court preserved the cross-claim issues for consideration along with ordinary Stage II back pay proceedings. See part III, E infra. That the court did not dispose of the cross-claims is more strongly suggested by the fact that the company's brief attempts neither to criticize nor to defend the 50% ruling. 23 The 50% ruling thus appears to be a preliminary ruling, perhaps thought desirable for back pay proceedings because a portion of the back pay claims had to be attributed to the company's settlement. The district court correctly viewed the company and the unions as joint wrongdoers whose concurrent acts caused plaintiffs' injuries. Accord, Carey v. Greyhound Bus Co., 500 F.2d 1372, 1379 (5th Cir.1975); Guerra v. Manchester Terminal Corporation, 498 F.2d 641, 645 n. 3, 655-56 (5th Cir.1974). The proceeding below appears properly to have been limited only to defendants' liability to plaintiffs, for a complex factual determination of the defendants' relative culpability should not interfere with plaintiffs' case. Postponing disposition of the cross-claims until individual back pay claims are resolved in Stage II has the additional benefit of giving the company an incentive to cooperate with the unions in their defense of individual back pay claims, since the company as well as the unions will have an interest in minimizing total back pay liability. 24 Consequently, full consideration of the unions' cross-claims may be made on remand. Although this court has never outlined in full the principles that should guide district courts in apportioning liability among defendants, we have alluded to the problem. See United States v. United States Steel Corporation, 520 F.2d 1043, 1060 (5th Cir.1975), cert. denied sub nom. United States Steel Corporation v. Ford, --- U.S. ----, 97 S.Ct. 61, 49 L.Ed.2d ---- (1976); Gamble v. Birmingham Southern Railroad Co., 514 F.2d 678, 686-87 (5th Cir.1975); Guerra v. Manchester Terminal Corporation, supra; Johnson v. Goodyear Tire & Rubber Company, supra at 1381, 1382. We commend those cases to the district court. 25 B. IBEW Liability. IBEW attacks the district court's holding that it is liable for the perpetuation of discrimination by its local's collective bargaining agreements with the company even though the local is not its agent and it was not a signatory to the contracts. IBEW concedes that one of its international representatives attended the 1970-73 contract negotiations of its local in an advisory role and that its president approved the 1968-70 and 1970-73 contracts. The international argues, however, that it cannot be held liable for the effects of its local's contracts unless there is specific proof that it caused, participated in, or ratified its local's acts or omissions. According to this argument, since there is no specific evidence in the record that the international's representative advised the local regarding the seniority provisions or that its president was aware of the discriminatory effects of the facially neutral provisions, it cannot be held liable. 26 Labor organizations, as well as employers, have an affirmative duty to take corrective steps to prevent the perpetuation of past discrimination. Rodriguez v. East Texas Motor Freight, 505 F.2d 40, 60 (5th Cir.1974), cert. granted, --- U.S. ----, 96 S.Ct. 2200, 48 L.Ed.2d 814 (1976); Carey v. Greyhound Bus Co., supra at 1377; Pettway v. American Cast Iron Pipe Co., supra at 236. It is the reasonably certain prospect of a backpay award that 'provide[s] the spur or catalyst which causes employers and unions to self-examine and to self-evaluate their employment practices and to endeavor to eliminate, so far as possible, the last vestiges of an unfortunate and ignominious page in this country's history.'  Albemarle Paper Co. v. Moody, 422 U.S. 405, 417-18, 95 S.Ct. 2362, 2371-2372, 45 L.Ed.2d 280, 296-97 (1975). There must be a sufficient connection between the labor organization and the discriminatory practice to render the organization liable. Sagers v. Yellow Freight System, Inc., supra at 737. The Fourth Circuit has recently held that a sufficient connection exists where, as here, the international union provided an advisor to the local in its negotiations and the international approved the resultant collective bargaining agreement. See Patterson v. American Tobacco Company, 535 F.2d 257, 270-71 (4th Cir.1976). See also Kaplan v. International Alliance of Theatrical and Stage Employees and Motion Picture Machine Operators, 525 F.2d 1354, 1359-60 (9th Cir.1975). 27 IBEW argues, however, that its policy is to limit its approval to what is apparent from the face of the collective bargaining agreement. We do not think the instant case differs from Patterson, supra, and we do think Patterson is correct. Here the international established a close relationship with its locals, under which the international would generally provide advisors who would review and often comment upon the local's bargaining positions. An additional aspect of the relationship was the international's requirement that locals submit contracts to it for its approval. The international obviously expected benefits, tangible and intangible, from this relationship. It cannot now claim that it limits the relationship's scope to encompass only the benefits and not the burdens. As far as third parties were concerned, the international gave its imprimatur to local contracts by providing contract advisors and approval of the final agreement. No doubt the international would have been willing to claim whatever advantages that arose from this appearance of full approval; it cannot now disclaim the disadvantages. 28 C. Apportionment of Liability Among the Unions. The district court ruled that for purposes of further back pay proceedings, the unions' share of liability in the mill, where UPIU, IAM, and IBEW locals represent different bargaining units, would be apportioned among the unions on the basis of the number of employees represented in each unit. Accordingly, the court concluded that UPIU and its mill locals would be liable for 72% of the unions' share, IAM and its local would be liable for 18%, and IBEW and its local would be liable for 10%. The unions contend that since a more precise determination of the loss caused by the collective bargaining agreements of each can be made, the district court erred in apportioning liability as it did. They argue that it will be relatively easy to determine in the back pay proceedings the exact number of vacancies open in the electrical unit, for example, and that it will be easy to determine who would have obtained the positions and when they would have been obtained absent the discriminatory practices. Therefore, a precise calculation is possible of the economic loss caused by the bargaining agreement of a particular unit. Such a calculation, it is argued, might bear no resemblance to the apportionment made by the lower court. 29 While such a method of calculating the liability of each union might be possible or perhaps desirable, we are reminded that district courts are afforded wide latitude in fashioning Title VII remedies. Rodriguez v. East Texas Motor Freight, supra at 61; Johnson v. Goodyear Tire & Rubber Co., supra at 1380. Here the district court was concerned about rules to govern the remedy for a discriminatory system of jobs caused by the joint acts of the unions and the company. Being jointly responsible for the creation and maintenance of this system, each had an affirmative obligation to seek Title VII compliance. Had one of the unions, for example, forcefully brought Title VII's requirements to the company's and the other unions' attention, that might have provided the necessary stimulus for some or all of the other joint wrongdoers to end the violations. There was some evidence that the UPIU did undertake to bring Title VII's requirements to the company's attention and was rebuffed, but who can say that the company might not have had a different response had the IBEW and IAM strongly supported UPIU's position? Therefore, the omissions of IBEW and IAM make them in part responsible for the losses suffered by blacks throughout the entire work force. Likewise, UPIU bears partial responsibility for the obstacles to black entry to craft jobs. Incumbent blacks who were deterred from seeking transfers to those jobs were members of UPIU bargaining units. It is settled that Title VII required UPIU at some point to take the affirmative step to initiate negotiations with [the company] in an effort to salvage for its own ex-members the seniority they would inevitably and foreseeably lose. Carey v. Greyhound Bus Co., supra at 1379. Consequently, each union was not exclusively responsible for the losses arguably traceable to provisions of its own contracts. The craft unions might have good cause for complaint if the district court assessed 50% of the unions' share against them, since UPIU represented the great majority of mill employees. It is logical to apportion liability instead on the basis of each union's numerical strength in the plant, which may roughly reflect the relative strength of each union with the employer. The district court could properly conclude that such an apportionment should be based on the percentage of mill employees represented by each union. 30 D. The Presumptive Entitlement to Back Pay of Those Hired after the Effective Date of the Act. The district court held that members of plaintiff classes A and B who were initially assigned to a black job are presumptively entitled to an award of back pay. As observed in note 2 supra, those classes consist primarily of blacks hired after July 2, 1965. Union liability for the existence of a neutral seniority system must be based on a finding that the seniority system perpetuates or perpetuated the employer's discrimination in hiring or assigning workers. Swint v. Pullman-Standard, supra at 98, 99. Stevenson v. International Paper Co., 516 F.2d 103, 111-12 (5th Cir.1975); Watkins v. United States, supra at 1167; Johnson v. Goodyear Tire & Rubber Co., supra at 1373. Consequently, the conclusion below that the unions are presumptively liable to members of classes A and B, whether hired and assigned prior to or after July 2, 1965, must rest on a finding that the company assigned workers both before and after that date on a discriminatory basis. 31 The evidence below showed that of the 77 Class A members hired after July 2, 1965, in the mill, 55 were assigned to traditionally black jobs. However, of the 118 Class A members hired in the bag plant, 95 were assigned to formerly white jobs. Thus, of the 195 Class A members assigned to jobs after the effective date of the Act, 117 were assigned to white jobs and only 78 were assigned to black jobs. Further, the testimony of John Love, the company's Assistant Industrial Relations Director, was that after July 2, 1965, the company's employment program was nondiscriminatory and that individuals were assigned without regard to race. This testimony was elicited both by counsel for the defendants and by counsel for the plaintiffs. The district court, after stating the facts, concluded by saying that the evidence shows and the Court finds that, prior to the effective date of Title VII, Blacks were hired into relatively low paying lines ... and were prohibited from entering the higher paying lines.... 392 F.Supp. at 419 (emphasis added). Nowhere in the court's opinion does there appear any conclusion or finding that the employer continued to hire or to make initial assignments on a discriminatory basis after July 2, 1965. It therefore appears that the finding of post-Act employer discrimination in assignments necessary to impose liability to post-Act hires on the unions is lacking. 32 Appellees contend, however, that the evidence made out a prima facie case of post-Act employer discrimination. A substantial disparity between the proportion of blacks and whites assigned to certain job classifications can be sufficient to establish a prima facie case of employment discrimination. E.g., Robinson v. Union Carbide Corporation, 538 F.2d 652, 660 (5th Cir.1976); Sagers v. Yellow Freight System, supra at 729-30; Wade v. Mississippi Cooperative Extension Service, 528 F.2d 508, 516-17 (5th Cir.1976). But the record clearly demonstrates that the parties and court below proceeded on the assumption that the company ceased its discriminatory hiring and assignment practices on July 2, 1965. Appellees' principal theory throughout the litigation appears to have been that the company discriminated in the assignment of new hires prior to the effective date of Title VII and that the appellants perpetuated the effects of that pre-Act assignment discrimination. At no time below did appellees expressly assert that assignment discrimination continued after the Act became effective. Indeed, appellees introduced testimony establishing that the company stopped its assignment discrimination with the advent of Title VII. Although appellees arguably made an issue of assignment discrimination in their pleadings, the issue was overlooked in their pretrial statement of issues and in their proposed findings of fact. If appellants and the court ever were on notice of a post-Act assignment discrimination claim, that claim was apparently soon forgotten by everyone concerned, as reflected by the absence of a finding in the lower court's opinion. 8 Consequently, on the present state of the record the court erred in holding that members of classes A and B initially assigned to formerly black jobs after July 2, 1965, were presumptively entitled to back pay. Proceeding as a court of equity, the district court may wish to receive additional evidence with respect to initial assignment discrimination after July 2, 1965, and the perpetuation of the effects of that discrimination. 33 E. Observations About Further Back Pay Proceedings. Appellants seem disturbed by what they perceive to be the district court's misunderstanding about burdens of proof in back pay proceedings. It is clear from the court's opinion that it correctly understood the bifurcated nature of discrimination suits and the burden of proof problems presented thereby. As noted above, there is some error in the description of the class presumptively entitled to back pay. The court correctly stated, however, that [u]pon the trial of the next stage, plaintiffs will be required to show, with reasonable accuracy, the amount of economic loss of each class member who was initially assigned to a black job [before July 2, 1965]. 392 F.Supp. at 424. That procedure follows from our discussion of Title VII proceedings in Baxter v. Savannah Sugar Refining Corp., 495 F.2d 437, 443-44 (5th Cir.1974), cert. denied, 419 U.S. 1033, 95 S.Ct. 515, 42 L.Ed.2d 308 (1975): 34 A Title VII class action suit presents a bifurcated burden of proof problem. Initially, it is incumbent on the class to establish that an employer's [or union's] employment practices have resulted in cognizable deprivations to it as a class. At that juncture of the litigation, it is unnecessarily complicating and cumbersome to compel any particular discriminatee to prove class coverage by showing personal monetary loss. What is necessary to establish liability is evidence that the class of black employees has suffered from the policies and practices of the particular employer. Assuming that the class does establish invidious treatment, the court should then properly proceed to resolve whether a particular employee is in fact a member of the covered class, has suffered financial loss, and [is] thus entitled to back pay or other appropriate relief. 35 See also Franks v. Bowman Transportation Company, Inc., 424 U.S. 747, 772, 96 S.Ct. 1251, 1268, 47 L.Ed.2d 444, 466 (1976); Sagers v. Yellow Freight System, Inc., supra at 733. 36 In Pettway v. American Cast Iron Pipe Company, supra at 259-60, we stated in greater detail the burden upon an individual claimant in Stage II proceedings. The individual claimant should be required to come forward with a statement of his current or last position and pay rate thereof, the jobs he was denied because of discrimination and their pay rates, a record of his employment history with the company and other evidence that qualified or would have qualified him for the denied positions, and an estimate of the amount of requested back pay. The defendants are then entitled to present evidence showing, for example, that the claimant was in fact unqualified or that there was no vacancy at the time or times he would have requested transfer. Franks v. Bowman Transportation Company, Inc., supra at 773 n. 32, 96 S.Ct. at 1268 n. 32, 47 L.Ed.2d at 466 n. 32. 37