Opinion ID: 318171
Heading Depth: 2
Heading Rank: 1

Heading: company organization and employment practices

Text: 10 1. Departments. The company's operations are organized into various departments. There are five primary production departments, each having separate and distinct functions from the other. They consist of: (1) the mono-cast department containing three pipe shops for the production of cast iron and ductile iron pipe; (2) the fittings foundry which produces between 35,000 to 40,000 different accessories to complement the pipe produced in the pipe shops; (3) the steel foundry which produces steel tubes and castings of various alloys and shapes; (4) the melting department which melts all of the hot metal required by the mono-cast department, the fittings foundry, and the steel foundry; (5) the steel pipe foundry which produces steel pipe from steel skelp. In addition, there is a machine shop which performs all the labor required on items produced in the steel foundry, the fittings foundry, and the mono-cast department, as well as replacement maintenance on all machinery. Four of these departments-- all except the steel pipe foundry and the machine shop-- have employed the majority of black employees within the company between 1963 and 1971. 11 The company also has service departments consisting of the general yards department, central stores, the shipping department, electrical department, maintenance department, inspection department, and the construction department. These departments perform services in the receipt of raw materials, the shipment of finished products, and various maintenance functions in the company's operations. Of these departments, the general yards, shipping, and construction departments have had substantial numbers of black employees. 7 The machine, electrical, maintenance, and inspection departments consist principally of the higher skilled jobs and craft positions with a small turnover in personnel. Fewer blacks have been employed in these departments. 8 12 2. Wage progression and advancement. The method of advancement within these departments is a wage progression schedule, a ladder of pay groups, embracing one or more jobs. The company alleges that these are job-to-job sequences with functional relationship. The appellants argue that the company admitted that no formal, functional lines of job progressions have ever been maintained. Until 1968 the company maintained twenty-three pay groups, but on February 19, 1968, the structure was consolidated into fifteen pay groups: (a) groups 1-8 include the unskilled and semi-skilled functions; (b) groups 9 and 10 contain the more semi-skilled positions; (c) group 11 is the skilled non-craft, technical and clerical positions; (d) groups 12 and 13 are the skilled craft and technical jobs; (e) group 14 includes the secondary supervisory, and group 15, the primary supervisory positions (leadmen and foremen). The district court found that 'the overwhelming majority of the black employees historically were and continue to be employed in the pay groups 1-8 jobs in the various departments and particularly in the mono-cast 1, 2, and 3, and foundry.' 9
13 1. Intentional discrimination. Until 1961 the company formally maintained exclusively black jobs and exclusively white jobs. 10 Departments were not totally segregated, but there were predominantly black and predominantly white departments. When Presidential Executive Order No. 10925 made such a policy unlawful in 1961, the company terminated this practice. The resulting employment segregated profile, however, was preserved until 1963 by economic conditions requiring lay-offs and subsequent rehiring of laid-off workers. The process of lay-off and rehiring meant that any movement of black employees into traditional white jobs would come to an end. As lay-offs occurred, the employees with the least departmental seniority, e.g. the newly hired, promoted, or transferred black employees, would be either (1) furloughed, if newly hired, or (2) dropped back into the department from which they transferred, as they retained former departmental seniority in that department for lay-off purposes. 11 As production increased in 1964, and re-employment of blacks might normally be expected to increase, the company instituted its illegal testing and educational requirements. As of 1963 black employees constituted about half the work force of the company, but only three blacks earned more than any white production workers, and few if any jobs had racially mixed staffing. 14 2. Hiring. Sometime prior to 1960, the company had instituted a hiring requirement of a high school education or its equivalent for all white applicants. By 1960 white applicants were also required to pass a screening test battery and a physical examination. Black applicants employed prior to 1964 were only required to pass the physical examination. In 1964, after a compliance review under Order No. 10925 by the Department of Army and Office of Federal Contract Compliance, the company was informed that to be eligible for federal contracts it could no longer maintain different standards for hiring black and white applicants. The company at that time extended the testing and education criteria to black applicants. These standards for hiring remained in effect until 1971. However, the company eliminated test requirements as well as the criterion of a high school education or its equivalent for hiring into pay groups 1-8 on July 14, 1969. 12 The failure of blacks successfully to hurdle these qualifying barriers had resulted, between 1965 and 1969, in the decrease in the number of black employees in the plant from 869 to 791, while the number of white employees increased from 923 to 2,162. 13 15 3. Promotion and transfer. In December, 1964, the company initiated a testing requirement for promotion within or between any pay groups and for transfer between departments. 14 Achievement levels (test cut-off scores) were established using the California Survey of Mental Maturity Tests. To be eligible for position in a particular pay group, an employee had to obtain a test score corresponding to the specified achievement level. The company determined that the tests, recommended national norms were too high for the company's purposes. Therefore, the company in an effort to establish its own standards of norm selected 100 average performers from its employees to take the test. This was used to determine what achievement levels to assign to various jobs within the company's pay grades. Ninety-eight of the 100 selected employees took the test. Seventy-five were black; and twenty-three were white. This testing program for promotion was reviewed by Dr. Brimm of the Department of Army and Office of Federal Contracts Compliance and praised as one of the best systems in the companies he had visited on compliance reviews. 16 On February 19, 1968, the company eliminated the testing criterion for promotion within the first eight pay grades. 15 In addition to employee complaints concerning these testing requirements, the company determined that ability of employees to perform functions in these pay grades could be established by on-the-job observation without detriment to the company. Requisite achievement levels for hiring and for promotion or transfer within or without a department to positions in pay groups 9-15 were retained, however. The company eliminated all testing in March, 1971. Currently, the company simply tries the person, selected under the bidding procedure on the basis of departmental seniority or plant seniority and ability, on the job and evaluates his performance in determining the promotion. 17 4. Testing and educational requirements. A testing prerequisite was required for hiring, promotion and transfer, and entry into the apprentice and on-the-job training programs. A high school education or its equivalent was a criterion, as well, for being hired or entry into the apprentice program. 18 Concerning the testing conducted by the company, the district court concluded: 19 The history of the testing, as they existed and were administered by defendant from July 2, 1965, 16 to March 25, 1971, recorded in the findings of fact, supra, is convincing that they were not discriminatorily applied to defendant black employees. Their adverse impact on the employment opportunities of blacks is equally clear. Judged by the standard established by Griggs v. Duke Power Company, 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971), they could not pass muster. 17 20 The Supreme Court in facing a high school education and testing requirement in Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971), stated: 21 . . . The Act (Title VII) proscribes not only overt discrimination but also practices that are fair in form, but discriminatory in operation. The touchstone is business necessity. If an employment practice which operates to exclude Negroes cannot be shown to be related to job performance, the practice is prohibited. 22 On the record before us, neither the high school completion requirement nor the general intelligence test is shown to bear a demonstrable relationship to successful performance of the jobs for which it was used. Both were adopted, as the Court of Appeals noted, without meaningful study of their relationship to job-performance ability. 23