Waters v. Wisconsin Steel Works of International Harvester Company Petition for a Writ of Certiorari with Appendix

    I n  t h e

g’upratw (Enurt of tljf llnitfJi States
October T erm, 1974 

No. 74-

W illiam  A. W aters and D onald Samuels,

Petitioners,
v.

W isconsin Steel W orks of International H arvester Com­
pany and U nited Order of A merican B ricklayers and 
Stone M asons, L ocal 21.

PETITION FOR A W RIT OF CERTIORARI TO 
THE UNITED STATES COURT OF APPEALS 

FOR THE SEVENTH CIRCUIT

Judson H. M iner 
Charles B arnhill, J r .

Davis, Miner & Barnhill 
14 West Erie Street 
Chicago, Illinois 60610

J ack Greenberg 
James M. N abrit III 
B arry L. Goldstein 
M orris J. B aller 
E ric S chnapper

10 Columbus Circle 
Suite 2030
New York, New York 10019

Counsel for Petitioners

P hilip B. K urland
Rothschild, Barry & Myers 
Two First National Plaza 
Chicago, Illinois 60670

Of Counsel



I N D E X

Opinion Below .........................  1

Jurisdiction .........................................................................  2

Questions Presented .......................................................... 2

Statutory Provisions Involved ........................................  2

Statement of the Case ............................   5

Reasons for Granting the Writ .....................................  7

I. The Decision of the Court of Appeals That Sec­
tion 703(h) of Title VII Limits the Remedies 
Provided by Section 1981 Is Inconsistent With 
the Decision of This Court in Alexander v. 
Gardner-Denver Co.................................................... 11

II. The Decision of the Court of Appeals That Sec­
tion 703(h) Protects Seniority Systems Which 
Perpetuate the Effects of Past Discrimination 
Is In Conflict With the Decisions of Other Cir­
cuits .............................................................................  15

III. The Decision of the Court of Appeals Limiting 
Waters’ Right to Back Pay Is In Conflict With 
Decisions of the Third and Fourth Circuits .....  27

Conclusion ......................................................................................  30

A ppendix—

Opinion of the Court of Appeals......................................  la

Order of the Court of Appeals Denying Rehearing.....  21a

Order of the District C ourt...............   23a

PAGE



11

T able of A uthorities:

Cases: page

Afro-American Patrolmen’s League v. Duck, 366 
F. Supp. 1095 (N.D. Ohio 1973), aff’d in pertinent
part 503 F.2d 294 (6th Cir. 1974) ..............................  18

Albemarle Paper Co. v. Moody No. 74-389, cert, granted
December 16, 1974 .......................... ................................ 9

Alexander v. Oardner-Denver Co., 415 TJ.S. 36
(1974) ....................................................................9,13,14,15

Allen v. City of Mobile, 331 F. Supp. 1134 (S.D. A la .); 
aff’d per curiam 466 F.2d 122 (5th Cir. 1972); cert.
denied 412 U.S. 909 (1973) ............................................ 18

Atlantic Maintenance Co. v. NLRB, 305 F.2d 604 (3rd 
Cor. 1962), enf’g 134 NLRB 1328 (1961) ................... 21

Brady v. Bristol-Myers Co., 459 F.2d 621 (8th Cir.
1972) .................................................................................  12

Bridgeport Guardians, Inc. v. Bridgeport Civil Service
Comm., 497 F.2d 1113 (2nd Cir. 1974) ................... 18

Brooklyn Savings Bank v. O’Neil, 324 U.S. 697 (1945) 29
Brown v. Gaston County Dyeing Machine Co., 457 F.2d 

1377 (4th Cir. 1972) cert, denied 409 U.S. 982 (1972) 11

Chance v. Board of Examiners, No. 70 Civ. 4141 (S.D.
N.Y. Feb. 7, 1975) .......................................................... 20

Contractors Association of Eastern Pennsylvania v. 
Secretary of Labor, 442 F.2d 159 (3rd Cir. 1971)
cert, denied 404 U.S. 859 (1971) ....................................  14

Corning Glass Works v. Brennan, 41 L.Ed.2d 1 (1974) 24

Delay v. Carling Brewing Company, 9 EPD ft 9877
(N.D. Ga. 1974) ............................. ................................ 19

Dobbins v. Electrical Workers Local 212, 292 F.Supp.
413 (S.D. Ohio 1968) atf’d as later modified, 472 F.2d 
634 (6th Cir. 1973) .......................................................... 18



Ill

EEOC v. Plumbers, Local Union No. 189, 311 F. Supp.

PAGE

468 (S.D. Ohio 1970) vac’d on other grounds 438 
F.2d 408 (6th Cir. 1971) cert, denied 404 U.S. 832 
(1971) ............................................................................ 18

Franks v. Bowman Transportation Company, O.T. No.
74-728, cert, pending ..................................................2, 9,18

Franks v. Bowman Transportation Co., 495 F.2d 398 
(5th Cir. 1974) cert, denied 43 LW  3330 (1974) .......  18

Grates v. Georgia Pacific Corp., 492 F.2d 292 (1974) ....22, 24 
Golden State Bottling Co. v. NLRB, 38 L.Ed.2d 388

(1973), afUg 467 F.2d 164 (9th Cir. 1972) ............... 21
Griggs v. Duke Power Co., 401 U.S. 424 (1971) .....9, 23, 24
Guerra v. Manchester Terminal Co., 498 F.2d 641 (5th 

Cir. 1974) .......................................................................12,14

Hackett v. McGuire Brothers, Inc., 445 F.2d 442 (3rd
Cir. 1971) .........................................................................  11

Harper v. Mayor and City Council of Baltimore, 359 
F. Supp. 1187 (D. Md. 1973), aff’d sub nom. Harper
v. Kloster, 486 F.2d 1134 (4th Cir. 1973) ..................  18

Head v. Timken Roller Bearing Co., 486 F.2d 870 (6th 
Cir. 1973) .........................................................................  21

Jersey Central Power & Light Co. v. Electrical Work­
ers, Local 327,------ F .2d------- , 9 FEP Cases 117 (3rd
Cir. 1975) ....................................................................... 17, 20

Johnson v. Railway Express Agency, Inc., O.T. 1974,
No. 73-1543 ..................................................    13

Johnson v. Zerbst, 304 U.S. 458 (1938) ..........................  29
Jones v. Lee Way Motor Freight, Inc., 7 EPD 9066

(W.D. Okla. 1973) ...............    10
Jones v. Mayer, 392 U.S. 409 (1968) ..............................  14



PAGE

Jnrinko v. Edwin L. Wiegand Co., 477 F.2d 1038, va­
cated and remanded on other grounds, 414 U.S. 970 
reinstated 497 F.2d 403 (3rd Cir. 1974) ...............19, 24,

Local 189, United Papermakers and Paperworkers v. 
United States, 416 F.2d 980 (5th Cir. 1969) cert.
denied 397 U.S. 919 (1970) ..................................... .

Long v. Ford Motor Company, 496 F.2d 500 (6th Cir.
1974) ..................................................................................

Love v. Pullman Co., 404 U.S. 522 (1972) ...................
Loy v. City of Cleveland, 8 FEP Cases 614 (N.D. Ohio 

1974) .................................................................................

McDonnell-Douglas Corp. v. Green, 411 U.S. 792 (1973) 
Macklin v. Spector Motor Freight Systems, Inc., 478

F.2d 979 (D.C. 1973) ......................................................
Meadows v. Ford Motor Company,------  F.2d —— , 9

EPD 9907 (6th Cir. 1975) .................................. 17,19,
Morton v. Mancari, 417 U.S. 535 (1974) .......................13,

NLRB v. Cone Brothers Contracting Co., 317 F.2d 3
(5th Cir. 1963) ................................................................

NLRB v. Lamar Creamery Co., 246 F.2d 3, (5th Cir.
1957), enf’g 115 NLRB 1113 (1956) ..........................

NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333
(1938) ...............................................................................

NLRB v. Rutter-Rex Mfg. Co., 396 U.S. 258 (1969) ....

Pettway v. American Cast Iron Pipe Co., 495 F.2d 211
(5th Cir. 1974) ..............................................................21,

Phelps Dodge Corp. v. NLRB, 313 U.S. 177 (1941) 
Phillips v. Martin-Marietta Corp., 400 U.S. 542 (1971)

28

20

12
9

18

9

12

24
14

21

21

21
21

24
21
9

Quarles v. Phillip Morris, Inc., 279 F. Supp. 505 (E.D.
Va. 1969) ........................... .............................................  20



V

Robinson v. Lorillard Corp., 444 F.2d 791 (4th Cir.
1971) , cert, dismissed 404 U.S. 1006 (1971) ............. 21

Rock v. Norfolk & Western Rwy. Co., 473 F.2d 1344
(4 Cir. 1973), cert, denied 412 U.S. 933 (1973) .......  24

Rowe v. General Motors Corp., 457 F.2d 348 (5th Cir.
1972) .................................................................................  18

Southport Co. v. NLRB, 315 U.S. 100 (1942) ..............  21
Sullivan v. Little Hunting Park, Inc., 396 U.S. 229

(1969) ...............................................................................  14
Swann v. Charlotte-Mecklenburg Bd. of Education, 402 

U.S. 1 (1971) ...................................................................  14

United Packinghouse, etc. Union v. NLRB, 416 F.2d 
1126 (D.C. Cir. 1969), cert, denied 396 U.S. 903
(1969) ...............................................................................  14

United States v. Bethlehem Steel Corp., 446 F.2d 652
(2nd Cir. 1971) .....................................................   21

United States v. Borden Co., 308 U.S. 188 (1939) .......  14
United States v. Chesapeake & Ohio Ry., 471 F.2d 582

(4th Cir. 1972) cert, denied 411 U.S. 939 (1973) .......  21
United States v. Georgia Power Co., 7 EPD 9167 

(N.D. Ga. 1974) issuing decree on remand from 474
F.2d 906 (5th Cir. 1973) .............................................. 10,21

United States v. Jacksonville Terminal Co., 451 F.2d 
418 (5th Cir. 1971) cert, denied 406 U.S. 906 (1972) 21

United States v. Louisiana, 380 U.S. 145 (1965) ....... 24
LTnited States v. Navajo Freight Lines, Inc., C.A. No. 

116-MNL (C.D. Cal.) (supplemental order to consent
decree entered January 15, 1973) .......   10

United States v. N.L. Industries, Inc., 479 F.2d 354 
(8th Cir. 1973) .................. :........ ...... ....................... . 21

PAGE



VI

United States v. Pilot Freight Carriers, Inc., C.A. No. 
C-143-WS-71 (M.D.N. Car.) (consent decree entered
October 31, 1972) ....... ....................................................

United States v. Roadway Express, Inc., C.A. No. 
C-68-321 (N.D. Ohio) (consent decree entered Sep­
tember 1,1970) partially reported at 2 EPD 10,295
p. 1176 affirmed, 457 F.2d 854 (6th Cir. 1972) ........... 10

United States v. Sheet Metal Workers, Local 36, 416 
F.2d 123 (8th Cir. 1969), rev’ing 280 F. Snpp. 719 
(E.D. No. 1968) ................................................18,19, 23, 24

Vogler v. McCarty, Inc,, 451 F.2d 1236 (5th Cir. 1971) 24

Waters v. Wisconsin Steel Works, 427 F.2d 476 (7th
Cir. 1970), cert, denied 400 IT.S. 911 (1970) ........... 5

Watkins v. United Steel Workers of America, 369
F. Snpp. 1221 (E.D. La. 1974) .............................. 14,17,19

Williams v. Albemarle City Board of Education,
____F .2d------- 8 EPD 9820 (4th Cir. 1974) ............ 28, 29

Statutes:

28 U.S.C. § 1254(1) ............................................................ 2

42 U.S.C. § 1981 ...........................................................passim

42 U.S.C. § 1983 .................................................................  13
42 U.S.C. §§ 2000e et seq. [Title V II of the Civil 

Rights Act of 1964] ...................................................passim

42 U.S.C. § 2000e-2(a) [§ 703(a) of Title VII] ....3,23,24

42 U.S.C. § 2000e-2(c) ...............................-----.......... -.... -  3
42 U.S.C. §2000e-2(h) [§ 703(h) of Title VII]  .....passim

42 U.S.C. § 2000e-2(j) [§703(j) of Title V II] ........... 14

PAGE



42 U.S.C. §§ 3601 et seq. [Title VIII of the Civil 
Rights Act of 1968] ........................................................ 14

National Labor Relations Act [29 U.S.C. §§ 151 
et seq.] .......................... ...................................................  21

Other Authorities:

Burean of Labor Statistics: The Employment Situa­
tion, Jan. 1975 ..................................................................  8

Cooper and Sobol, Seniority and Testing Under Fair 
Employment Laws: A  General Approach to Objec­
tive Criteria of Hiring and Promotion, 82 Harv.
L. Rev. 1589 (1969) .............................. .........................  20

H. Rep. No. 914, 88th Cong., 1st Sess. 64-66 ...............24, 25

110 Cong. Rec. 2726 (1964) (Remarks of Rep. Dowdy) 25

110 Cong. Rec. 2728 (1964) .......................................  25

110 Cong. Rec. 2804 (1964) ..............................................  25

110 Cong. Rec. 6992 (April 8, 1964) ..............................  23

110 Cong. Rec. 7207 et seq. (1964)....................................  25

110 Cong. Rec. 12,723 (1964) ............................................  26

110 Cong. Rec. 13650-13652 (1964) ...............................  14

110 Cong. Rec. 14,511 (1964) ....................    26

110 Cong. Rec. 15,896 (1964) .......................................   26

118 Cong. Rec. 3462 (daily ed. March 6, 1972) ............... 24

Vll

PAGE

42 TJ.S.C. § 2000e-5(g) [§ 706(g) of Title VII] .....4,23,24



IN  THE

S>uprrmf (Eourl of tlj? lit t le  Stales
October T erm, 1974 

No. 74-

W illiam A. W aters and D onald Samuels,

v.
Petitioners,

W isconsin S teel W orks of I nternational H arvester, Com­
pany and U nited Order op A merican B ricklayers and 
S tone M asons, L ocal 21.

PETITION FOR A W RIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS 

FOR THE SEVENTH CIRCUIT

Petitioners, William A. Waters and Donald Samuels, 
respectfully pray that a Writ of Certiorari issue to review 
the judgment and opinion of the United States Court of 
Appeals for the Seventh Circuit entered in this proceeding 
on August 26, 1974.

Opinions Below

The opinion of the Court of Appeals, reported at 502 
F.2d 1309, is reprinted in the Appendix hereto at pp. la- 
20a. The order of the Court of Appeals denying peti­
tioners’ Petition for Rehearing is set out in the Appendix 
at pp. 21a-22a. The Findings of Fact, Conclusions of Law, 
and Order of the District Court, which axe not reported, 
are set out in the Appendix at pp. 23a-29a.



2

Jurisdiction

The judgment of the Court of Appeals was entered on 
August 26, 1974. Petitioners’ timely Petition for Rehear­
ing was denied on November 26, 1974. This Court’s juris­
diction is invoked under 28 U.S.C. §1254(1).

Questions Presented

1. Do the limitations of section 703(h) of Title VII
of the Civil Rights Act of 1964, apply to or restrict the 
remedies available under 42 U.S.C. § 1981!

2. Does section 703(h) preclude the district courts in 
Title VII actions from providing a remedy for a seniority 
system which perpetuates the effects of past discrimination 
and has a discriminatory impact on black employees and 
job applicants!*

3. Is an aggrieved employee’s right to additional back 
pay cut off when he declines to accept a job offer from the 
defendant employer, where (a) the job offered is less 
desirable than the job to which he is entitled, (b) the job 
offered is less desirable than the job he then holds, and 
(c) the offer is conditioned on a waiver by the employee 
of some or all of his remedies for past discrimination!

Statutory Provisions Involved

The pertinent sections of Title VII of the Civil Rights 
Act of 1964, 42 U.S.C. §§ 2000e et seq., as amended, provide:

* See Franks v. Bowman Transportation Company, No. 74-728.



3

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 of employment, because of 
such individual’s race, color, religion, sex, or national 
origin; or

(2) to limit, segregate, or classify his employees or 
applicants for employment in any way which would 
deprive or tend to deprive any individual of employ­
ment opportunities or otherwise adversely affect his 
status as an employee, because of such individual’s 
race, color, religion, sex, or national origin.

Section 703(c)-, 42 U.S.C. §2000e-2(c):

It shall he an unlawful employment practice for a 
labor organization—

(1) to exclude or to expel from its membership, or 
otherwise to discriminate against, any individual be­
cause of his race, color, religion, sex, or national 
origin;

(2) to limit, segregate, or classify its membership or 
applicants for membership, or to classify or fail or 
refuse to refer for employment any individual, in any 
way which would deprive or tend to deprive any in­
dividual of employment opportunities, or would limit 
such employment opportunities or otherwise adversely 
affect his status as an employee or as an applicant for 
employment, because of such individual’s race, color, 
religion, sex, or national origin..

Section 703(a), 42 U.S.C. § 2000e-2(a):



4

Notwithstanding any other provision of this title, it 
shall not he an unlawful employment practice for an 
employer to apply different standards of compensa­
tion, or different terms, conditions, or privileges of 
employment pursuant to a bona fide seniority or merit 
system, or a system which measures earnings by quan­
tity or quality of production or to employees who work 
in different locations, provided that such differences 
are not the result of an intention to discriminate be­
cause of race, color, religion, sex, or national origin.

Section 706(g), 42 U.S.C. § 2000e-5(g):

I f the court finds that the respondent has inten­
tionally engaged in or is intentionally engaging in an 
unlawful employment practice charged in the com­
plaint, the court may enjoin the respondent from en­
gaging in such unlawful employment practice, and 
order such affirmative action as may he appropriate, 
which may include, hut is not limited to, reinstatement 
or hiring of employees, with or without hack pay (pay­
able by the employer, employment agency, or labor or­
ganization, as the case may be, responsible for the 
unlawful employment practice), or any other equitable 
relief as the court deems appropriate. . . .  No order of 
the court shall require the admission or reinstatement 
of an individual as a member of a union, or the hiring, 
reinstatement, or promotion of an individual as an em­
ployee, or the payment to him of any hack pay, if such 
individual was refused admission, suspended, or ex­
pelled, or was refused employment or advancement or 
was suspended or discharged for any reason other than 
discrimination on account of race, color, religion, sex, 
or national origin or in violation of section 704(a).

Section 703(h), 42 U.S.C. § 2000e-2(h):



5

All persons within the jurisdiction of the United 
States shall have the same right in every State and 
Territory to make and enforce contracts, to sne, be 
parties, give evidence, and to the full and equal benefit 
of all laws and proceedings for the security of persons 
and property as is enjoyed by white citizens, and shall 
be subject to like punishment, pains, penalties, taxes, 
licenses, and exactions of every kind, and to no other.

Statement of the Case

This action was filed in December, 1968, in the United 
States District Court for the Northern District of Illinois 
by two black bricklayers alleging discrimination on the 
basis of race by the Wisconsin Steel Works of the Inter­
national Harvester Company and the United Order of 
American Bricklayers and Stone Masons, Local 21, in viola­
tion of Title VII of the 1964 Civil Eights Act and of 42 
U.S.C. §1981. Plaintiff Waters alleged that he was initially 
denied employment on the basis of race, and that he was 
subsequently hired for a short period of time but then laid 
off because he had less seniority than whites hired during 
the period when Wisconsin Steel refused to hire blacks. 
Plaintiff Samuels alleged that he had been denied employ­
ment because Wisconsin Steel gave preference to appli­
cants who had previously worked for the company during 
the period when it employed only whites.

The District Court1 upheld plaintiffs’ factual allegations 
regarding the employment practices of Wisconsin Steel

1 The district court had earlier dismissed the action on proce­
dural grounds; the decision of the district court was reversed 
and the case remanded, Waters v. Wisconsin Steel Works, 427 
F.2d 476 (7th Cir. 1970), cert, denied 400 U.S. 911 (1970).

The Civil Eights Act of 1866, 42 U.S.C. §1981, provides:



6

and Local 21. It held that prior to April, 1964,2 Wisconsin 
Steel maintained a policy of racial discrimination in the 
hiring of bricklayers and hired only white applicants.3 
The District Court further found that after 1964 Wiscon­
sin Steel, in laying off and recalling employees, had given 
preferential treatment to employees hired during the “white 
only” period, including white employees who had no con­
tractual seniority rights because those rights had been 
waived in return for severance pay. The District Court 
concluded that this preferential treatment had the effect of 
continuing the impact of Wisconsin Steel’s past policy of 
discrimination, and directly injured plaintiffs (24a-27a).

The record revealed that the seniority system and prefer­
ences guaranteed that any black bricklayer at Wisconsin 
Steel would be the first laid off, and that virtually all 
bricklayers hired would be white. Plaintiffs’ qualifications 
were not disputed; Waters and Samuels had twenty and 
thirteen years of experience, respectively, as bricklayers. 
Among the white bricklayers recalled ahead of Waters on 
grounds of seniority were bricklayers hired after Waters 
had been rejected for employment because of his race.

The District Court held that these practices constituted 
a violation of Title VII and of section 1981. It ruled that 
the defendants’ seniority system, as well as the preferen­

2 Petitioner Waters had first sought employment at Wisconsin 
Steel in the Fall, 1957.

3 Specifically, the district court found that black bricklayers 
bad applied unsuccessfully for work on several occasions be­
ginning as early as 1949, but that Wisconsin Steel did not hire 
a black bricklayer until April 1964; furthermore black laborers 
in Wisconsin Steel’s mason department had sought transfer to 
Wisconsin Steel’s apprentice program but were denied admis­
sion, supposedly on the basis of their age, even though whites 
were admitted into the program who were the same age as some 
of the black rejected applicants (24a-27a).



7

tial treatment for whites whose contractual seniority rights 
had been waived, had its genesis in a period of racial dis­
crimination and was thus not a “bona fide” seniority sys­
tem under Title VII. The District Court awarded $5,000 
in back pay to Waters and Samuels, and directed Wiscon­
sin Steel to offer both plaintiffs employment (27a-29a).

On appeal the Seventh Circuit upheld the District Court’s 
findings of fact, but reversed on the ground that the district 
court was powerless to award most of the relief granted. 
The Court of Appeals ruled, as a matter of law, (1) that a 
contractual seniority system as well as an informal prefer­
ence for employees whose seniority rights had expired, 
even though they perpetuated the effect of past discrimina­
tion, were absolutely protected from judicial scrutiny under 
Title V II by section 703(h), 42 U.S.C. §2000e-2(h), (2) that 
the limitations placed by section 703(h) on remedies under 
Title V II also applied to 42 U.S.C. §1981, (3) that the 
company could give white employees who had waived their 
seniority rights preference over plaintiff Samuels, although 
to do so over Waters was unlawful, and (4) that plaintiff 
Waters forfeited his right to any further back pay when, 
while his claim was pending, Wisconsin Steel offered him 
a job if he would waive his claim for retroactive seniority 
and otherwise prejudice his case, and he refused to take it 
(la-20a).

Reasons for Granting the Writ

This case arises from a problem of discrimination which 
has long obstructed economic opportunity for blacks—the 
practice of hiring blacks last when employment is rising 
and firing blacks first when the workforce is reduced. The 
fact that minority workers were the most recently hired is 
seized upon by employers and unions as a justification for



8

laying off those workers before whites with greater com­
pany seniority. That in many firms most black employees 
were hired only in the last few years is a result of open 
and avowed discrimination prior to 1964, and of the con­
tinuation of that discrimination in more subtle but equally 
effective forms thereafter. This “last hired, first fired” 
form of discrimination is one of the primary reasons for 
the chronically higher level of unemployment among non­
whites compared to white workers.

Under ordinary economic conditions the workforce at 
any given plant or office expands and contracts in response 
to seasonal variation in demand and the success or prob­
lems of the particular firm. The abolition of “ last hired, 
first fired” discrimination against blacks is thus a matter 
of continuing concern. The problem is of particular 
importance now in a time of serious economic dislocation, 
with millions of workers being fired, laid off or furloughed 
due to falling production. In the last month alone unem­
ployment rose by 930,000, and over the last year unemploy­
ment rose substantially faster among non-whites than 
among whites.4 When the economy begins to recover from 
its present difficulties and employment begins to rise, the 
“ last hired, first fired” principle will prevent black workers 
from participating fully in that new prosperity.

The decision of the Seventh Circuit strips the district 
courts of any power to remedy “last hired, first fired” 
discrimination. The Court of Appeals held that an em­
ployer in laying off employees could give preferential 
treatment to whites because they worked for the firm 
longer, and could in hiring give preference to whites be­
cause they had worked for the firm before. The Court of

4 See generally: Bureau of Labor Statistics, The Employment 
Situation, January, 1975.



9

Appeals did not deny that this practice served to per­
petuate the effects of past discrimination, but held that 
such discrimination enjoyed absolute immunity from legal 
attack because of Section 703(h) of Title VII of the 1964 
Civil Rights Act. The decision deprives district courts in 
that circuit of any ability to fashion fair and effective 
relief appropriate to the circumstances of each case for 
such “ last hired, first fired” discrimination. The decision 
of the Court of Appeals is squarely in conflict with the 
decisions of this Court and other courts of appeals, and 
with the policies and language of Title VII and 42 U.S.C. 
§ 1981.

Previously this Court has resolved questions arising 
under Title VII regarding procedure5 and standards of 
proof.6 The critical issues of employment discrimination 
law at present involve remedies.7 This case presents 
important questions involving the scope of remedial au­
thority vested in the district courts once discrimination 
has been established.8 The Court of Appeals decision

5 See, e.g., Alexander v. Gardner-Denver Co., 415 U.S. 36 
(1974) ; and Love v. Pullman Co., 404 U.S. 522 (1972).

6 See, e.g., McDonnell-Douglas Corp. v. Green, 411 U.S. 792 
(1973); Phillips v. Martin-Marietta Corp., 400 U.S. 542 (1971) ; 
and Griggs v. Duke Power Co., 401 U.S. 424 (1971).

7 See e.g., Albemarle Paper Co. v. Moody, No. 74-389 cert, 
granted December 16, 1974; and Franks v. Bowman Transporta­
tion Company, No. 74-728 cert, pending.

8 This Court has spoken generally concerning the broad power 
of the f  ederal courts to eliminate employment discrimination:

Congress enacted Title V II . . .  to assure equality of employ­
ment opportunities by eliminating those practices and devices 
that discriminate on the basis of race, color, religion, sex 
or national origin.

Alexander v. Gardner-Denver Co., supra at 44; see also McDon­
nell-Douglas Corp. v. Green, supra at 800; Griggs v. Duke Power 
Co., supra at 429-430.



10

resolved these questions in a manner which not only 
severely limits the district court’s power hut also would 
restrict the ability of the Department of Justice9 and the 
Equal Employment Opportunity Commission10 to obtain 
effective relief for victims of unlawful employment dis­
crimination.

That the use of seniority as a criterion in layoffs and 
hiring is of unusual importance does not, of course, mean 
that this Court must adopt a per se rule that the applica­
tion of such a standard is always, or never permissible. 
The use of seniority takes a variety of forms— contractual 
labor-management agreements, written or informal com­
pany policies, and ad hoc rules. Different minority em­
ployees present different problems—some were denied jobs 
on account of race before Title VII became law in 1965, 
other applicants were rejected for this reason after 1965, 
and still others did not apply to work for an employer 
until after the employer had ended such overt discrimina­

9 In several Title V II cases, the United States Department of 
Justice has secured decrees granting compensatory seniority to 
unlawfully rejected applicants. See, e.g., United States v. Road­
way Express, Inc., C.A. No. C-68-321 (N.D. Ohio) (consent decree 
entered September 1, 1970), partially repeated at 2 EPD 1)10,295 
p. 1176 affirmed, 457 F.2d 854 (6th Cir. 1972) ; United States v. 
Navajo Freight Lines, Inc., C.A. No. 72-116-MNL (C.D. Cal.) 
(supplemental order to consent decree entered January 15, 1973) ; 
United States v. Pilot Freight Carriers, Inc., C.A. No. C-143-WS- 
71 (M.D.N. Car.) (consent decree entered October 31, 1972); 
United States v. Georgia Power Co., 7 EPD 1)9167 (N.D. Ga. 
1974), issuing decree on remand from 174 F.2d 906 (5th Cir. 
1973) ; Jones v. Lee Way Motor Freight, Inc., 7 EPD 1)9066, 
p. 6500 (W .D. Okla. 1973).

10 EEOC’s authority derives solely from Title V II. Thus, a 
limitation read into Title V II may hamstring EEOC in all its 
proceedings. The EEOC has filed 306 pending lawsuits, 174 of 
which seek relief from discrimination in hiring [information sup­
plied by EEOC Litigation Services Branch, December 5, 1974], 
And EEOC has thousands of pending administrative charges of 
discrimination involving refusals to hire.



11

tion. The instant case involves several different types of 
problems.11 Different situations may require different 
answers, but the decision below would prevent the district 
courts from fashioning remedies appropriate to the par­
ticular circumstances of each case. The very complexity 
of the possible legal situations accentuates the need for 
guidance from this Court.

I.

The Decision of the Court of Appeals That Section 
7 0 3 (h ) of Title VII Limits the Remedies Provided by 
Section 1981 Is Inconsistent With the Decision of This 
Court in Alexander v. Gardner-Denver Co.

The allegations of plaintiffs’ complaint, and the facts 
found by the District Court, clearly established a violation 
of 42 U.S.C. § 1981 and mandated an award of back pay 
as well as an injunction requiring the company to hire 
both Waters and Samuels with retroactive seniority. 
Section 1981, which forbids racial discrimination in the 
making of contracts, includes within its prohibition any 
racial discrimination in employment.12 Waters first sought

11 Wisconsin Steel had three sets of seniority rules: a written 
agreement with Local 21, an unwritten policy regarding laid-off 
employees whose recall rights had expired, and a special ad hoc 
rule for eight white employees who had waived their recall rights 
in return for severance pay. Plaintiff Waters was rejected for 
employment by Wisconsin Steel because of his race in 1957, before 
the adoption of Title VII. Plaintiff Samuels had not applied for 
employment with Wisconsin Steel until April, 1966 when he ap­
plied and was rejected because the company gave preference to 
former employees.

12 The availability of 42 U.S.C. Section 1981 as an alternative 
jurisdictional basis for employment discrimination litigation free 
of the procedures incorporated in Title V II has been unanimously 
recognized by the Circuits. Hackett v. McGuire Brothers, Inc., 
445 F.2d 442 (3rd Cir. 1971) ; Brown v. Gaston Dyeing Machine



12

a job at Wisconsin Steel during the fall of 1957. Had be 
been white he would have been hired at that time, would 
have been laid off only infrequently in the following years, 
and would by now have accumulated 18 years of seniority. 
Instead, Waters was not hired until 1964, actually worked 
at Wisconsin Steel for less than three months; Waters 
was then not recalled until March, 1967, when he was once 
again laid off within three months. The Company’s refusal 
to accord Waters the seniority to which he was entitled, 
in conjunction with its seniority system for layoffs and 
recalls, has clearly perpetuated the effects of its past 
discrimination. Similarly, when Samuels applied to Wis­
consin Steel in 1966, he was rejected, not because he had 
less skill or less experience, but because he had not worked 
at Wisconsin Steel before, and the former employees hired 
instead were, because of the company’s previous policy of 
discrimination, all white. As to Samuels as well, the com­
pany’s seniority system served to continue into the future 
the effects of discrimination of years past.

The Court of Appeals did not deny that the facts found 
by the District Court would, prior to 1964, have established 
a violation of § 1981 and entitled plaintiffs to the relief 
they sought. The Court held, rather, that to the extent that 
section 1981 afforded plaintiffs any remedy, it had been 
repealed by Title YII of the 1964 Civil Rights Act. The 
Seventh Circuit concluded that the company’s practices 
did not violate Title V II because of a loophole for certain 
seniority provisions contained in section 703(h), and then 
summarily rejected plaintiffs’ section 1981 claim with the

Co., 457 F.2d 1377 (4th Cir. 1972), cert, denied 409 U.S. 982 
(1972) ; Guerra v. Manchester Terminal Co., 498 F.2d 641 (5th 
Cir. 1974); Long v. Ford Motor Company, 496 F.2d 500 (6th 
Cir. 1974) ; Brady v. Bristol-Myers Co., 459 F.2d 621 (8th Cir. 
1972) ; Macklin v. Spector Motor Freight Systems, Inc., 478 F.2d 
979 (D.C. 1973).



13

words “having passed scrutiny under the substantive re­
quirements of Title VII, the employment seniority system 
utilized by Wisconsin Steel is not violative of 42 U.S.C. 
Section 1981.” (16a n.4). The Seventh Circuit apparently 
concluded that if a disputed employment practice was not 
forbidden under Title V II it was ipso facto legal under all 
other statutes prohibiting discrimination, and that any pre­
existing remedy for such discrimination broader than Title 
V II had been tacitly repealed by the 1964 Civil Rights Act.

This summary rejection of plaintiffs’ section 1981 claim 
is squarely in conflict with this Court’s decision in 
Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974). In 
Alexander this Court rejected the contention that ag­
grieved employees were limited to any single remedial 
provision.

• • • (L)egislative enactments in this area have long 
evinced a general intent to accord parallel or over­
lapping remedies against discrimination7 . . . (T)he 
legislative history of Title V II manifests a congres­
sional intent to allow an individual to pursue inde­
pendently his rights under both Title VII and other 
applicable state and federal statutes. The clear infer­
ence is that Title VII was designed to supplement, 
rather than supplant, existing laws and institutions 
relating to employment discrimination.

7 See, e.g. 42 U.S.C. Section 1981 (Civil Rights Act of 
1966); 42 U.S.C. Section 1983 (Civil Rights Act of 1871).

id. at 47-49; see also Morton v. Mancari, 417 U.S. 535, 545- 
549 (1974).13 It is the very essence of “ overlapping 
remedies” that discrimination not covered by one remedy 13

13 Cf. Johnson v. Railway Express Agency, Inc., O T  1974 
No. 73-1543. ’



14

may be forbidden by another. This Court has repeatedly 
rejected the argument that other sections of the Civil 
Rights Act of 1964 or the Civil Rights Act of 1968 limit 
or repeal, substantively or procedurally, the provisions 
of the earlier Civil Rights Acts. Jones v. Mayer, 392 U.S. 
409, 416 n. 20 (1968); Sullivan v. Little Hunting Park, Inc., 
396 U.S. 229, 405 (1969); Swann v. Ckarlotte-Mecklenburg 
Bd. of Education, 402 U.S. 1, 17 (1971).

That section 703(h) could have limited section 1981 is 
inconsistent with the established principle that repeals by 
implication are not favored. Morton v. Mancari, 417 U.S. 
535, 549-550 (1974); United States v. Borden Co., 308 U.S. 
188, 198 (1939). In the area of employment discrimination 
the intention of Congress not to repeal or limit pre-existing 
or parallel remedies is “ clear and manifest” .14 In both 
1964 and 1972 Congress expressly rejected proposals to 
make Title VII the exclusive remedy for employment 
discrimination.15

Other circuits have, consistent with Alexander, uniformly 
rejected attempts to impose on other remedies the limita­
tions applicable to Title VII. See e.g., Contractors Associa­
tion of Eastern Pennsylvania v. Secretary of Labor, 442 
F.2d 159, 172 (3rd Cir. 1971), cert, denied 404 U.S. 859 
(1971) (Section 703(j ) of Title VII could not limit the 
remedial scope of Executive Order 11246); Guerra v. Man­
chester Terminal Co., 498 F.2d 641, 653-4 (5th Cir. 1974) 
(Title V II’s failure to prohibit discrimination in favor of 
citizens does not limit the protection afforded aliens by 
section 1981); Watkins v. United Steel Workers of America, 
369 F. Supp. 1221, 1230-31 (E.D. La. 1974).

14 United Packinghouse, etc. Union v. N.L.B.B., 416 F.2d 1126, 
1133, n . l l  (D.C. Cir. 1969), cert, denied 396 U.S. 903 (1969).

15 See 110 Cong. Rec. 13650-13652 (1964); Alexander v. Gard- 
ner-Denver Co., 415 U.S. 48, n.9.



15

The Seventh Circuit’s decision imposing on section 1981 
the limitations which it believed to exist under Title VII is 
precisely the approach Congress rejected when it refused 
to make Title VII the exclusive remedy for racial dis­
crimination in employment, and warrants summary 
reversal in the light of Alexander v. Gardner-Denver Co.

II.

The Decision of the Court of Appeals That Section 
7 0 3 (h ) Protects Seniority Systems Which Perpetuate 
the Effects of Past Discrimination Is In Conflict With 
the Decisions of Other Circuits.

The District Court awarded both plaintiffs injunctive 
and monetary relief under Title VII because defendants’ 
seniority system had operated to perpetuate the effects of 
past discrimination. The Court of Appeals did not deny 
that the company had discriminated in the past, or that the 
seniority system had the effect of continuing the discrim­
inatory impact of that prior misconduct. The Seventh Cir­
cuit overturned the awarded relief solely on the ground 
that section 703(h) placed this discriminatory impact out­
side the scope of Title V II’s prohibition or remedies.

Section 703(h) provides

[I] t shall not be an unlawful employment practice for 
an employer to apply . . . different terms and condi­
tions, or privileges of employment pursuant to a bona 
fide seniority . . . system . . . provided that such differ­
ences are not the result of an intention to discriminate 
because of race.

42 U.S.C. §2000e-2(h). The Court of Appeals read 703(h) 
as establishing a per se rule that any contractual seniority



16

system, and as to new applicants any informal or ad hoc 
seniority rule,16 is excluded from the reach of Title VII 
regardless of whether it has a discriminatory impact.

The decision of the Seventh Circuit is the latest develop­
ment in a controversy now dividing, and confounding, the 
lower courts as to whether section 703(h) protects a senior­
ity system even if the system perpetuates the effects of 
past discrimination and, solely because of their race, gives 
preferential treatment to whites in layoffs and recalls. That 
controversy appears in the guise of one of three questions 
— (1) Can such a seniority system he used to determine the 
order of layoffs and recalls! (2) Can minority workers 
who were or would have been denied employment in the 
past be given “ retroactive” seniority to overcome the dis­
criminatory impact of such a system! (3) Is a system with 
such an impact bona fidef In most cases these questions 
as a practical matter yield identical answers as to the 
impact of section 703(h); it is a measure of the confusion 
wrought by this problem that the answers to these different 
questions within a single circuit have not always been 
consistent.17

16 In addition to the contractual seniority agreement between 
Wisconsin Steel and Local 21, the company adopted a special 
ad hoc rule granting a hiring preference to eight white former 
employees who had waived recall rights in return for severance 
pay. The Seventh Circuit held that as to a former employee like 
I\aters, this ad hoc rule was an illegal act of discrimination but 
that, as to a new applicant like Samuels, the rule was a bona fide 
seniority system outside the reach of Title V II. The logic of this 
distinction is not irresistible.

17 Thus the position advocated by petitioners might be stated to 
be (1) that the seniority system was covered by section 703(h), 
but coverage does not protect the system when it has such an 
impact, (2 ) that 703(h) did not bar giving minority employees 
sufficient seniority to overcome any discriminatory effect, or (3) 
that the system was not covered by section 703(h), according to 
which question is asked.



17

In the instant case the Seventh Circuit cast the issue in 
the form of the first question and concluded that section 
703(h) protects the use of seniority in hiring and layoffs 
regardless of its discriminatory impact. The same posi­
tion has been taken by the Third Circuit in Jersey Central
Power & Light Co. v. Electrical Workers, Local 327 , --------
F. 2d ------ , 9 FEP cases 117 (3d Cir. 1975). The Third
Circuit ruled that a labor agreement which provided for 
the use of company seniority to determine layoffs and re­
calls would have to he adhered to even though it might 
continue the effects of past race and sex discrimination 
and even though it might negate the affirmative steps which 
had been taken to eradicate the effects of discrimination 
pursuant to an agreement that had been entered into by 
the company, union, and the EEOC. Id. at 130-32.

The contrary position was taken by the Sixth Circuit in
Meadows v. Ford Motor Company,------ F .2 d ------- , 9 EPD
H 9907, pp. 6771-72 (6th Cir. 1975). In that case the de­
fendant company had refused to hire women because of 
their sex. The Sixth Circuit held that, in order to afford 
relief to the victims of discrimination, the plant seniority 
system governing layoffs and recalls would have to be 
changed since that system violated Title V II by continuing 
the effects of past discrimination.18 Similarly, in Watkins 
v. United Steel Workers, 369 P.Supp. 1221 (E.D. La. 1974) 
the court prohibited the use of seniority in determining 
which employees would be laid off and recalled. The dis­
trict court held that it was a clear violation of Title VII 
to make employment decisions on the length of service,

18 The Sixth Circuit in Meadows remanded the case back to the 
district court for a consideration of balancing the equitable factors 
concerning the victims of the hiring discrimination with the in­
terests of the incumbents. The Sixth Circuit stated that recon­
ciliation of these competing interests would be difficult, but not 
impossible. This is the traditional function of a district court in 
equity; however, it is exactly what the broad prohibition of Waters 
would prohibit.



18

where blacks had been, by virtue of prior discrimination, 
prevented from accumulating seniority. 369 F.Supp. at 
1226-27.

Although unions may technically be “ employers” under 
Title VII, and thus hiring hall preferences for union mem­
bers of long standing are seniority systems, the Eighth 
Circuit has forbidden the use of such seniority in giving 
preferences in hiring hall referrals. United States v. Sheet 
Metal Workers, Local 36, 416 F.2d 123, 131, 133-34 n.20 
(8th Cir. 1969), rev’ing 280 F.Supp. 719, 728-730 (E.D. Mo. 
1969).19 Similarly, Fourth, Fifth and Sixth Circuits have 
forbidden the use of seniority as a factor in promotions 
in cases where the employer had in the past discriminated 
in hiring on account of race.20

The dispute regarding the use of retroactive seniority to 
overcome the discriminatory effect of seniority systems has 
also divided the circuits. In Franks v. Bowman Transpor­
tation Co., 495 F.2d 398, 414 (5th Cir. 1974), cert, denied, 
43 LW  3330 (1974)21 the Fifth Circuit held such relief was 
precluded by section 703(h):

19 See also Bobbins v. Electrical Workers Local 212, 292 F.Supp. 
413 (S.D. Ohio 1968), aff’d as later modified, 472 F.2d 634 (6th 
Cir. 1973) ; EEOC v. Plumbers, Local Union No. 189, 311 F.Supp. 
468, 474-476 (S.D. Ohio 1970), vac’d on other grounds 438 F.2d 
408 (6th Cir. 1971, cert, denied, 404 U.S. 832 (1971).

20 Rowe v. General Motors Corp., 457 F.2d 348, 358 (5th Cir.
1972) ; Allen v. City of Mobile, 331 F.Supp. 1134, 1142-1143 (S.D. 
Ala. 1971), aff’d per curiam 466 F.2d 122 (5th Cir. 1972), cert, 
denied 412 U.S. 909 (1973) ; Afro-American Patrolmen’s League 
v. Buck, 366 F.Supp. 1095, 1102 (N.D. Ohio 1973), aff’d in perti­
nent part 503 F.2d 294 (6th Cir. 1974); Harper v. Mayor and 
City Council of Baltimore, 359 F.Supp. 1187, 1203-1204 (D. Md.
1973) , aff’d sub nom Harper v. Kloster, 486 F.2d 1134 (4th Cir.
1973) ; Loy v. City of Cleveland, 8 FE P  Cases 614 (N.D. Ohio
1974) ; see also Bridgeport Guardians, Inc. v. Members of Civil 
Service Com’n, 497 F.2d 1113, 1115 (2nd Cir. 1974).

21 A  second petition for certiorari which presents the question 
of whether district courts have the authority to award retroactive 
seniority as a remedy for hiring discrimination is pending. Franks 
v. Bowman Transportation Company, No. 74-728.



19

. . .  We do not believe that Title VII permits the exten­
sion of constrnctive seniority to them [the black vic­
tims of discrimination] as a remedy, section 703(h).
. . . The discrimination which has taken place in a 
refusal to hire does not affect the bona, fides of the 
seniority system.

In Jurinko v. Edwin L. Wiegand Co., 477 F.2d 1038, vacated 
and remanded on other grounds, 414 U.S. 970, reinstated 
497 F.2d 403 (3rd Cir. 1974), the Third Circuit reached the 
opposite conclusion:

We can perceive no basis for the trial court to have 
refused to award back seniority or for its conclusion 
that “the plaintiffs are to be offered employment in 
production with the company, of course, as new em­
ployees” . Seniority is, of course, of great importance 
to production workers for it determines both oppor­
tunities for job advancement and the order of layoff 
in the case of a reduction in a company’s operating 
forces. It is our view that the plaintiffs are entitled 
to seniority and back pay dating from the time of the 
discriminatory employment practice up to the time 
they are actually reinstated. Only in this way will the 
present effects of the past discrimination be eliminated.

477 F.2d at 1046. The Sixth and Eighth Circuits have also 
sanctioned the award of retroactive seniority. Meadows v.
Ford Motor Company,------  F .2 d ------ , 9 EPD H9907 (6th
Cir. 1975). United States v. Sheet Metal Workers, Local 36, 
416 F.2d 123, 131, 133-34, n.20 (8th Cir. 1969).22

22 Several district courts have also specifically held that Title 
V II permits the district courts to provide retroactive seniority 
or some other relief for discrimination which results from a last 
hired, first fired seniority system. Watkins v. United Steelworkers 
of America, Local 2369, 369 F.Supp. 1221 (D.C. La. 1974); Delay



20

Similar conflict exists as to whether a seniority system 
with a discriminatory impact is “ bona fide”  within the 
meaning of section 703(h). Jersey Central Power & Light 
Co. v. Electrical Workers, Local 327  concluded that such 
a system could qualify as bona fide and thus falls under the 
protection of §703 (h).

“We thus conclude in light of the legislative history 
that on balance a facially neutral company-wide se­
niority system, without more, is a bona fide seniority 
system and will he sustained even though it may oper­
ate to the disadvantage of females and minority groups 
as a result of past employment practices” .

9 FEP Cases at 131. In Quarles v. Phillip Morris, Inc., 
279 F.Supp. 505 (E.D. Va. 1969), however, the court 
reached the opposite conclusion:

Obviously one characteristic of a bona fide seniority 
system must he lack of discrimination. Nothing in 
§703 (h), or in its legislative history, suggests that a 
racially discriminatory system established before the 
Act is a bona fide seniority system under the Act.

279 F.Supp. at 517.* 23 See also Local 1 8 9 , United Paper- 
makers and Paperworkers v. United States, 416 F.2d 980,

v. Carling Brewing Company, 9 EPD T19877 (N.D. Ga. 1974) ;  see 
Chance v. Board of Examiners, No. 70 Civ. 4141 (S.D.N.Y. Feb. 
7, 1975). See cases cited in Fn.9, supra, and Cooper and Sobol, 
Seniority and Testing Under Fair Employment Laws: A General 
Approach to Objective Criteria of Hiring and Promotion, 82 Harv. 
L.Rev. 1589, 1629 (1969) (hereinafter cited as Cooper and Sobol).

23 In these cases the courts have required the substitution of 
date-of-hire ( “ Company” or “ plant” ) seniority for unit seniority 
to allow black employees equal access to jobs in formerly all-white 
units. These decisions adopt employment date as a nondiscrimina-



21

995-97 (5th Cir. 1969) cert, denied 397 U.S. 919 
(1970).24

tory seniority standard not because it is per se valid but because 
it accomplishes the remedial purpose of Title VII. The instant 
case requires a different remedy under the same principles be­
cause of a crucial factual difference— the existence of an all-white 
work-force. See also, United States v. Bethlehem Steel Corp., 446 
F.2d 652 (2nd Cir. 1971) ; Robinson v. Lorillard Corp., 444 F.2d 
791 (4th Cir. 1971), cert, dismissed 404 U.S. 1006 (1971) ; United 
States v. Chesapeake & Ohio Ry., 471 F.2d 582 (4th Cir. 1972), 
cert, denied 411 U.S. 939 (1973) ; United States v. Jacksonville 
Terminal Co., 451 F.2d 418 (5th Cir. 1971), cert, denied 406 U.S. 
906 (1972) ; Head v. Timken Roller Bearing Co., 486 F.2d 870 
(6th Cir. 1973) ; United States v. N.L. Industries, Inc., 479 F.2d 
354 (8th Cir. 1973).

24 The decision of the Court of Appeals conflicts with labor law 
decisions of this Court which establish appropriate relief under 
Section 10(c) of the National Labor Relations Act, 29 U.S.C. 
§160(c ). The conflict is particularly significant because section 
10(c) served as the model for Section 706(g), the remedial pro­
vision of Title V II. United States v. Georgia Power Co., 474 F.2d 
906, 921 n.19 (5th Cir. 1973) • Pettway v. American Cast Iron Pipe 
Co., 494 F.2d 211, 252 (5th Cir. 1974).

In NLRA cases this Court has consistently held that a victim 
of an unlawful employment practice must be placed in the posi­
tion he would have occupied but for the discriminatory practice, 
NLRB v. Rutter-Rcx Mfg. Co., 396 U.S. 258, 263 (1969). A  rem­
edy that leaves him “worse off” is inadequate, id; Golden State 
Bottling Co. v. NLRB, 38 L.Ed.2d 388 (1973), aff’g 467 F.2d 164, 
166 (9th Cir. 1972). Accordingly, reinstatement to full status, 
including all seniority benefits, is necessary relief for an employee 
subjected to an unfair labor practice, including unlawfully rejected 
job applicants. Victims of unlawful hiring discrimination should 
therefore be reinstated on the same basis as those unlawfully dis­
charged. Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 188 (1941); 
Southport Co. v. NLRB, 315 U.S. 100, 196 n.4 (1942) ; NLRB v. 
Mackay Radio & Telegraph Co., 304 U.S. 333, 341, 348 (1938). 
See e.g., Atlantic Maintenance Co. v. NLRB, 305 F.2d 604 (3rd 
Cir. 1962), enf’g 134 NLRB 1328 (1961) ; NLRB v. Lamar Cream­
ery Co., 246 F.2d 3, 10 (5th Cir. 1957), enf’g 115 NLRB 1113 
(1956); NLRB v. Cone Brothers Co7itracting Co., 317 F.2d 3, 7 
(5th Cir. 1963).



22

Wisconsin Steel rejected Samuels’ application solely25 
because it decided to rehire former white employees who 
had no contractual rights to recall and who had been hired 
during a period when the Company only hired white brick­
layers. The Seventh Circuit rejected Samuels’ claim that 
this preference for former employees was unlawful with 
the following blanket statement:

We do not doubt that a policy favoring recall of a 
former employee with experience even though white 
before considering a new black applicant without ex­
perience comports with the requirements of Title V II 
and Section 1981.

(16a).26 The Ninth Circuit took a contrary position in 
Gates v. Georgia Pacific Corp., 492 F.2d 292 (1974). In 
that case, the defendant, in hiring for an accountant’s job, 
gave a preference to present company employees. Since 
the firm had few, if any, eligible black employees, the pref­
erence had the effect of discriminating on the basis of race. 
The Ninth Circuit enjoined the use of such a preference 
reasoning that the policy “ as applied”  in the context of a 
past practice of excluding blacks was in violation of Title 
VII,27 id. at 296. When an employer with a history of 
racially discriminatory hiring practices gives preference 
to its former employees, it does more than create a “built-

25 A t the time Samuels applied for work at Wisconsin Steel in 
April, 1966, he was an experienced bricklayer.

26 The Seventh Circuit, while not expressly so stating, consid­
ered, in all likelihood, the informal or ad hoc recall of former 
white employees who had no contractual rights, as not a violation 
of Title V II because of its interpretation of Section 703(h).

27 The Ninth Circuit, unlike the Seventh Circuit, properly 
analyzed the business reasons for the promotion-from-within policy 
in light of the “business necessity” test. Gates v. Georgia Pacific 
Corp., supra at 296.



23

in headwind” to the equal employment opportunities of 
black applicants, see Griggs v. Duke Power Co., supra at 
432; it erects an insurmountable barrier to employment 
to those previously excluded on the basis of race.28

The limitation that the Seventh Circuit imposed on 
Title V II is inconsistent with the breadth of remedy con­
templated by other provisions of that statute. Section 
703(a)(2) defines as an unlawful employment practice any 
practice which would merely “ tend to” deprive individuals 
of equal employment opportunities or adversely affect them 
because of race. 42 U.S.C. § 2000e-2(a). This Court, noting 
the broad sweep of this section, explained in Griggs v. 
Duke Power Co., 401 U.S. 424, 430 (1970):

Under the Act, practices, procedures or tests neutral 
on their face, and even neutral in terms of intent, 
cannot be maintained if they operate to “ freeze” the 
status quo of prior discriminatory employment prac­
tices.

Similarly, Section 706(g) grants broad powers to the fed­
eral courts to remedy any discrimination they find. 42 
U.S.C. §2000e-5(g). In 1972, the Conference Committee 
Report explained that Section 706(g)

28 The legislative history of Title V II supports the position of 
* the Ninth Circuit. The passage of the Clark-Case Memorandum 

dealing with recall preferences states:
. . . .  "Where waiting lists for employment or training are, 
prior to the effective date of the Title, maintained on a dis­
criminatory basis, the use of such lists after the Title takes 
effect may be held an unlawful subterfuge to accomplish 
discrimination.

110 Cong. Ree. 6992 (April 8, 1964) ; see United States v. Sheet 
Metal Workers, supra at 133-34, n.20. The recall on the basis of 
length of service of former employees who have no contractual 
rights to recall is just such a “waiting list(s) for employment,”



24

requires that persons aggrieved by the consequences 
and effects of the unlawful employment practices be, 
so far as possible, restored to a position where they 
would have been were it not for the unlawful discrim­
ination.

118 Cong. Rec. 3462 (daily ed., March 6, 1972).29 The con­
struction of Section 703(h) suggested by Gates, Meadows, 
Sheet Metal Workers, and Jurinko limiting that provision 
to seniority systems which do not have a discriminatory 
effect is more consistent with the broadly remedial pur­
pose of Title V II and avoids any conflict between that 
provision and Sections 703(a)(2) and 706(g).

The Seventh Circuit’s reading of the legislative history 
of Title V II is clearly erroneous. The Seventh Circuit did 
not deny that, but for section 703(h), Wisconsin Steel’s 
seniority system would have violated Title VII. When Title 
VII was reported out by the House Judiciary Committee 
on November 20, 1963, it contained no such provision 
regarding seniority. Conservatives on the Committee criti­
cized the bill on the ground that it would require a revision 
of seniority practices by employers who had discriminated 
on the basis of race.30 The same objection to Title VII

29 See also United States v. Louisiana, 380 U.S. 145, 154 (1965); 
Griggs v. Duke Power Go., supra at 429-430 (1971) ; Vogler v. 
McCarty, Inc., 451 F.2d 1236, 1238 (5th Cir. 1971) ; Pettway v. 
American Cast Iron Pipe Co., 494 F.2d 211, 243 (5th Cir. 1974); 
Bock v. Norfolk & Western Bwy. Co., 473 F.2d 1344 (4th Cir. 
1973), cert, denied 412 U.S. 933 (1973). Cf. Corning Glass Works 
v. Brennan, 41 L.Ed.2d 1 (1974).

30 “ I f the proposed legislation is enacted, the President of the 
United States and his appointees— particularly the Attorney Gen­
eral— would be granted the power to seriously impair . . . the 
seniority rights of employees in corporate and other employment 
[and] the seniority rights of labor union members within their 
locals and in their apprenticeship program. . . .

“ The provisions of this act grant the power to destroy union 
seniority . . . .  with the full statutory powers granted by this



25

was voiced on the floor of the House,31 and proponents of 
the bill did not deny this would be its effect. Congress­
man Dowdy proposed an amendment to exempt completely 
from coverage by Title VII any employment decision based 
on a seniority system;32 the House rejected the amend­
ment.33 The House on February 4, 1964 adopted Title VII 
without any special language regarding seniority.34

The original Senate bill, reported out of the Commerce 
Committee on February 10, 1964, was similar to the House 
bill, and contained no provision similar to section 703(h). 
The initial Senate bill was also criticized on the ground 
that it would affect seniority rights. In response to this 
criticism Senator Clark, on a single occasion on April 8, 
1968, before a nearly empty chamber, placed into the record 
the documents relied on by the Seventh Circuit suggesting 
that Title VII would have no effect whatever on seniority 
rights.35 By the Seventh Circuit’s own reasoning the Clark 
materials were erroneous, for, on April 8, the proposed civil 
rights bill did not contain section 703(h) or any comparable 
provision. On May 26, 1964, the Senate leadership offered 
a new civil rights bill of their own, containing §703(h). The 
language of this new provision, which bore no resemblance

bill, the extent of actions which would he taken to destroy the 
seniority system is unknown and unknowable” . H. Rep. No. 914, 
88th Cong., 1st Sess. 64-66, 71-72.

31110 Cong. Rec. 2726 (1964) (Remarks of Rep. Dowdy).
32 The proposed amendment provided “ [t]he provisions of this 

title shall not be applicable to any employer whose hiring and 
employment practices are pursuant to (1) a seniority system 
. . . . ”  110 Cong. Rec. 2727 (1964).

33110 Cong. Rec. 2728 (1964).
34110 Cong. Rec. 2804 (1964).
35 See 110 Cong. Rec. 7207 et seq. (1964). The Clark construc­

tion also appears mistaken in the light of the bill’s history in the 
House.



26

to the rejected Dowdy amendment, was explained by Sen­
ator Humphrey, one of the sponsors of the leadership bill :36

[T]his provision makes clear that it is only discrim­
ination on account of race, color, religion, sex or na­
tional origin that is forbidden by the title. The change 
does not narrow application of the Title, but merely 
clarifies its present intent and effect.

Neither Senator Clark, Senator Case, nor the Department 
of Justice ever offered any construction of or comment on 
section 703(h), which was adopted along with the rest 
of the leadership bill on June 19, 1964.37 Congressman 
Celler, in explaining to the House the changes contained 
in the Senate bill, noted the provisions in section 703(h) 
regarding job-related testing but, apparently agreeing with 
Senator Humphrey’s construction, did not mention the se­
niority language.38 Under these circumstances the deci­
sion of the Seventh Circuit, construing section 703(h) on 
the basis of comments made by Senator Clark weeks be­
fore that section was ever written or proposed, was clearly 
mistaken.

36110 Cong. Rec. 12,723 (1964).
37110 Cong. Rec. 14,511 (1964).
38110 Cong. Rec. 15896 (1964). Celler did mention such in­

significant changes as those regarding corporations owned by 
Indian tribes and discrimination against atheists.



27

III.

The Decision of the Court of Appeals Limiting 
Waters’ Right to Back Pay Is In Conflict With Deci­
sions of the Third and Fourth Circuits.

The Seventh Circuit upheld the decision of the Dis­
trict Court that Wisconsin Steel discriminated against 
plaintiff Waters when on January 17, 1967 it gave recall 
preference to a former white employee who had waived 
his recall rights in return for back pay. Waters main­
tained that he continued to suffer monetary loss from that 
date until the present time and neither court below found 
otherwise. The Court of Appeals, however, ruled that as 
a matter of law Waters was only entitled to back pay 
for the period prior to September 5, 1967, when Waters 
declined an offer of employment at Wisconsin Steel.

Three critical facts, set out in the record, bear on the 
legal significance of this offer. First, the Company in­
sisted that as a condition of returning to work Waters 
execute a waiver abandoning his then pending claim to 
be restored to the seniority he would have had but for 
the Company’s initial refusal to hire him because of his 
race. Second, Waters was concerned that it would be 
argued that he had waived some or all of his rights merely 
by accepting the Company’s offer and he so advised the 
Company in writing. The Company responded, not by as­
suring him it would not so argue, but by insisting he 
was entitled to neither back pay nor seniority.39 Third,

39 Waters wrote:
I believe that International Harvester Company, Wisconsin 
Steel Division has discriminated against me because of my 
race, and I believe that I would lose some of my rights, 
privileges or immunities secured and protected by the Con­
stitution and laws of the United States if I  came back to



28

since Wisconsin Steel would accord him no seniority, 
Waters had every reason to believe he would promptly 
be laid off soon after starting work as he had been twice 
before. To take snch a position and give np a more 
secure job he had with another firm would have been 
inconsistent with both common sense and Waters’ obliga­
tion to mitigate his damages. The district court found 
that Waters had declined the September, 1967 offer of 
employment because it might prejudice his pending Title 
VII claim.

The Court of Appeals held that despite these conditions 
Waters had an absolute legal obligation to accept the job 
offered by Wisconsin Steel and forfeited any right to fur­
ther back pay when he declined to do so. The Seventh 
Circuit’s decision is in direct conflict with the decision of 
the Third Circuit in Jurinko v. Edwin L. Wiegand Com­
pany, 477 F.2d 1038 (3rd Cir. 1973) and the en banc deci­
sion of the Fourth Circuit in Williams v. Albemarle City
Board of Education, ------  F.2d ------ , 8 EPD f  9820 (4th
Cir. 1974). In Jurinko, the employer had refused in 1966 
to hire the plaintiffs because of their sex, but in February, 
1969 offered them jobs with neither back pay nor the se­
niority to which they were entitled. The district court held 
their refusal to accept the jobs ended plaintiffs’ right to 
further back pay. The Third Circuit reversed, reasoning:

work before the Equal Employment Opportunity Commission 
render their decision in this case.
I would like to know if Wisconsin Steel Works is prepared 
to pay me my lost time and place me on the seniority list 
in the position I should be in?

The Company responded:
We find that no monies are due you.
W e reject your request that you be placed on the seniority 
list when, in fact, you have no accrued seniority, on the 
ground that such action would be in direct violation of our 
labor agreement.



29

The terms of the 1969 job oilers were within Wiegand’s 
control, and it did not offer plaintiffs seniority or back 
pay. The offer that was made did not rectify the effect 
of its past discrimination, and the plaintiffs were under 
no duty to accept such an offer.

477 F.2d at 1038. In Williams, the plaintiff had been re­
moved from his job as a school principal because of his 
race, but the defendants contended he had no right to back 
pay because he had rejected its offer of employment as a 
teacher. The Fourth Circuit rejected that contention and 
held the principal had no obligation to accept a position 
less than that to which he was entitled. 8 EPD at p. 6439.40

The decision of the Seventh Circuit on the facts of this 
case sanctioned a deliberate and callous attempt by Wis­
consin Steel to sabotage Waters’ pending claim by forcing 
him to choose between waiving his claim for seniority and 
back pay (if he accepted the job) and waiving any future 
back pay (if he did not). Such a legal maneuver is not 
consistent with the requirement that all waivers must be 
voluntary, Johnson v. Zerbst, 304 U.S. 458 (1938), or with 
the public policy against any waivers of rights involving 
the public interest. Brooklyn Savings Bank v. O’Neil, 324 
U.S. 697 (1945). I f such job offers can have the effect 
claimed by the Court of Appeals, they will afford recal­
citrant employers a ready means to prevent the enforce­
ment of Title VII.

40“ [Tlhere can be little question that the alternative employ­
ment was of a kind inferior to that previously followed by the 
appellee . . . .  More importantly, the acceptance of the alterna­
tive employment in this case could well have been regarded as 
an acquiescence by the appellee in his racially discriminatory de­
motion.”  Id.



30

CONCLUSION

For these reasons, a Writ of Certiorari should issue to 
review the judgment and opinion of the Seventh Circuit.

Respectfully submitted,

Judson H. M iner 
Charles B arnhill , Jr.

Davis, Miner & Barnhill 
14 West Erie Street 
Chicago, Illinois 60610

Jack Greenberg 
James M. N abrit III 
B arry L. Goldstein 
M orris J. B aller 
E ric S chnapper

10 Columbus Circle 
Suite 2030
New York, New York 10019 

Counsel for Petitioners
P hilip B. K urland

Rothschild, Barry & Myers 
Two First National Plaza 
Chicago, Illinois 60670

Of Counsel



APPENDIX



intfie
Mmteh States; Court of

jFor tfje g>ebentfj Circuit

Nos. 73-1822, 73-1823, and 73-1824 '  
W illiam  A. W aters and D onald 

Samuels,
Plaintiffs-Appellants,

v.
W isconsin Steel W orks of I nter­

national H arvester Company, a 
corporation, and U nited Order 
of A merican B ricklayers and 
S tone M asons, L ocal 21, an un­
incorporated association,

Defendants-Appellees.

U nited Order of A merican B rick-
LAYERS AND S T O N E  MaSONS,
L ocal 21,

Defendant-Appellant,
v.

W illiam  A. W aters and D onald 
Samuels,

Plaintiff s-Appellees.

A p p e a l s  from the 
United States Dis­
trict Court for the 
Northern District 

>- of Illinois, Eastern 
Division.
No. 68 C 2483 

W illiam J. 
Campbell, Judge.

I nternational H arvester Com­
pany,

Defendant-Appellant,
v.

W illiam  A. W aters and Donald 
Samuels,

Plaintiffs-Appellees.

A rgued A pril 22, 1974 —  Decided A ugust 26, 1974

Before Swygert, Chief Judge, H astings, Senior Circuit 
Judge, and Sprecher, Circuit Judge.

la



2a

Swygert, Chief Judge. P la in tiffs  W illiam  A . W a ters  
and D onald  Sam uels, both  black  jou rn eym en  brick layers, 
appeal fro m  a  ju dgm ent o f  the d istrict cou rt entered 
a fter  a bench tria l finding that the defendants had v io la ted  
both  T itle  V I I  o f  the C ivil R igh ts A ct o f  1964, 42 
IT.S.C. § 2000e et seq., and Section  I  o f  the C ivil R ights 
A c t  o f  1866, 42 U .S.C . § 1981. T he p la in tiffs ’ appeals 
cen ter so le ly  on  the d istrict co u rt ’s ap p roach  to  ca lcu ­
lating  the p la in tiffs ’ back -pay  aw ard and a ttorn eys ’ fees 
under T itle  V I I . D efendants International H arvester  
C om pany (In tern ation a l), W iscon sin  Steel W o rk s  o f  
International H arv ester  C om pany (W iscon sin  S tee l), and 
L oca l 21, U nited  O rder o f  A m erican  B rick layers  and 
S tone M asons (L oca l 21), cross-appea l fro m  the d istrict 
co u rt ’s finding that they v iola ted  § 1981 and T itle  V II .

In ternational operates a la rge  steel p lant in Chicago, 
know n as the W iscon sin  Steel W ork s. I t  em ploys a 
sm all fo r c e  o f  brick layers to  m aintain  and rep a ir  b last 
furnaces. L oca l 21 is the exclusive barga in in g  represen ta ­
tive fo r  the brick layers em ployed  b y  International.

W a ters  and Sam uels in itiated  an action  in  the d istrict 
cou rt on  D ecem ber 27, 1968, cla im ing that certain  em ­
p loym ent practices and p o lic ies  o f  In ternational and 
jo in ed  in b y  L oca l 21 d ep rived  them  o f  rights secured 
b y :  Section  I  o f  the C ivil R igh ts  A c t  o f  1866, 42 U .S .C . 
§ 1981; T itle  V I I  o f  the C ivil R ig h ts  A c t  o f  1964, 42 
U .S.C . ^ 2000 et seq.; the L a b o r  M anagem ent R elations 
A ct, 29 U .S .C . § 1 8 5 (a ) ; and the N ational L a b o r  R e la ­
tions A ct, 29 U .S .C . § 151 et seq. B e fo re  filing  their 
suit, p la in tiffs  in M ay, 1966 had registered  com plaints 
w ith both  the Illin o is  F a ir  E m ploym en t P ractices  C om ­
m ission  and the U nited States E qual E m ploym ent 
O pportu n ity  C om m ission  (E E O C ) ch arg in g  W iscon sin  
Steel w ith  racia l d iscrim ination  due to W iscon sin  S tee l’s 
la y -o ff o f  W a ters  and its subsequent refu sa l to reh ire 
him and its fa ilu re  to h ire Sam uels. T h e  S tate C om ­
m ission  d ism issed  the charges as u nsu bstan tiated ; likew ise 
the E E O C  concluded  in  a F ebru ary , 1967 decision  that 
no probab le  cause existed  to  believe that W iscon sin  Steel 
had violated  T itle  V II . B u t as a result o f  new  evidence 
that w hite brick layers had been  h ired  a fter  W a ters  sought 
reinstatem ent and Sam uels had requested in itial em p loy ­

73-1822,73-1823,73-1824



3a

m ent, the E E O C  reassum ed ju risd iction  and, on recon ­
sideration , it determ ined that the p la in tiffs  had cause to 
sue.

S h ortly  th erea fter  the p la in tiffs  in itiated their action 
as a  class action  against both International and L oca l
21. On d efen d an ts ’ m otions, the d istrict court dism issed 
p la in tiffs ’ claim s. On appeal w e reversed  and rem anded 
the cause fo r  a  trial. Waters v. Wisconsin Steel Works, 
427 F .2d  476 (7th  Cir. 1970), cert, denied, 400 U .S . 911 
(1970). On rem and the p la in tiffs  abandoned their class 
allegations and p roceed ed  to  tria l on  claim s o f  ind ividual 
d iscrim ination  against the tw o p la in tiffs .

A t  tr ia l W a ters  challenged the existence o f  W isconsin  
S tee l’s “ last h ired , first fired ”  sen iority  system  fo r  brick ­
layers. W a ters  claim ed the system  v iola ted  section 1981 
and T itle  V I I  in  that it perpetuated  alleged p r io r  d is­
crim in atory  p o lic ies  and h ir in g  practices o f  the defen ­
dants. In  addition , both  p la in tiffs  condem ned as v io la tive  
o f  S ection  1981 and T itle  V I I  tw o am endatory agree­
m ents to the co llective  barga in in g  contract entered betw een 
W iscon sin  Steel and L oca l 21 w hich  a ffected  em ployee 
recall rights and sen iority  status.

W ith  respect to the sen iority  system  as it relates to 
W a ters , it w as established at tria l that the co llective  bar­
ga in in g  agreem ents betw een W iscon sin  Steel and L oca l 21 
have since 1946 p rov id ed  fo r  a “ last h ired , first fired ”  
sen iority  system  fo r  brick layers em ployed  at W iscon sin  
Steel. T he sen iority  system  gives fu ll cred it to all brick ­
layers  f o r  their actual length o f service or  earned sen iority  
as brick layers. S en iority  vests a fter  a 90-day p robation ary  
p er iod  and m ay be broken  b y  variou s events, including 
lay -o ffs  in excess o f  tw o years. The system  governs the 
o rd er  o f  lay -o ffs  and recalls o f  brick layers.

W a ters  first inqu ired  about em ploym ent at W isconsin  
Steel in  the fa ll o f  1957. H e w as to ld  that no brick layers 
w ere being  hired. A p p rox im a te ly  seven years later W aters  
inqu ired  a second  tim e fo r  em ploym ent and w as h ired  in 
J u ly  1964. T w o m onths later, in Septem ber 1964, W aters  
w as la id  o ff  a ccord in g  to his length  o f  service and be fore  
com p letin g  his 90-day p rob ation ary  p eriod  and ach ieving 
contractual sen iority  status. W a te rs ’ la y -o ff w as one o f

73-1822, 73-1823, 73-1824



4a

several lay-offs during late 1964 and 1965 which occurred 
as a result of an anticipated decrease in the steel plant’s 
bricklaying needs because of a fundamental change in the 
steelmaking process. (During this period, Wisconsin Steel 
was converting from twelve open-hearth brick-lined fur­
naces to two basic oxygen furnaces, and, consequently, it 
had been anticipated that the volume of brick maintenance 
work would be correspondingly reduced.) By March 1965, 
over thirty bricklayers with up to ten years seniority had 
been laid off. Wisconsin Steel had expected that over half 
of the laid-off bricklayers, including eight bricklayers with 
five to six years seniority, would not be recalled within the 
two-year period and that pursuant to the terms of the 
collective bargaining contract these bricklayers’ contrac­
tual seniority rights would be lost.

During the course of the next year, however, Wisconsin 
Steel became aware that it had underestimated its brick­
layer requirements for the basic oxygen steelmaking pro­
cess. The company therefore began recalling bricklayers 
in the order of their length of prior service.

Besides the contractual right of recall for those em­
ployees with contractual rights, Wisconsin Steel had a 
policy that former employees, including bricklayers who 
did not have contractual seniority rights would nonetheless 
be recalled according to their length of service. In March 
1967, pursuant to this policy and not because of contrac­
tual right of recall, Waters was recalled. Waters accepted 
reinstatement and continued to work until May 19, 1967 
when he was once again laid off because of a temporary 
reduction in plant operations. Waters was recalled on 
August 30, 1967, but refused this third offer of employment 
because he had another job and also, because he believed 
that his return to Wisconsin Steel might prejudice his 
then pending EEOC charges against Wisconsin Steel which 
he had filed in May 1966.

With respect to the amendatory agreements to the col­
lective bargaining contract which plaintiffs challenge as dis­
criminatory, the following evidence was adduced at trial. 
Prior to 1965, Wisconsin Steel, unlike other steel plants, 
had no provision for severance pay in its collective bar­
gaining agreement with Local 21. However, in March 
1965, after the decision had been made to lay off eight 
white bricklayers having five to six years seniority, the

73-1822, 73-1823, 73-1824



5a

company negotiated a “ severance agreement” with Local 
21, dealing exclusively with these eight employees. The 
agreement provided that after being laid off the eight 
bricklayers could elect to retain their contractual seniority 
rights or receive $966.00 in severance pay. An election to 
retain contractual seniority rights carried with it the risk 
that these bricklayers would lose their seniority rights 
anyway after two years on lay-off; this risk was believed 
to be substantial in view of Wisconsin Steel’s anticipated 
decline in bricklaying needs. Consequently, the eight brick­
layers, subsequent to their involuntary lay-off pursuant to 
seniority, elected to receive severance pay, thereby for­
feiting their contractual seniority rights to recall.

As noted earlier, it became apparent to Wisconsin Steel 
in 1966 that it had underestimated its predicted brick­
laying requirement for the basic oxygen process. In view 
of its new felt demand for bricklayers and its asserted 
belief that an injustice had been done to the eight brick­
layers who had exchanged their contractual seniority rights 
for $966.00, the company proposed to Local 21 that the 
March 1965 severance pay agreement be partially nullified 
by an amendment restoring the eight bricklayers’ contrac­
tual seniority rights for purposes of recall. Accordingly, 
an amendatory agreement was entered into in June 1966. 
Three of the eight white bricklayers who had previously 
accepted the severance pay also accepted the recall and 
reurned to work, two in July 1966 and the third in Janu­
ary 1967. In each instance the man was rehired without 
reapplying with the company for employment.

At trial plaintiffs contended that the June 1966 amenda­
tory agreement was, in effect, discriminatory for it re­
stored contractual seniority status to the three white brick­
layers who accepted recall and thereby advanced those 
three bricklayers ahead of Waters and Samuels on the 
hiring and recall roster. The defendants countered plain­
tiffs’ contention by arguing that the three bricklayers would 
have been entitled to prior recall in any event pursuant 
to the company policy whereby former employees without 
contractual rights of recall are nevertheless recalled pur­
suant to their length of prior service.

After submission of the evidence the trial judge made 
certain findings of fact. He also made the following con­
clusions of law:

73-1822, 73-1823, 73-1824



6a

“ 4. P r io r  to  A p r il, 1964, W iscon sin  Steel d iscrim i­
nated  in  the h irin g  o f  b rick layers in  v io la tion  o f  
42 U .S .C . § 1981.

5. T he sen iority  system  n egotia ted  betw een defen ­
dants W iscon sin  Steel and L oca l 21 had its genesis 
in  a p er iod  o f  racia l d iscrim ination  and is thus v io la ­
tive o f  42 U .S .C . § 1981 and is n ot a bona  fide sen ior­
ity  system  under T itle  V I I .

6. B y  lay in g  o ff  p la in tiff W a ters  in  Septem ber, 1964, 
pursuant to  the term s o f  the sen iority  system  o f  the 
collective  barga in in g  agreem ent, defendants v io la ted  
both  § 1981 and T itle  V I I . D efendan ts also v io la ted  
§ 1981 and T itle  V I I  when, in reliance on  the sen ior­
ity  system , W iscon sin  Steel fa ile d  to reca ll p la in tiff 
W a ters  in  M arch , 1965, and w hen it again  la id  o ff  
p la in tiff W a ters  in M ay, 1967.

7. D efendants June 15, 1966 agreem ent to am end the 
earlier severance p a y  agreem ent and th ereby  restore  
reca ll righ ts to  an all w hite g rou p  o f  brick layers w ho 
otherw ise possessed  no reca ll rights under the p r io r  
severance p ay  agreem ent, th ereby  p la cin g  those w hite 
brick layers ahead o f  b lack  brick layers, constituted  a 
v io la tion  o f  both  § 1981 and T itle  V I I . T h is v io la ­
tion  d iscrim inated  against the righ ts o f  both  p la in tiff 
W a ters  and p la in tiff Sam uels.”

P ursuant to  its decision  the d istrict court d irected  W is ­
consin  S teel to  o ffe r  em ploym ent to  W a ters  and Sam uels 
and ordered  both  defendants to share in  a back -pay  aw ard  
o f  $5000 to W a ters  and $5000 to Sam uels. In  addition , 
the court aw arded  the sum o f  $5000 as a ttorn eys ’ fee  fo r  
p la in tiffs ’ counsel and as a jo in t  liab ility  o f  the d efen ­
dants.

W e  address the fo llow in g  issues in these a p p ea ls : (1 ) 
W hether the d istrict cou rt p ro p e r ly  asserted  ju risd iction  
ov er  either defendant under 42 U .S .C . § 1 9 8 1 ; (2 ) w hether 
an a g grieved  p la in tiff m ust exhaust grievan ce  p roced u res 
under a co llective  barga in in g  agreem ent b e fo re  he can 
in itiate a law suit under section  1981; (3 ) w hether the 
tria l co u rt ’s conclusion  that defendant W iscon sin  Steel 
d iscrim inated  in  the h irin g  o f  b rick layers p r io r  to A p r il 
1964 is c learly  erron eou s ; (4 ) w hether the tr ia l cou rt erred

73-1822,73-1823, 73-1824



7a
73-1822, 73-1823, 73-1824

in conclu d in g  that W iscon sin  S teel’s “ last h ired, first fired ”  
sen iority  system  is v io la tive  o f  42 U .S .C . $ 1981 and is 
n ot a bon a  fide sen iority  system  under T itle  V I I ;  (5 ) 
w hether there w as e rro r  in  h old ing  that d efendants ’ June 
15, 1966 agreem ent to  am end the p r io r  severance p ay  
agreem ent th ereby  restorin g  contractua l reca ll rights to 
an all-w hite g rou p  o f  brick layers constituted  a v io la tion  
o f  section  1981 and T itle  V I I ;  (6 ) w hether the p artic ip a ­
tion  o f  d efendant L oca l 21 as s ign a tory  to  the collective  
ba rga in in g  agreem ent as w ell as to the tw o challenged  
agreem ents to am end the collective  barga in in g  agreem ent 
is sufficient to  hold  the union liable under section  1981; 
(7 )  w hether the d istrict court erred  in  its ca lcu lation  o f  
the back -pay  a w a rd ; and (8 ) w hether the d istrict court 
e rred  in  its m aking the aw ard  o f  a ttorn eys ’ fees to counsel 
f o r  the p la in tiffs . W e  affirm in  p art the d istrict cou rt ’s 
finding on  liab ility , but reverse and rem and w ith  respect 
to the questions o f  back -pay dam ages and attorney  fees.

I
L o ca l 21 op p oses  the d istrict co u rt ’s assum ption o f  ju r is ­

d iction  ov er  it on tw o g rou n d s : T he union  contends that 
the p la in tiffs  d id  not ju s t ify  their fa ilu re  to file charges 
against L o ca l 21 w ith the E E O C  under T itle  V I I . In  ad d i­
tion , it challenges the standing o f  W a ters  to sue the union 
under section  1981 on the basis that he w as n ot at any 
relevant tim e a m em ber o f  the union.

W ith  respect to the argum ent o f  L oca l 21 that the p la in ­
tiffs  have fa iled  to p rov e  a  reasonable excuse fo r  b y ­
p assin g  the adm in istrative procedures o f  T itle  V I I ,  we 
p rev iou s ly  addressed  that issue in Waters v. Wisconsin 
Steel, 427 F .2d  476 (7th Cir. 1970) w here w e sta ted :

“ W e  hold , th ere fore , that an aggrieved  person  m ay 
sue d irectly  under section 1981 i f  he p leads a reason ­
able excuse fo r  h is fa ilu re  to  exhaust E E O C  rem edies. 
W e  need n ot define the fu ll scope  o f  this exception  
here. N evertheless, we believe that p la in tiffs  in the 
case at bar have presented  allegations sufficient to 
ju s t ify  their fa ilu re  to charge L oca l 21 b e fo re  the 
C om m ission .

W e  re ly  p articu larly  on  the fo llow in g  allegations. 
T he p rim a ry  charge o f  racia l d iscrim ination  m ade by



8a
73-1822, 73-1823, 73-1824

plaintiffs is based on an amendment of the collective 
bargaining agreement between Harvester and Local 
21. That amendment occurred in June 1966 after 
plaintiffs filed their charge before the EEOC. Until 
this amendment plaintiffs were, at least arguably, 
unaware of the participation of Local 21 in Harvester’s 
alleged policy of racial discrimination.” 427 F.2d at 
487.

The evidence adduced at trial supports plaintiffs’ allega­
tion that the collective bargaining agreement amendment 
occurred after the EEOC charge was filed thereby justify­
ing the by-pass of the EEOC. Moreover, we note and are 
somewhat inclined to agree with the recent decisions which 
hold that exhaustion of Title VII remedies, or reasonable 
excuse for failing to do so, is not a jurisdictional prerequi­
site to an action under section 1981. See, e.g., Long v. 
Ford Motor Co., 42 U.S.L.W. 2599 (6th Cir. April 30, 
1974).

As to the contention that Waters lacks standing to sue 
under section 1981, Local 21 premises its argument on the 
assertion that jurisdiction under section 1981 is dependent 
on a contractual relationship between Waters and the 
union (which did not exist here for Waters was not a 
member of the union). Section 1981 assures that “ all per­
sons within the jurisdiction of the United States shall have 
the same right in every State and Territory to make and 
enforce contracts . . .  as is enjoyed by white citizens.” The 
subject matter of this suit is cognizable under section 1981 
for Waters complains that his right to enter into an em­
ployment contract with the company on the same basis as 
whites was impaired by the joint action of the union and 
company. It follows that his nonmembership in the 
union has no bearing on his section 1981 claim against 
Local 21.1

II
Local 21 contends that plaintiffs should be barred from 

proceeding against the union under section 1981 because 
they failed to exhaust their contractual remedies under 
the collective bargaining agreement. The nature of plain­

1 In addition, jurisdiction over Wisconsin Steel was properly enter­
tained under both Title VII and section 1981.



9a
73-1822, 73-1823, 73-1824

tiffs’ claims however is that of a complaint against racial 
discrimination in employment and not a labor law action, 
asserting rights under a collective bargaining contract. 
Indeed, the focus of this civil rights suit is an attack by 
plaintiffs on the contract itself as embodying racially dis­
criminatory practices.

Title VII and section 1981 are “parallel or overlapping 
remedies against discrimination.” Alexander v. Gardner- 
Denver Co., No. 72-5847, at p. 10 (U.S. 1974). Conse­
quently, in fashioning a substantive body of law under 
section 1981 the courts should, in an effort to avoid unde­
sirable substantive law conflicts, look to the principles of 
law created under Title VII for direction. It is well-estab­
lished that under Title VII there is no exhaustion of con­
tractual remedies requirement. Alexander v. Gardner- 
Denver Co., supra, at p. 12; Rios v. Reynolds Metal Co., 
467 F.2d 54, 57 (5th Cir. 1972); Bowe v. Colgate-Palmolive 
Co., 416 F.2d 711 (7th Cir. 1969). Moreover, an exhaus­
tion of remedies requirement does not appear to apply to 
claims for relief brought under any of the civil rights acts. 
See Monroe v. Pape, 365 U.S. 167 (1960); McNeese v. 
Board of Education, 373 U.S. 668 (1963); D’Amico v. Cali­
fornia, 389 U.S. 416 (1967); and King v. Smith, 392 U.S. 
309 (1968).2 We are of the view, therefore, that plain­
tiffs could properly proceed against the union under section 
1981 without first exhausting any contractual remedies 
under the collective bargaining agreement.

I l l
Wisconsin Steel contends that the evidence does not 

support the district court’s holding that “ [p]rior to April, 
1964, Wisconsin Steel discriminated in the hiring of brick­
layers in violation of 42 U.S.C. § 1981.” We believe the 
record supports the conclusion that Wisconsin Steel en­
gaged in racially discriminatory hiring policies with respect 
to the position of bricklayer prior to the enactment of 
Title VII.

Wisconsin Steel did not hire its first black bricklayer 
until April 1964 although blacks had made inquiries seek­
ing employment as early as 1947. In addition, the evi­

2 Although these cases treated the exhaustion of remedy requirement 
with respect to 42 U.S.C. § 1983 of the Civil Rights Act, we think the 
Court’s analysis is applicable to actions brought under 42 U.S.C. § 1981,



dence reflects a discriminatory departmental transfer 
policy whereby blacks hired by Wisconsin Steel as labor­
ers were denied the opportunity available to white labor­
ers to transfer to the bricklayers’ apprenticeship program.

It is urged by the company that the “ single statistic” 
of no black bricklayers prior to 1964 is not sufficient to 
make a showing of discrimination. Although we doubt the 
validity of this contention (see Jones v. Lee Way Motor 
Freight, Inc., 431 F.2d 245, 247 (10th Cir. 1970); Parham 
v. Southwestern Bell Tel. Co., 433 F.2d 421, 426 (8th Cir. 
1970)), we think that the statistical data joined by the 
evidence indicating repeated attempts by blacks to obtain 
employment as bricklayers substantiates the trial court’s 
finding of discrimination.

Wisconsin Steel further contends that plaintiffs did not 
make a showing of past racial discrimination because they 
failed to prove that black applicants were denied actual 
job openings. Relying on McDonnell Douglas Corp. v. 
Grem, 411 U.S. 792 (1973), the defendant in effect urges 
that discrimination can only be shown if there is a precise 
matching of job openings and job applicants. While a 
showing of matching might be required where the focus 
of inquiry is on an “ individualized hiring decision,” such 
as in McDonnell Douglas,3 we do not believe such a show­
ing is required, where, as here, the inquiry centers on 
whether the employer engaged in discriminatory hiring 
procedures or practices in the past unrelated to the sub­
sequent employment applications. Accordingly, we do not 
find McDcmnell Douglas controlling on this issue.

IV
With respect to the validity of Wisconsin Steel’s em­

ployment seniority system which embodies the “ last hired,
3 In M cD onn ell Douglas v. G reen, 411 U.S. 792 (1973), the Court 

stated that a plaintiff in a Title VII case establishes a prima facie case 
of discrimination by showing:

“ (i) that he belongs to a racial minority; (ii) that he applied 
and was qualified for a job for which the employer was seeking 
applicants; (iii) that, despite his qualifications, he was rejected; 
and (iv) that, after his rejection, the position remained open and 
the employer continued to seek applicants from persons of com­
plainant’s qualifications.” 411 U.S. at 802.

In referring to the foregoing elements, the Court stated in a footnote: 
“The facts necessarily will vary in Title VII cases, and the 

specification above of the prima facie proof required from respondent 
is not necessarily applicable in every respect to differing factual 
situations.” 411 U.S. at 802, fn. 13.

10a
73-1822, 73-1823, 73-1824



11a

first fired” principle of seniority for job recalls and lay­
offs, the district court held:

“ 5. The seniority system negotiated between defen­
dants Wisconsin Steel and Local 21 had its genesis 
in a period of racial discrimination and is thus viola­
tive of 42 U.S.C. § 1981 and is not a bona fide seniority 
system under Title VII.
6. By laying off plaintiff Waters in September, 1964, 
pursuant to the terms of the seniority system of the 
collective bargaining agreement, defendants violated 
both § 1981 and Title VII. Defendants also violated 
 ̂1981 and Title VII when, in reliance on the senior­

ity system, Wisconsin Steel failed to recall plaintiff 
Waters in March, 1965, and when it again laid off 
plaintiff Waters in May, 1967.”

The plaintiffs contend that Wisconsin Steel’s employ­
ment seniority system perpetuates the effects of past dis­
crimination in view of the facts that blacks will be laid 
off before and recalled after certain whites who might not 
otherwise have had seniority had Wisconsin Steel not dis­
criminated in hiring prior to 1964. They argue that such 
a system facilitates a return to the status quo of the era 
when Wisconsin Steel hired no black bricklayers. Wiscon­
sin Steel argues, however, that an employment seniority 
system which accords workers credit for the full period 
of their employment is racially neutral and as such is a 
bona fide seniority system within the contemplation of 
$ 703(h) of Title VII, 42 U.S.C. §2000e-2(h). The defen­
dant says that to strike down its employment seniority 
system would be to countenance reverse discrimination.

It is asserted that here there is an employment senior­
ity system (unlike the departmental or job seniority sys­
tems which courts have modified under Title V II) which 
grants workers equal credit for actual length of service 
with the employer. Under a departmental seniority system, 
seniority is measured by length of service in a department 
while a job seniority system accords seniority on the 
basis of length of service on a job. The decisions modify­
ing these two forms of seniority systems have routinely 
involved situations where the employer previously main­
tained segregated work forces, prohibiting transfers by 
blacks into various jobs or departments which offered

73-1822, 73-1823, 73-1824



improved employment conditions. With the advent of 
Title VII the employer would facially lift the restric­
tions on transfers but would effectively prohibit transfers 
through a department or job seniority policy whereby 
blacks would be given no credit for their previous years 
of employment with the employer and would be placed 
at the bottom of the employee roster in the formerly all- 
white job or department to which they transferred. Often 
in modifying these discriminatory forms of seniority sys­
tems the courts have deployed an employment seniority 
system as a racially neutral and adequate remedy to the 
discriminatory impact of the prior seniority systems.

We are of the view that Wisconsin Steel’s employment 
seniority system embodying the “ last hired, first fired” 
principle of seniority is not of itself racially discrimina­
tory or does it have the effect of perpetuating prior racial 
discrimination in violation of the strictures of Title VII. 
To that end we find the legislative history of Title VII 
supportive of the claim that an employment seniority sys­
tem is a “bona fide” seniority system under the Act, The 
history points out that:

“ Title V II would have no effect on established se­
niority rights. Its effect is prospective and not retro­
spective. Thus, for example, if a business has been 
discriminating in the past and as a result has an all- 
white working force, when the title comes into effect 
the employer’s obligation would be simply to fill future 
vacancies on a nondiscriminatory basis. He would 
not be obliged—or indeed, permitted—to fire whites 

. in order to hire Negroes, or to prefer Negroes for 
future vacancies, or, once Negroes are hired, to give 
them special seniority rights at the expense of the 
white workers hired earlier. (However, where waiting 
lists for employment or training are, prior to the 
effective date of the title, maintained on a discrimi­
natory basis, the use of such lists after the title takes 
effect may be held an unlawful subterfuge to accom­
plish discrimination.)” Interpretative Memorandum 
of Senators Clark and Case, 110 Cong. Rec. 7213 
(April 8, 1964). (Emphasis added).

In response to written questions by Senator Dirksen, one 
of the Senate floor managers for the bill, Senator Clark,

12a
73-1822, 73-1823, 73-1824



13a
73-1822, 73-1823, 73-1824

emphasized that the “ last hired, first fired” principle of 
seniority would be preserved under Title V II:

“ Question. Would the same situation prevail in 
respect to promotions, when that management func­
tion is governed by a labor contract calling for pro­
motions on the basis of seniority? What of dismiss­
als? Normally, labor contracts call for ‘last hired, 
first fired.’ If the last hired are Negroes, is the em­
ployer discriminating if his contract requires that 
they be first fired and the remaining emplovees are 
white?”

“ Answer. Seniority rights are in no way affected 
by the bill. If under a ‘last hired, first fired’ agree­
ment a Negro happens to be the ‘last hired,’ he can 
still be ‘first fired’ as long as it is done because of his 
status as ‘last hired’ and not because of his race.” 
110 Cong. Rec. 7217 (April 8, 1964).

Moreover, to alleviate any further doubt as to the mean­
ing of Title VII, Senator Clark obtained an interpretative 
memorandum from the Department of Justice which indi­
cated that “ last hired, first fired” seniority rules would 
be valid under Title V II:

“ Title VII would have no effect on seniority rights 
existing at the time it takes effect. If, for example, 
a collective bargaining contract provides that in the 
event of layoffs, those who were hired last must be 
laid off first, such a provision would not be affected 
in the least by title VII. This would be true even 
in the case where owing to discrimination prior to the 
effective date of the title, white workers had more 
seniority than Negroes. Title VII is directed at dis­
crimination based on race, color, religion, sex or 
national origin. It is perfectly clear that when a 
worker is laid off or denied a chance for promotion 
because under established seniority rules he is low 
man on the totem pole he is not being discriminated 
against because of his race.” 110 Cong. Rec. 7207 
(April 8, 1964).

In Quarles v. Philip Morris, Inc., 279 F.Supp. 505 (E.D. 
Va. 1968), the district court was faced with a proposal by 
the plaintiffs, akin to that presented here, in derogation



14a

of the employment seniority of white workers. There, 
after a thorough analysis of the legislative history of 
Title VII, Judge Butzner wrote:

“ [T]he plaintiffs’ proposal, while not ousting white 
employees from present jobs, would prefer Negroes 
even though they might have less employment senior­
ity than whites. Nothing in the act indicates this 
result was intended.” 279 F.Supp. at 519.

Similarly, the Fifth Circuit in passing upon the legislative 
history of Title VII stated:

“ No doubt, Congress, to prevent ‘reverse discrimi­
nation’ meant to protect certain seniority rights that 
could not have existed but for previous racial dis­
crimination. For example a Negro who had been 
rejected by an employer on racial grounds before 
passage of the Act could not, after being hired, claim 
to outrank whites who had been hired before him but 
after his original rejection, even though the Negro 
might have had senior status but for the past discrimi­
nation. As the court pointed out in Quarles, the treat­
ment of ‘job ’ or ‘department seniority’ raises prob­
lems different from those discussed in the Senate 
debates: ‘a department seniority system that has its 
genesis in racial discrimination is not a bona fide 
seniority system.’ ” 279 F.Supp. at 517.

“ It is one thing for legislation to require the crea­
tion of jfictional seniority for newly hired Negroes, 
and quite another thing for it to require that time 
actually worked in Negro jobs be given equal status 
with time worked in white jobs. To begin with, 
requiring employers to correct their pre-Act dis­
crimination by creating fictional seniority for new 
Negro employees would not necessarily aid the actual 
victims of the previous discrimination. There would 
be no guaranty that the new employees had actually 
suffered exclusion at the hands of the employer in the 
past, or, if they had, there would be no way of 
knowing whether, after being hired, they would have 
continued to work for the same employer. In other 
words, creating fictional employment time for newly- 
hired Negroes would comprise preferential rather

73-1822, 73-1823, 73-1824



15a
73-1822, 73-1823,73-1824

than rem edial treatm ent. The clear thrust of the 
Senate debate is directed against such preferential 
treatment on the basis of race.
“ We conclude, in agreement with Q uarles, that Con­
gress exempted from the anti-discrimination require­
ments only those seniority rights that gave white 
workers preference over junior Negroes.” Local 189, 
U n ited  P aperm ak & P a p erw ork  v. U nited  S ta tes , 
416 F.2d 980, 994-95 (5th Cir. 1969), cert, denied, 
397 U.S. 919 (1970). [Emphasis in original and 
added].

Title V II mandates that workers of every race be 
treated equally according to their earned seniority. It 
does not require as the Fifth Circuit said, that a worker 
be granted fictional seniority or special privileges be­
cause of his race.

Moreover, an employment seniority system is properly 
distinguished from job or department seniority systems 
for purposes of Title VII. Under the latter, continuing 
restrictions on transfer and promotion create unearned 
or artificial expectations of preference in favor of white 
workers when compared with black incumbents having 
an equal or greater length of service. Under the employ­
ment' seniority system there is equal recognition of em­
ployment seniority which preserves only the earned ex­
pectations of long-service employees.

Title VII speaks only to the future. Its backward gaze 
is found only on a present practice which may perpetuate 
past discrimination. An employment seniority system 
embodying the “ last hired, first fired” principle does not 
of itself perpetuate past discrimination. To hold other­
wise would be tantamount to shackling white employees 
with a burden of a past discrimination created not by 
them but by their employer. Title V II was not designed 
to nurture such reverse discriminatory preferences. 
Griggs v. Duke Power Co., 401 U.S. 424, 430-31 (1971).

We are not, however, insensitive to the plaintiffs’ argu­
ment, and think employers should be discrete in devising 
an employment seniority system. We recognize that it is 
a fine line we draw between plaintiffs’ claim of discrimi­
nation and defendants’ countercharge of reverse discrimi­



nation. On balance, we think Wisconsin Steel’s seniority- 
system is racially neutral and does not perpetuate the 
discrimination of the past.4

V
We come finally to the pivotal issue in determining 

liability: whether the June 15, 1966 agreement between 
Local 21 and Wisconsin Steel to amend an earlier 
severance pay agreement and thereby recall three white 
bricklayers who had accepted severance pay under the 
initial agreement discriminated against the plaintiffs in 
violation of Title VII and section 1981. In light of 
Wisconsin Steel’s past history of racially discriminatory 
hiring practices and the racially neutral yet potentially 
discriminatory impact of the employment seniority system 
utilized by the company, we hold that the June 1966 
agreement reinstating contract recall rights to three 
white bricklayers was racially discriminatory with respect 
to Waters, but not discriminatory with respect to 
Samuels.

The defendants contend that the restoration of con­
tractual seniority rights to the white bricklayers who 
had previously accepted severance pay did not discrimi­
nate against the plaintiffs for it is claimed that the white 
bricklayers would have been entitled to prior recall in 
any event in accordance with company policy. As we 
noted earlier, that policy, pursuant to which plaintiff 
Waters was himself recalled, provided that former em­
ployees without contractual rights of recall would 
nonetheless be recalled in order of their length of prior 
service. We do not doubt that a policy favoring recall 
of a former employee with experience even though white 
before considering a new black applicant without ex­
perience comports with the requirements of Title VII 
and section 1981. To that end, we do not perceive any 
discriminatory impact with respect to Samuels who was 
a new applicant.

With respect to Waters, however, the company policy 
occupies a different posture. At the outset we note that 
it is not entirely clear what the company policy was with

4 Having passed scrutiny under the substantive requirements of Title 
VII, the employment seniority system utilized by Wisconsin Steel is not 
violative of 42 U.S.C. § 1981.

16a
73-1822, 73-1823, 73-1824



respect to the priority status of the white bricklayers 
who had accepted severance pay vis-a-vis employees such 
as Waters who possessed no contractual seniority. Even 
assuming that the priority of the white bricklayers ac­
cepting severance pay emanated from a long-standing 
company policy and not from an ad hoc determination, 
we are inclined to find that aspect of the company policy 
to be violative of Title VII and section 1981. We reach 
such a conclusion due to the fact that Wisconsin Steel 
through its prior discrimination and its implementation 
of an employment seniority system occupied a racially 
precarious position—indeed, at the brink of present dis­
crimination. A  company policy of according priority to 
white bricklayers who had accepted the benefits of sever­
ance pay would, in our view, project the company into 
the realm of presently perpetuating the racial discrimi­
nation of the past. The company policy is no defense to 
the defendants’ action in entering the June 1966 agree­
ment restoring contractual seniority to three white brick­
layers.

We find the June 1966 agreement, therefore, to be 
discriminatory with respect to Waters. Moreover, it can­
not be urged that the agreement was justified by “busi­
ness necessity.” The practice of restoring contractual 
seniority to white bricklayers who elected to receive 
severance pay must be justified, if at all, by a showing 
of “ business necessity.” Griggs v. Duke Power Co., 401 
U. S. 424, 431 (1971). In that respect an employment 
practice “ ‘can be justified only by a showing that it is 
necessary to the safe and efficient operation of the busi- 
nes.’ ” Robvnson v. Lorillard Corp., 444 F.2d 791, 797 
(4th Cir. 1971), quoting, Jones v. Lee Way Motor Freight, 
431 F.2d 245, 249 (10th Cir. 1970). Defendants’ claim of 
employee-employer goodwill and alleged concern for fear 
of potential labor strife does not rise to the level of 
urgency required for a demonstration of business neces­
sity.

VI
Local 21 contends that there is insufficient evidence to 

support a claim against the union under section 1981. It 
is enough, however, that the union was an integral party 
to the June 1966 amendment which discriminated against

73-1822, 73-1823,73-1824



W aters . Johnson v. Goodyear Tire & Rubber Co., 7 E P D , 
1T9233 (5th  Cir. 1974). L oca l 21 th ere fore  shares jo in tly  
in  the lia b ility  o f  W iscon sin  Steel.

V I I

B oth  W a ters  and defendants jo in  in the contention  
that the d istrict court erred  in  ca lcu lating  the back -pay 
aw ard  to  w hich W aters  is entitled. W e  agree that the 
tria l ju d g e  abused his d iscretion  in fash ion in g  the back­
p ay  aw ard. T he aw ard  w as the p rod u ct o f  an a rb itrary  
calcu lation  en tire ly  d evoid  o f  an y  reasoned  ap p roach  to 
the p ro p e r  m easure o f  dam ages. M oreover, the d istrict 
co u rt ’s con sid eration  o f  the absence o f  a racia lly  d iscr im i­
n atory  m otive  on the part o f  the defendants w as im proper. 
The absence o f  a d iscrim in atory  m otive  is not a  p rop er  
basis fo r  d en y in g  o r  lim iting  re lie f. Robinson v. Lorillard 
Cory., 444 F .2d  791, 804 (4th  C ir. 1971).

I t  w ou ld  ap p ear fro m  the re cord  that bu t fo r  the June 
1966 agreem ent, W a ters  w ou ld  have been reca lled  on 
Jan u ary  17, 1967 and that he w ou ld  not have been la id  
o ff  on M ay  19, 1967. W a ters  w as tendered  reem ploym ent 
on Septem ber 5, 1967, w hich he declined  to  accept. In  our 
judgm ent the d iscrim in atory  im pact o f  defen d an ts ’ June 
1966 agreem ent ended w ith  the tender m ade to  W aters  
in  Septem ber. The relevant p eriod  fo r  com puting  dam ages 
th ere fore  ranges fro m  Ja n u a ry  17, 1967 to  Septem ber 
5, 1967.

P la in tiff W a te rs ’ dam ages fo r  the relevan t p eriod  are 
to be determ ined by  m easuring  the d ifference between 
p la in tiff ’s actual earn ings fo r  the p er iod  and those w hich 
he w ou ld  have earned absent the d iscrim ination  o f  d e­
fendants. In  determ ining the am ount o f  W a te rs ’ likely  
earn ings but fo r  the d iscrim ination , w e re ject the notion  
advanced  by  W a ters  that since he cou ld  have held tw o 
job s  w hile em ployed  at W iscon s in  Steel, defendants are 
th ere fore  liable not on ly  fo r  his lost earn ings w ith 
W iscon sin  Steel but also fo r  his p robab le  lost earn ings 
fro m  a second jo b . R ecom pense fo r  econom ic loss resu lt­
in g  fro m  racia lly  d iscrim in atory  practices does not 
require that w e entertain  claim s o f  such a speculative and 
rem ote nature.

18a
73-1822, 73-1823, 73-1824



19a

Accordingly, we remand to the district court for find­
ings with regard to Waters’ actual and probable earnings 
for the relevant period.5

73-1822, 73-1823, 73-1824

VIII
All parties condemn the district court’s method of 

computing the award of attorney fees to the plaintiffs’ 
counsel pursuant to section 706K of Title VII, 42 U.S.C. 
§ 2000e-5(K). Although the determination of reasonable 
attorney fees is left to the sound discretion of the trial 
judge, Weeks v. Southern Bell Tele. & Tele. Co., 467 F.2d 
95, 97 (5th Cir. 1972), we are convinced that the method 
whereby the judge computed the award of attorney’s fee 
was so lacking of analysis that it constituted an abuse 
of discretion.

In fashioning a method of analysis to assist in determin­
ing the amount of attorney fees properly to be awarded 
in a Title VII action, we cannot subscribe to the view 
that attorney fees are to be determined solely on the 
basis of a formula applying “hours spent times billing 
rate.” We recognize however that such a factor is a con­
sideration in making the ultimate award and indeed it 
is a convenient starting point from which adjustments 
can be made for various other elements. Other elements 
to be considered are set out in the Code of Professional 
Responsibility as adopted by the American Bar Associa­
tion :

Factors to be considered as guides in determining the 
reasonableness of a fee include the following:

(1) The time and labor required, the novelty 
and difficulty of the questions involved, and 
the skill requisite to perform the legal 
service properly.

(2) The likelihood, if apparent to the client, 
that the acceptance of the particular em­
ployment will preclude other employment by 
the lawyer.

5 It would appear that Wisconsin Steel concedes in its brief that 
Waters would not have been laid off on May 19, 1967 had he been 
recalled on January 17, 1967. (Defendant’s Brief, p. 44.) The record is 
not clear on this matter. Therefore we direct that there be findings 
thereon if defendant does not concede the point. It should be noted 
however that the outer most parameters of defendants’ liability extend 
from January 17, 1967 to September 5, 1967.



(3 )  T he fee  cu stom arily  charged  in the lo ca lity  
fo r  sim ilar lega l services.

(4) T he am ount in vo lved  and the results ob ­
tained.

(5 )  The tim e lim itations im p osed  b y  the client 
o r  b y  the circum stances.

(6 )  T he nature and length  o f  the p ro fess ion a l 
re la tionsh ip  w ith  the client.

(7 ) T he experience, reputation , and  ab ility  o f  
the law yer o r  law yers p er fo rm in g  the ser­
v ices.

(8 )  W h eth er the fee  is fixed  or  contingent. 

D isc ip lin a ry  E ule 2-106.

T he C ode o f  P ro fe ss io n a l R esp on sib ility  c lea rly  reflects 
that an aw ard  o f  a ttorn ey  fees  involves the coalescence 
o f  m any considerations in clu d in g  the reasonableness o f  
the tim e spent b y  counsel, the extent o f  cou n sel’s success, 
and the com p lex ity  o f  the case. A n  analysis b y  the d istrict 
court w hich encom passes the fo re g o in g  considerations is 
m ost assured ly  an analysis w ell w ithin  the bounds o f  
tr ia l cou rt d iscretion . A cco rd in g ly , w e rem and to  the 
d istrict cou rt f o r  recon sideration  o f  a ttorn eys ’ fees in  
light o f  the a forem en tion ed  fa ctors .

T he ju dgm en t o f  lia b ility  is affirm ed in  p a rt as to  p la in ­
tiff W a ters  and reversed  as to  p la in tiff Sam uels. In  ac­
cordan ce  w ith  C ircu it R u le  23 w e rem and fo r  fu rth er  
consideration  on the question  o f  dam ages and aw ard  o f  
a ttorney  fees  to p la in tiff W a ters , consisten t w ith  the 
view s exp ressed  herein.

A  true C o p y :

T e s t e :

20a
73-1822, 73-1823, 73-1824

Clerk of the United States Court of 
Appeals for the Seventh Circuit.



21a

Order of United States Court of Appeals 
For the Seventh Circuit

U nited S tates Court o f  A ppeals 

F or the Seventh Circuit 

Chicago, I llinois 60604

November 26, 1974

(68 C 2483)
APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS 
EASTERN DIVISION

B e f o r e  :

H on. L uther M. Swygert, Chief Judge 
“ J ohn S. H astings, Sr., Circuit Judge 
“ T homas E. F airchild, Circuit Judge 
“ W alter J. Cum m ings, Circuit Judge 
“ W ilbur F. P ell, Jr., Circuit Judge 
“ J ohn P aul S tevens, Circuit Judge 
“ R obert A. Sprecher, Circuit Judge 
“ P hilip W . T one, Circuit Judge

W illiam W aters and D onald Samuels,

Plaintiff-Appellees 
Cross-Appellants,

No. 73-1822 thru vs.
73-1824

W isconsin Steel W orks of I nternational H arvester C o. 
and U nited Order, of A merican B ricklayers & 

Stone M asons, Local 21,

Defendants-Appellees.



22a

Order of United States Court of Appeals 
For the Seventh Circuit

On consideration of the petition for rehearing and sug­
gestion that it be heard en banc filed in the above-entitled 
cause, a vote of the active members of the Court was 
requested, and a majority of the active members of the 
Court having voted to deny a rehearing en banc,

It Is Ordered that the petition for rehearing and the 
suggestion that it be heard en banc be, and the same are 
hereby, D estied.

Judge Fairchild voted to grant said petition for rehear­
ing en banc.

Judge Pell disqualified himself from consideration of 
this matter.



23a

Findings of Fact, Conclusions of Law and Order

In  the U nited S tates D istrict Court 

F or the N orthern D istrict of Illinois 

E astern D ivision 

No. 68-C-2483

W illiam A. W aters and D onald Samuels,

vs.
Plaintiffs,

W isconsin S teel W orks op I nternational H arvester Com­
pany , a Corporation and U nited Order of A merican 
B ricklayers and S tone M asons, L ocal 21, an Unin­
corporated Association,

Defendants.

Following the Court of Appeals remand of this cause 
to the district court, Waters vs. Wisconsin Steel Works, 
427 F.2d 476 (7th Cir. 1970), it was assigned to my calen­
dar for the purpose of conducting a trial on the issues. 
Sitting without a jury, I have heard the evidence presented 
by the parties, considered the exhibits submitted by them 
and have reviewed the stipulations and supplemental stipu­
lations of fact filed with the court by the parties. At the 
outset it should be observed that plaintiffs have abandoned 
the class aspect of their complaint and have limited their 
request for injtinctive relief to the hiring of the two indi­
vidual plaintiffs. Against this background, I hereby make 
the following Findings of Fact and Conclusions of Law.



24a

Findings of Fact, Conclusions of Law and Order 

F indings of F act

1. The stipulations and supplemental stipulations of 
fact are, to the extent not expressly referred to herein, 
specifically incorporated by reference and made a part 
hereof.

2. Plaintiffs William Waters and Donald Samuels are 
Negro bricklayers residing in Chicago, Illinois and are 
citizens of the United States.

3. Since the 1920’s, defendant Wisconsin Steel Works of 
International Harvester (hereafter “Wisconsin Steel” ) has 
maintained a permanent crew of bricklayers.

4. The number of bricklayers employed at Wisconsin 
Steel has varied since 1950 between 15 and 58.

5. Since 1944, collective bargaining agreements between 
Wisconsin Steel and United Order of American Brick­
layers and Stone Masons, Local 21 (hereafter “Local 21” ) 
have contained seniority provisions relating to layoff, re­
call and fringe benefits for bricklayers employed at W is­
consin Steel for ninety consecutive days.

6. On August 15, 1962, defendants Wisconsin Steel and 
Local 21 entered into a collective bargaining agreement.

7. The collective bargaining agreement provided, in 
pertinent part, that seniority was broken only when (1) 
“an employee voluntarily leaves the company’s service” 
and (2) “ due to layoff because of no work, a period of more 
than two years has elapsed since the employee last worked 
for the Company.”



25a

8. Under the collective bargaining agreement, employees 
on layoff for more than two years retained recall priority 
in the order of their former seniority.

9. It was the policy of Wisconsin Steel to recall laid off 
employees who had not yet acquired seniority or who had 
had their seniority broken by the length of the layoff prior 
to hiring new applicants.

10. Prior to April of 1964, Wisconsin Steel had hired 
no Negro bricklayers.

11. On at least three occasions between 1949 and 1957, 
Negro bricklayers sought employment at Wisconsin Steel.

12. Prior to October 9, 1967, Wisconsin Steel had hired 
no Negro apprentice bricklayers.

13. On at least three occasions prior to October, 1967, 
Negro laborers in the mason department at Wisconsin 
Steel had sought to transfer to Wisconsin Steel’s apprentice 
program.

14. The Negroes who had so applied were told that 
their applications were rejected on the ground that they 
were too old.

15. One of the rejected bricklayers was told that the 
age limit was 25 years of age.

16. One of the rejected Negro laborers was less than 25 
years of age when his application was denied.

17. A  29 year old white bricklayer was hired into the 
apprentice program shortly after a Negro laborer had been 
rejected.

Findings of Fact, Conclusions of Law and Order



26a

18. In April, 1964, Wisconsin Steel hired its first Negro 
bricklayer. In Jlne, 1964, four more Negro bricklayers 
were hired including the plaintiff William Waters.

19. In September, 1964, the latter four Negro brick­
layers were laid off pursuant to the seniority provisions of 
the collective bargaining agreement.

20. On March 2, 1965, defendants Local 21 and Wiscon­
sin Steel entered into a severance pay agreement.

21. The remaining Negro bricklayer was laid off on 
March 3, 1965 pursuant to the seniority provision of the 
collective bargaining agreement.

22. Approximately eight white bricklayers also laid off 
on March 3, 1965 were eligible to accept severance pay and 
chose to accept severance pay.

23. The election to accept severance pay constituted a 
severance of the employment relationship under the col­
lective bargaining agreement.

24. On approximately April 2, 1966, the plaintiffs W il­
liam Waters and Donald Samuels mailed applications for 
employment as bricklayers to Wisconsin Steel.

25. On June 15, 1966, defendants Wisconsin Steel and 
Local 21 entered into an agreement to amend the March 2, 
1965 severance pay agreement.

26. Three white bricklayers who had accepted severance 
pay in March of 1965, accepted recall by Wisconsin Steel 
during June and July, 1966 and January, 1967, respectively.

Findings of Fact, Conclusions of Law and Order



27a

27. In March, 1967, plaintiff Waters was recalled and 
returned to work and was thereafter laid off in May, 1967.

28. Plaintiff Waters was recalled in August of 1967 hut 
declined the offer of employment for the stated reasons 
that acceptance of such employment might prejudice his 
charge then pending before the E E O C .

29. I f defendants had not amended their March 2, 1965 
severance pay agreement, those white bricklayers who 
elected to accept severance pay would have had no recall 
priorities under the seniority provisions of the prior col­
lective bargaining agreement.

CoE'CLusioisrs of L aw

1. The court has jurisdiction of this action and the 
parties thereto pursuant to § 706 (f) of Title VII, 42 U S C 
§ 2000e-5 (f) and 28 U S C § 1341 and § 1343.

2. Defendant International Harvester Company is a 
foreign corporation, licensed to do business in Illinois and 
is an employer within the meaning of Title VII. Inter­
national Harvester operates a steel plant known as Wis­
consin Steel Works which is located in Cook County, 
Illinois.

3. Defendant Local 21 is a labor organization represent­
ing bricklayers employed in Cook County, Illinois and is 
engaged in an industry affecting commerce within the 
meaning of Title VII.

4. Prior to April, 1964, Wisconsin Steel discriminated 
in the hiring of bricklayers in violation of 42 U S C § 1981.

Findings of Fact, Conclusions of Law and Order



28a

5. The seniority system negotiated between defendants 
Wisconsin Steel and Local 21 had its genesis in a period of 
racial discrimination and is thns violative of 42 U S C 1981 
and is not a bona fide seniority system under Title VII.

6. By laying off plaintiff Waters in September, 1964, 
pursuant to the terms of the seniority system of the collec­
tive bargaining agreement, defendants also violated § 1981 
and Title VII. Defendants also violated § 1981 and Title 
V II when, in reliance on the seniority system, Wisconsin 
Steel failed to recall plaintiff Waters in March, 1965, and 
when it again laid off plaintiff Waters in May, 1967.

7. Defendants’ June 15, 1966 agreement to amend the 
earlier severance pay agreement and thereby restore recall 
rights to an all white group of bricklayers who otherwise 
possessed no recall rights under the prior severance pay 
agreement, thereby placing those white bricklayers ahead 
of black bricklayers, constitutes a violation of both § 1981 
and Title VII. This violation discriminated against the 
rights of both plaintiff Waters and plaintiff Samuels.

Order

1. By reason of the above described violations of § 1981 
and Title VII, the defendant Wisconsin Steel is hereby 
directed to offer the plaintiffs Waters and Samuels employ­
ment as bricklayers in its steel plant known as Wisconsin 
Steel Works and located in Cook County, Illinois.

2. Pursuant to 42 U S C § 2000e-5 (g), and in the exer­
cise of the court’s discretion thereunder, the plaintiffs 
Waters and Samuels are awarded as and for back pay 
from the Defendants Wisconsin Steel and Local 21, the

Findings of Fact, Conclusions of Law and Order



29a

sum of $5,000.00 for each plaintiff. In exercising this dis­
cretion, I have noted and considered the absence of a 
racially discriminatory motive on the part of the two de­
fendants. Although the absence of a specific intent to dis­
criminate does not act as a bar to a back pay award, 
Robinson v. Lorillard Corporation, 444 F.2d 791, 804 (4th 
Cir. 1971), it is a proper element of consideration in the 
exercise of the court’s discretion under 42 U S C § 2000e-5 
(g). Considering this and the other circumstances of this 
case, I have made what I consider to be a generous back 
pay award.

3. As and for reasonable attorneys’ fees, counsel for the 
plaintiffs are hereby awarded from the defendants the sum 
of $5,000.00. In making the award for reasonable attorneys’ 
fees, I have considered the efforts expended by plaintiffs’ 
counsel both in the Court of Appeals and in the district 
court.

Campbell 
District' Judge

Findings of Fact, Conclusions of Law and Order

Date: May 2, 1973



MEILEN PRESS INC.— N. Y. C. 219