Loeffler v. Tisch Brief Amicus Curiae in Support of Petitioner

    No. 86-1431

'<-/ L $72>A"'

I s r  t h e

Buptm? (Emtrt nf %  Inttpii Status
October Teem, 1987

T heodore J. L oeppler,

vs.
Petitioner,

P reston R. T isch, Postmaster General 
of tlie United States,

Respondent.

ON W R IT  OE CERTIORARI TO T H E  U N IT E D  STATES 

COURT OP A PPEALS POR T H E  E IG H T H  CIRCU IT

BRIEF OF THE NAACP LEGAL DEFENSE AND 
EDUCATIONAL FUND, INC., AS AMICUS CURIAE 

IN SUPPORT OF PETITIONER

J ulius L eV onne Chambers 
Gail J. W right*
Charles Stephen R alston 

16th Floor 
99 Hudson Street 
New York, New York 10013 
(212) 219-1900

Attorneys for Amicus Curiae 
NAACP Legal Defense and 
Educational Fund, Inc.

^Counsel of Record



QUESTION PRESENTED
Whether the United States Postal 

Service, created by an act of Congress in 
1970 and therein authorized "to sue and 
be sued," 39 U.S.C. 401(1), is immunized 
against an award of pre-judgment interest 
in a suit brought pursuant to the Equal 
Employment Opportunity Act of 1972, 42 
U.S.C. §§ 2000e, et seq.

l



Table of Contents
Page

Question Presented .................  i
Table of Authorities...............  ii
Interest of Amicus Curiae ........... 1
Summary of Argument .................  3
Argument ............................ 5

Introduction ...................  5
I. "Sue And Be Sued" Clauses

Raise A Strong Presumption 
Of Waiver of Sovereign 
Immunity .................  8

II. Congress Intended Postal
Service Employees To Be 
Treated Like Employees In 
Private Firms ............. 27

III. The Inclusion of The Postal
Service In Section 717 Did 
Not Diminish The Rights of 
Postal Employees ........... 31

Conclusion............................3 6

ii



Table of Authorities
Cases: Page
Airco Speer Carbon-Graphite v. Local 

502, Int'l Union of Elec., Radio 
and Machine Workers of America, 
AFL-CIO, 479 F. Supp. 246 
(W.D. Penn. 1979) . .............  25

Asheville Mica Co. v. CCC, 239 F.
Supp. 383 (S.D.N.Y. 1965) aff'd 
360 F.2d 931 (2d Cir. 1966) . . .  23

Brown V. GSA, 425 U.S. 820 (1976) . . 35
Citizens Savings Bank v. Bell, 605

F. Supp. 1033 (D.R.I. 1985) . . 24
Cross v. United States Postal Service,

733 F .2d 1327 (8th Cir. 1984) . 23
Davis v. Jobs for Progress, Inc.,

427 F. Supp. 479 (D. Ariz. 1976) 31
Dependahl v. Falstaff Brewing Corp.,

653 F .2d 1208 (8th Cir. 1981) 
cert, denied. 454 U.S. 968 (1981) 26

Eazor Exp. Inc. v. International Bro. 
of Teamsters, 520 F.2d 951 (3d 
Cir. 1975) cert, denied, 424 U.S.
935 (1976) rehearing denied. 425
U.S. 908 (1976).................  25

FCIC V .  DeCell, 76 So.2d 826 (S.Ct.
Miss. 1955)  ............... 23

Federal Housing Administration v.
Barr, 309 U.S. 242 (1940) . . 20, 21

iii



Ferguson v. Union National Bank of 
Clarksburg, W. Va., 126 F.2d 
753 (4th Cir. 1 9 4 2 ) .............. .24

Franchise Tax Board v. United States 
Postal Service, 467 U.S. 512 
(1984).......................... 21

Green v. United States Steel Corp.,
640 F. Supp. 1521 (E.D. Pa.
1 9 8 6 ) ............................ 31

In Re Townsend, 348 F. Supp. 1284
(W.D. Mo. 1 9 7 2 ) ..................  25

Industrial Indemnity Inc. v.
Landrieu, 615 F.2d 644 (5th
Cir. 1 9 8 0 ) .....................  24

Keifer & Keifer v. Reconstruction 
Finance Corp., 306 U.S. 381 
(1939)   8

Kennedy Elec. Co., Inc. v. United 
States Postal Service, 508 F.
2d 954 (10th Cir. 1974) . . . .  6

Loeffler v. Tisch, 806 F.2d 817
(8th Cir. 1 9 8 6 ) ................. 23

McCarty v. Gault, 24 F. Supp. 977
(D. Or. 1 9 3 8 ) .................  25

McCauley v. Thygerson, 732 F.2d 978
(D.C. Cir. 1984) .    15

Milner v. Bolger, 546 F. Supp. 375
(E.D. Cal. 1 9 8 2 ) ................  22

Muday v. Cleaver, 590 F. Supp. 1209
(W.D. Mich. 1 9 8 4 ) ............... 30

iv



Nagy v. United States Postal Service, 
773 F .2d 1190 (11th Cir. 1985) .

National Home for Disabled Volunteer 
Soldiers v. Parrish, 229 U.S.
494 (1913)...................  6 >

New York Guardian Mortgage Corp. v. 
Cleland, 473 F. Supp. 422 
(S.D.N.Y. 1979) ........  . . .

North N.Y. Savings Bank v. FSLIC, 515 
F .2d 1355 (D.C. Cir. 1975) . . .

Queen v. Tennessee Valley Authority,
689 F .2d 80 (6th Cir. 1982) . . •

R & R Farm Enterprises v. FCIC, 788
F .2d 1148 (5th Cir. 1986) . . . .

Short v. Central States, Southeast
& Southwest Areas Pension Fund, 
729 F .2d 567 (8th Cir. 1984) . .

Standard Oil Co. v. United States,
269 U.S. 76 (1925) .............

Stearns v. Veterans of Foreign Wars, 
394 F. Supp. 138 (D.D.C.
1975) . . . . .  ...............

Taylor v. Phillips Industries, Inc., 
593 F .2d 783 (7th Cir. 1979) . .

United States v. Parkside Court, Inc. 
257 F. Supp. 177 (D.N.J. 1966) 
aff'd 376 F .2d 853 (3d Cir.
1967) ..........................

Van Lusch v. Hoffmaster, 253 F. Supp. 
633 (D. Md. 1966) .............

22

25 

24 

23 

23

26 

15

12

31
r

. 24 

. 21

22

V



Statutes

7 U.S.C. § 942 ....................... 13
7 U.S.C. § 1506 ..................... 13
7 U.S.C. § 1507(a).................... 16
11 U.S.C. § 323 ( b ) .................... 13
12 U.S.C. § 2 4 ( 4 ) ..............   13
12 U.S.C. § 197(b)............... 12, 26
12 U.S.C. § 341(4).................... 12
12 U.S.C. § 341(5).................... 15
12 U.S.C. § 6 1 4 ....................... 13
12 U.S.C. § 635(a) ( 1 ) .................13
12 U.S.C. § 1432 ( a ) ................... 13
12 U.S.C. § 1439 ..................  15
12 U.S.C. § 1452 (b)(7)............  13
12 U.S.C. § 1702 ..................  13
12 U.S.C. § 1723a ( a ) ..............  13
12 U.S.C. § 1723a ( d ) ..............  16
12 U.S.C. § 1725(c) ( 4 ) ............  13
12 U.S.C. § 1725(C)(5)............  15
12 U.S.C. § 1757(2)..............  13

5 U.S.C. § 2 1 0 5 ( e ) ...................... 27

vi



12 U.S.C. § 1789(a)(2)............  13
12 U.S.C. § 1 7 9 5 f ..................... 13
12 U.S.C. § 1819(4)................... 13
12 U.S.C. § 1819(5)................... 15
12 U.S.C. § 2012(4)................... 13
12 U.S.C. § 2033 ( 4 ) ................  13
12 U.S.C. § 2072 ................... 13
12 U.S.C. § 2093 ( 4 ) ..............  13
12 U.S.C. § 2093 ( 1 7 ) ..............  15
12 U.S.C. § 2216f (a) ( 3 ) .......... 15
12 U.S.C. § 2216f (a) ( 7 ) .......... 13
12 U.S.C. § 2216f ( c ) ..............  15
12 U.S.C. § 2122(4)..............  13
12 U.S.C. § 2252 (a) ( 1 3 ) ...............13
12 U.S.C. § 2289(1)................  13
12 U.S.C. § 2289(8)................  15
12 U.S.C. § 3012(3)   16
12 U.S.C. § 3012(6)................... 13
15 U.S.C. § 77dd .. ................ 16
15 U.S.C. § 78ccc (b) ( 1 ) ...............14

12 U.S.C. § 1766(b) ( 3 ) ..............  13

vii



15 U.S.C. § 146(c)................  16
15 U.S.C. § 1 5 6 ....................... 17
15 U.S.C. § 504 ( b ) ................  17
15 U.S.C. § 634 ( a ) ................  16
15 U.S.C. § 634 (b) ( 1 ) ................. 14
15 U.S.C. § 714b ( c ) ................... 14
15 U.S.C. § 7 1 4 h ................... 16
16 U.S.C. § 19i ... ....................17
16 U.S.C. § 468 (c) ( b ) ................. 17
16 U.S.C. § 8 3 1 b ................... 19
16 U.S.C. § 1103(c)................... 17
16 U.S.C. § 831c ( b ) ................... 17
16 U.S.C. § 1103(d)................... 18
16 U.S.C. § 3702 (g)(2)(a).............18
16 U.S.C. § 3703 (c)(5)............  17
19 U.S.C. § 2350 ................... 14
20 U.S.C. § 1082 (a) ( 2 ) ............  14
20 U.S.C. § 1087-2 (i) ( 1 ) ..........  14
20 U.S.C. § 1132d-l(b) ( 2 ) ..............14
20 U.S.C. § 1132g-l(c) ( 2 ) ..............14

15 U.S.C. § 78ccc(b) ( 7 ) ................ 16

viii



20 U.S.C. § 4303 (b)(4)............  18
20 U.S.C. § 4414(3)................... 17
20 U.S.C. § 4416(a)................... 18
20 U.S.C. § 4465(d)(7)............  18
20 U.S.C. § 4665(d) ( 3 ) ............  17
22 U.S.C. § 290(f) (e)(5).......... 17
22 U.S.C. § 290f (e) ( 1 0 ) ...............17
22 U.S.C. § 290h-4 (a) ( 2 ) ..........  17
22 U.S.C. § 290h—4(a)(7)..........  19
22 U.S.C. § 2199(d)................... 14
22 U.S.C. § 3303 (b) ( 7 ) ............  17
22 U.S.C. § 4604 (j) ................... 17
22 U.S.C. § 4606(b)   19
25 U.S.C. § 505 ..................... 17
25 U.S.C. § 1496(a) .   14
25 U.S.C. § 1725(d)(1)............  18
26 U.S.C. § 501(c) ( 4 ) ................. 10
28 U.S.C. § 754 ..................... 14
28 U.S.C. § 2679 ................... 18
29 U.S.C. § 185(b)................. 26

20 U.S.C. § 4302 ( a ) .....................17

IX



29 U.S.C. § 205(a).................  y
29 U.S.C. § 402 ( e ) .................  29
29 U.S.C. § 1132(d)(1)...........14, 26
29 U.S.C. § 1302 (b)(1)................. 14
29 U.S.C. § 1302 (b) ( 6 ) ................. 14
33 U.S.C. § 984 (a) ( 3 ) .................. 17
33 U.S.C. § 984 (a) ( 7 ) .................. I9

33 U.S.C. § 1517(f) ( 1 ) .............  14
36 U.S.C. § 2 .......................  9
36 U.S.C. S 2 0 c .............   9
36 U.S.C. § 2 2 ........................... 9
36 U.S.C. § 3 2 ........................  9
36 U.S.C. § 4 6 ..........................11
36 U.S.C. § 5 7 b ......................  9
36 U.S.C. § 6 3 ...........................9
36 U.S.C. § 67j . . . .  .................. 11
36 U.S.C. § 78c(4)......................1°
36 U.S.C. § .......................... 11
36 U.S.C. § 78j ..................... 11
36 U.S.C. § 8 6 ..................... ' 11

36 U.S.C. § 90f ..................' • • X1

x



36
36
36
36
36
36
36
36
36
36
36
36
36
36
36
36
36
36
36
36
36

10
11
9
9

11
10
11
11
9

11
11
11
11
10
11
11
10
11
11
10
11

u.s.c. § 96 . .
u.s.c. § 98 . .
u.s.c. § 114 . .
u.s.c. § 140b(c)
u.s.c. §§t 230, 2
u.s.c. § 274 (3)
u.s.c. § 280 . .
u.s.c. § 281 . .
u.s.c. § 314 ( j  )

u.s.c. § 342 . .
u.s.c. § 346 . .
u.s.c. § 376 . .
u.s.c. § 411 . .
u.s.c. § 434 (3)
u.s.c. § 440 . .
u.s.c. § 441 . .
u.s.c. § 464 (3)
u.s.c. § 471 . .
u.s.c. § 472 . .
u.s.c. § 504(3)
u.s.c. § 510 . .

xi



36 U.S.C. § 5 4 1 ....................... 11
36 U.S.C. § 542 ....................  11
36 U.S.C. § 580 ....................  11
36 U.S.C. § 5 8 1 ....................... 11
36 U.S.C. § 604(4).................  10
36 U.S.C. § 640 ................   11
36 U.S.C. § 6 4 1 ....................... 11
36 U.S.C. § 664(3)................  10
36 U.S.C. § 670 ..................... 11
36 U.S.C. § 6 7 1 ....................... 11
36 U.S.C. § 694(4) .    10
36 U.S.C. § 700 ..................... 11
36 U.S.C. § 7 0 1 ....................... 11
36 U.S.C. § 764 ( 4 ) ..................  10
36 U.S.C. § 7 7 1 ....................... 11
36 U.S.C. § 772 ....................  11
36 U.S.C. § 800 ....................  11
36 U.S.C. § 8 0 1 ....................... 11
36 U.S.C. § 830 ..................... 11

xii

36 U.S.C. § 5 3 4 ( 4 ) .................. 10



36 U.S.C. § 860 ........................ 11
36 U.S.C. § 8 6 1 ........................ 11
36 U.S.C. § 884 ( 4 ) ....................  10
36 U.S.C. § 890 .......................  11
36 U.S.C. § 8 9 1 ....................  11
36 U.S.C. § 944(4)....................  11
36 U.S.C. § 950 .......................   li
36 U.S.C. § 9 5 1 .......................  ll
36 U.S.C. § 974(4)..................  H
36 U.S.C. § 980 ......................  11
36 U.S.C. § 9 8 1 ....................... 11
36 U.S.C. § 1 0 1 1 ....................  12
36 U.S.C. § 1 0 1 2 ....................  12
36 U.S.C. § 1044 ( 4 ) .................  10
36 U.S.C. § 1050 .................  12
36 U.S.C. § 1 0 5 1 ................... .12
36 U.S.C. § 1074 ( 3 ) .................  10
36 U.S.C. § 1080 ....................  12
36 U.S.C. § 1 0 8 1 ......................12
36 U.S.C. § 1101 ...................  10

36 U.S.C. § 8 3 1 ........................... 11

xiii



36 U.S.C. § 1 1 0 3 ..................  y
36 U.S.C. § 1 1 5 6 ..................  12
36 U.S.C. § 1 1 6 5 ..................  12
36 U.S.C. § 1210 ..................  11
36 U.S.C. § 1 2 1 9 ................... 10
36 U.S.C. § 1304 ................... 12
36 U.S.C. § 3304 ................... 12
36 U.S.C. § 3 4 1 0 ..................  12
36 U.S.C. § 3 4 1 1 ..................  12
36 U.S.C. § 3608(d)...............  12
36 U.S.C. § 3609 ..................  12
36 U.S.C. § 3 6 1 4 ................... 10
38 U.S.C. § 1820(a)(1)............ 14
39 U.S.C. § 1 0 1 ....................... 28
39 U.S.C. § 401(1)................  17
39 U.S.C. § 409(e)................  7
39 U.S.C. § 1 0 0 1 ..................  6
39 U.S.C. § 1002 ..................  6
39 U.S.C. § 1003 ..................  29
39 U.S.C. § 1004 ..................  6
39 U.S.C. § 1005 ..................  28

xiv



39 U.S.C. § 1208 ( e ) ..............  18
39 U.S.C. § 1209 ................... 29
39 U.S.C. § 2401(b) ( 1 ) ............  7
40 U.S.C. § 875(4)................  17
42 U.S.C. § 294h(a) ( 2 ) ............  14
42 U.S.C. § 1 4 0 4 a ................. 14
42 U.S.C. § 1456(c) ( 1 ) ............  14
42 U.S.C. § 2000e-2................... 30
42 U.S.C. § 2000e-16 ( a ) ...............30
42 U.S.C. § 3211(11) .    14
42 U.S.C. § 8104(a)   16
42 U.S.C. § 8105(b)(4) . . . . . . .  14
42 U.S.C. § 8771(a) ( 4 ) ............  14
43 U.S.C. § 1653 (c) ( 4 ) ............  14
43 U.S.C. § 1812(a)................... 14
43 U.S.C. § 1842 (a) ( 4 ) ............  15
45 U.S.C. § 822 (c) ( 5 ) .................14
48 U.S.C. § 733 ....................  17
Civil Rights Act of 1964, Title VII,

Section 7 0 1 ...................  32

39 U.S.C. § 1202 .....................  6

xv



Civil Rights Act of 1964, Title
VII, Section 7 1 7 ............ 31

Other Authorities:
H.R. Rep. No. 1104, 91st Cong.,

2d Sess. (1970)............. 5, 7
116 Cong. Rec. 22279 (1970) . . . .  33
116 Cong. Rec. 26956 (1970) . . . .  33
116 Cong. Rec. 26957 (1970).......... 35
116 Cong. Rec. 27597 (1970) . . . 34, 35

xv i



NO. 86-1431

IN THE
SUPREME COURT OF THE UNITED STATES 

OCTOBER TERM, 1987

THEODORE J. LOEFFLER, 
Petitioner, 
vs.

PRESTON R. TISCH, POSTMASTER 
GENERAL OF THE UNITED STATES,

Respondent.

ON WRIT OF CERTIORARI TO THE 
UNITED STATES COURT OF APPEALS 

FOR THE EIGHTH CIRCUIT

BRIEF OF THE NAACP LEGAL DEFENSE 
AND EDUCATIONAL FUND, INC. AS 
AMICUS CURIAE IN SUPPORT OF 

PETITIONER
Interest of Amicus Curiae1

The NAACP Legal Defense and

1Letters consenting to the filing of 
this Brief on behalf of the petitioner 
and the. respondent are on file with the 
Clerk of Court.



2
Educational Fund, Inc. is a non-profit 
corporation that was established for the 
purpose of assisting black citizens in 
securing their constitutional and civil 
rights. Its attorneys have represented 
parties and participated as amicus curiae 
in numerous cases before this Court 
involving various facets of the law.

The Legal Defense Fund has a 
particular interest in the question 
before the Court in the present case 
because of its representation of 
employees of the United States Postal 
Service in a number of actions brought 
under Title VII of the Civil Rights Act 
of 1964, as amended by the Equal 
Employment Opportunity Act of 1972.
United States Postal Service Board__of
Governors v. Aikens, 460 U.S. 711 (1983);
Chisholm v. United States Postal Service,



3
665 F . 2d 482 (4th Cir. 1981); Griffin v. 
Carlin. 755 F.2d 1516 (11th Cir. 1985).
The last of these cases is yet to be 
resolved, and the right of the members of 
the plaintiff class to be fully 
compensated for denials of promotions 
that allegedly violated Title VII will be 
resolved by the decision in the present 
case.

Summary of Argument
I.

For many years "sue and be sued" 
clauses have been broadly interpreted by 
this Court to effect general waivers of 
sovereign immunity. Thus, as long ago as 
1913 the Court held that pre-judgment 
interest could be awarded against a 
federally-chartered corporation closely 
analogous to the Postal Service. The 
lower courts have similarly permitted



4
such awards against a number of the many 
c o r p o r a t i o n s  and agencies whose 
authorizing statutes include a "sue and 
be sued" clause.

II.
When it passed the Postal Service 

Reorganization Act, Congress clearly 
intended Postal Service employees to be 
treated, with a few exceptions, like 
employees in private firms. Thus, they 
do not come within the civil service 
system under Title 5 of the United States 
Code and they come under the auspices of 
the National Labor Relations Board. 
Therefore, to disallow such employees 
pre-judgment interest on back pay awards 
would place them in a disfavored position 
vis-a-vis other employees.

III.
When Congress included the Postal



5
Service under Section 717 of the Equal 
Employment Opportunity Act of 1972 it did 
not intend to diminish the rights of 
Postal Service employees to be treated as 
employees in the private sector. In 
1970, Congress only intended that Postal 
Service employees have the benefit of 
what were then perceived to be the 
superior procedures for administrative 
resolution of EEO complaints afforded by 
the Civil Service Commission.

ARGUMENT
Introduction

The United States Postal Service was 
created out of the old Postal Department 
by the Postal Reorganization Act of 1970, 
with the intention of creating efficient 
and economical mail service.2 This was

2 H.R. Rep. No. 1104, 91st Cong., 2d 
Sess., (1970) reprinted in 1970 U.S. Code
Cong. & Admin. News 3649, 3650.
Hereinafter House Report.



6
accomplished in several ways, including 
making the Postal Service independent of 
politics3 and the restructuring of the 
organization in a more business-like 
manner.4 5 One important aspect of the new 
Postal Service is that it is to be 
financially independent of the federal 
government.̂  House Report, at 3659.

3 Id.; 39 U.S.C. § 1002 (1980).
4 For example, the management of the 

Post Office was reorganized to be more 
business-like. House Report, at 3660; 39 
U.S.C. §§ 1001(c), 1004. Executives, 
although not politically appointed, 
cannot be included in a collective 
bargaining unit. 39 U.S.C. § 1202(1).

5 If the funds from a suit would be 
taken from the United States Treasury, 
then sovereign immunity usually applies. 
But see National Home for Disabled 
Volunteer Soldiers v. Parrish, 229 U.S. 
494 (1913). But where an organization 
has been empowered to sue and be sued, 
and the judgment is paid out of the 
organization's own funds, then sovereign 
immunity may not be a bar. Kennedy Elec. 
Co.. Inc. v. United States Postal 
Service, 508 F.2d 954 (10th Cir. 1974).



7
This extends to any "judgment against the 
Government of the United States arising 
out of activities of the Postal Service" 
since it must be "paid by the Postal 
Service out of any funds available to the 
Postal Service." 39 U.S.C. 409(e).

As much as the Congress wished the 
Postal Service to be business-like and 
independent of the government, it could 
not be entirely freed from its previous 
role because of the importance of mail 
delivery in the United States. For this 
reason the prohibition against strikes 
was applied to Postal employees,6 and the 
federal government subsidizes the Postal 
Service to the extent that it is mandated 
to operate inefficient Post Offices. 39 
U.S.C. § 2401(b) (1) .

6 House Report, at 3662.



8

"SUE AND BE SUED" CLAUSES RAISE A STRONG 
PRESUMPTION OF WAIVER OF SOVEREIGN 
IMMUNITY

The words "sue and be sued" do not 
have a magical meaning since Congress can 
situate a federal entity into the private 
marketplace such that sovereign immunity 
is waived even though the organization 
lacks a "sue and be sued" clause. Keifer. 
& Keifer v. Reconstruction Finance Corp., 
306 U.S. 381 (1939). However, Congress's 
selective use of the clause has created a 
family of organizations which are 
primarily private in nature. When 
Congress placed the Postal Service within 
this family in 1970, it intended the 
Service to be treated like other private 
organizations.

The phrase "sue and be sued" is

I.



9
found 124 times in the U.S. Code 
Annotated, and a review of these statutes 
indicates that these organizations ŵ ere 
meant to be on the same footing as their 
private sector counterparts. The largest 
category of these statutes are those 
creating Patriotic Societies in Title 36 
of the U.S. Code.7 These societies are 
c o n s i d e r e d  private c o r p o r a t i o n s  
established under federal law. 36 U.S.C. 
§ 1101. Although these corporations must 
submit reports to Congress,8 and many are

7 In addition to the statutes listed
in footnotes 8-11, see 36 U.S.C. § 2
(American National Red Cross); 36 
U.S.C. § 20c (Sons of the American
Revolution); 36 U.S.C. § 22 (Boy Scouts
of America); 36 U.S.C. § 32 (Girl Scouts 
of America) ; 36 U.S.C. § 57b (Marine
Corps League); 36 U.S.C. § 63 (Belleau
Wood Memorial Association); 36 U.S.C. § 
114 (Veterans of Foreign Wars) ; 36
U.S.C. § 140b(c) (Service Clubs); 36
U.S.C. § 205(a) (Civil Air Patrol); 36
U.S.C. 314 (j) (Military Chaplains Association) .

8 36 U.S.C. § 1103 (1980).



10
tax-exempt,9 they are able to choose 
employees as they require,10 they are 
non-political, and they are liable for

9 36 U.S.C. § 96 (American War
Mothers); 36 U.S.C. § 1219 (United States 
Capitol Historical Society); 36 U.S.C. § 
3 6 1 4  ( P e a r l  H a r b o r  S u r v i v o r s  
Association) ; and see generally, 26 
U.S.C. § 501(c)(4).

10 36 U.S.C. § 78c (4) (Ladies of the
Grand Army of the Republic); 36 U.S.C. § 
274(3) (Future Farmers of America); 36 
U.S.C. § 434(3) (National Conference on
Citizenship); 36 U.S.C. § 464(3)
(National Safety Council); 36 U.S.C. §
504(3) (Board for Fundamental Education); 
36 U.S.C. § 534(4) (Sons of Union
Veterans); 36 U.S.C. § 604(4) (National
Fund for Medical Education); 36 U.S.C. § 
664(3) (National Music Council); 36 
U.S.C. § 694(4) (Boys' Clubs of America); 
36 U.S.C. § 764(4) (Veterans of World War 
I of the United States of America); 36
U.S.C. § 884(4) (Big Brothers— Big
Sisters of America); 36 U.S.C. § 944(4) 
(Blue Star Mothers); 36 U.S.C. § 974(4) 
(Agricultural Hall of Fame); 36 U.S.C. §
1044(4) (Naval Sea Cadets); 36 U.S.C. § 
1074(3) (Little League Baseball, Inc.); 
36 U.S.C. § 3404(4) (American Symphony
Orchestra League).



11
the actions of their officers.11 On the

11 36 U.S.C. § 46 (American Legion); 
36 U.S.C. § 67j (AMVETS) ; 36 U.S.C. §§
78 i, 78j (Ladies of the Grand Army of the 
Republic); 36 U.S.C. § 86 (United States 
Blind Veterans of World War I); 36 U.S.C. 
§ 90f (Disabled Army Veterans); 36 U.S.C. 
§ 98 (American War Mothers); 36 U.S.C. §§ 
230, 232 (Reserve Officers Association);
36 U.S.C. §§ 280, 281 (Future Farmers of 
America); 36 U.S.C. §§ 342, 346 (American 
Society of International Law); 36 U.S.C. 
§ 376 (United States Olympic Committee); 
36 U.S.C. § 411 (Conference of State
Societies, Washington, D.C.); 36 U.S.C.
§§ 440, 441 (National Conference on
Citizenship); 36 U.S.C. §§ 471, 472
(National Safety Council); 36 U.S.C. §§ 
510, 511 (Board for Fundamental
Education); 36 U.S.C. §§ 541, 542 (Sons
of Union Veterans); 36 U.S.C. §§ 580, 581 
(Foundation of the Federal Bar 
Association); 36 U.S.C. §§ 640, 641
(Legion of Valor); 36 U.S.C. §§ 670, 671 
(National Music Council); 36 U.S.C. §§ 
700, 701 (Boys' Clubs of America); 36
U.S.C. §§ 771, 772 (Veterans of World War 
I); 36 U.S.C. §§ 800, 801 (Congressional 
Medal of Honor Society); 36 U.S.C. §§ 
830, 831 (Military Order of the Purple
Heart); 36 U.S.C. §§ 860, 861 (Blinded
Veterans Association); 36 U.S.C. §§ 890, 
891 (Big Brothers--Big Sisters of 
America); 36 U.S.C. §§ 919, 920 (Jewish
War Veterans); 36 U.S.C. §§ 950, 951
(Blue Star Mothers); 36 U.S.C. §§ 980,
981 (Agricultural Hall of Fame); 36



12
whole, these patriotic societies are not 
considered a part of the government. In 
Stearns v. Veterans of Foreign Wars, 394 
F.Supp. 138 (D.D.C. 1975), for example,
the court held that a discriminatory 
membership policy does not implicate 
state action although Congress created 
the VFW and its membership requirements.

The next largest group of statutes 
concern banks, insurance, loans,

U.S.C. §§ 1011, 1012 (National Woman's
Relief Corps, Auxiliary to the Grand Army 
of the Republic); 36 U.S.C. §§ 1050, 1051 
(Naval Sea Cadets); 36 U.S.C. §§ 1080,
1081 (Little League Baseball, Inc.); 36 
U.S.C. §§ 1156, 1165 (Paralyzed Veterans
of America); 36 U.S.C. § 1210 (United
States Capitol Historical Society); 36
U . S . C .  § 1304 (United Service
Organizations); 36 U.S.C. § 3304
(American National Theater and Academy); 
36 U.S.C. §§ 3410, 3411 (American
Symphony Orchestra League); 36 U.S.C. §§ 
3608(d), 3609 (Pearl Harbor Survivors
Association).



13
investments, and receivers.12 In

12 Rural Telephone Bank, 7 U.S.C. § 
942; Federal Crop Insurance Corporation, 
7 U.S.C. § 1506; bankruptcy trustees, 11 
U.S.C. § 323(b); national banks, 12
U.S.C. § 24(4); receivers of national
banks, 12 U.S.C. § 197(b); Federal
Reserve Banks, 12 U.S.C. § 341(4);
corporations which do international or 
foreign banking, 12 U.S.C. § 614; Export- 
Import Bank of Washington, 12 U.S.C. § 
635(a)(1); Federal Home Loan Banks, 12 
U.S.C. § 1432(a); Federal Home Loan
Mortgage Corporation, 12 U.S.C. § 
1 4 5 2 (b) (7) ; H o u s i n g  and Urban 
Development, 12 U.S.C. § 1702; Government 
National Mortgage Association and Federal 
National Mortgage Association, 12 U.S.C. 
§ 1723a(a); Federal Savings and Loan
Insurance Corporation, 12 U.S.C. § 
1725(c)(4); federally chartered credit 
unions, 12 U.S.C. § 1757(2); National
Credit Union Administration Board, 12 
U.S.C. §§ 1766(b)(3), 1789(a)(2), 1795f;
Federal Deposit Insurance Corporation, 12 
U.S.C. § 1819(4); Federal Land Bank, 12
U.S.C. § 2012(4); federal land bank
associations, 12 U.S.C. § 2033(4);
Federal Intermediate Credit Banks, 12 
U.S.C. § 2072; Production Credit
Associations, 12 U.S.C. § 2093(4); banks 
for cooperatives, 12 U.S.C. § 2122(4);
Farm Credit System Capital Corporation, 
12 U.S.C. § 2216f(a)(7); Farm Credit
Administration, 12 U.S.C. § 2252 (a) (13);
Federal Financing Bank, 12 U.S.C. § 
2289(1); National Consumer Cooperative 
Bank, 12 U.S.C. § 3012(6); Securities



14

Investor Protection Corporation, 15 
U.S.C. § 78ccc(b)(1); Small Business 
Administration, 15 U.S.C. § 634(b)(1);
Commodity Credit Corporation, 15 U.S.C. § 
714b(c); Secretary of Commerce (loans to 
private firms), 19 U.S.C. § 2350;
Secretary of Education (student loans), 
20 U.S.C. § 1082(a)(2); Student Loan
Marketing Association, 20 U.S.C. § 1087- 
2(i)(l); Secretary of Education (loans 
for building educational facilities), §§
20 U.S.C. § 1132d-l(b) (2) , 1132g-
1(c)(2); Overseas Private Investment 
Corporation, 22 U.S.C. § 2199(d);
Secretary of the Interior (loans to 
Indian organizations), 25 U.S.C. § 
1496(a); property receivers in different 
district courts, 28 U.S.C. § 754; ERISA
benefit plans, 29 U.S.C. § 1132(d)(1);
Pension Benefit Guarantee Corporation, 29 
U.S.C. § 1302(b)(1); Deep Water Liability 
Fund, 33 U.S.C. § 1517(f)(1); VA
Administrator (home loans), 38 U.S.C. § 
1820(a)(1); Secretary of HHS (loans to 
graduate students in the health 
professions), 42 U.S.C. § 294h(a)(2);
United States Housing Authority, 42 
U.S.C. § 1404a; Secretary of HHS (urban
renewal loans), 42 U.S.C. § 1456(c)(1);
Secretary of HHS (public works loans), 42 
U.S.C. § 3211(11); Neighborhood
Reinvestment Corporation, 42 U.S.C. § 
8105(b)(4); United States Synthetic Fuels 
Corporation, 42 U.S.C. § 8771(a)(4);
Trans Alaska Pipeline Fund, 43 U.S.C. § 
1653(c)(4); Offshore Oil Pollution 
Compensation Fund, 43 U.S.C. § 1812(a);



15
general, these organizations are 
proprietary, and are meant to be as 
liable as their private counterparts. 
See e.g. Standard Oil Co. v. United 
States. 269 U.S. 76 (1925). In terms of
employment p olicy, most of these 
organizations fall outside of the Civil 
Service system,* 13 such that the employees

Fishermen's Contingency Fund, 43 U.S.C. § 
1842(a)(4); Railroad Rehabilitation and 
Improvement Fund, 45 U.S.C. § 822(c)(5).

13 Within the statutory framework of 
an organization, the Code does not always 
specify the status of its employees. The 
status has been specified in the 
following organizations.

Not in Civil Service; Federal 
Reserve Banks, 12 U.S.C. § 341(5);
Federal Home Loan Banks, 12 U.S.C. § 
1439; Federal Home Loan Mortgage 
Corporation, McCauley v. Thygerson. 732 
F.2d 978 (D.C. Cir. 1984); FSLIC, 12
U.S.C. § 1725(c)(5); FDIC, 12 U.S.C. §
1819(5); Federal Intermediate Credit 
Banks, 12 U.S.C. § 2072(15); Production
Credit Associations, 12 U.S.C. § 
2093(17); Farm Credit System Capital 
Corporation, 12 U.S.C. §§ 2216f(a)(3),
2216f(c); Federal Financing Bank, 12 
U.S.C. § 2289(8); National Consumer



16
are treated like employees in the private 
sector.

The remainder of the "sue and be 
sued" statutes contain a variety of 
organizations, some more private than 
others. Many of these are meant to 
encourage or organize a specific 
activity,14 some concern governments,15

Cooperative Bank, 12 U.S.C. § 3012(3);
S e c u r i t i e s  I n v e s t o r  Pro t e c t i o n  
Corporation, 15 U.S.C. § 78ccc(b)(7);
Neighborhood Reinvestment Corporation, 42 
U.S.C. § 8104(a).

Mixed Civil Service: Government
National Mortgage Association and Federal 
National Mortgage Association, 12 U.S.C. 
§§ 1723a(d)(1), (d)(2); Pension Benefit
Guarantee Corporation, 29 U.S.C. § 
1302(b)(6).

Within Civil Service: Federal Crop
Insurance Corporation, 7 U.S.C. § 
1 5 0 7 ( a ) ; National Credit Union 
A d m i n i s t r a t i o n  Central Liquidity 
Facility, 12 U.S.C. § 1795f(a)(2); Small 
Business Administration, 15 U.S.C. § 
634(a); Commodity Credit Corporation, 15 
U.S.C. § 714h.

14 Corporation of Foreign Security 
Holders, 15 U.S.C. § 77dd; China Trade
Act corporations, 15 U.S.C. §§ 146(c),



17
and others deal with services that could 
be provided by private companies*16

156; Textile Foundation, 15 U.S.C. § 
504(b); National Park Foundation, 16 
U.S.C. § 19i; National Trust for Historic 
Preservation in the United States, 16 
U.S.C. § 468(c)(b); Roosevelt Campobello 
International Park Commission, 16 U.S.C. 
§ 1103(c); National Fish and Wildlife
Foundation, 16 U.S.C. § 3703(c)(5);
Institute of American Indian and Alaska 
Native Culture and Arts Development, 20 
U.S.C. § 4414(3); National Trust for Drug 
Free Youth, 20 U.S.C. § 4665(d)(3);
Inter-American Foundation, 22 U.S.C. § 
2 9 0 f (e ) (10) ; African Development 
Foundation, 22 U.S.C. § 290h-4(a)(2);
United States Institute of Peace, 22 
U.S.C. § 4604 (j) ; Saint Lawrence Seaway
Development Corporation, 33 U.S.C. § 
9 8 4 ( a ) (3); P e n n s y l v a n i a  Avenue 
Development Corporation, 40 U.S.C. § 875(4).

15 Taiwan, 22 U.S.C. § 3303(b)(7);
Puerto Rico, 48 U.S.C. § 733.

16 Tennessee Valley Authority, 16
U.S.C. § 831c(b); United States Postal
Service, 39 U.S.C. § 401(1).

There is a final group of statutes 
that are not readily classifiable. 
Gallaudet University, 20 U.S.C. § 
4302(a); Indian cooperative associations 
in Oklahoma, 25 U.S.C. § 505; settlement 
agreement between Maine and Passamaguoddy 
Tribe, Penobscott Nation, and Houlton



18
Although each of these organizations 
pursue a governmental objective, none of 
them compare with other federal agencies. 
These organizations are not rule-making 
in nature, and where the organization has 
its own employees, they are most likely 
not within the Civil Service System.* 17

Band of Maliseet Indians, 25 U.S.C. § 
1725(d)(1); Federal Tort Claims Act, 28 
U.S.C. § 2679; labor unions, 29 U.S.C. § 
185(b); unions of the USPS, 39 U.S.C. § 
1208(e).

17 N o t  in C i v i l  S e r v i c e :  
Corporation of Foreign Security Holders, 
15 U.S.C. § 7 7 dd; Roosevelt Campobello
International Park Commission, 16 U.S.C. 
§ 1103(d); National Fish and Wildlife
Foundation, 16 U.S.C. § 3702(g)(2)(a);
Gallaudet University, 20 U.S.C. § 
4303(b)(4); Institute of American Indian 
and Alaska Native Culture and Arts 
Development, 20 U.S.C. § 4416(a);
National Trust for Drug Free Youth, 2 0 
U.S.C. § 4465(d)(7); Inter-American
Foundation, 22 U.S.C. § 290f(e)(5);
African Development Foundation, 22 U.S.C.



19
Congress has used the "sue and be 

sued" clause over many years, in 
circumstances where the organization has 
been meant to act and be treated like 
other private organizations. By charging 
the Postal Service with the power to "sue 
and be sued," Congress included the 
Postal Service in the family of private­
like organizations, and intended it to be 
subject to the same liability as private 
employers.

Recognizing this, the courts have 
construed "sue and be sued" waivers of

§ 290h-4(a)(7).
Mixed Civil Service: Tennessee

Valley Authority, 16 U.S.C. § 831b;
United States Postal Service (a full 
discussion follows in Part II) .

Within Civil Service: United States
Institute of Peace, 22 U.S.C. § 4606(b); 
Saint Lawrence Seaway Development 
Corporation, 33 U.S.C. § 984(a)(7).



20

sovereign immunity broadly. In Federal
Housing Administration v. Burr, 309 U.S.
242 (1940), the Supreme Court stated:

[W]e start from the premise that 
such waivers by Congress of 
governmental immunity in case of 
such federal instrumentalities 
should be liberally construed. This 
policy is in line with the current 
disfavor of the doctrine of 
governmental immunity from suit, as 
evidenced by the increasing tendency 
of Congress to waive the immunity 
w h e r e  f e d e r a l  g o v e r n m e n t a l  
corporations are concerned.... 
Hence, when Congress established 
such an agency, authorizes it to 
engage in commercial and business 
transactions with the public, and 
permits it to "sue and be sued," it 
cannot be lightly assumed that 
restrictions on that authority are 
to be implied. Rather if the 
general authority to "sue and be 
sued" is to be delimited by implied 
exceptions, it must be clearly shown 
that certain types of suits are not 
consistent with the statutory or 
constitutional scheme, that an 
implied restriction of the general 
authority is necessary to avoid 
grave interference with the 
performance of a governmental 
function, or that for other reasons 
it was plainly the purpose of 
Congress to use the "sue and be 
sued" clause in a narrow sense. In



21
the absence of such showing, it must 
be presumed that when Congress 
launched a governmental agency into 
the commercial world and endowed it 
with authority to "sue and be sued," 
that agency is not less amenable to 
judicial process than a private 
enterprise under like circumstances 
would be.

309 U.S. at 245. Moreover, the waiver of
Postal Service immunity is even broader
than that found in Burr.

In passing the Postal Reorganization 
Act of 1970, 84 Stat 719, Congress
not only indicated that the Postal 
Service could "sue and be sued," 39 
USC § 401(1), but also that it had
the power "to settle and compromise 
claims by or against it," § 401(8), 
and that " [t]he provisions of 
chapter 171 and all other provisions 
of title 28 relating to tort claims 
shall apply to tort claims arising 
out of activities of the Postal 
Service." § 409(c). Neither of
these provisions would have been 
necessary had Congress intended to 
preserve sovereign immunity with 
respect to the Postal Service.

Franchise Tax Board v. United States
Postal Service. 467 U.S. 512, 519 (1984).

The broad waiver effected by a "sue



22

and be sued" clause was held as long ago 
as 1913 to permit an award of pre­
judgment interest against a federally- 
chartered corporation carrying out 
government related functions. National
Home for Disabled Volunteer Soldiers_v^
Parrish, 229 U.S. 494 (1913). Thus, 
lower courts have upheld awards of pre­
judgment interest against a number of 
federally created organizations with the 
power to sue and be sued. The Postal 
Service and the Tennessee Valley 
Authority are the two agencies against 
whom Title VII plaintiffs have been 
awarded pre-judgment interest. See Nagy 
v. United States Postal Service, 773 F.2d 
1190 (11th Cir. 1985) and Milner v.
Bolder, 54 6 F.Supp 37 5 (E.D.Cal. 1982) 
Eastland v. Tennessee Valley Authority./
35 E.P.D. 11 34,713, and generally, Queen



23
v. Tennessee Valley Authority. 689 F. 2d
80 (6th Cir. 1982).18 In non-Title VII 
actions, pre-judgment interest has been 
awarded against the Federal Crop 
Insurance Corporation,19 the Commodity 
Credit Corporation,20 the Federal Savings

18 By a sharply divided court, the 
8th Circuit has reached the opposite 
conclusion. Cross v. United States 
Postal Service. 733 F.2d 1327 (8th Cir. 
1984) (aff'd en banc by an equally 
divided court); Loeffler v. Tisch. 806 
F . 2d 817 (8th Cir. 1986) (en banc, 
decided 6-5).

19 FCIC v. DeCell. 76 So.2d 826
(S.Ct. Miss. 1955) (pre-judgment interest 
allowed on insurance claim when the FCIC 
refused to cover 1947 crop damage); but. 
R & R Farm Enterprises v. FCIC. 788 F.2d 
1148 (5th Cir. 1986) (pre- and post­
judgment interest immunity not waived 
since FCIC is a non commercial venture 
where FCIC refused to pay entire claim 
for allegedly lost crops).

20 Asheville Mica Co. v. CCC. 239
F.Supp. 383 (S.D.N.Y. 1965) aff'd 360
F .2d 931 (2d Cir. 1966) (pre-judgment 
interest granted where CCC breached 
contract concerning imported mica and 
stockpiling).



24
and Loan Insurance Corporation,21 the 
Department of Housing and Urban 
D e v e l o p m e n t ,22 the Secretary of 
E d u c a t i o n ,23 and the Veter a n s

21 worth N-V. Savings Bank v_̂ _FSLIC, 
515 F2d 1355 (D.C. Cir. 1975) (pre­
judgment interest granted on bank 
reserved held by FSLIC).

22Ferguson v. Union National Bank of 
Clarksburg. W.Va.. 125 F.2d 753 (4th Cir. 
1942) (interest allowed where Federal 
Housing Administrator, now Secretary of 
HUD, guaranteed loan to an industrial 
corporation) ; Industrial Indemnity ,— IrtciiJL 
v. Landrieu, 615 F .2d 644 (5th Cir. 1980) 
("sue and be sued" is a waiver of 
sovereign immunity for purposes of a 
c o n t r a c t o r  seeking payment for 
construction work on housing project 
insured by the Secretary under a program 
authorized by the National Housing Act), 
United States v. Parkside Court,— Inc. , 
257 F.Supp. 177, 179 (D.N.J. 1966) afflA
376 F . 2d 853 (3d Cir. 1967) ("Congress,
having launched its agency into the world 
of commerce, endowed it with both the 
right to sue and be sued as any other 
private enterprise").

23Citizens Savings Bank v. Bell, 605 
F.Supp. 1033 (D.R.I. 1985) (lender is
owed pre-judgment interest on guaranteed 
student loan).



25
Administration administrator.24 25 The "sue 
and be sued" clause has also allowed 
interest against bank receivers,^ labor 
unions,26 and ERISA benefit plans,27 all

24 New York Guardian Mortgage Coro, 
v. Cleland, 473 F.Supp. 422 (S.D.N.Y.
1979) (sovereign immunity not a bar to 
pre-judgment interest in regards to home 
loan guarantees); see also In re 
Townsend. 348 F.Supp. 1284 (W.D.Mo. 1972) 
("sue and be sued" waives immunity so 
that a bankruptcy injunction prevents the 
VA from foreclosing on a lien.).

25McCartv v, Gault. 24 F.Supp. 977 
(D.Or. 1938) (stockholder awarded pre- 
and post-judgment interest on his 
assessment from bank receiver).

26Airco Speer Carbon-Graphite v. 
Local 502, Int'l Union of Elec., Radio 
and Machine Workers of America, AFL-CIO. 
479 F.Supp. 246 (W.D.Penn. 1979) (pre­
judgment interest allowed where union 
breached no-strike clause of collective 
bargaining agreement entitling employer 
to damages) ; Eazor Exp. Inc. v. 
International Bro. of Teamsters. 520 F.2d 
951 (3d Cir. 1975) cert, denied 424 U.S.
935 (1976) rehearing denied 425 U.S. 908
(1976) (in action for unauthorized 
strike, pre-judgment interest available 
when the damages are ascertainable with 
precision).



26
in cases where rights have been 
statutorily created.28

On the basis of Congress's inclusion 
of the Postal Service within the category 
of "sue and be sued" agencies, and the 
case law that developed both before and 
after the adoption of the Postal 
Reorganization Act, the Postal Service 
should be subject to pre-judgment 
interest. 27

27Short v. Central States. Southeast 
& Southwest Areas Pension Fund. 729 F.2d 
567 (8th Cir. 1984) (in order to make 
plaintiff whole, tractor owner-operator 
is entitled to pre-judgment interest from 
the time of the denial of his 
application); Dependahl v. Falstaff 
Brewing Corp. , 653 F.2d 1208 (8th Cir.
1981) cert, denied 454 U.S. 968 (1981)
(pre-judgment interest is appropriate 
equitable relief to executives dismissed 
without cause).

2 8 See 12 U.S.C.A. 197(b), 29
U.S.C.A. 185(b), 29 U.S.C.A. 1132(d)(1).



27

CONGRESS INTENDED POSTAL SERVICE 
EMPLOYEES TO BE TREATED LIKE EMPLOYEES IN 
PRIVATE FIRMS

Unlike most other federal employees, 
the workers at the Postal Service are not 
within the usual civil service 
program; 29 rather, they are within the 
postal career service created by chapters 
10 and 12 of Title 39 of the U.S. Code. 
These chapters place the postal employees 
within only a few procedures of the Civil 
Service, viz., adverse actions, 
preference eligibility, pay allowances 
based on living costs, compensation for 
w o r k  injuries, and retirement.

II.

29 "Except as otherwise provided by 
law, an employee of the United States 
Postal Service or of the Postal Rate 
Commission is deemed not an employee for 
purposes of this title." 5 U.S.C.A. § 
2105(e).



28
Everything else is subject to collective 
bargaining.30

In terms of compensation, Congress 
clearly intended that Postal Service 
employees have salaries competitive with 
the private sector. Among the policies 
of the reorganized postal system is that 
"As an employer, the Postal Service shall 
achieve and maintain compensation for its 
officers and employees comparable to the 
rates and types of compensation paid in 
the private sector of the economy of the 
United States." 39 U.S.C. § 101 (1980).
Pay encompasses more than an employee's 
salary; it also includes intangible 
benefits. This was recognized by
Congress explicitly when it stated that 
"It shall be the policy of the Postal 
Service to maintain compensation and

30 See 39 U.S.C.A. § 1005 (1980).



29
benefits for all officers and employees 
on a standard of comparability to the 
compensation and benefits paid for 
comparable levels of work in the private 
sector of the economy." 39 U.S.C. § 1003 
(1980) (emphasis added).

In addition to the benefits provided 
Postal employees, labor-management 
relations are also patterned on the 
private sector. The Postal Service is 
the only federal organization which falls 
under the auspices of the National Labor 
Relations Board, 39 U.S.C. § 1209(a), and 
for the purposes of labor-management 
reporting and disclosure procedures the 
Postal Service is specifically considered 
a private employer. 39 U.S.C. § 1209(b), 
29 U.S.C. 402(e). Congress intended to 
"bring postal labor relations within the 
same structure that exists for nationwide



30
enterprises in the private sector." 
House Report, at 3662, quoted in Mudav v. 
C l e a v e r . 590 F.Supp. 1209, 1210
(W.D.Mich. 1984).

One important component of an 
employee's working conditions is 
protection from discrimination. For 
individuals who feel that they may be 
subject to discrimination on account of 
race, sex, religion, or national origin, 
it would be natural for them to prefer 
companies with non-discriminatory 
policies and grievance procedures over 
other companies. While both private 
employers and the Postal Service are 
subject to Title VII,31 the remedies 
available to aggrieved employees differ 
if Postal workers cannot obtain pre­

31 42 U.S.C.A. §§ 2000e-2, 2000e-
16(a).



31
judgment interest on back pay awards.32 
Thus disallowing pre-judgment interest to 
postal Service employees would result in 
a lower compensation package than is 
provided by the private sector of the 
economy.

III.
THE INCLUSION OF THE POSTAL SERVICE IN 
SECTION 717 DID NOT DIMINISH THE RIGHTS 
OF POSTAL EMPLOYEES

The main basis for the government's 
argument that Postal Service employees 
should be treated like other federal 
employees is that the Postal Service is 
included in Section 717 of Title VII 
along with other federal employees,

32 pre-judgment interest awards are 
available against private employers. 
Taylor v. Phillips Industries. Inc,. 593 
F.2d 783 (7th Cir. 1979); Davis v. Jobs 
For Progress. Inc.. 427 F.Supp. 479 
(D.Ariz. 1976); Green v. United States 
Steel Corp., 640 F.Supp. 1521 (E.D.Pa.
1986) .



32
rather than Section 701, which includes 
private employees. Contrary to the 
government's suggestion, this was not 
done to indicate that Postal Service 
employees are like other federal 
employees, rather, it simply reflects 
that the Postal Service was not 
previously under Title VII, and that the 
Title VII provisions were simultaneously 
made available to Postal employees and 
other federal employees.

A review of the legislative history 
of the Postal Reorganization Act 
clarifies that Postal workers are to have 
anti-discriminatory procedures at least 
as good as those provided the public 
sector. On June 30, 1970, Senator Cook
introduced an amendment to the Postal 
Reorganization Act which would subject 
the Postal Service to the provisions of



33
Title VII. The amendment was quickly
adopted by a 93-0 vote, 116 Cong. Rec.
22279-80 (1970), but the conference
committee deleted the amendment. The
floor manager, Senator McGee, explained
to the Senate that the deletion

was less a concession to the House 
and its insistence than it was to 
the persuasion of the conferees in 
consultation with the legal minds 
involved in the interpretation of 
the law and in consultation with the 
Chairman of the Civil Service 
Commission that, indeed, in this 
instance a very strong case was made 
that the equal rights provision 
would redound in more equal terms 
and more forceful terms under the 
Executive order that is now on the 
books than going through the EEOC.

It was on that ground that the 
Senate conferees decided that 
because of the absence of similar 
language on the House side, we were 
really making a stronger case 
procedurally, because we were 
achieving the goals that the 93-to-0 
vote spelled out on the Senate side.

116 Cong. Rec. 26956 (1970) . In other
words, the conferees adopted the Civil



34
Service Commission procedures since they 
believed those procedures were superior 
to those of the EEOC.33 Indeed, Senator 
McGee stated that if this proves not to 
be the case, the Senate would take 
appropriate action.34

33 Representative Daniels explained: 
"Mr. Speaker, I would like to say to the 
distinguished chairman of our committee 
and to the gentleman from California that 
as a conferee I requested the Senate to 
reconsider its position [°n Title VII]. 
The Senate reconsidered and receded and 
agreed to accept the House version which 
permits any charge or complaint of 
discrimination by virtue of age, sex, 
national origin and so forth to still be 
heard by the Civil Service Commission 
where as I pointed out the procedures 
with reference to the hearing of such 
complaints is much more adequate and 
affords much more protection to the 
person who is complaining." 116 Cong. 
Rec. 27597 (1970).

34"Mr. McGEE.... The conferees 
believe we will, indeed, achieve the 
laudable purpose that the Cook amendment 
intended. If it does not, if we discover 
that the conferees were proven to be 
wrong in their expectation and that the 
fears of the Senator from Kentucky [Cook] 
are warranted by subsequent decision or



35
Since the intent was to give Postal 

Service employees procedural protections 
as great or greater than those enjoyed by 
private employees, no intent to afford 
them inferior relief can be inferred from 
Congress' decisions in 1970 and 1972 to 
leave administrative enforcement in the 
hands of the Civil Service Commission.35 
it follows that sovereign immunity was 
waived as to pre-judgment interest.

action, then I can guarantee to him that 
this body would proceed at once with the 
urging of members of the Committee on 
Post Office and Civil Service to 
legislate appropriately without delay. 
We believe it is not necessary. That is 
our judgment." 116 Cong. Rec. 26957 
(1970).

35 The fact that Congress later, in 
1978, concluded that its confidence in 
the Civil Service Commission was 
misplaced and it acquiesced in the 
transfer of federal EEO authority to the 
Egual Employment Opportunity Commission 
can not be retroactively used to re­
interpret its intent when it passed the 
Postal Reorganization Act in 1970. Cf. 
Brown V .  GSA. 425 U.S. 820 (1976).



3 6

CONCLUSION
For the foregoing reasons, the 

decision of the court below should be 
reversed.

Respectfully submitted,

JULIUS LeVONNE CHAMBERS 
GAIL J. WRIGHT*
CHARLES STEPHEN RALSTON 
16th Floor 
99 Hudson Street 
New York, N.Y. 10013 
(212) 219-1900

Attorneys for Amicus Curiae 
NAACP Legal Defense and 
Educational Fund, Inc.
* Counsel of Record



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