Rodgers v US Steel Corp. Appellants Brief

    IN THE
UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 
NO. 76-1297

JIMMIE L. RODGERS and JOHN A. TURNER, 
et al.,

Appellants,

vs.

UNITED STATES STEEL CORPORATION; LOCAL 1397 
AFL-CIO, UNITED STEELWORKERS OF AMERICA; and 
THE UNITED STEELWORKERS OF AMERICA, AFL-CIO,

Appellees.

On Appeal From The United States District Court 
For The Western District Of Pennsylvania

APPELLANTS' BRIEF

Of Counsel:
BRUCE W. KAUFFMAN 
Dilworth, Paxson, Kalish 

& Levy
' 2600 The Fidelity Bldg.
123 South Broad Street 
Philadelphia, Pennsylvania
Thomas M. Kerr
415 Oliver Building
Pittsburgh, Pennsylvania 15222

BERNARD D. MARCUS 
PAUL H. TITUS 
JOHN HOGUE 
KAUFMAN & HARRIS

415 Oliver Building 
Pittsburgh, Pa. 15222

JACK GREENBERG 
JAMES M. NABRIT, III 
BARRY L. GOLDSTEIN 
DEBORAH M. GREENBERG 
ERIC SCHNAPPER

10 Columbus Circle 
New York, New York 10019

Attorneys for Appellants



<* \s

INDEX

Page

Issues Presented For Review ......................  2
Statement of the Case ............................  3
Jurisdiction .....................................  12
Argument .........................................  17

I. The District Court Erred As a Matter 
Of Law And Abused Its Discretion In
Approving the Back Pay Tender Offers .... 17
A. The Requirement of a Hearing

on Fairness and Adequacy ..........  19
B. The Standards For a Determination

of Fairness and Adequacy ..........  27
C. The Unlawful Practices of the Company and the Union, Resulting 

Economic Harm and the Insuf­
ficiency of the Consent Decree
Remedy ............................  29
1. Liability ....................  30
2. Inadequacy of Injunctive 

Relief Under the Consent
Decree .......................  34
a. Seniority Relief ........  34
b. Affirmative Action for 

Trade and Craft Jobs
and Testing .............  38

3. Inadequacy of Monetary Relief
Under Consent Decrees ........  40

II. Certain Aspects of the Proposed 
Waivers Are Invalid As A Matter
of Law .................................  44

■III. The District Court Erred In Approving 
The Notice of Rights, etc., E.E.O.C.
Letters, and Back Pay Tender
Procedures .............................  54



Page

A. The Notice of Rights and Related
Documents .........................  54
1. Intelligibility of the

Notices, etc..................  54
2. Bias in the Notices, etc......  56
3. Substantive Content ..........  57

B. The E.E.O.C. Letters ..............  59
C. Procedure and Opportunity for

Consultation With Counsel ..........  61
1. 45-Day Limit .................  62
2. Availability of Free Counsel .. 65
3. One-Step Procedure ...........  67

CONCLUSION .......................................  70



•>

TABLE OF AUTHORITIES

CASES
Ace Heating & Plumbing Co. v. Crane Co.,

453 F.2d 30 (3rd Cir. 1971).......................... 18
Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975)....18, 24 
Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974)..... 17
Balias v. Symm, 494 F.2d 1167 (5th Cir. 1974)...........
Barnett v. W.T. Grant Co., 518 F.2d 543 549 (5th Cir.

1975)................................................
Brunson v. Board of Trustees, 311 F.2d 107 (4th Cir.

1962)................................................
Bryan v. Pittsburgh Plate Glass Co., 494 F. 2d 799, 803

(3rd Cir. 1974)......................................
Buckner v. Goodyear Tire & Rubber Company, 339 F. Supp. 

1108, 1125 (N.D. Ala. 1972) aff'd per curiam 476 F.2d
1287 (1973)..........................................

Bush v. Lone Star Steel Corp., 373 F. Supp. 526 530-35
(E.D.Tex. 1971)......................................

Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541
(1949) .......... ...............................12, 13,

Cox Broadcasting Corp. v. Cohn, 420 U.S. 469 (1975).....
Culpepper v. Reynolds Metal Co., 421 F.2d 880

(5th Cir. 1970)
Dickinson v. Petroleum Conversion Corp., 338 U.S. 507

(1950) ...............................................
Duhon v. Goodyear Tire & Rubber Co., 494 F.2d 817

(5th Cir. 1974)......................................
Eisen v. Carlisle & Jacquelin, 417 U.S. 156, (1974).....
Ford v. United States Steel Corporation 520 F.2d 1043, 

1056-57, as clarified 525 F.2d 1214(5th Cir. 1975)... 
Franks v. Bowman Transportation Co., 495 F.2d 398

(5th Cir. 1974)......................................
Franks v. Bowman Transportation Co. 44 U.S.L.W. 4356 ■

(March 24, 1976)................................ 18, 33,
Gillespie v. U.S. Steel Corp., 379 U.S. 148 (1964)......

PAGE

20, 25 
33, 50 
48, 49

16
30
16
22

33
30

14, 15 
12

14
32

12, 14

23, 24 
32, 37 
41, 51 
12, 15

i



PAGE
Girsh v. Jepson, 521 F.2d 153 (3rd Cir. 1975)...........  18, 27
Greenfield v. Villager Industries, Inc. 483 F.2d 824

(3rd Cir. 1973)......................................  18
Gulf & Western Indus., Inc. v. Great A.&P. Tea Co., 476

F.2d 687 (1973)......................................  16
Hackett v. General Host Corp., 455 F.2d 618 (3rd Cir.

1972) ................................................ 16
Hansberry v. Lee, 311 U.S. 32 (1940)....................  20
Head v. Timken Roller Bearing Co., 486 F.2d 870, 879

(6th Cir. 1973)......................................  33
Johnson v. Railway Express Agency, Inc., 421 U.S. 454

(1975)...............................................  33
Jones v. Diamond, 519 F.2d 1090 (5th Cir. 1975).........  16
Jurinko v. Wiegand Co., 477 F.2d 1036, 1046 (3rd Cir.

1973) , vac. on other grounds 414 U.S. 970 (1973)
reinstated 497 F.2d 403 (3rd Cir. 1974)..............  24

Kahan v. Rosenstiel, 424 F.2d 161 (3rd Cir. 1970) cert.
denied, 398 U.S. 950 (1970).......................... 18, 19, 22

LaChapelle v. Owens-Illinois, 513 F.2d 286, 288 n.7 (5th
Cir. 1975) . . ..........................................  23

Local 189 United Papermakers & Paperworkers v. United 
States, 416 F.2d 980 (5th Cir. 1969) cert, denied 397 
U.S. 919 (1970)......................................  33

Moody v. Albemarle Paper Company, 474 F.2d 134, 138 n.l
(4th Cir. 1974)......................................  32

Mullane v. Central Hanover Bank & Trust Co. 339 U.S.
306 (1950)...........................................  20

Omega Importing Corp. v. Petri-Kine Camera Corp., 451
F.2d 1190 (2d Cir. 1971).............................  16

Patterson v. American Tobacco Co. F.2d (Nos. 75-1259-63,
Feb. 23, 1976, 4th Cir.).............................  41

Pettway v. American Cast Iron Pipe Company, 494 F.2d 211,
260-63 (5th Cir. 1974)....................... 24, 30, 33, 35, 41

Phelan v. Middle States Oil Corp., 210 F.2d 360, 364
(2nd Cir. 1954)......................................  18

Philadelphia Elec. Co. v. Anaconda American Brass Co.,
42 FRD 324, 327-28 (E.D.Pa. 1967);...................  19

ii



PAGE
Price v. Lucky Stores, Inc., 501 F.2d 1177 (9th Cir.,

1974) ................................................. 16
Robinson v. Lorillard Corp., 444 F.2d 791, 798-800

(4th Cir. 1971).......................................
Rodgers v. U.S. Steel Corp., 508 F.2d 152, cert, denied,

46 L.Ed. 50 (1975)................................ 5, 12,
Rogers.v. International Paper Co. 510 F.2d 1340, 1335

(8th Cir. 1975)...................................... 32,
Rosen v. Public Services Gas & Electric Co. 477 F.2d 90,

95-6 (3rd Cir. 1973)..................................
Sagers v. Yellow Freight System, Inc., No. 74-3617

(5th Cir. April 2, 1976) slip op. at 2715.............  23
Stevenson v. International Paper Co., 516 F.2d 103, 114

(5th Cir. 1975).......................................  35
Swann v. Charlotte-Mecklenburg Board of Education, 402 U.S.

1, 15 (1971)..........................................  52
United States v. Allegheny-Ludlum Industries, Inc., C.A.

No. 74-P-339, N.D. Ala................................  4, 28
United States v. Allegheny-Ludlum Industries, Inc., 63

F.R.D. 1 (N.D.Ala. 1974), aff'd 517 F.2d 826 (5th Cir.
1975) ; cert pending, U.S. Supreme Court
No. 75-1008....................................... 5, 28, 33, 36

United States v. Bethlehem Steel Corp., 446 F.2d 652,
658-9 (2nd Cir. 1971).................................  30, 33

33
16, 67 
33, 35 
24, 41

iii



PAGE

United States v. Hayes, 95 F.2d 1938
(5th Cir. 1969) .........................  15

United States v. N.L. Industries, Inc.,
479 F. 2d 354 (8th Cir. 1973) ............  33

United States v. Schiavo, 504 F.2d
(3rd Cir. 1974) .........................  13 , 14

United States v. United States Steel Corp.,
371 F.Supp. 1045, 1055-56 (N.D. Ala.
1973), vac. and rem. on other grounds,
520 F. 2d 1043 (5th Cir. 1975) ..........  30 , 38 , 41

United States, et al., v. United States 
Steel Corp. et al., 5EPD 1(8619 (N.D.
Ala. 1973) (Decree) .....................  35

Webster Eisenlohr v. Kalodner, 145 F.2d 
316 (3rd Cir. 1944), cert, denied 325 
U.S. 867 (1945) ........................  26

Weight Watchers of Philadelphia, Inc. v.
Weight Watchers Int11, 455 F.2d
770 (2nd Cir. 1972)   26

Wetzel v. Liberty Mutual Ins. Co., 508
F.2d 239 (3rd Cir. 1975), cert, denied,
44 L. Ed. 2d 679 (1975) .................  17, 23 , 32

Williams v. Mumford, 511 F.2d 363
(D.C. Cir. 1975) , rehearing en banc
denied, 511 F.2d at 371 ................  16

Williamson v. Bethlehem Steel Corp.,
468 F.2d 1201 (2nd Cir. 1972), cert.
denied, 411 U.S. (1973) ...............  22 , 36

Yaffe v. Powers, 454 F.2d, 362
(1st Cir. 1972) .........................  16

iv



Statutes

28 U.S.C. § 1291 ---  2' 12
28 U.S.C. § 1292(a)(1) ---  2' 16
Labor Management Relations Act of 1947

as amended, 29 U.S.C. §§ 151 et_ seq. .... 3
Civil Rights Act of 1866, 42 U.S.C. § 1981 .... 3
Title VII Civil Rights Act of 1964, 42 U.S.C......  3, 41

Regulations

29 C.F.R. § 1601.196 .............................  60
29 C.F.R. § 1607 .............................  39

Other Authorities
F.R. Civ. P. 23 (b) (2) ...........................  2

F.R.Civ.P. 23(e) ................................  6, 52
3B Moore's Federal Practice, 1(23.02-1, p. 124 .... 26
Wright & Miller - 7A Federal Practice

& Procedure, § 1797, pp.229-230 ..............  19

PAGE

v.



IN THE
UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 
NO. 76-1297

JIMMIE L. RODGERS and JOHN A. TURNER, 
et al.,

Appellants,

v s .

UNITED STATES STEEL CORPORATION; LOCAL 1397 
AFL-CIO, UNITED STEELWORKERS OF AMERICA; and 
THE UNITED STEELWORKERS OF AMERICA, AFL-CIO,

Appellees.

On Appeal From The United States District Court 
For The Western District Of Pennsylvania

APPELLANTS1 BRIEF

This appeal is from an order of the United States District 
Court for the Western District of Pennsylvania, Teitelbaum, j., 
entered March 8, 1976, denying plaintiffs-appellants1 (hereinafter, 
"plaintiff") motion for a preliminary injunction and approving a 
tender of back pay to certain members of the class represented 
by plaintiffs in settlement of their claims in this action for 
injunctive and monetary relief from racial discrimination in 
employment. This case raises important issues concerning a) judicial



oversight of attempted settlements of F.R. Civ. P. 23(b) (2) 
class actions, when those settlements are opposed by the class 
representatives; b) the legality of waivers of prospective 
relief; and c) the standards of fairness and comprehensibility 
of notices and procedures used by defendants in employment 
discrimination suits to solicit releases from employees who are 
members of the plaintiff class.

Jurisdiction on this appeal is predicated on 28 U.S.C. 
§1291 and §1292 (a) (1). Because of the complex and unusual 
posture of this case, a more detailed statement of jurisdiction 
follows the statement of the case.

Issues Presented for Review
1. Whether the district court erred as a matter of 

law and abused its discretion in approving the making of back 
pay tenders to members of plaintiffs 1 class?

2. Whether the Court below erred as a matter of law
in approving the submission to plaintiffs' class of the waivers 
which they must sign in return for the tendered backpay.

3. Whether the court below applied the wrong legal 
standard and abused its discretion in approving the notice of 
rights forms, the EEOC letters and the procedures relating
to the backpay tenders?

-2-



Statement of the Case
Plaintiffs are black employees of defendant United 

States Steel Corporation ("hereinafter, "USS" or "the company") 
and members of the defendant Local 1397, affiliated with 
defendant United Steelworkers of America, AFL-CIO. This action 
was commenced by the filing of a complaint on August 21, 1971 
seeking injunctive relief and back pay to remedy racial dis­
crimination at the Homestead Works of USS. An amended com­
plaint was filed on November 22, 1971. The complaint as 
amended alleges violations of Title VII of the Civil Rights 
Act of 1964, 42 U.S.C. §§2000e et seq., the Civil Rights Act 
of 1866, 42 U.S.C. §1981, and the Labor Management Relations 
Act of 1947, as amended, 29 U.S.C. §§151 et_ sea. (927a) .

Prior to filing suit, plaintiffs Rodgers and Turner had, 
on July 7, 1970, filed charges of discrimination with the Equal 
Employment Opportunity Commission alleging that defendants had 
discriminated against them and other black employees. By decision 
dated February 1, 1972, the EEOC found that there was reasonable 
cause to believe that defendants had violated Title VII.

On April 12, 1974, Honorable Sam C. Pointer, Jr., United
States District Judge for the Northern District of Alabama,

1/signed two consent decrees (30a-63a; 979a-995a)

~L/ This form of citation is to pages of the Joint Appendix.

-3-



tendered in an employment discrimination suit filed that day 
by the United States and the Equal Employment Opportunity 
Commission against nine major steel companies (including USS) 
and the United Steelworkers of America, AFL-CIO. The Alabama 
case is styled United States v. Allegheny-Ludlum Industries, 
Inc., C.A. No. 74-P-339, N.D. Ala. The decree includes an 
injunction which purports to remedy systemic racial dis­
crimination and sex discrimination in over 200 plants employ­
ing more than 65,000 minority and female workers operated by 
the nine steel companies, including the Homestead Works of USS. 
The consent decrees also provide that the defendant companies 
will tender back pay to certain minority steelworkers in return 
for the workers' signing waivers of their rights to further 
injunctive relief or monetary relief from discrimination which 
occurred prior to April 12, 1974, and monetary relief from the
continuing effects of practices which took place prior to

2/April 12, 1974.

2/ By order entered January 1, 1976, the consent decrees
were amended to provide that persons accepting the tender 
offers would also waive their claims to injunctive relief from 
the post-decree continuing effects of discrimination which 
occurred prior to April 12, 1974 (64a-65a)- The district court 
denied plaintiffs1 motion to intervene to oppose the amendment, 
but permitted them to intervene for the purpose of filing a 
Motion to Reconsider (Id..). Plaintiffs' appeal from the denial 
of intervention and the amendment of the consent decrees is 
pending (5th Cir. No. 76-1067).

-4-



Plaintiffs moved to intervene in the Alabama action for 
the purpose of setting aside the decrees on the ground, inter
alia, that the scope of the waivers was unlawful. The Alabama 
district court granted intervention but rejected their objections 
to the terms of the decree. U.S. v. Allegheny-Ludlum Industries. 
Inc.• 63 F.R.D. 1 (N.D. Ala. 1974). The Court of Appeals affirmed, 
517 F.2d 826 (1975), and plaintiffs have petitioned for certiorari 
(United States Supreme Court No. 75-1008).

Subsequent to the entry of the consent decrees, Judge 
Teitelbaum issued a series of oral and written orders restricting 
communications with potential members of the Rodgers class bv 
plaintiffs or their attorneys for the purpose of preventing 
discussion of the consent decrees. On January 24, 1975, this 
Court granted plaintiffs' petition for a writ of mandamus with 
respect to said orders. Rodgers v. U.S. Steel Coro., 508 F.2d 
152, cert, denied, 46 L.Ed.2d 50 (1975).

On December 9, 1975, the district court entered an order 
granting plaintiffs' motion for class certification and defining 
the class as follows:

[F]or purposes of monetary liability or com­
pensation of any sort, to include and be limited 
to those blacks who have actually worked in United 
States Steel's Homestead Works at any time in the 
period from August 24, 1971 until May 1, 1973, or 
jobs in the unit represented by defendant Local 
1397, and, for purposes of injunctive relief, to 
include and to be limited to those blacks who have 
actually worked in United States Steel's Homestead 
Works at any time after August 24, 1971, on jobs in 
the unit represented by defendant Local 1397.

- 5 -



11 FEP Cases 1098 (1975). Plaintiffs estimate that their 
entire class numbers 1200 persons. Of these, about 570 are 
blacks whose date of employment preceded January 1, 1968 and 
either are still employed as of April 12, 1974, or retired in 
the two years preceding April 12, 1974. It is these members 
of plaintiffs' class who would be eligible to receive tender 
offers pursuant to the consent decrees ((57a) .

On December 11, 1975, defendants USS and United Steelworkers 
of America, together with the eight other steel companies that 
were parties to the steel industry consent decrees, filed a 
Motion for Approval of Back Pay Release and Notice Forms in the 
United States District Court for the Northern District of Alabama. 
Petitioners sought to intervene as plaintiffs to oppose approval 
of the Notice and Release Forms as well as amendment of the 
decrees (p. 4 n. 2, supra). The District Court, Pointer, J., in 
an order entered January 6, 1976 (64a-65a) , denied intervention
to petitioners and other applicants for intervention who were 
parties to pending cases on the ground that they would "have the 
opportunity to be heard in the court where such litigation is 
pending on the question of whether —  or in what form —  tender 
of back pay and release should be permitted as to such employees 
and their class" (70g). Judge Pointer explicitly declined to
authorize the tender of back pay to employees who are class members 
in pending litigation (70f-70g).

6



On January 22, 1976, defendants filed in the court
below their Joint Motion to Approve Tender of Back Pay Pursuant 
to Consent Decree in U.S. v. Allegheny-Ludlum Industries,Inc.
(68a-70aa). Those members of the Rodgers' class who ac­
cept the proposed back pay tender must waive their claims to 
further injunctive or monetary relief and consequently may be 
excluded as class members in this suit (9a, 70x-70aa).

On January 26, 1976, without ruling on plaintiffs' re­
quest for a Rule 23(e), F.R.Civ.P. hearing, the district court 
scheduled an evidentiary hearing for February 17 and 18, 1976 
on the questions of whether the tender offer, notice of rights 
and release form were fair and adequate and whether further 
proceedings would be required (77a-83a) .

On February 4, the district court denied plaintiffs' 
request for expedited discovery with respect to the implementation 
of the consent decrees and the adequacy of the injunctive relief 
provided by them (127a-133a) .

At the February 17 and 18 hearing, petitioners present­
ed substantial, uncontradicted statistical, documentary and 
testimonial evidence concerning the unlawful employment 
practices of the defendants, their liability under Title VII, 
the extent of the harm suffered by black workers both in terms 
of the denial of job opportunity and in lost earnings, and the 
inadequacy of both the injunctive relief provided by the con­
sent degrees and the monetary relief defendants propose to 
tender (see, pp. 29-43, infra).

7



Petitioners submitted the testimony and written reports 
of four experts to establish that even if the tender offers did 
constitute a fair and adequate settlement of petitioners' claims, 
the proposed notice of rights and release forms which would 
accompany the back pay checks could not be understood by most 
of the recipients, and that those portions which were easiest to 
understand were biased, in the sense that they would tend to 
influence the reader to accept the tender offer and sign the 
waiver (see, pp. 54 - 57 , infra).

Other shortcomings of the notice and release forms, and 
the one-step procedure for sending out checks with the notices 
were briefed to the District Court (256a-264a).

Defendants presented no evidence whatsoever with respect 
to liability, the fairness and adequacy of the injunctive and 
monetary relief for which members of petitioners' class will be 
asked to settle, or the comprehensibility and objectivity of the 
notice and release forms.

On March 8, 1976, the district court approved defendants' 
motion, thereby authorizing the tender in the form previously 
proposed by defendants (I. la-19a). At the same time the court 
denied plaintiffs' motion to preliminarily enjoin defendants' 
tender (id.).

The district court explicitly refused to decide whether 
the injunctive relief for which the Rodgers class members are 

being asked to settle, _i.e., the relief provided by the consent

8



decrees, provides an adequate remedy for discrimination at
Homestead Works, stating that the question had already been
decided by Judge Pointer and the Fifth Circuit Court of Appeals 

3/
(lla-13a) .

While the district court acknowledged its duty to weigh 
the fairness of the back pay proposed to be tendered, again it 
relied upon a statement by the Fifth Circuit to support its finding 
that an average back pay offer of $649.00 was fair and adequate 
(17a), despite plaintiffs' uncontested showing that members of 
the class were entitled to an average award of $7,700.00, plus 
interest, pension adjustments and front pay (see, pp. 40 - 43 , 
infra).

The court declined to consider the legality of the releases, 
insofar as they constitute a waiver of prospective rights to 
monetary and injunctive relief ( 12a-13a ) (see pp. 44 - 54 , infra).

The court agreed that the notice of rights and. release 
forms could be made more readable and less biased ( 20a-21a)
(see pp. 54 - 57 , infra). Its approval of them was based 
principally on the fact that Judge Pointer had approved them

3/ Neither Judge Pointer nor the Fifth Circuit ever had before 
them any evidence with respect to employment practices at Homestead 
Works, so that, questions of jurisdiction aside, they could not have 
made a determination of the adequacy of the relief provided by the 
consent decrees to members of the Rodgers class.

9



. i/(19a, 23a-24a) and that drafting a new notice and release
5/form would delay the tender offer (21a). The court did

not agree with plaintiffs' contention that the one-step 
procedure for the tender of back pay, that is, the sending of 
a check with the notice of rights, was coercive (see pp. 67 - 70, 
infra).

On March 11, plaintiffs filed in the district court a 
notice of appeal from the March 8 order and filed a motion 
for a stay pending appeal and for an expedited hearing in 
this Court. By endorsement dated March 16, 1976 this Court

4/ Judge Pointer explicitly limited his approval of the 
notice and release forms to tender offers made to employees 
who are not parties, class members or potential class 
members in pending litigation. The standard of clarity, 
comprehensibility and objectivity to be met by notice and 
release forms sent to class members in Rodgers, the potential 
value of whose claims is much greater and more likely to be 
realized than the value of claims not yet the subject of 
litigation, must be higher than that applied by Judge Pointer.
5/ The defendants did not move for approval of the tender 
offer until January 22, 1976, twenty months after entry of 
the consent decrees and five months after affirmance by the 
Fifth Circuit Court of Appeals. The defendants presented no 
evidence of any injury that would result in delaying the 
tender offers, to which interest could be added, until a 
comprehensible, fair notice could be prepared.

10



denied plaintiffs' motion, noting that the district court 
had stated that "plaintiffs' counsel presently possess, 
and will continue to enjoy, the unfettered right to 
contact and consult with members of the Rodgers class 
for the purpose of advising them with respect to the options 
presented by the tender." (22a).

Meanwhile, on March 12, 1976, the district court had 
entered an order forbidding plaintiffs’ counsel from dis­
closing or disseminating to class members information, which 
had been revealed in the testimony of Robert Moore, as to 
the manner in which the amount of the back pay offer had 
been calculated (28a-29a). Plaintiffs, on March 19,
petitioned this Court for a writ of mandamus commanding the 
district judge to vacate the March 12 order, and sought a 
stay of the order pendente lite, No. 76-1340. On November 26, 
after oral argument, this Court.denied the motion to stay 
the March 12 order, but, to maintain the status quo until 
action is taken on the petition , restrained defendants 
from distributing the back pay tender.

11



On March 30, plaintiffs filed a motion to consolidate 
the petition for prerogative writs with this appeal. Argument
on the merits of the petition and on the motion to consolidate 
was set down for April 9.

Jurisdiction
This Court has jurisdiction to review the lower court's 

March 8th order on the consent decree waivers pursuant to 
28 U.S.C. § 1291 as a "collateral" order under Cohen v. Beneficial 
industrial Loan Corn., 337 U.S. 541 (1949) and pursuant to 
28 U.S.C. § 1292(a)(1) as a refusal of an injunction.

Section 1291 confers jurisdiction to review orders which, 
as a practical matter, "finally determine claims of rights 
separable from, and collateral to, rights asserted in the 
action, too important to be denied review and too independent of 
the cause itself to require that appellate consideration be 
deferred until the whole case is adjudicated." Cohen v.

6 /Beneficial Industrial Loan Corp. . supra, 337 U.S. at 546.— 
Appellants assert that the March 8th order on the consent 
decrees is just such an order in the context of this Title VII 
litigation. In Rodgers v. U. S. Steel Coro., supra. 508 F.2d 
at 159, this court had occasion to consider an otherwise nonfinal

—/ , Tha*\ § 1291 is to be given a "practical rather than technicalconstruction," 337 U.S. at 546, has been reaffirmed often. 
ffillespie v. united States Steel Corp.. 379 U.S. 148, 152 (1964)- 
Ej.sen v. Carlisle & Jacquelin. 417 U~.S. 156, 170-72 (1974)- see 
alSO — ■* Broadcasting Corp. v. Cohn. 420 U.S. 469, 478 n. 7 (1975).

12



order barring communication with then potential class members.
It prohibits communication with potential 
class members as to the effect of the Alabama 
consent decree on their rights in the instant 
case, should class action treatment be per­
mitted. If by virtue of the order, potential 
class members are left uninformed, and sign, releases, pursuant to the Alabama consent decrees, 
those releases will undoubtedly be pleaded in the 
district court if a class action determination is 
made. When looked at from that standpoint, the 
finality of the [communication] order for purpose 
of the Cohen rule is a close issue.

The collateral finality of an order permitting issuance of the
consent decree releases to members of the class, a_ fortiori,
cannot be seriously questioned.

The Podaers opinion construed the Cohen rule as having 
three requisites: (1) "The order must be final rather than
a provisional disposition of an issue;" (2) " [I]t must not be
merely a step toward final disposition of the merits;" and 
(3) " [T]he rights asserted would be irreparably lost if 
review is postponed until final judgment." 508 F.2d at 159.
The March 8th order is clearly a final, non-tentative adjudi­
cation of the issues of whether a Rule 23 (e) hearing is 
required, whether the waiver provisions of the consent decrees 
are valid and whether the notice and implementation procedures 
are proper. Just as clearly, the order concerns rights "not 
an ingredient of the cause of action," Cohen v. Beneficial 
industrial Loan Corp., supra, 337 U.S. at 547, and "matter[s] 
independent of the issues to be resolved in the [underlying] 
proceeding," United States v. Schiavo, 504 F.2d 1, 5 (3rd cir. 
1974).

13



Finally, the March 8th order "concerned . . . collateral 
matter [s] that could not be reviewed effectively on appeal from 
the final judgment." Eisen v. Carlisle & Jacquelin, supra,
417 U.S. at 171. The rights that appellants assert are denied 
by the order are all associated in various ways with the right of 
class members who accept relief under the consent decrees to 
continue to participate in the prosecution of this Title VII class 
action, rather than the non-discrimination rights at issue on

Vthe merits of the case. collateral rights of this character
necessarily and as a matter of law tip the balance of "incon­
venience and costs of piecemeal review on the one hand and the 
danger of denying justice by delay on the other," Dickinson v. 
Petroleum Conversion corp., 338 U.S. 507, 511 (1950), cited in , 
Eisen v. Carlisle & Jacquelin, supra, 417 U.S. at 171, in
favor of immediate review on appeal. See, e.q., United States8/ -------------
v. Schiavo, supra. Class members who accept relief under the

l/ Thus, the Rodgers court summarized appellants' submissions 
concerning the effect of the consent decrees on this litigation 
in terms of "the practical effect of impeding [the] efforts to 
achieve more beneficial results through a class action instituted 
earlier in the Western District of Pennsylvania. This is because 
by the time litigation has proceeded to, judgment many of the class 
members will have opted out in favor of the relief afforded by the 
consent decree." 508 F.2d at 154.
8/ Compare the asserted requirement of a Rule 23(e) hearing with 
the requirement that a plaintiff in a stockholder derivative action 
deposit security considered on appeal in Cohen v. Beneficial 
Industrial Loan Corp., supra, and that respondents in a stockholder 
derivative class action be liable for notice costs considered in 
Eisen v. Carlisle & Jacauelin. supra; in all three cases
(footnote continued)

14



consent decrees face irreparable injury by exclusion from 
whatever preliminary and permanent injunctive relief the 
remainder of the class obtains through the Title VII action, 
until appellants succeed in having the March 8th order reversed. 
As a correlative matter, the remaining class members face 
irreparable injury if the class action thus decimated can'not 
be as effectively prosecuted. The simple fact is that waiting 
until final judgment to consider undoing the mischief worked by 
the March 8th order as to Title VII litigation rights would be 
"too late effectively to review the present order and the rights 
conferred by the statute, if it is applicable, will have been 
lost, probably irreparably." Cohen v. Beneficial Industrial 
Loan Corp., supra, 337 U.S. at 546. Cf. Culpepper v. Reynolds 
Metal Co., 421 F.2d 880, 893-95 (5th Cir. 1970); United States 
v. Hayes, 415 F.2d 1038, 1045 (5th Cir. 1969). On the other hand, 
immediate review does not impose greater inconvenience and cost.

8/ (Continued)
resolution of the issue by the lower court had "a final and irreparable effect on the rights of the parties." Cohen v. 
Beneficial Industrial Loan Corp., supra, 337 U.S. at 545.
Compare the asserted invalidity of class members' waivers of 
their right to sue with the question concerning the right>of 
the brother and sister to sue under the Jones Act considered- in Gillespie v. U. S. Steel Corp., supra; in both cases "delay 
of perhaps a number of years in having . . . rights determined 
might work a great injustice on them, since the claims for 
recovery for their benefit have been effectively cut off so long 
as the District Judge's ruling stands." 379 U.S. at 153. 
Similarly, compare the notice and implementation procedure 
questions with the same kind of separable questions in Cohen 
and Eisen.

15



The March 8th order expressly denied plaintiffs'
motion for a preliminary injunction to stop the issuance

2/of the tender offer and is thus properly before this Court
pursuant to 28 U.S.C. §1292 (a)(1) as an interlocutory order
"granting, continuing, modifying, refusing or dissolving" an

10/
injunction. There is no doubt that for class members who 
accept relief offered by the consent decrees the practical 
effect, whether right or not, will be exclusion from the class 
action and denial of any possibility of obtaining injunctive

11/ 'relief through the class action. The March 8th order is also
tantamount to an order narrowing the scope of whatever broad
injunctive relief the remaining class can obtain. Compare
Hackett v. General Host Corp., 455 F.2d 618, 622 (3rd Cir.
1972); but see, Rodgers v. U. S. Steel Corp., supra, 508

12/
F. 2d 160.

9/ Compare, e.g., Gulf & Western Indus., Inc, v. Great A. & P. 
Tea Co.. 476 F.2d 687 (1973) (antitrust case).
10/ See, e.g., Omega Importing Corp. v. Petri-Kine Camera Corp., 
451 F.2d 1190, 1197 (2d Cir. 1971).
11/ See, e.g., Ballis v. Symm, 494 F.2d 1167, 1169 (5th Cir. 
1974).
12/ See also, Jones v. Diamond, 519 F.2d 1090 (5th Cir. 1975); 
Yaffe v. Powers, 454 F.2d 1362 (1st Cir. 1972); Brunson v.
Board of Trustees, 311 F.2d 107 (4th Cir. 1962); Price v.
Lucky Stores, Inc., 501 F.2d 1177 (9th Cir. 1974); contra: 
Williams v. Mumford, 511 F.2d 363 (D.C. Cir. 1975), rehearing 
en banc denied, 511 F.2d at 371 (Chief Judge Bazelon and 
Judges Robinson, Wright and Leventhal would have granted 
rehearing).

16



ARGUMENT

I. THE DISTRICT COURT ERRED AS A MATTER OF LAW 
AND ABUSED ITS DISCRETION IN APPROVING THE BACK PAY TENDER OFFERS

This Court has forcefully articulated the importance of 
private suits in the legislative scheme of Title VII:

Suits brought by private employees are 
the-cutting edge of the Title VII sword 
which Congress has fashioned to fight a 
major enemy to continuing progress, strength 
and solidarity in our nation, discrimination in employment,

Wetzel v. Liberty Mutual Ins. Co., 508 F.2d 239, 254,
(3rd Cir. 1975). The Supreme Court, while acknowledging that 
"[c]ooperation and voluntary compliance were selected as the 
preferred means" for achieving the goal of equality of employ­
ment opportunities, has recognized that Congress reposed 
"ultimate authority" in federal courts and gave individuals 
"a significant role in the employment process of Title VII", 
stating:

In such cases, the private litigant not only 
redresses his own injury but also vindicates 
the important congressional policy against 
discriminatory employment practices.

Alexander v. Gardner-Denver Co.,415 U.S. 36, 44, 45 (1974).
The key question presented by this appeal is whether 

defendants, in a private suit brought under Title VII, should 
be permitted to buy up the claims of members of the class without 
appropriate judicial review of the fairness and adequacy of the 
injunctive and monetary relief for which the class members are 
being asked to settle. Such a tactic would seriously undermine

17



the ability of private employees to seek redress on behalf of 
a class and would defeat the J,make whole" purpose of Title VII. 
Franks v. Bowman Transportation Co., 44 U.S.L.W. 4356 (March 24, 
1976); Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975).

The tender offers approved by the district court will 
potentially result in the dismissal or compromise of the claims 
of about one-half of the class members. Under these circum­
stances, where the class claims of members of the class may be
finally dismissed or compromised, the interests of the class

13/must be protected as required by Rule 23(e), F.R.Civ.P.
While this is not the typical class action settlement situation, 
inasmuch as class members will, by accepting the tender offers, 
be opting out of the class, the conduct of the case must be 
guided by equitable principles. The appropriate standards of 
fairness to be applied are no better exemplified than by the 
procedure approved by the Supreme Court and this Court for closely 
analogous situations as embodied in Rule 23 (e) ; Girsh v. Jepson,
521 F.2d 153 (3rd Cir. 1975) ; Greenfield v. Villager Industries, 
Inc., 483 F.2d 824 (3rd Cir. 1973); Ace Heating & Plumbing Co., 
v. Crane Co., 453 F.2d 30 (3rd Cir. 1971); and Kahan v. Rosenstiel, 
424 F.2d 161 (3rd Cir. 1970), cert. denied, 398 U.S. 950 (1970).

13/ Even though the dismissal or compromise affects the claims 
of only a part of a class, a Rule 23(e) hearing is nevertheless 
required. Phelan v. Middle States Oil Corp., 210 F.2d 360, 364 
(2nd Cir. 1954).

18



Indeed., the district court recognized its obligation to assess 
the tender offer in the light of these standards (16a) . It 
failed to do so, however, explicitly declining to review the 
adequacy of the injunctive relief provided by the consent 
decrees (13a). and essentially relying upon a statement of 
the Fifth Circuit to support its finding that an average back 
pay offer of $649 was fair and adequate (17a).

Plaintiffs adduced substantial evidence that the injunc­
tive and monetary relief provided by the consent decrees was 
grossly inadequate to remedy the discrimination suffered by 
plaintiffs' class at Homestead Works. Defendants, who, as pro­
ponents of the compromise should have borne the burden of demon­
strating that the compromise is "fair and reasonable and in the

14 /best interests of all those who will be affected by it," offered 
not a shred of evidence in support of it. The district court's 
approval of the tender offer in these circumstances was erroneous 
and a clear abuse of discretion and should be reversed.

A. The Requirement of a Hearing on Fairnessand Adequacy
Rule 23(e), F.R.Civ.P. requires that district courts

approve any dismissal and compromise of a class action.
15/This rule has been strictly applied to protect absent class 

members from unfair, unreasonable settlements which are not in

14/ Wright & Miller - 7A Federal Practice & Procedure, §1797 pp. 229-230.
15/ The rule has been extended to actions which have not been 
certified as class actions. Philadelphia Elec. Co. v. Anaconda 
American Brass Co., 42 FRD 324, 327-28 (E.D. Pa. 1967); cf. Kahan 
v« Rosenstiel 424 F.2d 161, (3rd Cir. 1970) , cert, denied, 398 U.S. 950 (1970). ---- ------

19



their best interests. 3B Moore's Federal Practice, §23.80 [2-l]; 
cf. Hansberry v. Lee, 311 U.S. 32 (1940); Mullane v. Central 
Hanover Bank & Trust Co., 339 U.S. 306 (1950).

The typical class action settlement presented in a dis­
trict court for approval involves a proposed agreement which 
has been negotiated by the representatives of all the parties.
This is not the situation before this Court. The proposed 
tender offer is the result of negotiations between eight com­
panies and three agencies of the federal government (who are not 
parties to the Rodgers action) in addition to the defendants U.S. 
Steel and the Steelworkers. No representatives of the class were 
present at the negotiations which led to the Consent Decrees.
Nor, of course, did any representative of the class approve 
the proposed tender offer.

Although this litigation does not follow the usual pattern, 
all the reasons for applying the Rule 23(e) standard pertain equal­
ly or even more strongly to this action. The Court's obligation 
to review the adequacy of the settlement which applies when the 
representatives of the class have approved the compromise should 
apply even more strongly when only the defendants are the pro­
ponents :

[W]hen the settlement is not negotiated by a 
court designated class representative the court 
must be doubly careful in evaluating the fairness 
of the settlement to plaintiffs' class.

Ace Heating & Plumbing Co. v. Crane Co., supra, 453 F.2d at 33.

20



When class representatives join in proposing the settlement 
the class members have access to the information and procedures 
which produced the proposed settlement. In addition, the 
class representatives are charged with the serious responsi­
bility of representing the best interests of the class. Here, 
the class neither had their representatives present at the 
negotiations nor did they have access to the background of the 
proposed settlement or to information as to how the many open- 
ended provisions of the consent decrees have been implemented 
at Homestead Works and the movement of black employees since 
the decrees became effective.

Nor can representation by the government be considered 
comparable to representation in a private class action. The 
government no matter how diligently it prosecutes Title VII 
suits does not, as this Court described, have the same interests 
as those of private class representatives:

. . . [C]lass suits serve different ends than do
public suits. The Attorney General's prosecution 
of a suit is governed by desire to achieve broad 
public goals and the need to harmonize public 
policies that may be in conflict; practical 
considerations such as where limited public re­
sources can be concentrated most effectively, 
may dictate conduct of a suit inimical to the 
immediate interests of the discriminatee, who 
presumably seeks full satisfaction of his indi­
vidual claim regardless of the effect on other 
cases.

Unlike suit by the Attorney General or even 
by a "private attorney general," who sues to 
protect public rights, the class action seeks 
to vindicate the rights of specific individuals, 
the class members; and unlike the public action, 
for a class action to be maintained the class 
representatives must be members of the class, 
have claims typical of the class and adequately 
represent the interests of absent class members.

21



Bryan v. Pittsburgh Plate Glass Co., 494 F.2d 799, 803 (3rd 
Cir. 1974); see Williamson v. Bethlehem Steel Corp., 468 F.2d 
1201 (2nd Cir. 1972), cert, denied 411 U.S. 911 (1973).

The difference between the interests of the government 
and the private class representatives is dramatically illus­
trated by this case. The government's primary interest was 
apparently to negotiate an accommodation with the steel 
industry in order to provide a general form of relief to 
workers in over 200 plants. The interest of the private class 
representatives, and of the district court in approving the com­
promise of a class claim, is in a fair, reasonable and adequate 
remedy for the certified class at Homestead Works. This particular
interest was not addressed, nor could it be, within the enormous

16/
scope of the industry-wide settlement.

This Court in Kahan v. Rosenstiel, supra, strongly indi­
cated that Rule 23(e) applies to the instant case. Kahan was 
an action under the Securities Exchange Act to compel the 
defendants to increase the amount of an allegedly inadequate 
tender offer. After the suit was commenced the defendants, 
without negotiating with plaintiff, increased their tender offer. 
This Court held that, to the extent that the new offer was 
prompted by the pending litigation, a Rule 23(e) hearing was 
required,424 F.2d at 169. In Kahan a Rule 23(e) hearing was

16/ In fact, counsel for United States Steel Corporation, 
Mr. Scheinholtz, represented that in the determination of 
an appropriate back pay award "there was no particular con­
sideration of Homestead as a separate entity." (119a).

22



deemed proper even though the defendants had offered the class 
members 100 cents on the dollar and asked nothing in return; 
that decision applies a fortiori to the instant case, where 
the defendants offer nine cents on the dollar (see pp.40-43, 
infra) and require in return a sweeping waiver. It would be in­
consistent with Rule 23 to permit a defendant in a class action, 
absent the most stringent supervision, to buy up the rights of 
individual class members without acting through, or negotiating 
with the authorized class representative;

Moreover, the characteristics of a Rule 23(b) (2.) as 
opposed to those of a 23(b)(3) class action require a careful 
and extensive review of the fairness and adequacy of the tender 
offers. "The cohesive characteristics of the class are the vital 
core of a (b)(2) action," Wetzel v. Liberty Mutual Insurance Co., 
508 F.2d 239, 251 (3rd Cir. 1975), cert. denied 44 L.Ed.2d 679 
(1975), and accordingly class members may not opt out of a Rule 
23(b)(2) action, at least after it is certified. Wetzel v.
Liberty Mutual Ins. Co., supra at 248-49; Sagers v. Yellow Freight 
System, Inc., No. 74-3617 (5th Cir. April 2, 1976), slip op. at 
2715; LaChapelle v. Owens-Illinois, 513 F.2d 286, 288 n.7 (5th 
Cir. 1975); cf. Ford v. United States Steel Corporation, 520 F.2d 
1043, 1056-57, as clarified 525 F.2d 1214 (5th Cir. 1975).

If the Court affirms the district court's approval of 
the tender offer, those class members who accept will, in many 
cases, effectively opt out of the Rodgers action. Any such 
drastic departure from the established class action law designed 
to protect the "cohesiveness" of the (b)(2) action must, if it is 
lawful at all, be based on a careful review of the fairness and 
adequacy of the proposed settlement.

2 3



Finally, 23(e) should be scrupulously followed in 
light of the fact that the method by which the award of back 
pay was calculated under the consent decrees is antithetical 
to an appropriate determination by the courts in contested 
litigation. Briefly, the parties to the consent decrees 
agreed on a final amount for all minorities and females in 
over 200 plants throughout the United States. After the amount 
was divided by Company and by plant it was subdivided among the 
black workers at the Homestead plant.

It is now well established that a major purpose of Title 
VII is to make workers "whole" for losses suffered as a result 
of discrimination; a back pay award must be designed to accom­
plish this end. Albemarle Paper Company v. Moody, 422 U.S. 405, 
418-22 (1975); see also Rosen v. Public Services Gas & Electric 
Co., 477 F.2d 90, 95-6 (3rd Cir. 1973), Jurinko v.-Wiegand Co., 
477 F.2d 1036, 1046 (3rd Cir. 1973), vac. on other grounds, 414 
U.S. 970 (1973), reinstated 497 F.2d 403 (3rd Cir. 1974). The 
award of back pay in contested litigation, whether by a judicial 
judgment or supervision of a proposed settlement is determined 
by a calculation of the individual economic harm suffered or a 
reasonable approximation of individual or class harm based on 
the discriminatory practice. Ford v. United States Steel 
Corporation, supra at 1052-56; Pettway v. American Cast Iron 
Pipe Company, 494 F.2d 211, 260-63 (5th Cir. 1974).

24



When the method of determining the proposed award in 
settlement is at great variance with the established purpose 
and procedure of Title VII as it is here, there is a special 
burden on the court to scrutinize the fairness, adequacy and 
reasonableness of the award.

This Court's decision in Ace Heating & Plumbing Company 
v. Crane Company, 453 F.2d 30 (1971) is particularly instructive. 
In this class action, certified pursuant to 23(b)(3), class 
members were sent an "opt-out" notice along with a notice of 
the proposed settlement. The notice categorically stated that 
those who did not opt out would be subject to a judgment which 
is "final and unappealable". The question before the Third 
Circuit was whether class members who did not opt out could 
appeal from the entry of the settlement.

The Third Circuit stated that "perhaps" the drafters 
of Rule 23 did not envision a situation where the decision 
to opt out occurred when the class member knew precisely the 
terms of settlement. Although noting that "in such a case 
there may be less need [for the courts] to police settlements, 
since the question of fairness is left to the informed choice 
of the class members", the Court emphatically maintained that 
the full protection of Rule 23 applied. This included the right 
to appeal: "a serious public policy question would be presented 
if the notice was construed to require a waiver of the right to 
appeal as a condition of opting in", id. at 32-33.



Under former Rule 23, revised in 1966, defendants in
a "spurious" class action could enter into a settlement with
members of the class without court approval. But cf. Webster
Eisenlohr v. Kalodner, 145 F.2d 316, 325-26 (3rd Cir. 1944),
cert, denied 325 U.S. 867 (194S). At least one court has

12/applied this rule to a non-certified (b)(3) action under the 
present Rule 23. Weight Watchers of Philadelphia, Inc, v.
Weight Watchers Int*1, 455 F.2d 770 (2nd Cir. 1972) . The Weight 
Watchers case is clearly distinguishable from Rodgers and in fact 
indicates the need for active participation by the district court 
to protect class members from overreaching by the defendants.

18/Weight Watchers involved negotiation prior to class certification
19/between businesses, who were all represented by counsel, with 

relative equality of bargaining power, and plaintiffs' counsel 
was permitted to participate in the negotiations. Here the de­
fendants seek to make'"take it or leave it" offers of settlement 
(which resulted from secret negotiations) to laymen in a manner 
which severely limits their ability to receive legal counsel and 
to be informed of their options. This present situation requires 
the protection of Rule 23(e) to safeguard the interests and civil 
rights of class members.

17/ "The (b)(3) class action is the old spurious class action 
become mod." 3B Moore's Federal Practice, 1(23.02-1, p. 124.
18/ The Second Circuit specifically stated that the decision 
did not pertain to a certified class action. Weight Watchers 
of Phila. v. Weight Watcher Int'l, supra at 773, n.l.
19/ The putative class contained the franchisees of the 
defendant.

26



B. The Standards for a Determination of Fairnessand Adequacy
The district court, while holding that a normal 23(e) 

hearing was not required (15a ), purported to subject the 
proposed compromise to the standards for such hearings an­
nounced in Girsh v. Jepson, 521 F.2d 153, 157 (3rd Cir. 1975).
The hearing and decision of the court, however, fall far short 
of these standards.

(1) Girsh holds that the court must afford opponents 
of a compromise "an adequate opportunity to test by discovery 
the strengths and weaknesses of the proposed settlement."
521 F.2d at 157. The district court, however, refused to per­
mit full discovery as to what effect the consent decrees had 
had since their adoption in 1974, as to whether those decrees
had indeed remedied the alleged discrimination, or whether the

2 0/defendants were in compliance with the decrees.
(2) Girsh requires that the fairness of a monetary 

settlement be determined by comparing it with "the best 
possible recovery" and the likelihood that the litigation 
would succeed. 521 F.2d at 157. The district court, however, 
expressly stated that it considered and approved the compromise

20 / The plaintiffs sought expedited answers to interrogatories 
designed to determine whether blacks were provided an opportunity 
to move to previously all-white or predominantly white jobs since 
the consent decrees became effective in August 1974, and whether 
the testing practices of defendants since that date complied with 
Title VII, (101a-108a).
The district court denied plaintiffs the right to take such dis­
covery on an expedited basis so that it would be available for 
the February 17-18 hearing (127a-128a).

27



"[r]egardless of any likelihood of defendants' liability or 
the potential size of plaintiffs' possible monetary recovery" 
(17a). The court acknowledged disparity between the back 
pay offer and the actual liability, but assumed it was com­
pelled to approve any offer other than "a mere pittance" even 
if it was only a small fraction of the actual liability.

(3) Under the proposed waiver employees would lose 
their rights to seek additional injunctive relief over and 
above that provided by the consent decrees. Plaintiffs ex­
pressly objected to the waiver on the ground that the injunctive 
relief provided by those decrees at Homestead Works was neither 
fair, adequate, nor effective (94a-100a). The district
court refused to even consider this contention, asserting that 
the adequacy of the injunctive relief at Homestead had already
been, decided by Judge Pointer in Alabama (11a). That assertion

21_ /is entirely incorrect.' Nothing in Judge Pointer's decision 
intimates any approval of the injunctive relief in this case. 
Indeed, Judge Pointer has never had or sought any information 
whatever regarding the nature of the discrimination which 
exists at Homestead Works. Judge Pointer does not know, and 
Judge Teitelbaum refused to allow discovery to permit him to 
learn, whether the consent decrees have been obeyed at Homestead 
Works, how the broad language has been implemented, or how many

21/ United States v. Allegheny-Ludlum Industries, Inc., 
6 3 F.R.D. I (N.D. Alai 1974) ; U.S. v~. Allegheny-Ludlum 
Industries, Inc. No. CA 74-P-339-S (Memorandum Opinion, 
January 6 , 1976) , (70d) .

28



black employees, if any, have been able to transfer into 
previously white departments or jobs since the consent 
decrees were signed two years ago.

(4) Rule 23(e) expressly requires that, prior to 
approval of a compromise, the court must notify the affected 
class members and give them an opportunity to be heard.
Girsh requires the court considering a decree to take into 
account "the reaction of the class to the settlement." 521 
F.2d at 157. These requirements serve a variety of salutary 
purposes; in a case such as this they assure that minority 
employees, who have unique first hand knowledge of the problems 
of discrimination and the operation of the consent decrees, can 
make known their views as to the deficiencies of the decrees 
and that the court will rely on that information. The district 
court, however, refused to give the affected employees notice 
about and an opportunity to object, comment or to seek clari­
fication of the proposed tender offer.

C. The Unlawful Practices of the Company and
the Union, Resulting Economic Harm and the 
Insufficiency of the Consent Decree Remedy

The plaintiffs presented substantial, uncontradicted
evidence concerning the unlawful employment practices of the
defendants and their liability under Title VII, the extent of
the harm suffered by black workers both in terms of the denial
of job opportunity and in lost earnings, ag^the inadequacy of 
the relief provided by the consent decrees”

22_/(The district court's characterization of plaintiffs' evidence as "ex parte" (16a-17a) is misleading. The evidence was presented 
in open court, and defendants, who had as much notice as did 
plaintiffs that the February 17-18 hearing was to be an eviden­tiary one, simply chose to introduce no evidence.

29



1. Liability
Until August, 1974, the Company had a fractionalized

seniority system which required the forfeiture of accumulated
seniority whenever an employee transferred job sequences

23 /(called "lines of progression" or "LOPs").
This seniority

system, when superimposed on initial job assignments made on
racial lines, effectively "locks" blacks into the lowest-pay-

24/ing and most menial jobs. The lock-in effect of the seniority 
system was exacerbated in this case by the fact that vacancies

? S /m  one department were pot posted in other departments.

23_/ The requirement that an employee forfeits seniority upon 
transfer has aptly been termed "seniority suicide". Barnett v. W.T. Grant Co., 518 F.2d 543, 549 (5th Cir. 1975).

The production and .maintenance jobs at Homestead Works 
are divided into approximately eleven departments, 80 seniority units and 300 lines of progression(798a-808a). Until 1974 employee 
promotion and regression was primarily governed by "job seniority", 
the accumulated years of service an employee worked in a particu­lar job. If an employee transferred LOPs he forfeited his 
accumulated job seniority and for purposes of promotion and 
regression was treated as a new employee in his new LOP.
2aJ  The workings of a discriminatory seniority system is described in several cases involving steel plants. United 
States v. Bethelehem Steel-Corp., 446 F.2d 652, 658-59, (2nd 
Cir. 1971); Bush v. Lone Star Steel Corp., 373 F.Supp. 526,
530-35 (E.D. Tex. 1971); United States v. United States Steel 
Corp., 371 F.Supp. 1045, 1055-56 (N.D. Ala. 1973) vac. and rem. on other grounds 520 F.2d 1043 (5th Cir. 1975).
25/ See px-18, Deposition of John Owens, Supervisor of Employ- 
ment, (736a). Of course, without job posting blacks who were 
not in the basically all-white departments would be unable to 
bid for jobs in white departments even if they desired to commit 
"seniority suicide". See, e.g., Pettway v. American Cast Iron Pipe Co., 494 F.2d 211, 248-49 (5th Cir. 1974T:

30



The statistical representation of the racial 
allocation of jobs graphically demonstrates the racially 
adverse consequences of the seniority practices at Homestead:
Blacks are disproportionately assigned and "locked-in" to the

26/lower-paying departments and lines of progression.
Defendants have not yet acceded to plaintiffs' requests 

for information showing the relative treatment accorded blacks 
and whites prior to July 2, 1965, the effective date of Title 
VII. However, it is apparent that defendants continued to dis­
criminate against blacks in initial job assignment and entry 
into trade and craft jobs long after that date.

The Company's daily employment sheets for the period 
July 1965 through September 1970 show that virtually no blacks 
were hired into other than laborer jobs in the least desirable 
departments or seniority units while most whites were hired 
directly into higher paying jobs or into laborer jobs in de­
partments or units holding greater opportunity for advancement 
(902a-919a). The Company's personnel director has admitted that, 
with one exception, the non-laborer jobs into which whites were 
hired require no special education or previous experience. (6 6 8a- 
675a, 690a-695a).

The almost-total exclusion of blacks from the high- 
paying Trade and Craft jobs is perhaps most telling. The 
following chart indicates that blacks have occupied less than 
1% of Trade and Craft positions'from 1967 through 1973 (921a-

2 ft/ The plaintiffs submitted computer printouts which detailed 
the differential racial job assignments and pay rates. (772a- 
901a). see the summary of disparate racial assignment by 
department (920a).

[footnote cont'd]
31



925a).
# BLACKS # WHITES

1967 3 960
1971 6 1044
1973 10 1099

The Company's testing program as well as its seniority system
served to limit black enrollment in the apprentice and on-the
, • • 12/3 0b training programs for craft positions. The Company uses

the Wonderlic Test in the apprentice selection process. Courts
have repeatedly found that this test, as Judge Thornberry

28 /phrased it, is "race-oriented".
Finally, the plaintiffs were prepared to call class 

members to testify to particular acts of discrimination and to 
the manner in which they were affected by the systemic discrim­
ination. The district court did not permit their testifying 
in open court, but did permit the submission of the depositions

26/ [footnote cont'd]
This Court has recognized that "statistics" are particularly 

appropriate in Title VII class actions where it is the aggregate 
effect of a company's policy on the class which is important", 
(footnote omitted) Wetzel v. Liberty Mutual Insurance Co., 508 
F . 2d 239,  259 (1975T:

27/ The Company uses a "battery" of employment tests for select­
ing apprentices or on-the-job trainees. (See PX-13, Response of 
Defendant Company to Plaintiffs' First Interrogatories, No. 69*695a, 745a).
28/ m—  Franks v. Bowman Transportation Co., 495 F.2d 398, 412 (5th 
Cir. 1974), rev. and rem. on other grounds 44 U.S.L.W. 4355 (1976); Moody v. Albemarle Paper Company, 474 F.2d 134, 138 n.l (4th Cir. 
1974), vac. and rem. on other grounds, 422 U.S. 405; Rogers v. Inter- national Paper Company. 510 F.2d 1430 (8th Cir. 1975), vac. and rem. on 
other grounds* 46L.Ed.2d 29 (1975) ; Duhon v. Goodyear Tire & Rubber 
Co., 494 F.2d 817 (5th Cir. 1974).

32



of class members.
If, after a trial on the merits, the district court finds

that defendants have discriminated against plaintiffs' class in the
manner described above, plaintiffs will be entitled to relief which
will enable class members to reach their "rightful places," i.e.,
the jobs they would have held but for discrimination, as quickly as

30/the dictates of "business necessity" permit, affirmative action
31/with respect to certain categories of jobs, back pay to make them32/

financially whole, and, if the evidence warrants it, punitive 33/
damages. Those members of plaintiffs' class who accept the tender 
offers will be denied any injunctive relief beyond that afforded by 
the consent decrees entered in U.S. v. Allegheny-Ludlum Industries, 
Inc., 63 F.R.D. 1 (N.D. Ala. 1974), aff'd, 517 F.2d 826 (5th Cir. 
1975) and any monetary relief beyond that tendered.

29/

29/ See e.g., PX-75, Deposition of William Vick (discrimination 
in initial placement, transfer, promotion); PX-78, Deposition of 
Donald D. Peterson (discrimination in selection for craft position); 
PX-76, Deposition of Jackson Goodman (historical patterns of dis­
crimination) . Because of their length, these depositions have not been reproduced in the Joint Appendix.
30/ Franks v. Bowman Transportation Co., supra, 44 U.S.L.W. at TJ60-4361 n.21, 4362 n.28, 4363; Unxted States v. Bethlehem Steel 
Corp♦, 446 F.2d 652, 660-62 (2nd Cir. 1971); Robinson v. Lorillard 
Corp., 444 F.2d 791, 798-800 (4th Cir. 1971) Local 189 United Paper- 
makers & Paperworkers v. United States, 416 F.2d 980 (5th Cir. 1969) , 
cert, denied 397 U.S. 919 (1970); Pettway v. American Cast Iron Pipe 
Co., 494 F.2d 211. 248-49 (5th CirT 1974); Head v. Timken Roller 
Bearing Co., 486 F.2d 870, 879 (6th Cir. 1973); Rogers v. Inter­
national Paper Co., 510 F.2d 1340, 1355 (8th Cir. 1975), vac. and rem. on other grounds, 46 L.Ed.2d 29 (1975).
3 1/ Buckner v. Goodyear Tire & Rubber Company, 339 F.Supp. 1108,
IT25 (N.D. Ala., 1 9 7 2 ) ,  aff'd per curiam 476 F.2d 1287 (1 9 7 3 ) ;  United States v. N.L. Industries, Inc., 479 F.2d 354, 378 (8th Cir. 1 97 3) .

32/ Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975).
33/ Johnson v. Railway Express Agency, Inc., 421 U.S. 454 (1975).

33



2 Inadequacy of Injunctive Relief Under Consent Decrees
a. Seniority Relief

The job seniority system which was in effect 
prior to the consent decrees served to lock blacks into the 
less desirable seniority units to which they were discrimina- 
torily assigned, because to transfer would have resulted in 
loss of protection from layoff and the other advantages which 
seniority affords as well as a loss of pay, since transferring 
meant starting at an entry level job.

The consent decrees provide for the use of plant 
continuous service as the measure of continuous service for 
virtually all seniority purposes. However, there remain 
numerous impediments to a black employee’s use of plant 
seniority to attain his rightful place. The decrees establish 
a three-step bidding procedure. If a vacancy occurs on the 
second job in a job sequence, then that vacancy is filled by 
the senior employee on the first job in the sequence. The 
bottom or entry-level job is then filled by the senior employee 
in the department who bids on that job, regardless of whether 
his experience particularly qualifies him. Finally, the 
bottom job left vacant in the department is filled by the 
senior employee in the plant. It is only this last job that 
is posted for bidding plant-wide (46a, 720a-723a). This tedious 
time-consuming process for allowing black employees to move to

34



their rightful place contravenes at least three specific
necessary forms of relief which have been mandated by the
Courts: advance-level entry (transfer to a job above entry-
level in a job sequence), job skipping (jumping over certain
jobs, experience in which is not necessary for successful
performance of higher jobs in a job sequence), and plant-wide
posting of vacancies. See, e.g., Pettway v. American Cast
Iron Pipe Co., 494 F.2d 211, 248-49 (5th Cir. 1974); Stevenson
v. International Paper Co., 516 F.2d 103, 114 (5th Cir. 1975);
Rogers v. International Paper Co., 510 F.2d 1340, 1335-57 (8th
Cir. 1975), vac. and rem on other grounds, 46 L.Ed.2d (1975).

In addition, the seniority relief afforded in the
decrees ignores all the innovative relief designed to
terminate the unlawful continuing effects of discrimination
and speed black employees to their rightful place which was
established in the Title VII case involving the Company's 

24/Fairfield Works. Some of the important seniority relief 
provisions established by the Fairfield Works decree but not 
by the consent decrees include the following:

(1) The right of an employee to exercise his plant 
seniority to "bump" a junior employee one job 
above his job in a job sequence during a re­
duction in force, (Section 4(b)(1);

3 4 / United States, et al., v. United States Steel Corp., 
et al., 5 EPD 1(8619 (N.D. Ala. 1973) (Decree) ; the citations 
in the paragraph above are to the sections of that Decree.

35--



(2) The right of an employee on a recall from a
reduction in force to "exercise his seniority
to step up one job above the highest job he
held on a permanent basis prior to the re-

35/duction," (Section 4(b)(2);
(3) The right of an employee to carry his plant 

seniority from one plant to another plant 
where this is necessary to terminate the 
effects of past discrimination, (Section 
4(e) (f) (g) .

Thus, as the Fifth Circuit Court of Appeals recognized 
in United States v. Allegheny-Ludlum Industries, Inc., 517 F.2d 
826 (5th Cir. 1975), the consent decrees fail to include par­
ticular provisions which would give effect to the Congressional 
mandate to afford "the most complete relief possible" in Title 
VII actions.

Many of the critical decisions bearing on the 
effectiveness of the decrees —  such as whether to revise 
seniority units and pools, whether to establish two-step 
bidding, whether to alter temporary vacancy practices and 
whether to amend transfer provisions generally —  are left

_35/ Consent Decree I, Paragraph 4(a)(1)(b) (III.la., p.28) 
provides that "the sequence on a recall shall be made'. . . 
so that the same experienced people shall return to jobs in 
the same position relative to one another that existed prior 
to the reductions." This is the very system which the Second 
Circuit mandated the District Court to remedy in Williamson v. 
Bethlehem Steel Corp., 468 F.2d 1201 (2nd Cir. 1972H

36



to the local Implementation Committees. As of this date, almost 
two years after the entry of the decrees, the Implementation Com­
mittee at Homestead Works has failed to establish two-step bidding 
for any jobs or to alter temporary vacancy practices. (724a).

Hooker jobs to which blacks
have traditionally been assigned and which provide the best train­
ing for Craneman jobs, which have traditionally been held by whites, 
continue to be in separate promotional sequences, so that a hooker 
cannot move up to the job of craneman except by starting in an 
entry level job in another promotional sequence. (696~715a, 7 9 5a- 
835a).

In its recent decision in Franks v. Bowman Transportation 
Co., supra, the Supreme Court has stated in the clearest of terms 
the critical importance of granting complete seniority relief to 
victims of employment discrimination:

The Reports of both Houses of Congress indicated 
that "rightful place" was the intended objective 
of Title VII and the relief accorded thereunder . . . .  
[R]ightful place seniority, implicating an 
employee's future earnings, job security and 
advancement prospects, is absolutely essential 
to obtaining this congressionally mandated goal.

44 U.S.L.W. at 4361 n. 21 (emphasis in original);
[T]he issue of seniority relief cuts to the very 
heart of Title VII's primary objective of eradi­
cating present and future discrimination in a 
way that back pay, for example, can never do'.
"[S]eniority, after all, is a right which a 
worker exercises in each job movement in the 
future, rather than a simple one-time payment 
for the past."

Id. at 4362 n.28.
The gross inadequacy of the seniority relief provided by 

the consent decrees, when measured against the Franks standard, is 
in itself sufficient reason to disallow the making of the tender
offers. 37



b. Affirmative Action for Trade and Craft Jobs and Testing.
An analysis of defendants' records shows that as late 

as 1973, blacks were almost totally excluded from trade and 
craft jobs, the highest-paying, most prestigious jobs in the 
plant, holding ten out of 1109 such positions (921a-925a)

The consent decrees do not establish "goals and 
timetables for the placement of blacks in trade and craft 
jobs but do establish "implementing ratios," i.e., the ratios 
at which blacks, Spanish—surnamed Americans, and women com­
bined are to be hired or promoted. These implementing ratios 

f^r behind the ratios established for blacks alone in the 
^^i^fisld WorKs case. United States v. United States Steel 
Corp., 5 EPD 118619 (N.D. Ala. 1973) (Decree, Section 7).

The decrees provide that within 120 days of the entry 
date,.April 11, 1974, the Implementation Committee at each 
plant shall establish goals and timetables for minority re­
presentation in such jobs. Defendants have given plaintiffs

licting information as to whether such goals or timetables36/
have been established at Homestead Works. Thus, a class 
member to whom a tender offer was made would, if he accepted 
the offer, waive his right to seek relief from the discrimina­
tory exclusion of blacks from trade and craft jobs without 
knowing what relief was to be provided under the consent decree.

36/ While United States Steel's Supervisor of Employment and 
Placement, John owens, who is a member of the Homestead Imple­
mentation Committee, testified that no such goals had been 
established, (see PX-18, Deposition of John Owens, (756a-766a)) 
Pls-iritiffs have been advised by letter dated 2/13/76 from defendants' counsel that goals were established and are on file with the 
United States District Court for the Northern District of Alabama 
(926a). Not only do the affected class members in the Rodgers

38 [footnote continued]



One of the principal roadblocks to black entry into 
the apprenticeship programs which lead to trade and craft jobs 
has been the use of discriminatory, non-job related tests. 
Section 11 of the Consent Decree I requires that all selection 
procedures which have a disparate impact on minorities be 
validated in accordance with the EEOC's Guidelines on Employ­
ment Selection Procedures," 29 CFR §1607 (52a-53a) .
The Company admits that it is still using tests for admission 
into apprenticeship programs. It has refused to disclose
either the tests it is using or any validation studies. 
(745a-746a).

Section 10(g) of Consent Decree I provides that 
minority applicants for trade and craft jobs or apprentice­
ship programs "shall not be required . . .  to possess 
qualifications which exceed the minimum criteria applied to 
white male applicants, who, since a job was established as a 
craft in the plant,.have been admitted and are successfully 
performing the requirements of the job . . . "  (52a).
All employees who wish to become a motor inspector or mill­
wright must pass tests for admission to an apprenticeship 
program, then successfully complete an apprenticeship 
(754a). The Company's personnel director has admitted, 
that at Homestead V7orks there are motor

36/ [footnote cont'd]
case not know what these goals are and whether they are 

adequate, even defendants and their counsel were unaware of 
such goals until February 13, 1976.

- 39 -



inspectors and millwrights who have never taken tests or 
completed an apprenticeship program. (Id.)

The above are merely examples of ways in which the 
consent decrees, in the nearly two years since they were 
entered, have failed to provide adequate, or indeed any, 
injunctive relief to members of plaintiffs' class.

The mechanism for enforcement of the decrees, the 
Homestead Works Implementation Commitee and the Audit and 
Review Committee, is manifestly unfair and unreasonable 
because of the exclusion of the victims of discrimination 
from any role in monitoring compliance. The failure noted 
above to provide necessary additional systemic relief, or 
even to comply with the explicit mandates of the decree, 
well illustrates that the law violators can hardly be trusted 
to police their own violations.

3. Inadequacy of Monetary Relief Under Consent Decrees
The average back pay tender proposed for those 

members of the Rodgers class eligible for back pay under 
the consent decrees is $649 (Court's Exhibit 1).

The plaintiffs prepared an Exhibit,
(894a-897a) which compared the average earnings of blacks
and whites with the same year of hire for the years 1967,
1971 and 1973. The differences in black-white earnings were 37/
then pro-rated for the entire period covered by this action,

37/ The precise method for the calculation of the award 
is set forth in detail at 894a-895a.

40



1968-1976. The total amount calculated, $7,758.44, was 
over eleven times the average amount being tendered, (17a 
n. 12). However, the $7,758.44 does not include essential
elements of the back pay award which would be due the class:39/
interest on the back pay, pension benefits lost as a

40/ 41/result of discrimination, and "future" or "front" pay.
While the district court recognized that there was 

a significant disparity between the average proposed back 
pay tender and plaintiffs’ calculated average back pay 
award, the Court stated that plaintiffs' calculation was 
"rendered suspect" by its reliance on a formula which com­
puted the difference between the earnings of blacks and 
whites with the same seniority (17a and n. 12) . The method 
of computation used by the plaintiffs was the very method 
used by the government (see 192a-196a) -- and cited with
approval by the district court ( 1 2 a, n.5)—  in arriving at

38/

38/ The charge of discrimination was filed with the EEOC 
In 1970. Under Title VII back pay may be recovered from two 
years prior to the filing of the charge, §706(g) of Title VII 
of the Civil Rights Act of 1964 (as amended 1972) , 42 U.S.C. 
§2000e-5(g).
39/ Pettway v. American Cast Iron Pipe Co., supra at 263.
40/ Rosen v. Public Services Electric & Gas Co., 477 F.2d
41/ "Future" or "front" pay is compensation for the continued 
iconomic loss which blacks will suffer as a result of past 
discrimination until they receive the opportunity to promote 
to the position they would have occupied but for the discrim­
inatory practices. Patterson v. American Tobacco Co., F.2d 
(Nos. 75-1259-63, Feb. 23, 1976, 4th Cir.); United States v. 
United''States Steel Corp., 371 F.Supp. 1045 , 1057-63 (N.D. Ala. 
1973) vac. and rem. on other grounds 520 F.2d 1043 (5th Cir. 
1975); see Franks v. Bowman Transportation Co., supra, 44 
U.S.L.W. at 4365 n.38 and 4366 (Burger, Ch.Ji, dissenting).

41



the figure from which it started negotiating with the
companies and the union to arrive at the back pay figure
used in the consent decrees.

The plaintiffs discovered from the deposition of
one of the principal government negotiators that the large
disparity in the back pay tender and plaintiffs' calculation
of economic harm resulted to a significant extent from the

a ?/limited period of liability considered by the government, 
the exclusion of thousands of black workers from the calcu­
lation of economic harm which was used as a starting point43/
for negotiations, and the inclusion in the group to whom 
back pay was finally decided to be tendered, of 31% more 44
employees than the number for whom calculations were made.

42/ The period considered by the government was "two years 
and a fraction", PX-17, Deposition of Robert T. Moore, p.36 
(196a), whereas here there is at least eight years of 
liability.
43/ The government's back pay calculation for this period 
was artificially reduced by not including in the calculation the economic harm suffered by blacks in three major steel 
facilities, Sparrows Point and Lackawanna plants of Bethlehem 
Steel and Fairfield Works plant of United States Steel Cor­
poration. See Letter from Robert T. Moore to Judge Teitelbaum 
dated 2/15/76 (230a). (Plaintiffs estimate that approximate 
ly 15% of all black workers in the covered plants are located 
in these three).
44/ The government's calculation was based on approximately 
29,000 of 42,000 minority males in the plants covered by the 
consent decree. However, the tenders of back pay are being 
offered to 42,000 minority males, including some whom the 
government assumed were not discriminated against. (208a).
The shares of the victims of discrimination are thus sub­
stantially diluted.

42



An additional reason for the disparity is, of course,• that 
the total amount of back pay calculated by the government 
must have been considerably greater than the amount finally 
arrived at through negotiations. It must have been apparent 
to all parties that there was no credible threat that the 
government could actually litigate against all of the 
facilities of all ten companies who participated in the 
negotiations. It must be assumed that the absence of such 
a threat resulted in a substantial discounting of the 
government's opening figure. In the instant action, there 
can be no doubt that plaintiffs intend to prosecute this 
action to conclusion.

In sum, there is no basis in fact or law for the 
district court's ruling that the amounts to be tendered 
will provide fair and adequate monetary relief to plaintiffs' 
class.

43



II. Certain Aspects of The Proposed Waivers Are Invalid As A Matter Of Law

In the District Court appellants maintained 
that the proposed notice and release ought to be modified 
because, as written, they entailed an unlawful prospective 
waiver's of the right to sue for injunctive and monetary 
relief. The District Court expressly refused to decide 
this issue.

Judge Pointer did not intend that each 
concerned district court throughout the 
country undertake a fresh and totally 
independent review of the legality and 
adequacy of the nationwide settlement 
embodied in the Decrees, and I have neither 
the right nor the temerity to accede to 
plaintiffs' apparent request that this 
Court embark upon such a venture. Accord­
ingly, we start from the premise that the 
following issues have been litigated and 
decided in an appropriate forum and are 
not before me in the instant proceeding:
• • • (4) The substantive legality ofthe release. . . . the Fifth Circuit
will enlighten us in due course as to 
the permissible scope of the instant release

12a-13a.
It is indisputable that, in an ordinary case, the 

District Court would be required, prior to the distribution 
of the waivers, and certainly prior to permitting the de­
fendants to invoke the waivers as a bar to relief, to decide 
whether the waivers are invalid as a matter of law. Judge

4 5 /  259a.

44



Pointer has never indicated any desire to interfere
with this traditional responsibility. In his order of
July 17, 1974, Judge Pointer stressed, "This court does
not assume that there will be a ]ack of full and fair
consideration by other courts of the issues before them,46/
or a failure to grant such relief as is warranted". On
January 2, 1976, Judge Pointer reiterated "It's my view
that I should not attempt to preempt the local court
one way or the other either by saying that the notices
should or should not be sent out in the form suggested47/
or in some contrary form.” Even had Judge Pointer 
wished to prevent the district court, or this court, 
from inquiring into the validity of the waiver, he 
could not do so. Neither a decision by Judge Pointer 
nor by the Fifth Circuit are binding in this circuit, 
and no such decision can eliminate the responsibility 
of courts in this circuit to resolve on the merits cases 
over which they have jurisdiction. Moreover, the appeal 
now pending in the Fifth Circuit, and which Judge Teitelbaum 
contemplated would decide "the permissible scope of the 
instant release," is an appeal from a decision by Judge

46/ Slip opinion, p. 2.
47/ Transcript of Hearing of January 2, 1976, p. 63.

45



Pointer denying appellants' request to intervene, and 
the defendants" union and company there maintain that 
appellants have no standing to seek a decision as to 
the permissible scope of the waiver. At best the 
District Court's refusal to decide this issue was an 
abdication of its statutory responsibility to decide 
the case before it; at worst, if the defendants prevail 
in their standing argument in the Fifth Circuit, appel­
lants will never have any hearing in any forum on their 
claim that the waiver is invalid.

Appellants maintain that the proposed waiver 
is invalid (a) insofar as it purports to waive the 
right to seek injunctive relief to remedy the continuing 
effects of pre-consent decree discrimination, and (b) 
insofar as it purports to waive the right to seek monetary 
relief for the continuing effects of pre-consent decree 
discrimination.

Although this action and the consent decrees 
deal with a variety of forms of discrimination, the critical 
problem in the steel industry, and at the plant in this case, 
is reform of the seniority system. Prior to the entry of 
the decrees the defendant company maintained segregated 
departments and lines of progression. The departments 
and lines of progression to which blacks were assigned 
were generally limited to poorly paid and unpleasant jobs. 
Although this discrimination in initial assignment has to 
some extent abated, many minority employees have been

46



unable to transfer into traditionally white jobs because 
of the defendant's seniority system. Under that system 
when a vacancy occurs in an all-white department, applicants 
from within the department are given preference over employees 
from other departments. Thus if a job were sought by a 
white within the department who had worked for the company 
for only a year, and by a black from another department 
who had worked there for 20 years the position would be 
awarded to the white on the basis of "seniority." The 
seniority system perpetuates in this manner the effect 
of past discrimination in initial assignment. Until the 
seniority system is overhauled so as to eliminate this 
special treatment for employees in traditionally all- 
white departments, black employees will continue to 
earn less than whites solely on account of their race.

The issue, at this juncture, is as to the future 
conduct of the defendants. The question of paramount 
importance is whether the company and union, subsequent 
to the entry of the consent decrees will in the months 
and years ahead so modi-fy the seniority system as to 
permit black employees to reach their "rightful place." 
Appellants maintain that the Consent Decrees have had 
only a negligible impact on the seniority system at 
Homestead, and that the defendants will continue to 
promote junior whites over senior blacks, in the manner 
described above, unless restrained by the courts.

The appellees seek to include in the back pay

47



waiver a release of the right to sue if at some future 
date, the defendants use their seniority system to pro­
mote a junior white over a senior black, or if the 
defendants fail to take the steps necessary to put 
minority employees in their rightful place. There is 
no question that, if the defendants do so, they will be 
in violation of the law; the waiver however, purports 
to strip the employee of any right to have Title VII 
obeyed. Should a minority employee sign such a waiver 
and subsequently discover that he is still locked into 
a poorly paid all-black department, he will have no 
right to sue. At a plant where the decrees are generally 
ineffective, a whole generation of black workers would 
for the rest of their careers, be relegated to the jobs 
to which they were initially assigned on the basis of 
race. Although the consent decrees can be vacated on 
the motion of any signatory in 1979, the waivers remain 
binding for the indefinite future. The signatories 
insist that, even if a court should at some future date 
hold a seniority system illegal because it perpetuates 
the effect of pre-decree discrimination, the employer 
would be free to apply that illegal system to any employee 
who had signed an injunctive waiver. Such a release is 
not a compromise of accrued claims, it is a license to 
break the law.

In Alexander v. Gardner-Denver Co., 415 U.S.
36 (1974) an aggrieved employee, prior to commencing a

48



Title VII action, sought arbitration under a procedure 
which provided that it would be "final and binding upon 
the Company, the Union, and any employee or employees 
involved.' 415 U.S. at 42. The arbitrator found there 
was no racial discrimination, and the employer argued 
that the employee, by submitting his claim to binding 
arbitration, had waived his rights to sue under Title VII. 
This Court held:

We are also unable to accept the proposition 
that petitioner waived his cause of action 
under Title VII. To begin, we think it clear 
that there can be no prospective waiver of an 
employee's rights under Title VII . . . Title 
VII's strictures are absolute and represent 
a congressional command that each employee 
be free from discriminatory practices . . .
In these circumstances, an employee's rights 
under Title VII are not susceptible of pros­
pective waiver. 415 U.S. at 51-52.

The waiver in Alexander was prospective in that, although 
the disputed employer conduct occurred before the purported 
waiver, the employee committed himself in advance to ob­
taining only so much relief as the arbitration would 
thereafter award. The holding of Alexander applies a_ 
fortiori to the waiver proposed in this case. Not only 
is an employee asked to limit himself to such seniority 
relief as the government chooses to negotiate for him, the 
employee is asked to do so with regard to seniority problems 
which , as a result of unforeseeable patterns of vacancies, 
layoffs, and attrition, may only arise several years in the 
future.

Such a prospective waiver of Title VII rights

49



is also inconsistent with Albemarle Paper Co. v. Moody,
422 U.S. 405 (1975). Back pay is mandated in Title VII 
cases, not merely to make an employee whole for any vio­
lation of his rights, but also to deter an employer or 
union from failing to correct employment practices 
which discriminate or continue the effects of past dis­
crimination.

If employers faced only the prospect of 
an injunctive order, they would have little 
incentive to shun practices of dubious 
legality. It is the reasonably certain 
prospect of a back pay award that "provide [s] 
the spur or catalyst which causes employers 
and unions to self-examine and to self- 
evaluate their employment practices and to 
endeavor to eliminate, so far as possible, 
the last vestiges of an unfortunate and 
ignominious page in this country's history."
422 U.S. at 417-18.

Under the proposed waiver, not only would that incentive 
be eliminated, but even if the seniority system were proven 
to have this effect an employee could not obtain an in­
junction to stop such a violation of the law.

This waiver would preclude injunctive relief 
or back pay in a variety of situations which may arise 
in the future, such as the following:

(1) A black with 30 years employment and a
white with only 1 year apply for promotion 
to a job in department A. The white already 
works in department A; the black works in 
department B, an all black department to which 
he was assigned on the basis of race before 
1974. Both applicants are fully qualified to 
fill the vacancy. The white is given the job 
because of a rule giving preference to em­
ployees from the same department as that in 
which the job exists;

50



(2) A black with 30 years employment and a 
white with only 1 year apply for promotion 
to a job in a line of progression in de­
partment A. The white already works in 
that line of progression; the black works 
in the same department but in an all black line to which he was assigned on the basis 
of race before 1974. Both applicants are 
fully qualified to fill the vacancy. The 
white is given the job because of a rule 
giving preference to employees from the 
same line of progression as that in which 
the job exists;

(3) A black with 30 years employment and a white 
with only 5 years apply for promotion to a 
job in a line of progression in department 
A. Both already work in that line. The 
white, however, has a job higher up in the 
line because the black, initially assigned, 
on the basis of race prior to 1974 to an 
all black department has only recently 
succeeded in transferring into this pre­
viously all white department. Both applicants 
are fully qualified to fill the vacancy. The 
white is given the job because of a rule 
giving preference to employees with higher 
ranking jobs in the line of progression;

(4) A black applies for a job in 1965 and is rejected because of his race; he is subsequently 
hired in 1968. A white employee hired in 1966 
works at the same job. In layoffs from thisjob or in promotions to the next job in the 
line of progression the white is given a 
preference because he is senior by 1 year.
Compare Franks v. Bowman Transportation Co., supra.

The proposed waiver would bar any form of relief in these 
situations when they occur in 1977 or 1980. and would im­
munize the defendants from legal action to alter these pre­
ferential rules.

51



Appellees seek to avoid the obviously prospective nature 
of such a waiver by asserting that the only "act of dis­
crimination" was the creation prior to 1974 of black and 
white departments and that the application of a rule which 
gives preference to employees of the all-white department 
is not "act of discrimination," but merely a "continued 
effect of past discrimination." Since the "discrimina­
tion" occurred in the "past," respondents reason that the 
waiver is retrospective even when applied to events tran­
spiring in 1980 or later. But Alexander cannot be distin­
guished by such semantic sleight of hand. The problem 
presented by this proposed waiver is not unlike a case in 
which a school board, having assigned pupils on the basis 
of race in a de. jure segregated school system,obtained 
from parents a waiver of their right to the disestablish­
ment of racially identifiable schools. No court in the 
land would uphold releases signed by the parents of school 
age children purporting to relinquish their right "to elim­
inate from the public schools all vestiges of state imposed 
segregation." Swann v. Charlotte-Mecklenbury Board of 
Education, 402 U.S. 1, 15(1971).

If, as appellants contend, the prospective aspect of 
the waivers is invalid, the responsibilities of the district 
court order Rule 23(e) would be substantially lessened.
There would be no need to inquire as to whether the injunctive 
relief provided by the Consent Decrees was adequate, since

52



employees who signed waivers would not by so dcdng be compromising 
their rights to seek additional injunctive relief. Although an 
inquiry as to the adequacy of the monetary relief would still 
be necessary, the district court would not need to consider 
the employees' claims to back pay since April 12, 1974, for 
future pay, or for future pension benefits, since execution 
of the waiver would not entail a release of these claims.
The size of the total pre-1974 claims is far more capable of 
ascertainment, and the determination as to whether, for all 
employees or certain subclasses, the back pay offer is a 
reasonable compromise of those pre-1974 claims is corresponding­
ly easier. Such a limitation would also simplify the district 
court's problems in fashioning an intelligible notice and release, 
since evidence below demonstrated that the meaning of a waiver 
of "future effects of past discrimination" was not readily 
comprehensible to steelworkers, 590a-596a, or the district 
judge, 276a-278a.

There are several reasons why this Court should decide,, 
prior to the back pay offer, whether the prospective aspects 
of the waivers are valid. First, and most important, the 
employees to be offered money under the consent decrees are 
entitled to know what rights they are being asked to waive.
An employee cannot make a knowing and intelligent decision to 
waive the rights encompassed within the release unless he knows 
what those rights are. Second, the permissible scope of the 
release, and thus the nature of the rights to be lost, will bear 
directly on the court's determination as to whether, for some or

53



all employees, the compromise embodied in the back pay offer 
is fair and reasonable. Thus neither this Court nor the 
district court can satisfy the requirements of Rule 23(e) 
without knowing what rights will be lost in return for the 
back pay offered.

Ill• The District Court Erred in Approving 
The Notice of Rights, etc., E.E.O.C.
Letters, and Back Pay Tender Procedures

A. The Notice of Rights and Related Documents
Appellants maintain that the Notice of Rights and 

other documents drafted by the defendants, and approved by the
district court,have the combined effect, in the context of the

\

back pay tender procedures, of minimizing the potential importance 
of the employee's rights in the Rodgers litigation, rendering 
unintelligible the rights which are to be lost by signing a 
release, and deterring employees from seeking the advice of 
counsel before deciding whether to accept the back pay tender.
1. Intelligibility of the Notices, etc.

Plaintiffs offered extensive evidence in the district 
court demonstrating that the proposed notice and release were 
not comprehensible to the average Homestead steelworker. An 
analysis of the vocabulary necessary to understand these docu­
ments revealed that a median grade reading level of 1 0 . 5 years 
was required (353a). The Nelson-Denny Reading Comprehension 
Test, administered to a sample of minority employees, revealed 
an average reading level of 7.5 years. This was confirmed by 
the defendants' records as to the educational background of 
black employees. Compare 665a with 356a. Several
portions of the documents required a reading level in excess

54



of 1 2th grade, including the release itself, the release on the 
check, and much of the explanation of the Rodgers case (652a- 
662a).

A group of 30 minority employees were asked to read 
the proposed documents and were then questioned by experts on 
linguistics about what they had read. Many aspects of the docu­
ments were not in fact understood by many employees, and no one 
could comprehend the phrase "continuing effects of past discrimina­
tion" (590a-599a). Indeed, the district judge conceded he was
somewhat uncertain as to the meaning of that phrase, though he 
declined to clarify it (276a-278a). A group of graduate students 
at the University of Pennsylvania were unable to understand 
various legal terms employed, such as "declaratory relief" and 
"injunctive relief." The defendants offered no evidence whatever 
to rebut any of this testimony.

The district court did not disbelieve any of plaintiffs 
evidence. The judge stated:

I have listened attentively to that 
testimony and, candidly, cannot say 

, that'I find it utterly devoid of 
merit. Indeed, I am,inclined to 
believe that the general question of 
the "readability" level of class and 
other legal notices is one which might 
well require judicial consideration at 
an appropriate time. (2 0a).

But the district court declined, nonetheless, to modify a single 
word of the disputed documents. That refusal was grounded on 
several considerations —  the belief that the documents had been 
prepared in "good faith" (20a), the fact that other legal 
notices were commonly as incomprehensible (21a), and the 
court's concern that correcting the defects involved would take 
additional time (id.). The refusal was a clear error of law.

55



None of these grounds is sufficient to justify the 
district court's failure to take any steps at all to deal with 
the problems shown to exist with the notices, etc. The possibility 
that the notices may have been drafted in good faith was clearly 
irrelevant to the court's responsibility to do everything possible 
to enable the employees to make intelligent decisions. The in­
comprehensibility of past notices did.not justify persistence in 
that error, especially when the recipients in this case doubtless 
have a substantially lower reading level than recipients of notices 
in securities cases. Nor was it consistent with the district 
court's responsibilities to send out a defective notice now rather 
than a more intelligible one a few weeks hence. The delay needed 
to produce an optimal notice was relatively brief and substantial 
improvements could have been made in even a shorter period of time.
2. Bias in the Notices, etc.

The evidence in the district court clearly demonstrated 
the manner in which the notices, etc., were written subtly en- 
courged employees to sign the releases. The bias in the documents 
had several aspects. Certain problems were apparent from the sub­
stance of what was stated: the notices discussed at length the
"likely" delays in Rodgers (see 617a-618a)> omitted from its list 
of "what to do" consulting with an attorney (637a-638a), and instructed 
employees in their heading to "Read it carefully before signing", 
rather than "before deciding whether or not to sign" (64la).
The notice explained the consent decrees were a compromise because 
the defendants claimed they were innocent and were paying money 
to non-victims, but omitted any suggestion that the government 
had compromised as to the amount of back pay or type of injunctive 
relief C640a). Moreover, even in the substantively objective

56



sentences the language chosen emphasized the desirability of 
signing the waiver. Thus in describing the employees' rights 
or relief in pending or possible litigation the documents re­
peatedly use the words "if any", although the literal meaning 
of the sentences would have been the same without them (614a- 
620a). Not coincidentally such bias in substance and language 
were concentrated in the passages which require less than a ninth 
grade reading level and which employees are likely to rely on 
most heavily (641a-645a).

Here, as with the matter of intelligibility, the district 
court recognized the problems but inexplicably refused to correct 
them. The testimony introduced by appellant was conceded to be 
not "devoid of merit" (20a), although the court believed that 
the bias involved was sufficiently subtle or sophisticated as not 
to fall within the "common" or "lay" notions of prejudice (21a). 
Again, however, the court declined to deal with these problems 
because of the delay that might be involved. Td. We submit that 
the district court erred as a matter of law both in approving the 
documents despite these problems because of his desire to send out 
the back pay as soon as possible, and in refusing to correct the 
more egregious problems delineated by plaintiffs, for which plain­
tiffs proposed more balanced language which could have been sub­
stituted without any delay whatever.
3. Substantive Content

Appellants objected below that the proposed notices did 
not provide sufficient information, particularly regarding the 
facts of the Rodgers case (261a-263a). The district court refused 
to include any of the additional information on the ground, inter 
alia, that the description of the Rodgers litigation had been 
described "fully and accurately" (I9a).



This aspect of the district court’s decision was clearly 
erroneous. The proposed notice omits a wide variety of facts 
material to an understanding of Rodgers and of the possible relief 
for a class member;(a) The notice is silent as to the specific 
type of discrimination alleged, e.g. a restrictive seniority 
system, unlawful testing, exclusion from training, etc. (261a).
It states only in the broadest possible terms that the complaint 
alleges a violation of "the duty of fair representation" by the 
union and discrimination "in compensation and other terms, con­
ditions and privileges of employment" (70x). This is clearly
insufficient to enable an employee to understand if his problem 
is encompassed within the complaint or understood by the class 
representatives. (b) With regard to the possibilities of in­
junctive relief that might be lost if the waiver were signed, 
the notice states vaguely that certain "special benefits" may be 
lost (70aa). The notice should have spelled out what such 
benefits might include,such as 1-or 2-step bidding, constructive 
seniority, etc. (c) In stark comparison to this vagueness 
the documents stress at length that Rodgers is likely to be 
delayed for several years (70z). This chilling description 
should have been accompanied by an explanation that, if such a 
delay occurred, the ultimate award of back pay would include 
interest (262a). (d) Plaintiffs have obtained through discovery
a substantial amount of information, bearing on both the likelihood 
of a finding of liability and on the size of each employee's poten­
tial claim. The notice neither includes any of this information 
nor discloses that it exists and is available from plaintiff's 
counsel (262a-263a).

58



B. The E.E.O.C. Letters
On February 5, 1976, the Equal Employment Opportunity 

Commission filed a Motion for Leave to Make Special Appearance, 
seeking permission to send certain letters related to the back 
pay tender to various employees at Homestead. The E.E.O.C. 
proposed to send a letter to all employees with pending E.E.O.C. 
chargeswho were to receive an offer of back pay. If an employee's 
charge falls "wholly within the Consent Decree", letter "A" is to 
be used. If the charge is only partially within the scope of the 
decrees, or involve a wholly unrelated problem, letter "B" and 
"C", respectively, are to be used. Letter A constains a recom­
mendation by the government that the employee take the tender 
and waive his rights; Letters B and C contain no recommendations.

Appellants objected to the proposed letters on three 
types of grounds. First appellants objected that letter A was 
clearly inaccurate, since the recommendation was based on a 
purported decision by E.E.O.C. that "the practices complained 
of in your charge have been fully resolved by the relief provided 
by these Consent Decrees (265a). In fact the E.E.O.C. had
made no analysis of whether the back pay offer to each employee 
bore any reasonable relation to his back pay claim, and the 
E.E.O.C. has not reviewed whether the injunctive provisions 
of the decrees have succeeded in ending discrimination at Homestead. 
Second, the letters were utterly devoid of factual information re­
garding the type of discrimination at Homestead, the actual opera­
tion of the decrees, the pendency of the Rodgers case, the basis 
of calculating the back pay offer, or, of course, the non-existent 
E.E.O.C. analysis of how the decrees had actual employee's problems.
Such" information is clearly essential to an employee's decision 
whether to waive his rights, and the Commission's failure to provide

59



it is inconsistent, at least in spirit, with its regulations 
requiring a detailed written statement at a critical phase of 
the processing of a charge. 29 C.F.R. § 1601.19b. Third, although 
the government had earlier represented to Judge Pointer that such
information could be obtained through conferences with E.E.O.C.

48/
personnel, the letters do not indicate that such conferences 
are available, nor mention that the assistance of counsel at such

V.

a conference would be available.
Appellants briefed in detail the apparent defects in the 

letters (264a-267a). Neither the government, the company nor the 
union filed briefs regarding these objections, or presented 
orally any disagreement to those objections. Neither the govern­
ment, the company nor the union in any way opposed appellants' 
request that the letters be modified in certain ways so as to 
correct the delineated defects. Despite this- the district court 
summarily approved the disputed letters:

The United States Equal Employment Opportu­nity Commission has moved this Court to approve 
the sending of certain documents relating to 
the tender offer to certain members of plain­
tiffs ' class who have charges pending before 
the Commission. Judge Pointer approved the 
form and text of the Commission letters on 
January 14, 1976, and I can see no reason to 
preclude or delay their sending. The E.E.O.C's 
order will also be granted. 24a-25a.

48/ in opposing, before Judge Pointer, a request for specific 
information, counsel for the E.E.O.C. stated "[W]e prefer and 
suggest that it is much more likely to lead to a well informed 
charging party to use the conference approach . . . the district 
offices . . . will be talking to the individual charging party,
analyzing their charge, explaining how the decree resolves their 
particular grievance and what their rights are." Transcript of 
Hearing of January 2, 1976, p. 136.

60



Here, as with other matters discussed, supra, the district judge 
failed to squarely rule on the substance of appellants' objections.

The district court's remarks seem to rest on three 
possible grounds: (1) that the court was in a hurry to send
out the letters and could not wait to decide if they were in­
accurate or misleading, (2) that the appellants sought to preclude 
completely the sending of the letters, whereas in fact appellants 
sought merely to modify them, and (3) that the court lacked juris­
diction to review this matter because the letters had earlier 
been presented to Judge Pointer. None of these reasons, we submit, 
justified Judge Teitelbaum's refusal to consider whether the letters 
he was asked to approve were in fact inaccurate or misleading. His 
failure to do so was a clear error of law and the letters should 
have been modified in the manner requested by appellants below.

C. Procedure and Opportunity for Consultation 
With Counsel

Even if employees were provided with the optimal notice
of rights, and E.E.O.C. letter where applicable, the most important
and efficacious way of assuring that any decision will be knowing
and voluntary is through consultation with informed and experienced
counsel. A decision as to whether accepting the back pay offer is
in the best interest of each individual employee requires a thorough
knowledge of that employee's rights under Title VII, including the
increasingly complex case law regarding remedies such as constructive
seniority and bumping. Also necessary is a detailed understanding,
still only partially unearthed by the discovery in this case, of
the discriminatory practices which have existed during the last

,-units and 300 linesseveral decades in 11 departments 80 seniority7 of progression at 
the Homestead Works. The choice which each employee in this case

61



must make, and the consequences of that decision, are substantially 
more complex than those which must be made by a criminal defendant, 
with regard to which the most stringent of protections have been 
fashioned by the courts.

The importance of such consultation in this case is 
all the greater, because of the other problems detailed supra.
The district court, in approving the notice and back pay tender 
over appellants' objections, relied to a substantial degree on 
its assumption that any problems in the documents could be over­
come by the fact that

plaintiffs' counsel presently possess and will 
continue to enjoy, the unfettered right to 
contact and consult with members of the Rodgers 
class for the purpose of advising them with 
respect to the options presented by the tender.
I have no doubt that counsel's activities in 
this regard will provide an adequate counter­
weight to whatever subconscious bias might be said to lurk in the language of the tender 
notice and release forms. 22a.

The possibility of consultation with counsel is no excuse for 
disseminating inaccurate or misleading notices or other materials. 
Indeed, such defects in the written information may themselves 
deter such consultation by persuading an employee that signing 
the waiver is virtually mandatory or that further litigation is 
futile, and that consulting an attorney would be essentially pointless 
The problems noted above are, we suggest, of that magnitude.

In the district court appellants objected to three 
distinct aspects of the back pay procedure which were certain 
to prevent or deter consultation between minority employees 
and counsel.
1. 45 Dav Limit - Minority employees will have approximately
45 days from receipt of the back pay offer in which to cash the 
check enclosed. If an employee does not cash the check by the

62



end of this period it automatically becomes void.
It is, as a practical matter, literally impossible for 

plaintiffs' counsel to consult in this brief period of time with 
more than a small fraction of the class members who will need 
advice. Back pay will be offered to over 670 minority employees. 
Interviews which we have conducted in connection with discovery 
indicates that at least two hours of discussion with an employee 
would be necessary to obtain from him such information as he has 
on his employment history and to explain to him the relevant facts 
and law of which we are already cognizant. Since discovery in 
this case is still far from complete, we anticipate that in a 
substantial number of instances we will need additional informa­
tion from the defendants to enable the employee to make an intel­
ligent decision. The legal and factual problems posed by the 
proposed back pay tender are so complex as to require that each 
employee consult directly with an experienced Title VII attorney, 
rather than an investigator or law student working under our super­
vision .

If an attorney were to devote all his time to consulting 
with employees, forsaking all other professional responsibilities, 
and were able to schedule interviews for 8 hours of each day of the 
week, a total of 33 weeks would be required to advise all the class 
members in this case. While we would anticipate that some employees 
would elect to decide on the back pay tender without consulting with 
counsel, or choose to consult with attorneys unfamiliar with the 
facts of this case, it is also clear that, because of our other 
professional responsibilities, and due to the difficulty of scheduling 
interviews with workers during ordinary business hours, the actual 
number of employees who can be interviewed in a week will be less

63



than that hypothesized above. Bearing in mind these competing 
considerations, a minimum of six months would be required to 
consult with a substantial portion of the class members to be 
offered back pay.

Although the notices provide a procedure for ob­
taining additional time, it is clearly inadequate to solve the 
problems posed by the proposed tender at Homestead. An employee 
who wants additional time must request it within 15 days of re­
ceiving the back pay tender. The request is made to the Audit 
and Review Committee established by the decrees, which is composed 
of 5 representatives of the defendant companies, 5 representatives 
of the defendant union, and a single representative of the govern­
ment. There are no standards as to when the committee must grant 
extensions, how quickly it must act, or when, if ever, its 
decisions are subject to judicial scrutiny. Aside from the 
lack of standards, the procedure suffers from two fatal defects. 
First, there is no way we can ascertain within 15 days which 
employees will want to consult with us, and how many of them 
cannot be seen by the 45th day. Second, until an employee is 
actually interviewed, there is no way we can know if we will need 
additional information, and thus additional time, in order to 
advise him.

The defendants in this action have no legitimate reason 
for insisting that the decisions be made within 45 days, and no 
argument was advanced by them in the district court that either 
the company or union would in any way be injured if employees 
were given longer to decide. The district court had a clear 
obligation to fashion a procedure which allowed sufficient time 
for individualized consultation, and to enjoin any back pay

64



tender that did not include such a procedure. The court's failure 
to do so in this case was a clear error of law.
2. Availability of Free Counsel - In the proceedings below 
counsel for appellants represented to the district court, as 
they had in the past, that they would be willing to advise class 
members about the back pay tender without charging a fee (262a).
The proposed Notice conveys precisely the opposite impression.
The four page insert, styled "Effect of Release on Pending Litiga­
tion", mentions the name of the attorneys representing the plain­
tiff class, but is deliberately silent as to whether such counsel 
would be willing to advise minority employees under any circum­
stances (70x). The "Notice of Rights" states in a footnote,
"If you desire, you may obtain guidance and counsel from others, 
including an attorney. This is a matter of your choice, but any 
expense incurred will be for your own resolution" (70k). Read 
together these two provisions, at best, afford no reason to believe 
that plaintiffs' counsel would provide free counseling and, at worst, 
suggest that such legal services would only be available for a charge.

This problem is of controlling importance for many em­
ployees. The average back pay offer under the consent decrees is 
$649.00. As a practical matter, the fee that an ordinary attorney 
would charge for the detailed consultation necessary in this case 
would consume a substantial proportion of an employee's potential 
back pay check. If the attorney were unfamiliar with both Title 
VII and the facts of this case, his fee far the work needed to 
obtain the relevant information could easily exceed $649.00.
For the blue collar workers at a steel plant attorneys are 
regarded, correctly, as an expensive luxury to be incurred
only under the most grave of circumstances. Our experience 
during the last several months at Homestead confirms that the

65



minority employees are extremely concerned at the potential 
expense of consulting an attorney, and have been uniformly 
reluctant to seek our advice unless aware that such advice 
will be available without charge. To deny them that informa­
tion would be to effectively deter most employees from seeking 
legal advice.

Plaintiffs' counsel asked the court below to correct 
this critical defect by expressly advising minority employees 
in the proposed notice that such free legal advice was available 
(262a). The request was renewed at the-hearing of February
17, 1976, and was rejected by the district court.

MR. MARCUS: . . . .  The clarification I address 
myself to, your Honor, is the footnote on 
Page 2 of Exhibit 3. In the footnote the 
Audit and Review Committee states "If you 
desire you may obtain counsel or guidance 
from others or an attorney. Any expense 
will be at your own resolution." As your 
,Honor is fully aware counsel for the plain­
tiffs have not asked for any fees from class 
members in this case and we will not ask for 
any fee.

THE COURT: They don't have to come to you for 
counseling and guidance.

MR. MARCUS: I think they should know that counsel 
is available at no expense.

THE COURT: You don't really expect that counsel
will advise you for free do you? [sic] Well,
I am not going to suggest to anybody that in 
getting counsel they should seek counsel who 
has an interest in the case and you are in the litigation. If they want to come to you 
that is their business but the Court isn't 
going to suggest anything like that and don't 
pursue it any further. 436a.

The court clearly understood that withholding information that 
counseling would be free it would substantially reduce the number 
of employees seeking advice from counsel representing the class.

66



The court refused to disclose that information to minority 
employees for the express purpose of deterring them from seeking 
such counsel.

This aspect of the district court's decision is clearly 
an error of law. In Rodgers v. United States Steel, 508 F.2d 
152 (3rd Cir. 19751, cert, den. 46 L.E. 2d 50 (1975) this Court 
directed Judge Teitelbaum to cease restraining communication 
between plaintiffs' counsel and class members. There, as here, 
Judge Teitelbaum had fashioned an obstacle to such communication 
because of his apparent belief, in no way supported by the record, 
that appellants' counsel were incurably hostile to the consent 
decree merely because they were counsel in this case. The 
obstacle created in this case, the spectre of a fee if an employee 
initiates such discussions, is clearly inconsistent with thel975 
decision of this Court. The district court's attempt to obstruct 
such communication between class members and their attorneys is all 
the more unintelligible in the face of the district court's order 
of December 9, 1975, certifying this case as a class action. That 
order confirmed the attorney-client relationship between class 
members and plaintiffs 1 counsel, and eliminated any possible basis 
for the deliberate obstruction of consultation between them.
3. One-Step Procedure - Under the procedure proposed by the 
defendants, and approved by the district court, the employees 
will be mailed simultaneously both the notice of rights, explain­
ing the back pay tender and waiver, and the back pay check which 
will expire in 45 days. Appellants urged below, as they do here, 
that a two step procedure should be established, to wit that em­
ployees first be sent a notice of rights and told that a check 
is available on request, and second that an appropriate check
be provided to each employee who requests it (260a-261a).

- 67 -



The one-step procedure poses two inter-related problems. 
First, it maximizes the pressure on an employee in need of funds 
to cash the check at once without reading the notice, consulting 
an attorney, or considering carefully the consequences of his 
decision. Depending on the time of day when the check is received 
it would be possible for an employee to cash his check literally 
minutes after receiving it. Among minority employees at Homestead, 
whose average salary is less than $12,000 a year (828a-835a), 
temptation to put to immediate use a check for over $600 is certain 
to be very substantial. That pressure is all the greater for em­
ployees who, in the union's words, "have been on lay off for sub­
stantial amounts of time" and "are eagerly awaiting the tender

49/back pay." Second, a two step process would doubtless afford em­
ployees a longer period of time to decide whether to take the 
money, and to seek the advice of counsel in connection with the 
decis ion.

The district court rejected the use of a two-step proce­
dure on the ground that " [t]he 'one-step' procedure has been approved 
by Judge Pointer in consideration of the delay and substantial risks 
that would attend the use of a 'two-step' procedure (see pp. 69-72, 
77-81 of the transcript of the January 2, 1976 hearing before Judge 
Pointer), and I do not believe it necessary that we deviate from 
his decision here" (23a-24a).

Judge Pointer, however, did not approve a one-step pro­
cedure because of "the delay and substantial risks" of a two-step 
procedure. The cited pages from the hearing before Pointer contain, 
not Pointer's decision, but the arguments of counsel for the union 
and company. These were not arguments accepted by Pointer in his own 
decision. On the contrary, Pointer concluded that under a one-step 
49/ Union's Opposition To The Motion For Consolidationp.6.

-68-



procedure there was a greater risk that employees would "sign 
the waiver without full knowledge of the facts." Pointer approved 
the one-step procedure on the express ground that by using it the 
union and company assumed the risk that the resulting waivers 
would be invalid. Pointer concluded that the use of a one-step 
procedure was not unfair per se, and that an employee could

50/challenge the validity of the waiver because of that procedure. 
Counsel for the defendant companies advised Judge Pointer that a 
local district court, where a class action was pending, could order 
a two-step procedure, and urged that such a decision could and

51/should be made by each such court and not by Pointer.
The decision of the district court in this case is thus 

erroneous as a matter of law for several distinct reasons. First, 
it is based on the assumption that Pointer approved the one-step 
procedure because of the "risk and delay" of a two-step procedure, 
whereas in fact Pointer made no such decision. Second, the district 
judge, in failing to make an independent determination as to the

50/ Hearing of January 2, 1976, before Judge Pointer, pp. 153-54 
("Again for the record I say this can still be contested by an in­
dividual in later litigation who attempts to bring ah action and 
is in a position to say, 'My waiver was ineffective because I was 
pressured under the context or I didn't get enough information to 
intelligently make any qhoice.' The court which has that issue 
before it will have to resolve it.")
51/ Id. pp. 75-76

"THE COURT: Let me ask you this. Do you think that a District
Court in Pennsylvania where private action, class action is pending 
could on application for notices to be sent out in that case decide yes, to allow that to be tendered but perhaps to require that it be 
done in a two-step procedure or that more than thirty days be allowed

MR. MURRAY: I think that I would not first try to state whata District Court will or will not do, but I think its within the 
discretion of that Court to do what it thinks is right and in a 
particular circumstance. I think that decision should be made at 
the local Court and not here."

- 6 9 -

t



propriety of the one-step procedure, not only abdicated its 
own responsibilities but acted in a manner precisely the opposite 
of what Pointer intended. Third, had the district judge in fact 
ruled on the propriety of the one-step procedure under the cir­
cumstances of this case, particularly its tendency to deter con­
sultation with counsel, it would have been compelled to direct 
use of a two-step procedure.

CONCLUSION
For the above reasons the decision of the district 

court denying the injunction and approving the back pay tender, 
notices, etc., and E.E.O.C. letters should be reversed.

Respectfully submitted,

Of Counsel:
BRUCE W. KAUFFMAN

Dilworth, Paxson, Kalis’n & Levy
2600 The Fidelity Building 
123 South Broad Street 
Philadelphia, Pa.

THOMAS M. KERR415 Oliver Building 
Pittsburgh, Pa. 15222

BERNARD D. MARCUS 
PAUL H. TITUS 
JOHN HOGUE 
KAUFMAN & HARRIS

415 Oliver Building 
Pittsburgh, Pa. 15222

JACK GREENBERG 
JAMES M. NABRIT, III BARRY L. GOLDSTEIN 
DEBORAH M. GREENBERG ERIC SCHNAPPER

10 Columbus Circle
New York, New York 10019

Counsel for Appellants

70