Luevano v. Campbell Appendix to Background Memorandum Regarding the Settlement of the Pace Case

    V

BACKGROUND MEMORANDUM REGARDING 
THE SETTLEMENT OF THE PACE CASE, 

Luevano v. Campbell j*/

Table of Contents
Page

oduction 1

THE HISTORY OF THE LITIGATION 2

A. Luevano Action 2

1 . Description of the Lawsuit: Parties, Class 
Definition and Remedy 2

2. Course of Litigation 4

B. Litiaation Prior to Luevano 10

1 . Douqlas v. Hampton 10

2 . Ellis v. NARF 12

THE PROBLEM WITH PACE: USE? LEGAL BACKGROUND; 
DISCRIMINATORY EFFECT; LACK OF JUSTIFICATION 15

A. Use of the PACE 15

B. Legal Background 17

C. Discriminatory Effect 21

D. Lack of Justification 23

1 . Description of the PACE test 23

2 . General Problems 24

*/ This memorandum was prepared by lawyers for the plaintiffs, Luevano, 
et. al. The plaintiffs are represented by lawyers from five civil rights 
organizations, Lawyers' Committee for Civil Rights Under Law, Mexican 
American Legal Defense and Educational Fund, NAACP Legal Defense and 
Educational Fund, Puerto Rican Legal Defense and Education Fund and San 
Francisco Lawyers' Committee for Urban Affairs, as well as by lawyers in 
private practice.

If you have any questions regarding this Memorandum, please call 
Rick Seymour, Lawyers’ Committee, 202-628-6700, Barry L. Goldstein,
NAACP LDF, 202-638-3278 or Mike Bailer, MALDEF, 415-981-5800.



il

Page
III. THE SOLUTIONS: PROVISIONS IN THE CONSENT

DECREE; THE REMEDY THAT WOULD BE AVAIL­
ABLE IF THE PLAINTIFFS PREVAIL IN COURT 31
A. Description of the Consent Decree 31
B. Remedy Available after Litigation 36

Appendix A Letter from Dr. William Burns to the 
N.Y. Times

Appendix B Affidavits executed by Dr. Barrett in 
Douglas v. Hampton (PACE sample questions 
attached as exhibit)

Appendix C Plaintiffs' Trial Brief Re PACE, FSEE and 
the Appentice Selection System, Ellis v. 
NARF, pages 1-40.

Appendix D Letter from John H. Shenefield, Former 
Associate Attorney General, to the 
Washington Star



INTRODUCTION:

On January 16, 1981 Judge Joyce Green provisionally approved 
the Consent Decree in Luevano v. Campbell which calls for the 
federal government to phase out its use of an examination which 
has an enormous adverse impact upon blacks and Hispanics. This 
settlement represents an important civil rights issue. In effect, the 
federal government has agreed to apply to their system for selecting 
individuals for hire into the civil service the Supreme Court's 
admonition that Title VII of the Civil Rights Act of 1964 "proscribes 
not only overt discrimination but also practices that are fair in 
form but discriminatory in operation. The touchstone is business 
necessity. If an employment practice which operates to exclude 
Negroes cannot be shown to be related to job performance, the prac­
tice is prohibited." Griggs v. Duke Power Co., 401 U.S. 424, 431 
(1971). The reasons why the Decree is a significant step towards 
insuring equal employment opportunity in the federal government con­
sistent with the requirements of the Civil Rights Act and why the 
Decree is sound public policy are apparent if the history of the 
litigation, the problem with the Professional and Administrative 
Career Examination (PACE), and the solution to that problem offered 
by the Decree are reviewed.



2

I. THE HISTORY OF THE LITIGATION 
A. Luevano Action

1. Description of the Lawsuit; the Parties, Class 
Definition and Remedy

In January 1979, the plaintiffs filed a class-action com­
plaint on behalf of themselves and other blacks and Hispanics alleging 
that the "adverse impact of the PACE on plaintiffs and their class is 
so severe that it threatens to segregate the middle and upper 
levels of the executive branch of the Federal government" and that 
"despite the disproportionately adverse effect of the PACE on 
blacks and Hispanics" the defendant, the Office of Personnel 
Management, had never validated (demonstrated the job-relatedness) 
of the PACE as required by law. Thus, plaintiffs alleged that the 
PACE was discriminatory and unlawful under Title VII of the Civil 
Rights Act of 1964 (as amended 1972), 42 U.S.C. §§2000e et.seq.
(Title VII).

The plaintiffs include Angel Luevano, an Hispanic citizen, 
Melody A. Van, a black citizen, and Vicky L. Chapman, a black citizen. 
All three plaintiffs took and failed the PACE in April 1978 and thus 
were barred from consideration for hire into entry-level positions 
for which the PACE is used. All three plaintiffs filed administrative 
complaints. Additionally, there is an organizational plaintiff, I. M. 
A. G. E. De California (IMAGE). IMAGE is an association of Hispanic 
American governmental employees. IMAGE has approximately 80 chapters 
and 3,000 members nationwide. Subsequently, a fourth individual plain­
tiff, Vilma D. Diaz, an Hispanic citizen was added. She took the 
PACE in March 1979, failed and thus was banned from consideration



3

for hire into all entry-level positions for which the PACE is used.
As did the other individual complainants, Ms. Diaz properly filed 
an administrative complaint.

The plaintiffs are represented by lawyers from five civil 
rights organizations, Lawyers' Committee for Civil Rights Under Law, 
Mexican American Legal Defense and Educational Fund, NAACP Legal 
Defense and Educational Fund, Puerto Rican Legal Defense and Education 
Fund, and San Francisco Lawyers' Committee for Urban Affairs, as 
well as by lawyers in private practice.

The plaintiffs sought to represent a class defined as follows:
All past, present, and future black and 
Hispanic applicants for professional, 
administrative, or technical jobs for 
which the defendant administers the 
Professional and Administrative Career 
Examination (PACE) who have taken the 
Professional and Administrative Career 
Examination (PACE) within the period of 
limitations or who will take it here­
after, and who have been, are being, or 
may in the future be, denied equal 
employment or promotional opportunities 
as a result of defendant's use of the 
Professional and Administrative Career 
Examination (PACE).

The defendant, objected to the inclusion in the class of in­
dividuals who were denied promotional opportunity because the 
plaintiffs do not possess the same interest as individuals who were 
denied promotion. However, the District Court ruled in favor of the 
plaintiffs and included in the class individuals denied promotional 
opportunities as a result of the defendant's use of the PACE because 
the underlying question of the litigation concerns the PACE and the 
plaintiffs "are fully capable of litigating that allegation as it 
applies both to initial applicants and possible promotes". Order, 
November 12, 1980*



To remedy the unlawful use of the PACE, the plaintiffs sought 
an injunction barring the Government from using the PACE, affirmative 
action requirements designed to compensate the class for the loss of 
employment opportunity, back pay to equal the loss of wages suffered 
because of the denial of jobs, and other appropriate relief. The 
District Court's decision to include individuals who were denied pro­
motional opportunity because of the use of the PACE greatly in­
creased the potential liability of the Government. The PACE was 
only developed by OPM for use as a selection instrument for hire.
0PM has not even contended that the PACE is appropriate for use 
as an instrument for the promotion of experienced employees. However, 
agencies and departments have used the PACE to select individuals for 
promotion, a purpose for which the PACE is neither designed nor in­
tended. Since the Government has no justification for the use of 
the PACE for promotion and since the PACE has a substantial adverse 
impact, the class members denied promotional opportunity because of 
the use of the PACE would in all likelihood, be entitled to affirma­
tive relief and back pay, see section III, B, regardless of 
whether the PACE is appropriate for selection for hire.

2. Course of Litigation
In March 1979, two months after they filed the Complaint 

the plaintiffs filed a set of interrogatories inquiring as to the use, 
racial effect, and justification for the use of the PACE. Also the 
plaintiffs filed a request for production of documents which contained 
information regarding these issues. As discussed in the following

i/section, the Luevano action is actually the third in a series of 
major lawsuits which have challenged the Government's use of the PACE 
or the test used immediately preceding the PACE, the Federal Service 
Entrance Examination (FSEE).
17 The two prior lawsuits, Douglas v. Hampton, 512 F. 2d 976 (D.C. 1975); Ellis v. NARF, Civil Action No. C-73-1794 (N.D. Cal.)> are 
described in detail in section 3.



5

As a result of information gathered during the course of these 
lawsuits, the plaintiffs in Luevano had already obtained a con­
siderable amount of information regarding the use, racial effect 
and purported justification for the PACE.

Shortly after the filing of Luevano the parties agreed to«
explore the possibility of settlement. Discussions began within a 
couple of months after the filing of the lawsuit. As a result of 
representations made by the parties that settlement talks were pro­
gressing the District Court entered an Order on Aprii 18, 1979, pro­
viding that OPM did not have to respond to the Complaint and plaintiffs' 
discovery until the middle of June 1979. In order that "further 
negotiations toward a possible settlement may continue" the District 
Court by Orders dated June 21, July 20, and September 6 granted further 
extensions of time to the Government. In December 1979 the Government 
answered the Complaint but was granted by Order entered on December 13 
another extension of time to answer the discovery requests because:

the parties have conferred on several recent 
occasions and as a result of these meetings a 
settlement conference has been tentatively 
scheduled for January 16, 1980, in California 
in order to allow the full participation of 
plaintiffs' co-counsel. The purpose of the 
California meeting is to confer and hopefully 
resolve the remaining issues necessary for the 
settlement of this action.
After the January meeting in California the parties were 

close to settlement and so informed the District Court. However, the 
parties failed to finalize the agreement and the plaintiffs in July 
1980 requested the Government to admit certain facts. This request 
detailed information regarding the use, racial effect and justifica- 
for the PACE. During this period the parties continued to work



6

towards settlement. On September 15 the Government answered 
the plaintiffs' interrogatories and request for production of 
documents. On the following day the plaintiffs informed 
counsel for the Government that the answers, at least in 
part, were inadequate.

A status conference was held by the District Court on 
September 23, 1980. The parties informed the Court that the 
negotiations were continuing but having been so informed since 
April 1979, the District Court ordered the parties to take 
several actions in order to expedite settlement or litigation:

ORDERED that plaintiff shall have until September 25, 1980, 
to submit a motion asking the Court to consider as admitted the 
Requests for Admissions filed July 17, 1980, and that the defendant 
shall have until September 29, 1980, to respond to plaintiff's motion, 
and it is

FURTHER ORDERED that the defendant will make an offer of 
settlement no later than October 3, 1980, and that the parties 
will meet to discuss that offer no later than October 8, 1980, 
and that plaintiffs will respond with a counter-offer, as appro­
priate, no later than October 13, 1980, and it is

FURTHER ORDERED that the defendants and the plaintiffs will 
before October 3, 1980, discuss the outstanding issues regarding 
discovery, and that plaintiffs shall file as appropriate and not 
later than October 10, 1980, a motion to compel discovery, and it 
is

FURTHER ORDERED that the parties will convene in chambers 
for a Status Conference on October 23, 1980, at 9:30 A.M.

As a result of the Court's Order both litigation and 
settlement discussions progressed. OPM answered the request for 
admission of fact; the parties resolved the pending discovery 
dispute; the plaintiffs filed a second set of interrogatories and



7

a second set of requests for production of documents; and the 
parties informed the Court as to the additional time that would 
be required to prepare the case for trial. Also pursuant to the 
Court's direction the parties exchanged settlement terms covering 
the matters that remained unresolved after 17 months of negotia­
tions. As a result of this exchange, the parties reached a tenta­
tive agreement. As might be expected in a case involving the 
selection of candidates for 118 job categories in the federal civil 
service, the negotiations were long and arduous. As a result of 
the negotiations, the District Court granted six extensions of time 
beginning in April 1979 and ending in September 1980 with a direct 
order for the parties to exchange additional settlement proposals.

Due to the lengthy delay in the litigation, the Court 
did not grant any additional extensions in the litigation. Rather, 
on November 12, the Court ordered that trial would commence on June 
22, 1981. After 21 months of settlement discussions and an impend­
ing trial date, the parties finally concluded the settlement and it 
was presented to the District Court for provisional approval on 
January 9, 1981.

While engaging in settlement discussions, the plaintiffs' 
counsel with the assistance of experts reviewed the evidence regarding 
the adverse effect of the PACE upon minority candidates and the 
evidence regarding 0PM's attempt to justify the job-relatedness or 
validity of the PACE. The evidence of adverse impact was undisputed 
and overwhelming, see pp. 21-22 infra. The evidence regarding 
validity was complex. However, as described in greater detail in



8

section II, D, infra, we think that the evidence shows that OPM 
has not demonstrated that the PACE is job-related or appropriately 
used. We reached this conclusion based upon several sources of 
evidence. First, we had a considerable amount of evidence which had 
been gathered and analyzed in prior cases regarding the PACE or the 
FSEE. Second, we examined and we had experts examine reports pre­
pared by OPM regarding its attempts to justify the use of the PACE. 
Third, we consulted with experts in the field of personnel testing.
We then reviewed all this evidence in light of the applicable case 
law and administrative regulations.

In reviewing the PACE several experts have advised that 
the PACE had not been shown to be job related. We have consulted 
experts since the beginning of the lawsuit. In order to explain the 
development of the litigation it is helpful to describe briefly that 
consultation. We consulted Dr. William C. Burns, who is an in­
dustrial psychologist, the Director of Personnel Research for Pacific 
Gas and Electric Company, a former member in 1966 of Governor Reagan's 
Task Force on Efficiency and Cost Control in State Government, and a 
current member of the Advisory Panel on Personnel Selection Procedures, 
Division of Industrial-Organizational Psychology, American Psychological 
Association. Dr. Burns' opinion of the PACE is summarized in his letter 
to the N.Y. Times (which is attached as Appendix A). Dr. Burns has 
stated that "PACE is an affront to the merit principle" and that "PACE 
is the kind of test that discriminates most severely." Moreover, he 
thinks that "[ajnyone interested in trying to make the federal bureau­
cracy more efficient should welcome the chance to bury PACE and re­
place it with job-specific tests that give the government a way to 
locate the most qualified applicants from all groups."



9

We have also contacted Dr. Richard Barrett, an industrial
psychologist and a former Member of the Advisory Panel on Personnel
Selection Procedures, Division of Industrial—Organizational Psychology,
American Psychological Association. Dr. Barrett has testified in
many fair employment cases including the landmark Supreme Court cases
of Griggs y. puke Power Company and Albemarle Paper Company v. Moody.
Dr. Barrett has followed and reviewed the development of PACE from
its inception. He served as an expert for the plaintiffs in Douglas
v. Hampton which challenged the legality of the FSEE. In affidavits
executed for Douglas on November 1, 1975 and January 2, 1976 (which
are attached as Appendix B), Dr. Barrett stated that "the tests are
similar in format, content, difficulty, and emphasis on verbal and
numerical ability.... [T]he tests are so similar that I believe that
they would be highly correlated with each other, and [that the PACE]
would have an adverse impact on blacks similar to that found [in a
study on the FSEE]". Dr. Barrett correctly predicted the enormous
impact of the PACE. Dr. Barrett stated that: \

neither PACE nor the FSEE have been properly 
validated in accordance with professionally 
acceptable standards. Unlike the Civil 
Service Commission, private industry, the 
armed forces and educational institutions have 
all made substantial progress towards proper 
test validation and there is no professionally 
acceptable reason why the Civil Service Commission 
cannot do the same.

We have also consulted Dr. James Outtz, an industrial psycholo­
gist who has served as a private consultant to local governments. As 
did Drs. Burns and Barrett, Dr. Outtz advised that the PACE was neither 
properly validated nor properly used and that alternatives could be 
developed which would have less adverse impact upon minorities.



10

B. Litigation Prior to Luevano 
1. Douglas v. Hampton
Litigation challenging the PACE or its predecessor the FSEE 

began almost a decade ago. In order to fully understand Luevano, a 
brief review of this prior litigation is required. In 1971 a federal 
civil action, Douglas v. Hampton, was filed alleging that the use of 
the FSEE for the selection of individuals for hire constituted unlaw­
ful racial discrimination. The plaintiffs moved for a preliminary in­
junction against the use of the FSEE. The district court denied the 
motion and the plaintiffs appealed. The United States Court of 
Appeals, District of Columbia Circuit, in a detailed opinion rendered 
by Judge Spottswood Robinson vacated the opinion of the district 
court. Douglas v. Hampton, 512 F. 2d 976 (1975). The Court ruled 
that the plaintiffs were "likely to succeed on the merits", that 
the FSEE had a substantial adverse racial impact and that the Civil 
Service Commission had not demonstrated that the FSEE was valid. The 
Court commented upon the CSC's attempt to show job relatedness through

2J
the use of construct validity.

Although construct validity is a professionally 
recognized technique for proving validity, we

2 / The Court defined the " [t]hree techniques for proving the validity 
of testing procedures [which] have been judicially and professionally 
noted. 'Empirical' validity [also termed criterion-related validity] 
is demonstrated by identifying criteria that indicate successful job 
performance and then showing a correlation between test scores and 
those criteria. 'Construct' validity is proven when an examination is 
structured to determine the degree to which applicants possess identifi­
able characteristics that have been determined to be important to 
successful job performance.'Content' validity is established when the 
content of the test closely approximates the tasks to be performed on 
the job by the applicant." (Footnote omitted).

The standards for establishing validity according to these pro­
cedures are set forth in the Uniform Guidelines on Employee Selection 
Procedures, 43 Fed. Reg. 38290 (1978).



11

note that no court has found a demonstration of 
construct validity sufficient to satisfy Griggs 
[v. Duke Power Co;]. It may be that in a proper 
case a convincing demonstration of construct 
validity will suffice. It should be noted, 
however, that construct validity does not con­
clusively establish that test, results are 
directly related to job performance. It 
merely means that the test accurately measures 
certain constructs; in determining whether 
a showing of construct validity satisfies 
Griggs, the court must also determine whether 
the constructs are themselves related to job 
performance. In light of the strong pref­
erence expressed in reported opinions for 
empirical validity and the greater reliabil­
ity of empirical validity, we think construct 
validity may be considered, if at all, only in 
certain circumstances. (Footnote omitted).

This Opinion, by the Court of Appeals has some direct rel­
evance for Luevano since OPM maintains that it showed the job re­
lationship of PACE through construct validity and since the PACE, as 
Dr. Barrett stated, is "similar" to the FSEE. The issue of the validity 
of the FSEE or PACE was not finally decided in Douglas. In the district 
court the Government had replaced the FSEE with the PACE. The district 
court agreed that the issue of injunctive relief, whether to bar the 
use of the FSEE was moot; but the court stated the issue regarding in­
dividual relief for the plaintiffs, such as back pay, was not moot.
In Douglas the plaintiffs also attempted to challenge the successor 
to FSEE, the PACE. However, the Government argued and the district 
court agreed that prior to instituting a judicial challenge to the 
PACE individuals had to first exhaust their federal administrative 
remedies. Douglas v. Hampton, Civil Action No. 313-71 (Order,
January 20, 1976). Moreover, the Government offered to settle the

1/individual claims of the plaintiffs. Thus, the Government avoided 
having the issue of the validity of the FSEE and the PACE adjudicated.

3/ The eight plaintiffs in Douglas received a total of $105,000 in 
settlement of their claims. Stipulation of Compromise and Settlement; 
(April 13, 1977).



- 12-

2. Ellis v. NARF
In 1973 a class of black, Hispanic, Asian and Native 

American civilian employees and applicants for civilian employment 
at a naval facility in Alameda, California sued the Navy for main­
taining unlawful and discriminatory hiring, promotion, training 
and other practices, Ellis, et al. v. Naval Air Rework Facility,
Civil Action No. C-73-1794 (N.D. Calif.). The issue of the legality 
of the PACE was squarely raised by this case. Some of the counsel 
for plaintiffs in Ellis are now counsel for plaintiffs in Luevano.
In Ellis the plaintiffs undertook extensive discovery of the use, 
adverse impact and job relatedness of the PACE.

The evidence of the adverse racial impact of the PACE was 
dramatic. It is normally necessary for an individual to score at 
least 90 in order to obtain a high enough place on the register so 

that the applicant may actually receive a referral to an employing 
agency, see section II, A. Thus, as a practical matter, a score of 
90 may be viewed as a cut-off score for PACE applicants. The data 
for the San Francisco area made apparent that the PACE removed the 
entire black and Hispanic applicant pool from contention. Out of 
194 persons who obtained scores of 90 or higher, only one was black 
and none were either Hispanic or Filipino. (Not all of the applicants 
were identified by ethnic group).

Ethnic Distribution of 
Applicants With PACE Scores of 
90 or Higher (San Francisco Study) -

Number Who Total Who Obtained
Ethnic Grouo Took Test Scores of 90

White 683 172 (25..2%)
Black 93 1 ( 1 ..1%)Hispanic 42 0 ( 0%)
Filipino 46 0 ( 0%)

Total 1019 194 (19.0%)



13

In order for an applicant to be eligible for the PACE 
Register the applicant must obtain at least a score of 70 on 
the written test. The data compiled from the San Francisco 
study show that approximately two-thirds of the white applicants 
achieved a score of 70 or better whereas only one-tenth of black
applicants, one-third of Hispanic applicants and one-fifteenth of
the Filipino applicants attained scores of 70 or better. In other
words, nearly 90% of the black applicants, nearly 70% of the
Hispanic applicants and over 90% of the Filipino applicants were
declared to be ineligible as a result of their scores on the PACE.

Ethnic Distribution of Applicants 
With PACE Scores of 70 or Higher 
______ (San Francisco Study)_________

Number Who 
Took Test

683
93
42
46

Number Who Obtained 
Scores of 70 or Higher
460 (67.3%)
11 (11.8%)
14 (33.3%)
3 ( 6.5%)

Ethnic Group
White 
Black 
Hispanic 
Filipino

Total 1019 559 (54.9%)
Since the PACE had a severe discriminatory effect upon 

minority applicants, the Government had the burden to establish 
that the PACE was job related. (See section II, B, for a descrip­
tion of the applicable law). In Ellis the plaintiffs obtained the 
studies and analyses prepared by the Government in its attempt to 
justify the use of the PACE and took over 20 depositions of govern­
ment employees who were responsible for developing the PACE or 
attempting to justify its use. As a result of a detailed review 
of this material and consultations with experts, the plaintiffs



- 14 -

determined that the Government had not demonstrated that the 
PACE was job related or appropriately used. The position of 
the plaintiffs is set forth in some detail in "Plaintiffs' Trial 
Brief Re PACE, FSEE and the Apprentice Selection System". (The 
pages, 1-40, which pertain to the PACE are included as Appendix C). 
For example, the plaintiffs maintained that (1) the PACE was not 
the result of careful job analyses and test development but was in 
effect developed prior to the review of the jobs; evidence contrary 
to this a priori determination was ignored. Plaintiffs' Trial 
Brief in Ellis pp. 15-17, 31-33, Appendix D; (2) the abilities 
identified as important for the performance of jcb s by "subject 
matter experts" (government job analysts) were not tested by the 
PACE, id., pp. 27-29, while "quantitative ability was included 
despite the low evaluation of this ability by subject matter 
experts, id., pp. 30-31; (3) the Government did not have sufficient
empirical evidence to justify its conclusion that the PACE was 
justified for use in selection for 118 jobs when the effects of 
the test were measured with respect to only four jobs, id., pp.
19-21, 24-26; and (4) the studies performed for the four jobs 

contained critical flaws, id., pp. 21-23.
While these and other technical arguments provide a clear 

basis for a district court to find that the PACE was not job related, 
there are further arguments, which the plaintiffs would press in 
Luevano, see section II, D. In any event, as in Douglas v. Hampton, 
the issue of the validity of the PACE was not decided; rather in 
1978 the parties entered into a settlement. The agreement provided 
affirmative action, $500,000 in class back pay, limitations on the 
use of PACE, other injunctive relief and attorneys' fees.



15

II. THE PROBLEM WITH PACE: USE; LEGAL BACKGROUND; DISCRIMINATORY
EFFECT; LACK OF JUSTIFICATION
A. Use of the PACE
In the terminology associated with the selection of federal 

employees the word "examination" refers to the complete set of pro­
cedures by which selection for employment is made. "Test" specifically 
refers to the written test. The Professional and Administrative Career 
Examination (PACE) is an assessment instrument used by OPM to identify 
individuals for employment into entry-level jobs in 118 professional 
and administrative occupations in the federal service. These occupa­
tions vary considerably. For example, the following occupations are 
covered: Bond Sales Promotion, Outdoor Recreation Specialists,
Industrial Relations, Social Insurance Administration, Computer 
Specialist (Trainee), and Labor Management and Employee Relations.
(A complete list of occupations covered by the PACE is attached as 
Appendix A to the Consent Decree). In order to compete for an entry- 
level PACE job, the applicant must have a four-year college degree 
or three years of professional experience or the equivalent combina­
tion of experience and education. Over 90% of those individuals who 
compete in the PACE are or will be college graduates within nine 
months.

The plaintiffs in Luevano did not challenge the basic qualifi­
cation standard of experience and education. The Consent Decree 
leaves intact this basic qualification standard and the Government 
is free to continue to use the standard. The issue in Luevano 
concerns only the use of the written test portion of PACE.

The applicant must take a written test. The scores on the 
written test are converted into ratings. In order to be con­
sidered for competitive appointment, an individual must attain a



- 16 -

rating of 70 or higher. Due to the large number of applicants with 
high PACE ratings in many areas of the country and for many jobs , an 
applicant must have a rating of 90 or higher in order for the 
applicant to be referred to an agency for consideration for appoint­
ment. It should be noted that an applicant receives additional 
points on the rating scale if he or she has a sufficiently high 
grade ooint average or if, in accordance with 5 U.S.C. §3309, he

uor she qualifies for veteran's preference.
After eligible individuals with ratings of 70 or more have been 

identified, OPM prepares a rank-order list of the eligible applicants. 
If an agency has a vacant position in a PACE job category, the agency 
requests from the local OPM Area Office a list of names of PACE 
eligibles. The list is referred to as a "certificate". The agency 
selects from the certificate. In considering certified candidates, 
the agency must follow the "rule of three," 5 U.S.C. §3318, under 
which it can select any of the top three eligibles, with special 
consideration given to veterans as required by statute.

The written test portion of the PACE was first administered 
during the fall of 1974. In the first two years of the use of the PACE 
over 225,000 persons each year took the written test and approximately 
10,000 of these persons were selected. In the last two years, 
approximately 130,000 to 160,000 persons each year took the written 
test and approximately 7,000 of these persons were selected.

4 7 These practices are described in detail on pp. 16-17 of the 
Consent Decree.



B. Legal Background
What are the legal principles applicable to a lawsuit 

which claims that a written test like the PACE is discriminatory 
and unlawful? Chief Justice Burger, writing for a unanimous Supreme 
Court, established the basic principles governing the legality of 
a test or other employee selection standard. Griggs v, Duke Power 
Co., 401 U.S. 424 (1971). The Court ruled that the use of two 
selection devices —  a standard intelligence test and a high school 
diploma requirement —  violated Title VII of the Civil Rights Act 
of 1964 because the devices excluded blacks from consideration for 
jobs at a higher rate than they excluded whites (an occurrance 
referred to as "adverse impact" or "disparate treatment" in fair 
employment cases), and had not been shown to be job related, that 
is they did not "measure the person for the job," but only measured 
"the person in the abstract." 401 U.S. at 436. The Supreme Court 
stated that,

The objective of Congress in the enactment of Title VII 
is plain from the language of the statute. It was to 
achieve equality of employment opportunities and remove 
barriers that have operated in the past to favor an 
identifiable group of white employees over other 
employees. Under the Act, practices, procedures, or 
tests neutral on their face, and even neutral in 
terms of intent cannot be maintained if they operate' 
to ’freeze' the status quo of prior discriminatory 
practices. 401 U.S. at 429-30.

The Supreme Court further commented on issues directly relevant to
the legality of the PACE that,

Congress has now provided that tests or criteria for 
employment or promotion may not provide equality of opportunity merely in the sense of the fabled offer of 
milk for the stork and the fox. On the contrary,



- 18 -

Congress has now required that the posture and 
condition of the job seeker be taken into account...
The Act proscribes not only overt discrimination but 
also practices that are fair in form but discriminatory 
in operation. The touchstone is business necessity. If 
an employment practice which excludes Negroes cannot be 
shown to be related to job performance, the practice 
is prohibited. 401 U.S. at 431.
The facts of this case demonstrate the inadequacy of 
broad and general testing as well as the informality 
of using diplomas or degrees as fixed measures of 
capability. History is filled with examples of men 
and women who rendered highly effective performance 
without the conventional badges of accomplishment in 
terms of certificates, diplomas, or degrees. Diplomas 
and tests are useful servants but Congress has mandated 
the common-sense proposition that they are not to become 
masters of reality. 401 U.S. at 433.

Within one year after the decision in Griggs, Congress amended 
Title VII to apply to employment in the federal government. Equal 
Employment Opportunity Act of 1972, Pub L 92-261, 86 Stat 103. The 
House and Senate Committee Reports made clear in amending Title VII 
that the Supreme Court properly interpreted the statute in Griggs. 
Moreover, the Committees expressed their particular concern that the 
selection methods used by the Civil Service Commission (now the Office 
of Personnel Management) be re-examined to ensure that they meet the 
Griggs standards.

Civil Service selection and promotion techniques 
and requirements are replete with artificial re­
quirements that place a premium on "paper" cre­
dentials. Similar requirements in the private 
sectors of business have often proven of questionable 
value in predicting job performance and have often 
resulted in perpetuating existing patterns of dis­
crimination .... The inevitable consequence of this 
kind of a technique in Federal employment, as it has 
been in the private sector, is that classes of persons 
who are socio-economically or educationally dis­
advantaged suffer a very heavy burden in trying to 
meet such artificial qualifications.

It is in these and other areas where discrimination 
is institutional, rather than merely a matter of bad



- 19 -

faith, that corrective measures appear to be urgently- 
required. For example, the Committee expects the 
Civil Service Commission to undertake a thorough re­
examination of its entire testing and qualification 
program to ensure that the standards enunciated in the 
Griggs case are fully met. S. Rep. No. 92-412 (92nd 
Cong., 1st. Sess. 1971) pp. 14-15.

The House report was particularly critical of testing pro­
cedures which are like the PACE.

Civil Service selection and promotion requirements are 
replete with artificial selection and promotion require­
ments that place a premium on "paper" credentials which 
frequently proveaf questionable value as a means of pre­
dicting actual job performance. The problem is further aggravated by the agency's use of general ability tests 
which are not aimed to any direct relationship to specific 
jobs. The inevitable consequence of this, as demonstrated 
by similar practices in the private sector, and, found 
unlawful by the Supreme Court, is that classes of persons 
who are culturally or educationally disadvantaged are 
subjected to a heavier burden in seeking employment.
(emphasis added) H. Rep. No. 92-238 (92nd Cong., 1st 
Sess. 1971) p.24.

The principles in Griggs were reaffirmed by the Supreme Court in 
Albermarle Paper Co. v. Moody, 422 U.S. 405 (1975) (standardized test 
that excluded blacks disproportionately); and Dothard v. Rawlinson,
433 U.S. 321 (1977), (height and weight requirements that excluded 
women disproportionately). In Albemarle Paper Co., the Court elaborat­
ed on Griggs and addressed particularly the burden that must be met by 
an employer once disparate impact has been shown. An employer may 
not rest upon generalized or unsupported opinions but rather must 
prove that the test has been validated and properly used according 
to accepted norms of the profession. In determining the proper 
norms, the Court in Albemarle Paper Co. relied upon the Guidelines
established by the Equal Employment Opportunity Commission which



- 20 -

were in turn based upon the standards published by the American
5__/

Psychological Association. Subsequently, after an extensive
comment period and a thorough study by four departments of the

6 /federal government charged with reviewing employment practices, 
the Uniform Guidelines on Employee Selection Procedures were 
promulgated, 33 Fed. Reg. 38290 (1978).

The EEOC Guidelines and now the Uniform Guidelines have been 
repeatedly relied upon by the lower courts. For example, the Justice 
Department has used the Uniform Guidelines as a measure for deter­
mining the legality of the selection practices of local governments / 
and Courts of Appeal have strictly applied the Uniform Guidelines at 
the Department's request. See e.g., Ensley Branch of the NAACP v.
Seibels. 616 F.2d 812 (5th Cir. 1980); Firefighters Institute v. St.
Louis. 616 F.2d 350 (8th Cir. 1980).

Even if the employer demonstrates that a device is job related 
and used appropriately that does not end the inquiry. Even if the 
employer has shown the validity of a selection device the plaintiff 
may prevail if the plaintiff establishes "that other tests or 
selection devices, without a similarly undesirable racial effect, 
would also serve the employer's legitimate interest in efficient 
and trustworthy workmanship." Albemarle Paper Co. v. Moody, supra,
422 U.S. at 425.

As we describe in section D there is compelling evidence and 
argument that the PACE does not pass muster under these well-established

5 / Standards for Educational & Psychological Tests, (American Psycholo­
gical Association, Inc. 1974).
6 / Equal Employment Opportunity Commission, Department of Labor,
Justice Department and the Civil Service Commission.



21

principles. In the likely possibility that the Court declares the 
PACE unlawful, the Court would impose compensatory and corrective 
relief. In similar circumstances courts have imposed a variety 
of remedies, including the immediate cessation of the test, the 
use of interim selection procedures, the establishment of hiring 
goals that will correct for the discriminatory effects of the test, 
and back pay to the entire class of minorities who were harmed by 
the test, see section III, B.

C. Discriminatory Effect
The PACE written test has a substantial adverse impact upon 

blacks and Hispanics.
An analysis of data collected by OPM from a sample of test- 

takers from the January 1978 administration of the PACE and from all 
test-takers during the April 1978 administration shows:

Whites Blacks Hispanics
Total number taking the PACE 45,539 6,488 2,694
Number achieving unaugmented score 
of 70 or above 19,177 323 347
% of total 42.1% 5.0% 12.9%
Number achieving augmented score 
of 70 or above 21,343 940 518
% of total 46.9% 14.5% 19.2%
Number achieving unaugmented score 
of 90 or above 3,861 17 40
% of total 8.5% 0.3% 1 .5%
Number achieving augmented score of 
90 or above 6,030 42 69
% of total 13.2% 0.6% 2.6%

Only 42 or .6% out of 6,488 blacks who took the 1978 test scored
90 or above while 6,030 or 13.2% of 45,539 whites who took the 1978



22

test scored 90 or above. Since a score of 90 or above is necessary 
for consideration for many jobs, see p. 16 / supra, the PACE has a
severe adverse impact and in fact operates to exclude blacks from 
consideration for many jobs.

Moreover, the study undertaken in San Francisco regarding the 
impact of the PACE upon Hispanics, blacks, and Filipinos supports 
the conclusion that the PACE has a severe adverse impact. Finally, 
there is expert opinion that a test constructed like the PACE will 
"maximize scoring differences between whites and minorities," see 
p. 3 , supra, in fact Dr. Barrett correctly predicted that the PACE
would have a severe adverse impact upon minorities, see p. 9,
supra.



23

D. Lack of Justification
The issue regarding whether the Government has demonstrated 

that the PACE is job related and appropriately used requires sub­
stantial and detailed discussion. In this Memorandum we attempt only 
to describe briefly the many reasons which support the conclusion 
that the PACE is neither job related nor appropriately used.

1. Description of the PACE Test
The written test component of PACE is a cognitive ability

test. It is designed to measure five cognitive abilities: Deduction,2/Induction, Judgment, Number, and Verbal Comprehension. All applicants 
for the entire 118 occupational job categories take the identical test 
regardless of the particular job or jobs in which they are interested. 
The test questions are selected solely for their alleged relevance to 
one of the five cognitive abilities. It is important to emphasize 
that this test is designed to measure these general cognitive 
abilities and it is not designed to measure actual job knowledge or 
skill required for a specific job. Unlike a test for selecting an 
electrician which might question the applicant's knowledge of 
electrical wiring or even ask the applicant to perform a parti­
cular electrical repair, or a test for admission to the bar which 
might question an applicant's knowledge of local court procedure, 
the questions on the PACE test are not selected on the basis of 
any direct observation of the actual duties of the job. The PACE 
test is described in some detail in Dr. Barrett's affidavits, see 
p. 9, supra, ( sample questions from the PACE are included in an ex­
hibit to Dr. Barrett's affidavit, attached as Appendix B).

7/ These terms are merely labels for the abilities; the Government's 
description of these abilities is set forth on pp. 6-7 of the Plain­
tiffs’ Trial Brief in Ellis, Appendix C.



2. General Problems
The major problems with the Government’s attempted justi 

fication for the PACE are listed in Dr. Burns' letter to the N.Y. 
Times, Appendix A:

Like many other overbroad tests...
[the PACE] chooses the best general 
test-takers, not necessarily the best 
workers for specific jobs. A single 
test can't be expected to properly 
evaluate "merit" for 118 different 
jobs ranging from Bond Sales Pro­
motion through Digital Computer 
System Administration to Outdoor 
Recreation Specialist. The use of 
PACE, with insignificant variations, 
for all these jobs is patently 
absurd. PACE purports to test a 
number of skills such as numerical 
ability and deductive reasoning 
yet its different questions all 
come " packaged" in complex verbal 
puzzles. It is more similar to 
the Graduate Record Exam used to 
admit students to Ph.D. programs 
than it is to employment tests 
used in the private sector. The 
PACE is the kind of test that 
discriminates most severely....

Perhaps an analogy may help to explain at least in 
part the difficulty with justifying the PACE. Let us assume the 
following situation. A large private employer with vacancies in 
over 100 different white-collar positions in different plants 
scattered across the country wants to recruit college graduates.
The employer decides to base his selection solely upon the scores 
obtained by the applicants on the Graduate Record Examination. The 
applicants are ranked on the basis of these scores and the personnel 
managers in the employer's plants throughout the country must select 
in the order of this ranking. The employer ignored and refused to



25

consider the applicants' achievements in college, their job or
other experiences, interviews or recommendations. Of course, no
private employer would follow such an arbitrary plan. Yet, in
effect, the Government follows a similar plan in using the PACE.

Without delving into too much detail, we set forth four
basic arguments which plaintiffs would advance in court and which in
other cases have led to judicial determinations that tests were unlawfully

8/used: (a) construct validity was improperly used; (b) "ranking" of
candidates was not justified; (c) the existence of "unfairness" of 
the PACE to blacks and Hispanics was not investigated; and (d) the 
Government did not properly consider alternatives to the PACE which 
would have less or no adverse impact.

8/ In Appendices B and C more technical arguments regarding the 
validity of the PACE are set forth.

It should be noted that Alan K. Campbell, Director, Office of 
Personnel Management and the defendant in this lawsuit, testified 
in May 1979 before a House Subcommittee on Civil Service, chaired by 
Rep. Patricia Schroeder (D-Colorado). He stated several reasons 
supporting the validity of PACE. However, Mr. Campbell further 
stated that "we are nevertheless deeply concerned about the adverse 
impact of any component of the total selection process ... and will 
continue to press to reduce or eliminate this impact, especially 
through searching for alternatives to measure job-related qualifi­
cations ."



a. Construct validity. The Government chose to show
the job relationship of the PACE through the use of construct

9/validity. Unlike content validity which demonstrates that
a test measures the knowledge or skill for a particular job
(like a test for an electrician or a bar exam) or criterion-
related validity which demonstrates by empirical evidence that
a test measures job performance, construct validity i3 based
upon inferences and hypotheses. In developing construct
validity, one must hypothesize that a particular item (question)
measures the construct (for example, judgment) and that the
construct is a measure of job performance. In itself the proper
measurement of a construct such as judgment may be difficult and 

10/
inconclusive. Construct validity was developed in the field
of educational psychology and only recently applied to the field

97 see p. 10 n. 2 for a definition of the three strategies for 
validity.

The 0PM defines construct validity in the following manner: 
"Construct validity requires hypothesizing of various psychological 
constructs important for performance both on the test and on the 
criterion; the development of measures of these constructs; and 
the gathering of evidence to support both the relationship of the 
predictor and the criterion via the constructs as well as to 
explicate the constructs themselves." The Professional and 
Administrative Career Examination: Research and Development, United 
States Civil Service Commission (1977), p.5.
10/ For example, a research report prepared by the Civil Service 
Commission in its investigation of the validity of the PACE states 
that "empirical evidence for a Judgement factor, although present 
in the literature, is relatively weak and inconsistent. This, 
of course, made it difficult to find item types which could 
reasonably be expected to tap an ability called judgment," (emphasis
added). Experimental Item Types to Measure Judgment, United States 
Civil Service Commission (1977), p. 8.



27

of employment. Accordingly, the Uniform Guidelines provide as 
follows:

Construct validity is a more complex 
strategy than either criterion-related 
or content validity. Construct validation 
is a relatively new and developing procedure 
in the employment field, and there is at 
present a lack of substantial literature 
extending the concept to employment practices.
The user should be aware that the effort to 
obtain sufficient empirical support for 
construct validity is both an extensive and 
arduous effort.... Users choosing to justify 
use of a selection procedure by this strategy 
should therefore take particular care to 
assure that the validity study meets the 
standards set forth below. Section 14D(1).
The standards which users should take "particular care"

to meet include demonstrating by empirical evidence (criterion-
related studies) that the test measures job performance and
showing by a job analysis the "work behavior[s] required for
successful performance of the job ... and an identification of the
construct(s) believed to underlie successful performance of these
critical or important work behaviors in the job or jobs in question.

OPM only performed job analyses for 27 and empirical
studies for 4 of the 118 job categories for which the PACE is
used. This performance does not comply with the requirement that
OPM "take particular care to assure that the validity study meets
the standards ...." Moreover, the job analyses performed by the
OPM showed that many of the jobs, skills and abilities which were
thought important for job performance, such as the ability to
interact properly with people, were not tested by the PACE, see
e.g. Appendix C, pp. 27-30. The failure to measure a significant
part of a job may seriously undermine a claim as to the validity
of a selection instrument, see e.g. Firefighters Institute v,
Pity of st. Louis. 549 F.2d 506 (8th Cir.), cert, denied,



28

434 U.S. 819 (1977). The point was well made by Rep.
Patricia Schroeder after the hearings on the PACE by the
Subcommittee on Civil Service:

The subcommittee will continue to examine 
hiring for Federal jobs to assure that 
the twin goals of equal employment opportunity 
and merit selection are met. We need civil 
servants who cannot only handle paperwork 
but who have the heart and soul to serve 
the public with sensitivity. Press Release,
May 23, 1979.
Since the methodology of OPM did not meet the standards 

of the Uniform Guidelines, the claim of construct validity would 
not be upheld. See Douglas v. Hampton, discussed at pp.10-11, 
supra .

b. Ranking. The PACE is used to rank-order applicants; 
thus, if a person scores one point higher than another person 
it is assumed that the higher-scoring person is more qualified, 
see pp.15-16. supra.

The Guidelines state that a cutoff score 
"should normally be set so as to be reasonable 
and consistent with normal expectations of 
acceptable proficiency within the work force."
Guidelines §5(H). This also makes sense. No 
matter how valid the exam, it is the cutoff 
score that ultimately determines whether a 
person passes or fails [or when there is 
ranking whether a person is selected]. A 
cutoff score unrelated to job performance may 
well lead to the rejection of applicants who 
were capable of performing the job. When a 
cutoff score unrelated to job performance 
produces disparate racial results, Title VII 
is violated.
Guardians Ass'n of New York v. Civil Service Commission

of New York, 630 F.2d 79, 105 (2nd Cir. 1980). The "Questions and 
11/Answers" which provide interpretation for the Uniform

11/ The Questions and Answers were adopted by the four agencies 
which promulgated the Uniform Guidelines. Their intent is to 
"interpret and clarify, but not to modify, the provisions of the 
Guidelines." 44 Fed. Reg. 11, 966 (1979).



29

Guidelines state:
Criterion-related and construct validity 
strategies are essentially empirical....
To justify ranking under such validity 
strategies, therefore, the user need show 
mathematical support for the proposition 
that persons who receive higher scores on 
the procedure are likely to perform better 
on the job. Question and Answer No. 62,
44 Fed. Reg. 12,005 (1979).
The OPM has not met the required standard for ranking 

persons by use of the PACE. Even if the use of the PACE may 
be shown to be valid for some purpose, it has not been shown to 
be valid for the use to which it was put, ranking, and therefore, 
the PACE has been used unlawfully. Guardians Ass'n of New York v.
Civil Service Commission of New York, supra; Ensley Branch of 
the NAACP v. Siebels, supra, 616 F.2d at 822; Firefighters 
Institute v. City of St. Louis, supra, 616 F.2d at 357-58.

c. Fairness. "When a specific score on a selection 
procedure has a different meaning in terms of expected job performance 
for members of one race... than the same score does for members of 
another group, the use of that selection procedure may be unfair 
for members of one of the groups." Question and Answer No. 62, 
supra. The Uniform Guidelines require a user to investigate the 
question of fairness whenever feasible. Section 14B(8). It was 
feasible for OPM to investigate the question of fairness yet 
OPM did not investigate fairness. In Albermarle Paper Co. v. Moody, 
supra, 422 U.S. at 433-36, the Supreme Court indicated that a 
validation study was "materially deficient" because among other 
reasons the study did not include an investigation of fairness 
where it was not shown to be unfeasible to do so. See also,
U.S. v. Georgia Paper Co., 474 F.2d 906, 914 (5th Cir. 1973);
Rogers v. International Paper Co., 510 F.2d 1340, 1350 (8th Cir.
1 975: Kirkland v. New York State Department of Correctional Services,



30

628 F .2d 796, 798-99 (2nd Cir. 1980). Moreover, the Standards 
for Educational and Psychological Tests, published by the 
American Psychological Association (Wash., D.C. 1974) provide for 
the investigation of test fairness, pp. 43-44.

d. Failure to consider alternatives. Even if the 
PACE is valid and even if it were appropriately used for ranking, 
the PACE is still unlawful if the plaintiffs establish "that other 
tests or selection devices, without a similarly undesirable racial 
effect, would also serve the employer's legitimate interest in 
efficient and trustworthy workmanship", Albermarle Paper Company v. 
Moody, supra, 42 U.S. at 425. As Dr. Burns stated "the PACE 
is the kind of test that discriminates most severely," Appendix 
A. In any case, the Uniform Guidelines require "a user when 
conducting a validity study, to make a reasonable effort to become 
aware of suitable alternative selection procedures and methods of 
use which have as little adverse impact as possible, and to inves­
tigate those which are suitable. Section 3B." Question and 
Answer No. 48, supra. In devising and using the PACE, a test 
which maximizes adverse impact, the Government failed to comply 
with this provision in the Uniform Guidelines.



31

III. THE SOLUTIONS: PROVISIONS IN THE CONSENT DECREE?
REMEDY THAT WOULD BE AVAILABLE IF THE PLAINTIFFS
PREVAIL IN COURT
A. Provisions in the Consent Decree

The Consent Decree is a detailed, 48-page document which 
took 21 months to negotiate, see pp. 5-7, supra. The purpose of 
this outline is not to re-state or interpret the Decree but rather 
to provide some guidance for reading and understanding the Decree.

The provisions of the Decree are fully in accord with 
Title VII law and impose substantially less stringent requirements 
upon the Government than are frequently imposed by the courts or 
which are contained in other consent decrees. The provisions of 
the Decree reflect the compromise that developed during the months 
of bargaining. As is pointed out in some detail in section B, the 
plaintiffs have given up several remedies which may have been 
imposed by the Court if the case had proceeded to trial. The pro­
visions of the Decree are as follows:

1. The use of the PACE will be phased out gradually. By
12/

January 1, 1984, the PACE will no longer be used. Decree, paragraph 
13(a).

2. The District Court retains jurisdiction over this case. 
The Court retains jurisdiction with respect to any of the 118 job

12/ If the case had proceeded to trial the Court may have ordered the 
government to cease using the PACE immediately, see p. 37 , infra? or, 
if this were not possible, the Court may have ordered the Government to 
use the PACE in a manner which would insure that the PACE would not 
exclude proportionately more minorities than non-Hispanic whites, id. 
This latter remedy is substantially more strict than the provision in 
the Decree, which provides that the Government use "all practicable 
efforts" to remove the adverse impact of the PACE through the use of special programs. Decree, paragraph 16.



32

categories for which the PACE was used for a period of five years 
after the cessation of the use of PACE results and the implementation 
of an alternative examining procedure for that job category. Decree, 
paragraph 7. Since the use of the PACE will be completely phased 
out by January 1, 1984, the Court's jurisdiction will terminate by 
January 1, 1989. However, for job categories for which there are 
presently alternative examining procedures, the Court's jurisdiction 
will terminate in 1986.

3. During the period of interim use of the PACE or during
the retention of jurisdiction, agencies must use "all practicable
efforts" to remove "adverse impact" which may result from the use of
the PACE or the alternative examining procedure through the use

13/of special programs. Decree, paragraph 16. The special programs 
include the modification and use of existing programs: the Out­
standing Scholar program under which a college graduate who obtained 
a grade point average of 3.5 or higher on a 4.0 scale or who stands 
in the upper 10% of the graduating class may be hired without competi­
tion, Decree, paragraph 16(a); certification of applicants with bi­
lingual and/or bicultural skills for hire into PACE jobs where inter­
action with the public or job performance would be enhanced by these 
skills, Decree, paragraph 16(b); College Co-op and other work study 
programs in which student participants who successfully complete the 
programs may be hired without competition, Decree, paragraph 16(c).

4. The Decree provides that neither the special programs 
for removing "adverse impact" nor anything else in the Decree "shall 
be interpreted as requiring any Federal agency to hire any person 
for a job who is unqualified...." Decree, paragraph 12(k).

1 3/ if the case had proceeded to trial the Court may have ordered a quota provision to remove adverse impact and also to remedy the dis­
criminatory effects of the PACE as quickly as possible. A quota provision would remain in effect until the proportion of minorities 
in the pertinent job category equaled the proportion of minorities in
+- W  ^ «r  C o o  W  Q  1 Tlf .



33

5. "Adverse impact" is measured by the Decree in a manner 
consistent with well-established guidelines set by the courts and 
federal agencies. The Supreme Court defined what evidence must be 
shown to establish adverse impact and to shift the burden to the 
employer to show that the test is "job related." The plaintiff 
must demonstrate that "the tests in question select applicants for 
hire or promotion in a racial pattern significantly different from 
that of the pool of applicants," Albemarle Paper Co. v. Moody, supra,
422 U.S. at 425; see also Hazelwood School District v. United States,
433 U.S. 299, 308n. 14 (1977), (the Court applies the concept of statistical 
significance to Title VII cases). The Decree provides that adverse 
impact will be shown if the difference between the appointment rate for 
blacks or for Hispanics and the appointment rate for non-Hispanic whites 
is statistically significant at the .05 level of confidence or if the 
appointment rate for blacks or for Hispanics is less than 80% of the 
appointment rate for non-Hispanic whites. Decree, paragraph 8(b). In 
paragraph 4 of the Uniform Guidelines the federal agencies have 
established a similar definition of adverse impact.

The term "statistically significant at the .05 level of con-
ficence" means that there is less than a one in twenty (.05) chance

14/
that the disparity occurred as a random or chance event. The 80% 
rule permits ready application of the standard by those untrained 
to use statistical tests to determine significance. For example,

14/ "Significance levels refer to the risk of error we are willing 
to take in drawing conclusions from our data.... Most psychological 
research applies at either the .01 or the .05 levels, although other 
significance levels may be employed for special reasons." a . Anastasi, 
Psychological Testing (London: MacMillan, 3rd ed. 1968), p. 76.



34

if 100 whites and 100 blacks take a test, and 50 whites but only 40 
blacks are appointed adverse impact has not been shown since the 
appointment rate of blacks is 80% of that of whites.

6. During the period of the retained jurisdiction of the 
Court, an agency does not have to use "all practicable efforts" to 
remove the adverse impact which may result from an examining pro­
cedure for a job category if at least 20% of all incumbents of the 
job category are blacks and Hispanics. Decree, paragraph 12(c). In 
other words, the Decree provides a "safe harbor" for an agency; if 
blacks and Hispanics comprise 20% of the occupants of a job category 
then the agency has no obligation to use "all practicable efforts" to 
remove adverse impact. The 20% figure is in no way a numerical goal 
or quota. Several examples suffice to explain the limited application^ 
of the 20% figure and the obligation to use "all practicable efforts": 

a. If a job category has 7% blacks and Hispanics, the 
proportion of black and Hispanic applicants is 10%^ and it has 
an appointment rate of blacks and Hispanics of 10%, the agency 
would have no obligation to use "all practicable efforts" since 
there is no adverse impact even though the selection rate and 
the minority proportion of incumbents is substantially below 
20%. See Decree, paragraph 12 (b) .

b. If at the end of the period of jurisdiction, the minority 
proportion of the incumbents remains at 7% and the examining procedure

15/ The remedial provision is substantially less stringent than the 
quota provisions routinely applied by the courts, see pp. 38-39 , infra.



35

has an adverse impact, the agency would have no obligation under the 
Decree to use "all practicable efforts" to remove adverse impact even 
though the minority proportion of incumbents is substantially below 
20%. Of course, an agency would remain obligated by Title VII to 
use lawfully any selection procedure.

7. The Government will cease using the PACE test in the
16/

selection of employees for promotion.

8. The four named plaintiffs will receive a total of
17/$35,000. Decree, paragraph 20. Also any class member who has 

taken the PACE and filed an administrative charge which is still 
pending will receive $3,000 in full settlement. (OPM has been 
unable to find any non-plaintiff class members who have pending 
charges). Decree, paragraph 21.

9. The Decree provides reporting and monitoring require­
ments in order to ensure that information will go to plaintiffs and 
the Court regarding the Government1s compliance with the Decree and 
development of alternative examining procedures to the PACE. See 
e.g., Decree, paragraphs 23-31. The Decree emphasizes cooperative 
efforts between the parties to attempt to resolve any problems with 
the Decree's implementation. See e.g., Decree, paragraphs 12(e) (f), 
17-18.

16/ If the case proceeded to trial the Court may have ordered .pref­erential promotional rights for all class members who were denied 
a promotion because of the use of the PACE. See pp. 40, infra.
17/ If the plaintiffs prevailed at trial the class which includes 
thousands of individuals would be entitled to receive back pay. See 
pp. 40-41» infra. This amount of back pay could total millions of dollars.



36

B. Remedy Available after Litigation
A brief review of the principles for applying a judicially- 

imposed remedy when violations of Title VII are determined makes it 
apparent that the remedy provided in the Consent Decree is moderate 
and appropriate and that if plaintiffs prevailed in litigation re­
garding the PACE, the Court would,in all likelihood, order far more 
extensive remedies than those provided in the Decree.

The Supreme Court has stated that there are two major 
objectives of Title VII which courts must consider in determining 
an appropriate remedy: "'to eliminate so far as possible the last 
vestiges of an unfortunate and ignominious page [employment discrimina­
tion] in this country's history’" and "to make persons whole for in­
juries suffered on account of unlawful employment discrimination." 
Albemarle Paper Co. v. Moody, supra, 422 U.S. at 417-18. Accordingly, 
the Supreme Court has stressed "that federal courts are empowered to 
fashion such relief as the particular circumstances of a case may 
require to effect restitution, making whole insofar as possible the 
victims of racial discrimination...." Franks v. Bowman Transportation 
Co., 424 U.S. 747, 764 (1976). In fact, the Supreme Court has inter­
preted Title VII to restrict severely the discretion of the federal 
courts not to award a full remedy, Albemarle Paper Co. , supra, 422 
U. S. at 421 :

. . . given a finding of unlawful dis­
crimination, backpay should be denied 
only for reasons which, if applied 
generally, would not frustrate the 
central statutory purposes of eradicating 
discrimination throughout the economy 
and making persons whole for injuries 
suffered through past discrimination.



37

If we apply Title VII remedial law to this case it is 
likely that a court would order: (1) immediate cessation of the
use of the PACE or an immediate removal of its adverse impact;
(2) imposition of numerical goals designed to remedy the dis­
criminatory effect of the PACE over the past six years; (3) pref­
erential promotional rights with constructive seniority for 
those individuals who were denied a promotion as a result of the 
use of the PACE; and (4) class-wide back pay for those groups of 
minorities who were denied hire or promotion because of the use 
of the PACE.

1. If the PACE is found unlawful, the Court would enjoin 
its further use, see e.g. Boston Chapter, NAACP, Inc, v. Beecher,
371 F. Supp. 507, 521 (D. Mass.), aff'd, 504 F. 2d 1017 (1st Cir.
1974), cert, denied, 421 U.S. 910 (1975), United States v. City of 
Chicago, 549 F. 2d 415 (7th Cir.), cert, denied, 434 U.S. 857 (1977) or 
require that it be used in a manner which would eliminate adverse 
impact. For example, the Court could order that if the Government 
did not have any alternative selection device available and was re­
quired to use the PACE, then the Government would have to select 
minorities from the PACE register in a manner which would insure 
that there would be no adverse impact until a job-related and law­
ful selection device is implemented. See e.g. Local 53, Heat Frost 
Insulators v. Vogler, 407 F. 2d 1047, 1055 (5th Cir. 1969) (The court 
rendered a preliminary injunction which required that minorities 
account for 50% of job referrals) ,* Kirkland v. N.Y. Dept, of
Corrections, 628 F. 2d 796, 798 (2nd Cir. 1980) (The court approved a



38

provision under which the test scores of minorities will be augment­
ed by 250 points).

2. Where there has been class-based discrimination the 18/
Courts have regularly approved "quotas to correct past discrimina­
tory practices". United States v. Lathers, Local 46, 471 F. 2d 408 
(2d Cir. 1973), cert, denied, 412 U.S. 939 (1973). These remedial pro­
visions generally set an "implementing ratio" and a "goal". (For ex­
ample one black applicant will be selected for each white applicant who 
is selected until a "goal" such as the minority representation of 
the relevant labor force is reached.) The goal is determined by 
estimating what the level of minority employment would have been 
absent the discrimination. Cf. United Steelworkers v. Weber, 443 
U.S. 193, 208 (1979). Moreover, "goals and timetables" have been 
regularly used by the United States and other parties to consent 
decrees. One example of a nationwide, industry-wide, decree entered 
into in 1974 by the Justice Department, Department of Labor 
and the EEOC clearly makes the point. United States v. Allegheny- 
Ludlum Industries, Inc., Civil Action No. 74-P-339 (N.D. Ala.). This

18/ At least eight Circuits have approved numerical relief to correct 
past discriminatory practices. Boston Chapter, NAACP, Inc, v. Beecher,
504 F. 2d 1017, 1026 (1st Cir. 1974), cert, denied, 421 U.S. 910 (1975); 
Morgan v. Kerrigan, 530 F. 2d 431 (1st Cir. 1976) (in school desegregation suit one-to-one hiring ratio approved until blacks constitute 20% of the 
faculty); United States v. Elevator Constructors, Local 5, 538 F. 2d 1012 
(3rd Cir. 1976) (affirmed 23% membership goal and 33% referral quota 
based on area of union jurisdiction); NAACP v. Allen, 493 F.2d 614 (5th 
Cir. 1974) (imposition of quota on selection of Alabama State Highway 
patrol officers based on minority representation in the workforce); Stamns 
v. Detroit Edison, 365 F. Supp. 87, 122-23 (E.D. Mich. 1973), aff'd sub 
nom EEOC v. Detroit Edison, 515 F. 2d 301, 317 (6th Cir. 1975) (requiring 
Company to hire at ratio of three blacks for every two whites), vac. on 
other grounds, 431 U.S. 951 (1977); United States v. City of Chicago,
549 F. 2d 415, 436-37 (7th Cir.), cert, denied, 434 U.S. 875 (1977)



39

decree which covers approximately 150 plants operated by nine major 
steel companies, provides that 50% of those selected for trade and 
craft positions must be minorities or females until the goal established 
for each plant has been attained. (The goal is determined by analyz­
ing the available labor force). Decree, paragraph 10. Finally, the 
United States Supreme Court has approved the use of voluntarily- 
imposed quotas by private employers, United Steelworkers v. Weber, supra, 
and Supreme Courts of three states have approved the enactment of 
voluntary affirmative action programs by agencies or departments of 
local or state governments. Maehren v. City of Seattle, 92 Wn. 2d 480, 
599 P. 2d 1255, 20 FEP Cases 854 (1979); Price v. Civil Service 
Commission, Sacremento City, 26 Cal 3d 257, 604 P. 2d 1365, 21 FEP 
Cases 1512 (1980); chmill v. City of Pittsburgh, 22 FEP cases 742 
(Pa. S. Ct. 1980)? see California Department of Corrections v. Minnick, 
No. 79-1213, cert, granted, July 2, 1980.

18/ FOOTNOTE CONTINUED(approved requiring City to appoint at least 16% females and 42% minority 
group males to fill patrolman position); United States v. N.L. Industries, 
479 F. 2d 354, 377 (8th Cir. 1973); United States v. Ironworkers, Local 
86, 443 F. 2d 544, 552-54 (9th Cir. 1971), cert, denied, 404 U.S. 984 
(1971).

Two other Circuits have stated that numerical relief in the form 
of "quotas" is appropriate in certain circumstances which are present 
in Luevano. Compare Kirkland v. New York State Dept, of Correctional 
Services, 520 F. 2d 420 (2nd Cir.), reh. denied, 531 F. 2d 5 (1975), 
cert, denied, 429 U.S. 823 (1976) with Patterson v. Newspaper Deliverers 1 
Union, 514 F. 2d 767, 773-75 (2nd Cir. 1975); Patterson v. American 
Tobacco Company, 535 F. 2d 257, 273-75 (4th Cir. 1976), cert, denied,
429 U.S. 920 (1976).



4

3. The plaintiff class in Luevano includes individuals 
who were denied the opportunity to promote because of the use of the 
PACE, see p. 3, supra. The PACE was not designed or intended to be 
used as an instrument for the selection of employees for promotion, 
yet agencies have used the PACE in the selection process for promotions 
If this use of PACE is ruled unlawful, then class members may have pref 
erential remedies. An identifiable class member who was denied a 
promotion because of the use of the PACE may have the right to pref­
erential selection for the next available vacancy and for placement
in that position with all the seniority or other benefits the class 
member would have had if he or she had been selected rather than 
rejected when the PACE was used. Franks v. Bowman Transportation Co., 
supra, 424 U.S. at 764-68. Thus, for example in a case involving the 
city of Albany, Georgia, blacks who were denied job openings were given 
priority consideration for future openings. Johnson v. City of Albany, 
413 F. Supp. 782 (D. Ga. 1976), 13 EPD para. 11, 324 (Order).

4. If the use of the PACE is declared unlawful, the entire 
plaintiff class would be entitled to an award of back pay which would 
place them in the economic position they would have been in but for the 
use of the PACE. Albemarle Paper Co. v. Moody, supra, 422 U.S. at 421. 
The Supreme Court in Albemarle Paper Co., specifically rejected as a 
defense to the back pay award that the employer was acting in "good 
faith," 422 U.S. at 422? moreover, a court may not deny an award of 
back pay because the calculation of back pay would be difficult,
Stewart v. General Motors Corp., 542 F.2d 445, 451-53 (7th Cir. 1976), 
cert, denied, 433 U.S. 919 (1977); Kirby v. Colony Furniture Co., 613 
F.2d 696, 699 (8th Cir. 1980). Finally, once a practice has been 
ruled discriminatory "the burden then rests on the employer to

-  40 -



* 41

demonstrate that the individual applicant was denied an employment 
opportunity for lawful reasons," Teamsters v. United States, 431 U.S.
324, 361-62 (1977); any ambiguity regarding what an employee or group 
of employees would have earned but for the discrimination is resolved 
against the discriminating employer, Stewart v. General Motors, supra,
542 F .2d at 452-53; Pettway v. American Cast Iron Pipe Co., 494 F.2d 
211, 260-61 (5th Cir. 1974).

As a result of these legal principles, awards of back pay in Title 
VII cases have been substantial. For example, in a recent settlement of 
a Title VII action which had been litigated for many years, a class of 
approximately 1,000 black workers and applicants received $2,650,000. 
Stallworth v. Monsanto Co., 23 EPD para. 31, 089 (N.D. Fla. 1980).
In the Alleghenv-Ludlum decree, see p. 39, supra, the United States 
obtained $30,000,000 for black and female steelworkers. We estimate 
that for each year the PACE was used approximately 1,000 minorities 
were denied consideration for hire. It is easy fo comprehend that with 
a class of 5,000-6,000 individuals who have a presumption that they 
were discriminated against (if the PACE is ruled unlawful) the Govern­
ment's potential liability for back pay would be millions of dollars. Addi­
tionally, the Government faces a substantial back pay liability to those 
class members who were denied promotions because of the use of the PACE.

Accordingly, the Consent Decree saves the parties a lengthy and 
expensive trial, provides relief from a discriminatory test for the 
plaintiffs, and removes the possibility of a remedial order requiring 
the Government to pay millions of dollars in back pay, to grant pre­
ferential selection rights, and to impose a remedial quota. See Letter 
John H. Shenefield, Former Associate Attorney General to the Washington 
Star, Appendix D. In brief, the Consent Decree is a fair deal.