United States v. Allegheny Ludlum Industries Inc. Brief for Intervenors-Appellants

    5/ - '

UNITED STATES COURT OF APPEALS 
FOR THE FIFTH CIRCUIT 

No. 74-3056

UNITED STATES OF AtvIERICA, et al. ,
Plaintiffs-Appellees,

V -
ALLEGHENT-LUDLUM IND'USTRIES, al-,

Defendants-Appellses, 
SIDNEY HARRIS, et al. ,

Intervener s-AppeHants.

On Appeal From The United States District Court 
For The Northern District of Alabaraa

BRIEF FOR INTERVEHORS-APPEIJ.au IS

JACP; GREENBERG 
JAIffiS M. INHERIT, H I  
BARRY GOLliSTEIN 
MORRIS J. BALLER 
CH,'HILES STEPHEN lUHSTON 
ERIC SCHLLiPPER

10 Col'uiPbuG Circle 
Suite 2030New York, New York 10019 

Counsel for Intervenors-Appellants



UNITED STATES COURT OF APPEALS 
FOR THE FIFTH CIRCUIT 

No. 74-3056

UNITED STATES OF AMERICA, et al.,
Plaintiffs-Appellees,

V .
ALLEGHENY-LUDLUM INDUSTRIES, et al.,

Defendants-Appellees, 
SIDNEY HARRIS, et al.,

Intervenors-Appellants

CERTIFICATE REQUIRED BY FIFTH CIRCUIT 
__________LOCAL RULE 12(a)___________

The undersigned, counsel of record for Intervenors- 
Appellants, certifies that the following listed parties 
have an interest in the outcome of this case. These repre­
sentations are made in order that Judges of this Court may 
evaluate possible disqualification or recusal pursuant to 
Local Rule 12(a).

(a) Defendants who (i) might be required to afford 
certain additional injunctive or back pay re­
lief, (ii) might lose the services of the 
United States in defending private actions

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for such relief, (iii) might be required to 
provide information for compliance reviews and 
face termination of government contracts, and/ 
or (iv) might be required to provide the 
District Court with information or reports 
needed for adequate judicial supervision of 
,the instant Consent Decrees:

Allegheny-Ludlum Industries, Inc.
Armco Steel Corporation
Bethlehem Steel Corporation
Jones & Laughlin Steel Corporation
National Steel Corporation
Republic Steel Corporation
United States Steel Corporation
Wheeling-Pittsburgh Steel Corporation
Youngstown Sheet & Tube Company
United Steelworkers of America, AFL-CIO-CLC.

(b) Interveners who (i) might be entitled to certain 
additional injunctive or back pay relief, (ii) 
might have to litigate against the United States 
in private actions for such relief and/or (iii) 
might be denied conciliation or representation by 
the E.E.O.C. because of the instant Consent Decrees 

Sidney S. Harris, Willie J. Fonville,
Paige A. Millhouse, Albert Everett,
Nathaniel King, Ron Walker, John S. Ford,

-  2 -



Willie Cain, Willie L. Coleman,
Joe N. Taylor, Robert Cain, David 
Bowie, Earl Bell, Bernard Lane,
Ellis Lewis, Levy Mazyck, George 
Mercer, Robert Skates, Jimmie L.
Rodgers, John A. Turner, John Taylor,
Luther Reden, C. L. Garland, L. C. Waker,
James L. Allen, Joseph Kimbrough, Joe 
Bryant, Joseph Faulkner, Isaiah Hayer, III.

The class of all black steelworkers who are 
employed by the defendant companies, who have 
been employed, or who may in the future be so 
employed, and whose rights may or will be affected 
by the instant Consent Decrees.

Eric SchnapperAttorney of Rec^d for Intervenors- 
Appellants /'

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TABLE OF CONTENTS
Page

Statement of the Issue .......................
Table of Authorities...........................Statement of the Case ......................
ARGUMENT ......................................

A. THE DISTRICT COURT SHOULD HAVE SET ASIDE 
THE CONSENT DECREES BECAUSE THEIR 
PROVISIONS ARE CONTRARY TO LAW . . . . .

Ill
V
I

I. Section 18(g) of Decree I Unlawfully 
Requires Minority Employees to Waive 
Their Rights to Maintain Private 
Litigation to Remedy Employment 
Discrimination As a Condition of 
Obtaining Benefits Under an Action 
by the United States ..............
1. Prospective Waivers........ ..
2. Interference with Independent

Remedies .....................
3. Inadequate Back Pay Relief . . .

II. Section C of Decrees I and II Unlaw­
fully Requires the United States to 
Oppose Private Litigation Seeking 
Greater Systemic Relief Than Obtained 
by the United States Under the 
Decrees .............................

5
19

2 2 
31

40
III. Decrees I and II Unlawfully Restrict 

the Power of the E.E.O.C. to 
Maintain Actions Under Section 
706(f)(1) of Title VII of the 1964 
Civil Rights A c t ................ . 48

rv. Section 19 of Decree I Unlawfully
Restricts the Power of the E.E.O.C. 
to Conciliate Charges of Discrimina­
tion Under Section 706(b) 
of Title VII of the 1964 Civil Rights 
Act . . . .  ....................... 53

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Page
V. Section C of the Decrees and Section 

16 of Decree I Unlawfully Limits 
the Authority of the Office of 
Federal Contract Compliance and 
the Secretary of L a b o r .......... . 56

VI. Decrees I and II Unlawfully Fail 
to Provide for Adequate Judicial 
Supervision of the Decrees . . . 68

B. THE DISTRICT COURT SHOULD NOT HAVE- APPROVED 
THE DECREES WITHOUT FIRST AFFORDING A 
REASONABLE OPPORTUNITY FOR COMMENT AND 
INTERVENTION BY INTERESTED PARTIES . . . .

CONCLUSION .......................................
77
89

- XI -



STATEMENT OF THE ISSUE

Should the Consent Decrees approved by the District 
Court be set aside in whole or in part :

(1) because Section 18(g) of Decree I unlawfully 
requires minority employees to waive their 
rights to maintain private litigation to 
remedy employment discrimination as a con­
dition of obtaining benefits under an action 
by the United States ;

(2) because Section C of Decrees I and II unlaw­
fully requires the United States to oppose 
private litigation seeking greater systemic 
relief than ohta-ino<̂  hy the United States in 
their action ;

(3) because Decrees I and II unlawfully restrict 
the power of the Equal Employment Opportunity 
Commission to maintain actions under Section 
706(f)(1) of Title VII of the 1964 Civil 
Rights Act-;

(4) because Section 19 of Decree I unlawfully 
restricts the power of the Equal Employment 
Opportunity Commission to conciliate charges 
of discrimination under Section 706(b) of 
Title VII of the 1964 Civil Rights Act;

- Ill -



(5) because Section C of the Decrees and 
Section 16 of Decree I unlawfully limits 
the authority of the Office of Federal 
Contract Compliance and Secretary of Labor;

(6) because Consent Decrees I and II unlawfully 
fail to provide for adequate judicial super­
vision of the Decrees; or

(7) because the District Court approved the 
Decrees without first affording a reasonably 
opportunity for comment and intervention by 
interested parties.

- IV -



TABLE OF AUTHORITIES

Page

Adams v. Richardson, 351 F. Supp. 636 (D.D.C. 1972),
480 F.2d 1159 (D.C. Cir. 1973) ......... ...........  12,61

Alexander v. Gardner-Denver company, 39 L.Ed.2d
. 147 (1974)....................................  17,21,22

23,27,29,37
Alexander v. Holmes county Board of Education,

396 U.S. 19 (1969) ..........................  12
Ashv/ander v. Tennessee Valley Authority, 297 U.S.

288 (1936) .........................................  88
Baker v. California Shipbuilding Corporation, 73

F. Supp. 322 (S.D. cal. 1947) ...................... 34
Beverly v. Lone Star Lead Const. Corp., 437

F.2d 1136 (5th Cir. 1971) ...........................  27
Bingham v. Airport Limousine Service, 314 F. Supp.

565 (W.D. Ark. 1970) ...............................  16.34
Boles V. Union Camp Corp., 5 EPD 5 8051 (S.D. Ga.1972) .......................................    25
Bowe V. Colgate-Palmolive Co., 416 F.2d 711 ,(7th

cir. 1969) ......................................... 29
Boyd V. Grand Truck Western R. Co., 338 U.S.263 (1949) .........................................  17
Brennan v. American Telephone and Telegraph Co.,
No. 74-1342 (E.D. Pa.) .............................  5

Brooklyn Savings Bank v. O'Neil, 324 U.S. 697
(1945) .............................................  15,35,37

Brown V. Board of Education, 347 U.S. 483 (1954) ....  74
Boyd V. Grand Truck Western R. Co., 338 U.S. 263(1949) ............   17
Buford V. American Finance Company, 333 F. Supp.

1243 (N.D. Ga. 1971) ...............................  17,37
Bush V. Lone Star Steel Corp., 373 F. Supp. 526

(E.D. Tex. 1974) ...................................  9,11
Chastang v. Flynn and Emrich Company, 365 F. Supp.957 (D. Md. 1973) ..................................  17

- V -



Table of Authorities (Continued)
Page

Cochrane v. W. F. Potts Sons & Co., 47 F,2d 1027
(5th Cir. 1931) ...............................    43

Davis V. Board of School Commissioners of Mobile,
402 U.S. 33 (1971) .................................  12

Dickerson v. United States Steel, No. 73-1292
E. D. pa............................................  89,90

Durkin v. Waldron, 130 F. Supp. 501 (W.D. La. 1955)... 16
Duncan v. Thompson, 313 U.S. 1 (1942) ...............  16
E.E.O.C. V. Eagle Iron -Works, 367 F. Supp. 817

(S.D. Iowa 1973) ...................................  26
Farkas v. Texas Instr-ument, Inc., 375 F.2d 629

(5th Cir. 1967) ....................................  57,61
Farmer v. Philadelphia Electric Company, 329 F.2d 3

(3d Cir. 1964) .....................................  57,66
Ford V. United States Steel Corporation, No. 73-3907

(5th Cir.) .....................   30,31,66
Glover V. St. Louis-San Francisco Railway, 393 U.S.

374 (1969) .....   46,72
Government of the Virgin Islands v, Boddle, 427 F.2d

532 (3rd Cir. 1970) .................... ........... ’ 88
Green v. School Board of New Kent county, 391 U.S.

430 (1968) .........................................  21,74,75
Griffin v. Coiinty School Board, 377 U.S. 218 (1964)... 21
Griggs v. Duke Power Company, 401 U.S. 424 (1971) .... 11
Hadnott v. Laird, 463 F.2d 304 (D.C. Cir. 1972) .....  61
Hairston v. McLean Trucking Company, 7 EPD 9144,

p. 8783 (M.D. N.C. 1974) ..........................  74
Hansberry v. Lee, 311 U.S. 31 (194-0) ................  87
Hutchings v. United States Industries, Inc., 428

F. 2d 303 (5th Cir. 1970) ........................... 28,38
In the Matter of the Bethelehem Steel Corporation,
Decision of the Secretary of Labor, Docket No. 102-
68, January 15, 1973................................  9,12

In re Raabe, 71 F. Supp. 678 (S.D. N.Y. 1947) .......  80

- vi -



Table of Authorities (Continued)

International Brotherhood of Boilermakers, etc.
V. Rafferty, 348 F-2d 307 (5th Cir. 1965) .......

J. I. case V, N.L.R.B., 321 U.S. 332 (1940) .......
Johnson v. Georgia High'way Express, 498 F.2d 714

(5th Cir. 1974) ..................................
Johnson v. Goodyear Tire & Rubber Co., 491 F.2d

1364 (5th Cir. 1974) .............................
Joyce V. McCrane, 320 F. Supp. 1284 (D.N.J. 1970)...
Keller v. Wilson, 194 A. 45 (Del. 1937) ...........
Lane v. Bethlehem Steel Corp., No. 71-580-H, D. Md..
Legal Aid Society v. Brennan, 8 EPD 5 9483 (N.D.

cal. 1974) .......................................
Leisner v. New York Telephone Company, 358 F. Supp. 

359 (S.D.N.Y. 1973) ..............................
Local 189 V. United States, 416 F.2d 950 (5Lh CxL.

1969) ............................................
Long V. Georgia Kraft Co., 450 F.2d 557 (5th Cir. 

1971) ................................... .........
Louisiana v. United States, 380 U.S. 145 (1965) ....
Macklin v. Spencer Freight Systems, Inc., 478 F.2d 

979 (D.C. Cir. 1973) .............................
Martino v. Michigan Window Cleaning Co., 327 U.S.

173 (1945) .......................................
Mayheu's Super Liquor Stores v. Hodgson, 464 F.2d 

1196 (5th Cir. 1972) .............................
McDonald Douglas corp. v. Green, 411 U.S. 792

(1973) ...................... ....................
McNabb v. United States, 318 U.S. 332 (1942) ......
Moss V. Lane Company, 50 F.R.D. 122 (W.D. Va. 1970)
Newman v. Avco Corp., 451 F.2d 743 (6th Cir. 1971).
Newman v. Piggie Park Enterprises, 390 U.S. 400

(1968) ..........................................

Page

16
15

23

32
66
81
12

12,62

25

10,19

11
21

29

16

16

26 
88 

18 
29

23

- vii -



Table of Authorities (Continued)
Page

N.L.R.B. V. General Electric Company, 418 F.2d 
736 (2d Cir. 1969), cert. deri. 397 U.S. 965
(1970) ...........................................  . 55

Norman v. Missouri Pacific Railroad, 414 F.2d
73 (8th cir. 1969) ...............................  26

Pett'way v. American Cast Iron Pipe Company, 411
F.2d 998 (5th Cir. 1969) ......................... 32,51

Pett'way v. American Cast Iron Pipe Company, 494
F.2d 211 (5th Cir. 1974) ......................... 11,12,26

Philadelphia, etc. R.R. Co. v. Schubert, 224 U.S.
603 (1912) ....   16,36

Pittsburgh, etc. R.R. Co. v. Fink, 250 U.S. 577.
(1919) ......................................   16

Pyle-National Co. v. Amos, 172 F.2d 425 (7th Cir.
1949) ............................................  81

Oubichon v. North American Rockwel] rorp-,- P.Pd
569 (9th cir. 1973) ..............................  29

Raney v. Board of Education of the Gould School
District, 391 U.S. 443 (1968) .....................  75

Robinson v. Lorillard Corp., 444 F.2d 791 (4th cir.
1971) .....................................   12,18,27,32

Rodgers v. United States Steel, No. 74-1815
(3rd Cir. ) .......................................  90

Rogers v. United States Steel, No. 71-793 (W.D.
Pa.) .............................................  14

Rosen V. Public Service Electrical and Gas company,
328 F. Supp. 454 (D.N.J. 1970) ....................  18

Sanchez v. Standard Brands, 431 F.2d 455 (5th Cir.
1970)    13

Schulte V. Gangi, 328 U.S. 108 (1946) ................  35
Service v. Dulles, 354 U.S. 363 (1957) ............  61
Sheldon v. Sill 49 U.S. (8 How.) 440 (1850) .......  43
Swann v. Charlotte-Mecklenburg Board of Education,

402 U.S. 1 (1971) ................................  21,75
Taylor v. Armco Steel Corporation, 419 F.2d 498(5th Cir. 1970) ...........   26



Table of Authorities (Continued)

Thomas v. United States, 200 F.2d 686 (1st. Cir.
1952) ......................................... .

Tipler v. E. I. DuPont Co., 432 F.2d 125 (6th Cir.
1971) .............................................

Torres v. American Railroad Company of Porto Rico,
- 152 F.2d 255 (4th Cir. 1946), cert, denied, 329

U.S. 782 (1947) ..... ............... ..............
United States v. Barber, 442 F.2d 517 (3rd cir.

1971) .............................................
United States v. Bethlehem Steel Corp., 446 F.2d

652 (2d Cir. 1971) ................................
United States v. California Cooperative Canneries,

279 U.S. 553 (1929) .........................■.....
United States v. Chesapeake & Ohio Railroad Co.,

471 F.2d 582 (4th Cir. 1972), cert, denied, 411 
U.S. 939 (1973) ...................................

.. « .  ^ ___ n  Tn-m-N m  Q 1 C  ̂UllXL-Cto. DCauco v» vjciwj-J-c*. xr̂wvj;j_ jj, w »
(N.D. Ga. 1974) ...................................

united States v. Georgia Pov/er Company, 474 F.2d 906 
(5th cir. 1973 ) ............... ...................

united States v. Hayes International, 456 F.2d 112 
(5th Cir. 1972) ...................................

United States v. I.B.E.W., 428 F.2d 144 (6th Cir. 
1970) ............... .............................

United States v. Ironworkers, 5 EPD 5[ 7973 (W.D.
wash. 1972) .......................................

united States v. Jacksonville Terminal company,
451 F.2d 418, cert, denied, 406 U.S. 906 (1972) ...

United States v. Local 189, 301 F. Supp. 906 (E.D.
La. 1969), aff'd 416 F.2d 980 (5th Cir. 1969) ....

United States v. Operating Engineers, Local 3, 4 EPD 
?[ 7944 (N.D. cal. 1972) ...........................

United States v. Schiavo, No. 73-1855 (3rd Cir.)
(Opinion dated August 8, 1974) .................. .

united States v. Trucking Employers, Inc., No.
74-153 (D.D.C.) .................................. .

United States v. United States Steel Corp., 371 F. 
Supp. 1045 (N.D. Ala. 1973) .......................

page

37

26

34

88

9,12

81

11

11

11.74 

11 

74

12.74 

11 

11

24, 30 

88 

5,82 

9,11,74



Table of Authorities (Continued)

Vogler v. McCarthy, 451 F.2d 1236 (5th Cir.
1972)   73

Voutsis V. Union Carbide Corp., 452 F.2d 889
(2d cir. 1971), cerb. denied 406 U.S. 918.....  29,39

Williamson v. Bethlehem Steel Corporation, 468 
F.2d 1201 (2d cir. 1972), cert, denied 411
U.S. 911 (1973) ...............................  12,24,30,38

Wirtz V. Turner, 330 F.2d 11 (7th Cir. 1964)....  16
Wirtz V. William H.D. LaDev; of Louisiana, Inc.,

282 F. Supp. 742 (E.D. La. 1968) .............  16

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Statutes
Page

28 U.S.C. § 1291 .................................... 1
29 U.S.C. § 151 .....................................  4
Civil Rights Act of 1964, 42 U.S.C. § 2000d-l ......  51
42 U.S.C. § 2000e-5(b), Title VII, § 706 (b) .....  23,53,85
42 U.S.C. § 2000e-5 (f) (1), Title VII, § 706 (f) (1) . 3,4,23,45,47,50,52,79,

82,85

42 U.S.C. § 2000e-5(f) (3), Title VII, § 706 (f)(3)   46
42 U.S.C. § 2000e-5(f) (4), Title VII, § 705(f)(4) ... 46
42 U.S.C. § 2000e-5(f) (5), Title VII, § 705 (f) (5) ... 23,46
42 U.S.C. § 2000e-5(g), Title VII, § 706(g) .... 31,32,33,73
42 U.S.C. § 2000e-6, Title VII, § 7UV ...........  4,79,62,85

Regulations

28 C.F.R. § 50.1 .......................... .........’•
29 C.F.R. § 1601.22 ........ ............ ............  53
41 C.F.R. Chapter 60 ........................ 23,57,60,62,57
41 C.F.R. § 50-1.20 ...........................    58,53
41 C.F.R. § 60-1.26 ................................  58
41 C.F.R. § 60-1.27 ................................. 58,65
41 C.F.R. § 50-1.40 ................................. 57
41 C.F.R. § 50-1.6 .................................. 57
41 C.F.R. § 60-1.7 .................................. 57,64
41 C.F.R. § 60-2.1 .................................. 57

- XX -



Regulations (Cont'd)
41 C.F.R. § 60-2.32 .................................  57
41 C.F.R. § 60-30.1 .................................. 58.65
41 C.F.R. § 60-60.1 .................................  58
41 C.F.R. § 60-60.4(b)   57

Executive Orders
E. 0. 8802 (1941)   56,77
E. 0. 9346 (1943)   56
E. 0. 10308 (1951)   56
E. 0. 10479 (1953) ...................................  56
E. 0. 10557 (1954)   56
E. 0. 10975 (1961)   56
E. 0. 11246 (1965) ....................  5,24,23,40,49,56,57,

58,59,60,62,65,67

Legislative History
Hearings before a Subcommittee of the Senate Committee 

on Labor and Public Welfare, 92nd Cong., 1st 
Sess., p. 63 (1971) ........................... 27

Hearings before a Subcommittee of the House Committee 
on Education and Labor, 91st Cong., 2d Sess., 
pp. 36-37 (1969-70) ........................... 27

H. Rep. No. 92-238, 92nd Cong., 1st Sess., p. 62 ---- 48
S. Rep. No. 92-415, 92nd Cong., 1st Sess., p. 17 .... 51
110 Cong. Rec. 7207 (1964) .......................... 23
110 Cong. Rec. 13650 (1964) ......................... 23
118 Cong. Rec. 3642 (1972) ......................... 32
Legislative History of the Equal Employment

Opportunity Act of 1972 .....................  28,51,53
- xii -



other Authorities
" ~  ' Page

Rule 19, Federal Rules of Civil Procedure  .......  87
Rule 23(c)(2), Federal Rules of Civil Procedure ..... .87,90
Rule 59(c), Federal Rules of Civil Procedure ........  86
Disciplinary Rule, DR 5-105 (b) ....................... 52
Disciplinary Rule, DR 5-105 (c) .... ..................  52
3B, Moore's Federal-Practice, H 24.16(2) ............  43
Department of Justice Press Release, June 29, 1961 ... 84

- xixi -



STATEMENT OF THE CASE
On April 11, 1974, the United States filed this action 

in the Northern District of Alabama alleging that nine major 
steel companies and the United Steelworkers of America had 
engaged in discrimination in employment on the basis of race 
and sex. Appendix, 6a-14a. The parties similtaneously pre­
sented to the District Court for its approval two Consent 
Decrees which had been agreed to by the parties before the 
action was ever filed. The next day, April 12, the District

/
Court approved both Decrees. See Appendix,,184a. As between 
the original parties to this action the District Court has 
never been called upon to resolve any case or controversy, nor 
does it appear with certainty that any such disagreement requir­
ing judicial resolution will arise between the parties in the 
future.

The Decrees provide for injunctive relief and for the pay­
ment of back pay under certain circumstances. The Decrees are to 
be administered by an Implementation Committee at each plant, over- , 
seen by a National Audit and Review Committee; except for a single 
government representative on the Audit and Review Committee, all mem­
bers of these committees are appointed by the defendants. Appendix HDa-11

Nine days after the Decrees were entered. Appellants moved 
to intervene as party plaintiffs in the District Court and to 
set aside the Decrees as unlawful. Appendix 110a-122a. Inter­
veners are thirty-two black steelworkers employed at steel plants 
plants covered by the Consent Decrees. Interveners offered no 
objection to the implementation of the svibstantive portion of

-  1 -



the Decrees directing the defendants, inter alia, to modify 
their discriminatory seniority system and ordering the defendant 
to pay back pay to certain minority steelv/orkers. Intervenors 
(disputed the legality of other provisions of the Decrees which 
have the purpose and effect of curtailing the rights of minority 
employees to obtain additional relief in instances where the 
Consent Decrees did not provide the full remedy required by law. 
Appendix, 110a-122a.

On May 20, 1974, the District Court held a hearing on 
Appellants' motions to intervene and to set aside the Decrees.

heard at that time were similar motions by other individuals 
and groups seeking to intervene. At the conclusion of the hear­
ing the District Court granted Appellants' motion to intervene 
but denied the motion to set aside the Decrees. Appendix, 152a— 
165a. On June 7, 1974, the District Court amplified its decision 
in a formal Memorandum of Opinion. See Appendix, 184a-192a. 
Appellants filed a notice of appeal from that decision on July 3, 
1974. Appendix, 195a. This Court has jurisdiction of the 
appeal under 28 U.S.C. §1291.

On July 3, 1974, Appellants moved the District Court for an 
order staying those portions of the Consent Decrees whose legality 
they had questioned. None of the parties opposed that stay appli­
cation. On July 17, 1974, the District Court denied that stay 
application. See Appendix, 204a—209a. Thereafter Appellants 
applied to this Court for a stay. That application was denied 
on September 6, 1974.

-  2 -



A R G U M E N T

This appeal concerns the authority of the Department 
of Justice, Department of Labor and the Equal Employment 
Opportunity Commission to agree to, and the power of a United 
States District Court to order, a disestablishment of the en­
forcement mechanism set up by Congress and several Executive 
Orders to end discrimination in employment on the basis of 
race and sex.

In the District Court proceedings the government charged 
the defendant companies and union with such discrimination, and 
with failing to take steps necessary to end the continuing
^  ̂  ̂  ̂  ^  .-.T-k r>*a+-n r\y
C  J -  ' - i  'w  O  W  J _  li_ JV 4 .> _ A A  - * - w  — —  w  -

ml-KP Pnncont- (=>.=;
\ ^provided for certain injunctive relief aimed at ending

discrimination and the effects thereof, and an award of back 
pay to injured employees. The government did not claim that the 
injunctive relief contains all the provisions it would have 
liked, nor that every minority worker will get 100% of the back 
pay to which he is entitled —— as is common in consent decrees 
both the injunctive and monetary relief represented compromises.

In return for the injunctive and monetary relief, the 
defendants sought and obtained certain provisions designed to 
abolish the basic enforcement machinery. Under the scheme es­
tablished by Congress there are at least five overlapping 
remedies for employment discrimination —  (1) private civil 
actions under Section 706(f)(1) of Title VII, 42 U.S.C. §1981

- 3 -



and the duty of fair representation, 29 U.S.C. §§151 et
_ (2) civil actions by the E.E.O.C. for charging parties

under section 706(f)(1) of Title VII, (3) civil actions by 
the E.E.O.C. under Section 707 of Title VII alleging a 
••pattern or practice" of discrimination, (4) conciliatxon of 
particular complaints by the E.E.O.C. under Section 706(b) 
of Title VII, and (5) compliance reviews, investigations and hear­
ing by the Office of Federal Contract Compliance with the power 
to cancel and forbid government contracts with employers 
guilty of discrimination. Through a variety of provisions, the 
precise effect of which is not entirely clear, the Decrees re­
place this machinery with a number of committees, controlled 
or dominated by the defendants, which are supposed to end dis­
crimination at the specified piaiits.

. It is not suggested that the Department of Justice or 
E.E.O.C. themselves sought to disestablish this pre-existing 
enforcement machinery, or believe it would be best abolished. 
Rather, the government negotiators concluded that, by agreeing 
to the various provisions at issue, they could obtain additional 
concessions in the form of injunctive or monetary relief. The 
question raised by this appeal is not whether, in some sense, 
the government negotiators made a good deal in acceeding to 
these provisions in return for better seniority rules or more 
back pay. The question, rather, is whether, when the Congress 
and President establish particular machinery to enforce the 
ban on discrimination in employment. Federal officials can

-  4  -



bargain away that machinery in return for promises by employers 
that they will stop breaking the law. The problem is a novel 
one of substantial public importance; within the last year the 
-government has entered into similar arrangement involving 
hundreds of thousands of employees with the national trucking 
and telephone industry. Brennan v. American Telephone and 
Telegraph Co., No. 74-1342 (E.D. Pa.); United States v. Trucking
Employers, Inc., No. 74-153 (D.D.C.).

THE DISTRICT COURT SHOULD HAVE SET ASIDE THE 
CONSENT DECREES BECAUSE THEIR PROVISIONS ARE 
CONTRARY TO LAW.

I. Section 18(g) of Decree I Unlawfully Requires Minority 
Employees To Waive Their Rights To Maintain Private 
Litigation To Remedy Employment Discrimination As A 
Condition of Obtaining Benefits Under An Action By
iiie mi-Lueu srares.
Paragraph 18 (g) of Consent Decree I provides in

pertinent part
In order to receive such back pay each 

affected employee shall be required to execute 
a release, in a form approved by the Audit 
and Review Committee, of any claims against 
or liability of the Company, the Union, their 
officers, directors, agents, local unions, 
members, employees, successors and assigns, 
resulting from any alleged violations based 
on race, color, sex (exclusive of the matters 
referred to in paragraph D of this Decree), 
or national origin, occurring on or before 
the date of entry of this Decree, or any 
equal employment opportunity laws, ordinances, 
regulations, or orders, including but not 
limited to Title VII of the Civil Rights Act 
of 1964, as amended, 42 U.S.C. §§2000e ejt seq., 
the Civil Rights Act of 1866, 42 U.S.C. §1981 
et seq.. Executive Order 11246, as amended, 
the United States Constitution, the duty of 
fair representation under the Labor Management

- 5 -



Relations Act, 29 U.S.C. §§151 e_t seq. , and 
any otTner applicable federal, state or local 
constitutional or statutory provisions, orders 
or regulations. Such release will also bar 
recovery of any damages suffered at any time 
after the date of entry of this Decree by 
reason of containued effects of any such dis­
criminatory acts which occurred on or before 
the date of entry of this Decree.

Appendix, 60a. The meaning and scope of this paragraph
is discussed in the District Court’s opinions of May 20, June
.7, and July 17, 1974.

The defendants construe this paragraph to provide that 
employees will be required to waive two types of rights.
First, minority employees will be required to waive certain
prospective rights :

1. The right to sue for additioiidl lujunuLo.ve relief 
if the Consent Decrees do not eliminate the con­
tinuing effects of past discrimination.

2. The right to sue to enforce the Consent Decrees 
if the defendants fail to comply with their 
provisions ;

3. The right to sue for bach, p^y or damages which
may arise in the future by reason of the defendants' 
failure to eliminate the continuing effects of 
past discrimination.

Second, minority employees will be required to waive certain 
accrued rights:

1. The right to sue for back pay or damages which arose 
prior to execution of the waiver by reason of 
systemic discrimination by the defendants >

-  6 -



2, Ths iriglit to sue foir baclc puy or daitiages whicli
arose prior to execution of the waiver by reason 
of non—systemic dsicrimination by the defendants.

The precise meaning of paragraph 18 (g) is not clear on 
the face of the record. The opinions of the District Court 
describes the proposed waivers as though they involved only 
releases of accrued back pay claims. In its opinions of May
20, 1974, the Court stated:

The question of the binding effect of a release 
for back pay is one that all the parties have 
an interest in and which needs resolution. . . .
It is my conclusion after a study of the matters, 
that there can be an effective waiver or settle­
ment in a back pay situation.

Appendix, 157a- 158a. (Emphasis added). The Memorandum
Opinion of June 7 held similarly:

This Court concludes that there can be a legal 
waiver of back—pay claims where, for valuable 
consideration, or release is signed knowingly 
and voluntarily, with adequate notice which 
gives the employee full possession of the 
fa cts.

Appendix, 192a (Emphasis added). Similarly, the Memorandrun 
Opinion of July 17, 1974, states:

Assuming, arguendo, that the proposed back-p^y: 
releases should be declared invalid by the Fifth 
Circuit, there is no suggestion that all 
]x\inority steelworkers will sign such releases 
or that there may be a lack of class repre­sentatives to pursue pending of future liti­
gation. Additionally, while some class mem­
bers may choose to exectuve a back-pay release 
in exchange for a tender of immediate back—pay, 
such would not prevent continued litigation by 
the existing class representatives. . . .  Indeed, 
it appears that a decision by the Fifth Circuit 
v;hich would invalidate the release procedure

- 7 -



after payments had been made would adversely
affect only the defendants herein, as they
would have paid for something less than that
which was expected in return —  a valid release
of bach pay claims. Appendix, 205a—207a (emphasis added)

At the May 20 hearing the District Court indicated grave 
reservations regarding any purported waiver of future effects 
of past discrimination,

I believe the Supreme Court has indicated that 
there can be no effective waiver of damages 
for future violations. Now we get into a very 
tricky area as to whether or not, if you 
attempt to make a waiver that says that the 
present remedies adequately reraedŷ  con­tinuing effect of past discrimination, whether 
that is a waiver of future violations or not.

Transcript of Hearing of May 20, 1974, p. 51.
The government, unlike the defendants, maintained in the Dis—

• * - V > o  v  O  c*UUUXU, uiid. u ail ow -- --------
even if he signed a waiver

If any individual believes that he is not 
receiving all the relief available to him 
under the decrees, he may sue to obtain 
the relief.

Plaintiffs' Memorandum, p. 25. On July 23, 1974, intervenors 
moved in the District Court for an order clarifying the meaning 
of paragraph 18 (g) and the proposed waivers. Appendix, 
2ioa-212a. The District Court declined to rule on the motion 
at that time, postponing consideration of the issue until a 
later date when the parties submitted the text of the proposed 
waiver itself. Transcript of Hearing of July 23, 1974, p. 22.

The practical impact of the waivers depends in large 
measure on the type of discrimination which exists in plants

-  8 -



involved. Although the Complaint filed by the United States 
alleges a variety of forms of discrimination, see Appendix,
6a-14a, the most important problem is that present seniority
rules have the effect of preserving and perpetuating the effects 
of past discrimination. In years past, particularly before 
1968, minority and white workers were hired into separate 
lines of progression ("LOP") or departments. The jobs available to 
non-white workers were generally the most poorly paid, un­
pleasant, and dangerous. While this hiring practice has abated 
to some extent, minority employees are locked into their jobs 
by established seniority rules. These rules provide that, when 
a vacancy occurs in a desirable job in a white LOP or department it 
is given qualified applicant with the longest seniority in
that LOP or department. A qualified black.applicant outside the 
department cannot win the promotion unless all of the whites in 
the department first turn it down. A similar rule applies to 
layoffs and reinstatement. See generally United_ States _y.
Bethlehem Steel Corp., 446 F.2d 652 (2d. Cir. 1971); Bush y^
Lone Star Steel Corp., 373 F.Supp. 526 (E.D. Tex. 1974); United 
States V. United States Steel Corp., 371 F.Supp. 1045 (N.D. Ala. 
1973); In the matter of the Bethlehem Steel Corporation, Decision 
of the Secretary of Labor, Docket No. 102-68, January 15, 1973. 
These seniority rules, which perpetuate and preserve past dis­
criminatory hiring and assignment practices, lock minority 
workers into ill paid undesirable jobs for the rest of their lives.

- 9 -



The government's complaint in this action specifically charges 
the defendants with failing to take steps necessary to ter­
minate the continuing effects of this earlier discriminatory 
hiring and assignment. Complaint, '̂3115 (e) , 17, Appendix,

lQa_12a. Many of the provisions of the Consent Decrees 
deal with changes in the seniority system necessary to end
once and for all the continuing effects of that earlier dis­
crimination. Consent Decree I, .̂114, 5, 6, 7, 8, 9, Appendix,

33a-43a.
The Consent Decrees alter the seniority and other rules of 

the defendants in an effort to enable minority employees to 
reach their "rightful place", the jobs which they would have had but

-̂ ôt dl scr̂ ’m ’’ ti on. See Local 189 v. United Staĵ eĝ  416
F.2d 980 (5th Cir. 1969). Whether or not the Decrees will succeed i 
enabling minority workers to reach their "rightful place' is not 
known, and will not be kicwn for years. A variety of limitations in 
the Decrees may render the affirmative relief in the Decrees in­
effective. The Decrees provide for three step bidding; (1) when a 
vacancy occurs in a white LOP it will first be offered to the em­
ployee in the job immediately below the position in which the vacanc 
exists; (2) only when d.1 the LOP employees have had an opporunity tc 
advance will the employees within the department have an opportunity, 
to bid on the vacancy in the LOP; (3) and finally, after all the 
departmental employees have had an opportunity to advance into 
the LOP, then the departmental vacancy will be posted for plant­
wide bidding. The Consent Decrees do not establish any job-

-  10 -



1/si^ipping or iu0rging of dspartmsnts or LOPs, nor do tliey alter tlie 
rigid contractual definition of vacancy in order to increase the
opportunity for Blacks or women to move intO' their rightful place ,
require plant—wide bidding, or posting for, at least, all entry

1/level LOP jobs, provide any other affirmative relief geared to
terminate as quickly as possible, consistent with the demands^ of

^  ......................................."business necessity", the widespread effects of dxscriminatxon xn
the steel industry, or change or abolish any existing employment

5/test.
since the jobs available in this third step of bidding will 

generally be low paid entry level jobs, the Decrees provide that if 
an employee from another department takes such a job he or she will 
continue to be paid at the rate for his or her former job for up to 
two years. Appendix, 40a-42a. Whether this two year period will

 ̂ 1 .... . . ^

i]fiinority employees cannot be foreseen with certainty.

2/ See Pettway v. American Cast Iron Pipe Company, 494 F.2d 211, 
248 (5th Cir. 1974); Long v. Georgia Kraft Co., 450 F.2d 557, 562 
(5th Cir. 1971); United States v. Local 189, 301 F.Supp. 906 (E.D. 
La. 1969) aff'd 416 F.2d 980 (5th Cir. 1969).
-y United States v. United States Steel Corporation, 371 F.Supp..
1045, 1056-57 (N.D. Ala. 1973); Bush v. Lone Star Steel Corporation, 
373 F.Supp. 526, 534 (E.D. Tex. 1974); United States v. Jacksonville 
Terminal Company, 451 F.2d 418, 451 cert.denied 406 U.S. 906 (1972);
United States v. Haves International, 456 F.2d 112, 118-19^ ^
1972); United States v. Chesapeake & Ohio Railroad Co., 471 F.2d 
582,' 589 (4th Cir. 1972) cert.denied 411 U.S. 939 (1973).
y Pettway v. American Cast Iron Pipe Company, supra at 248.
4/ Rather, the utilization, if it is to occur at all, of these 
forms of affirmative relief,vhich courts have regularly instituted, 
is left almost entirely to the Implementation Committees in each 
individual plant. The members of these committees are appoonted by 
the discriminator - the Companies and the Union.
5/ The use of discriminatory employment tests is a common vio-- 
lation of Title VII, Griggs v. Duke Power Company, 401 U.S. 424 
(1971); United States v. Georgia Power Company, 474 F.2d 907 (5th 
Cir. 1973); Pettway v. American Cast Iron Pipe Company, supra.

-  11 -



The fact that the government has consented to these 
Decrees does not insure that minority employees will reach their 
rightful place as soon as possible, within a reasonable period 
of time, or ever. The United States is no less fallible, and 
no more prescient, than any other litigant. On two previous 
occasions the government has won or negotiated decrees in the 
steel industry. United States v. Bethlehem Steel Corp.., 446 
F.2d 652 (2d Cir. 1971); In the Matter of Bethlehem Steel
Corporation, supra. In both those plants minority employees, 
dissatisfied with the deficiencies in the relief won by uhe 
government, chose to pursue private litigation for additional 
relief. Williamson v. Bethlehem Steel Corp., 468 F.2d 1201 (2d 
Cir. 1972), cert.denied 411 U.S. 973 (1973); Lane v. Bethlehem
Steel corp.. No., 71-580-H, D. Md. On repeated occasions in other 
areas the judgment of the United States as to what constitutes 
adequate relief in civil rights litigation has been overturned 
by the courts. See e.g., Davis v. Board of School Commissioners. 
of Mobile, 402 U.S. 33 (1971); Alexander v. Holmes County Board of 
F.ducation. 396 U.S. 19 (1969); Adams v. Richardson, 480 F.2d 1159 
(D.C. Cir. 1973) ; Legal Aid Society v. Brennan, 8 EPD ^(9483 (N.D.
Cal. 1974); United States v. Ironworkers, 5 EDP ^[7973 (W.D. Wash. 
1972); Pettway v. American Cast Iron Pipe Co., 494 F.2d 211, 221 
n.21 (5th cir. 1974); Robinson v. Lorillard Corp., 444 F.2d
791, 800-01 (4th Cir. 1971).

The parties have claimed that any waivers executed by
minority steelworkers will be knowing and voluntary. This

-  12 -



assertion is at odds with the reality of the situation. The 
waivers are classic contracts of adhesion, a standardized agree­
ment imposed on the employees on a take it or leave it basis. 
Individual steelworkers have no significant bargaining power as 
against the. multi-billion dollar employers; such disputes have 
properly been characterized by this Court as a "modern day David 
and Goliath" confrontation. See Sanchez_„y.— Standard Brands,, 431 
F.2d 455 (5th Cir. 1970). Most minority steelworkers, already 
underpaid because of their race and faced with spiraling in­
flation and fears of layoffs, will likely need so badly the back­
pay tendered that they will have no choice but to execute any 
waiver involved, no matter how unfair its terms. No steelworkers 
will have the free choice afforded minority employees in 
virtually all government suits since 1965, to take the full relxef 
offered under that action and to sue for additional relief if 
necessary.

Nor will minority employees be able to intelligently 
evaluate the Hobson's choice presented to them. Even to an 
experienced attorney, the ramifications of the two lengthy 
Consent Decrees are difficult to understand. No one, not even 
the parties, can forsee whether the Decrees will prove effective 
in disestablishing the previously predominantly white and Black 
jobs at the defendants' plants. 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

- 13 -



whether to amend the transfer procedures generally —  will not 
be made until after minority employees are required to sign the 
waivers. Appendix, 53a. Although every minority 
employee will need to know how much back pay he might win if he 
rejected the waiver and chose to litigate, the companies have 
objected that such calculation for all the mLnority employees 
involved is impracticable. Transcript of Hearing of May 20,
1974, p. 173. The parties have already opposed one effort to 
notify minority employees of the pendency of any private liti­
gation affecting them or of the identity of the civil rights 
lawyer involved. Transcript of Hearing July 23, 1974, passim, and in 
one pending action the company and union have opposed any discover; 
to obtain information needed to advise employees whether to 
execute the waivers. Rodgers v. United States Steel, No. 71-793 
(W.D. Pa.)

In the District Court the government candidly recognized 
that in many instances minority employees will be unable to 
determine whether the Decrees will enable them to obtain the jobs

«
to which they are entitled. Regarding employees who had filed 
complaints with the E.E.O.C., the government stated:

If a practice is covered by a decree but 
the precise form of relief under the decree has 
■yet to be determined, the EEOC will not ask the 
charging party to make his choice until such time 
as relief has been finalized. . . For instance, a
black who charges that he has been "locked into a low paying line of progression may seek to have 
bis line merged with the higher paying line.
If the parties have not yet passed on that 
specific proposed merger at the time that the 
investigation is otherwise completed, the EEOC 
will not ask him to make a decision on the waiver.

- 14 -



Reply Memorandum of Plaintiffs, p. 8. This allowance for 
additional time applies only to employees who have filed com­
plaints with the commission; the vast majority of the minority 
employees who have not filed such complaints must decide 
whether to sign the waiver before they do or could know whether 
the Decrees will solve their particular problems.

Even if these waivers could be signed by minority workers 
under circimstances rendering them knowing and voluntary, that 
would not be sufficient to assure their validity. A waiver, 
like any contract, must be invalidated despite the consent of 
the parties if it contravenes public policy. As the Supreme 
Court pointed out in Brooklyn Savings Bank v.' O'Neil, 324 U.S.
\ j y  t \ J -  - / - r  y  /

It has been held in this and other courts 
that a statutory right conferred on a private 
party, but affecting the public interest, may 
not be waived or released if such waiver or 
release contravenes the statutory policy. 
Mid-State Horticultural Co. v. Pennsylvania R.
Co. . 320 U.S. 356, 361; A. J. Phillips Co. v . Grant Truck Western R. Co., 236 U.S. 662, 667,
Cf. Young v. Higbee Co., 324 U.S. 204, ante,
890. Where a private right is granted in the 
public interest to effectuate legislative policy, 
waivers of a right so charged or colored with 
the public interest will not be allowed where 
it would thwart the legislative policy it was 
designed to effectuate.

324 U.S. 704-706o
The Federal courts have invalidated a wide variety of 

"knowing and voluntary" waivers on the ground that they con­
travened public policy. In J. I. Case v. N.L.R.B., 321 U.S. 
332, 337-338 (1940), the Supreme Court held unlawful and

- 15 -



ineffective any waiver signed by individual employees of benefits 
to which the employee would be entitled under a union contract, 
concluding that such waivers would undermine the responsibility 
and bargaining power of the unions established by the National 
Labor Relations Act, 29 U.S.C. §157 ^  s^. Pittsburgh, etc.
R»R. Co. V. Fink, 250 U.S. 577 (1919) held that a shipper could 
not waive the provisions of the Interstate Commerce Act requiring 
railroads to charge equal rates to all shippers. In Martino 
V. Michigan Window Cleaning Co., 327 U.S. 173, 177 (1945), the 
Supreme Court held invalid private agreements not to seek over­
time payments for work for which such payments were required by 
the Fair Labor Standards Act. See also Wirtz v. William H.D. 
LaPevof Louisisna, Inc., 282 F.Supp. 742 (E.D. La. 1968); Wirtz 
V. Turner, 330 F.2d 11, 14 (7th Cir. 1964); Bingham v. Airport 
Limousine Service, 314 F.Supp. 565 (W.D. Ark. 1970); Durkin v. 
Waldron, 130 F.Supp. 501 (W.D. La. 1955); Mayheu‘s Super Liguor 
Stores V. Hodgson, 464 F.2d 1196, 1197 (5th Cir. 1972).

in International Brotherhood of Boilermakers, etc., v . 
Rafferty, 348 F.2d 307, 314, (5th Cir. 1965) this Court held that 
union members could not waive their rights to the protections 
of the Landrum-Griffin Act. The Supreme Court has invalidated 
a variety of waivers aimed at exempting a carrier from liability 
under the Federal Employers Liability Act. See e.g.. Phi 1 pU i 
^tc, R.R. CO. V. Schubert. 224 U.S. 603 (1912)(waiver of right 
to sue in return for membership in employer Relief Fund). Dunran 
V. Thompson, 313 U.S. 1 (1942) (waiver of right to sue unless

- 16 -



advance from employer repaid); Boyd v. Grand Truck Western 
R. Co., 338 U.S. 263 (1949)(waiver of right to sue in state
court in return for money paid after injury). In Buford v. 
American Finance Company, 333 F.Supp. 1243, 1248-9 (N,D. Ga. 1971) 
the court declared null and void releases executed by a con­
sumer in return for a partial cash settlement waiving her right 
to full recovery under the Truth in Lending Act.

The courts have repeatedly invalidated waivers which pur­
ported to limit the rights or remedies under Title VII. In 
Alexander v. Gardner-Denver Company, 39 L.Ed.2d 147 (1974),
the minority employee;claiming that he had been fired because 
of his race, voluntarily submitted his claim for arbitration 
under the collective bargaining agreement in force at his plant. 
The agreement provided that, where arbitration was sought, the 
decision of the arbitrator would be binding on the employee.
After the arbitrator ruled against him, the employee filed a 
complaint with the E.E.O.C. and thereafter brought suit in 
federal court. The Supreme Court held invalid any agreement by 
an employee establishing arbitration, rather than the federal 
courts, as the forum in which his claims would be finally adju­
dicated. 39 L.Ed.2d at 147. In Chastang v. Flynn and Emrich 
company, 365 F.Supp. 957 (D. Md. 1973) the plaintiff employees
had on several occasions executed releases waiving any right 
to sue arising in connection with their employment. The District 
Court held the releases invalid

- 17 -



F & E argues that the re-execution of the 
documents after the effective date of 
Title VII prevents plaintiffs from relying 
upon Title VII to sue the company since they 
were aware of the Act at the time they re- 
executed the releases. The simple answer to 
this is that the parties cannot agree to per­
form an illegal act. United Mine Workers v.
Pennington, 381 U.S. 557. . . (1965); United
Brotherhood of Carpenters and Joiners of 
America v. United States, 330 U.S. 395,
(1947) A statutory right conferred upon a 
private party, but affecting the public 
interest may not be waived or released, if 
such waiver or release contravenes public 
policy. Brooklyn Savings Bank v. O'Neil,
324 U.S. 697, 704 ... (1945).

365 F.Supp. at 968. In Rosen v. Public Service Electrical and 
romuanv. 328 F.Supp. 454 (D.N. J. 1970) , the employer argued

that any discrimination in its pension plans had been waived 
when the employees, through their union,agreed to that plan 
through collective bargaining. The court held that any such 
contractual agreement to the plan was unenforceable. 328 F.Supp. 
at 464. The Fourth Circuit rejected a similar argument in 
Robinson v. Lorillard Corporation, 444 F.2d 791, 799 (4th Cir. 
1971): "The rights assured by Title VII are not rights which
can be bargained away —  either by union, by an employer, or by 
both acting in concert". In Moss v. Lane Company, 50 F.R.D.
122 (W.D. Va. 1970), the plaintiff sued on behalf of himself and 
his fellow minority employees. The employer thereafter served 
affidavits from all other minority employees disclaiming any 
authority from them to commence the suit. The court refused to 
dismiss the class action aspect of the case despite these waivers.

- 18 -



By such dismissal, I would be saying that 
either there is no racial discrimination 
practiced by the defendant against the other 
members of the class or that the other Negro 
employees want to be racially discriminated 
against. Clearly the latter is unacceptable, 
and, certainly, the former would be an improper 
determination at this stage of the suit.

50 F.R.D. at 126.
Intervenors maintain that the proposed waivers contravene 

public policy and are thus invalid because (1) the waivers are 
prospective in nature and deprive employees of any remedy if 
the defendants continue to fail to remedy the effects of past 
discrimination, (2) the waivers require employees to waive 
their rights to maintain private litigation as a condition of 
receiving certain benefits under government litigation, and (3) 
the waivers preclude employees from obtaining full monetary 
compensation for past discrimination.

1. Prospective Waivers
The critical problem in the steel industry is the failure 

of the companies and the union to take steps to remedy the 
effects of past discrimination by disestablishing previously 
black and white jobs, lines of progression and departments, and 
permitting minority employees to reach their rightful place as 
quickly as possible. Every day the defendants fail to take such 
action they are in violation of the law. See Local 189 v .
United States, 416 F.2d 980 (5th Cir. 1969). At issue in this 
case is whether the defendants can continue thus violating the 
law and the rights of minority employees. Until these effects

- 19 -



of past discriminatory assignments are terminated, black employees 
will continue to earn less than whites solely on account of their
race.

Thus continuing effects of past discrimination are the 
primary cause of discriminatory treatment of black employees and 
preferred treatment for whites in the steel industry. The pro­
posed waivers are carefully tailored to strip minority employees 
of any right to seek any necessary additional remedies for such 
discrimination. Employees who sign the waivers do not, for 
example, waive their rights if there are new acts of discrijnina- 
tion; but for the last six years it has been the contxnuing effects 
of past discrimination, not new acts, which have caused the 
majority of violations of the rights of black employees.

This litigation is not about what remedies minority 
employees will have if the Decrees succeed, for if they succeed 
no remedies would be invoked or necessary. The issue presented 
by this appeal is what remedy minority employees will have if 
the Decrees fail. The parties insist at length that they believe 
the Decrees will succeed in promptly remedyxng the effects of 
past discrimination. But the defendants will not need releases 
if the Decrees work; they seek and need those waiver's solely 
to preclude additional relief if the Decrees prove inade­
quate. It is only to the extent that the Decrees fail that 
the waivers will have any practical impact —  and that xmpact 
will be to lock a whole generation of black steelworkers into 
the poorly paid jobs and departments to which they were

-  20 -



initially assigned on the basis of race. A waiver with such an 
effect is clearly void as contrary to public policy.

Such a release is not a compromise of accrued claims, it is 
a license to break the law. No court in the land would uphold 
]̂ 02.eases signed by the parents of school age children purporting 
to waive their right "to eliminate from the public schools all 
vestiges of state imposed segregation." Swann v. Charlotte- 
Mecklenburq Board of Education, 402 U.S. 1, 15 (1971). See also
' ■■■ .. .1.. ■■ ' f

Griffin v. County School Board, 377 U.S. 218, 232-234 (1964)
Green v. County School Board, 391 U.S. 430, 438, n.4 (1968). Nor 
would this Court enforce a release signed by a citizen denied the 
right to vote which purported to waive the right to judicial 
relief which would "so far as possible eiiminare rhe uiscxiiui- 
natory effects of the past as well as well as bar like dis­
crimination in the future." Louisiana v. United States, 380 
U.S. 145, 154 (1965). The proposed waiver in the instant case 
is no different.

The question of whether a prospective waiver of Title 
VII rights is lawful and binding was decided five months ago 
by the United States Supreme Court in Alexander v. Gardner- 
Denver Company, 39 L.Ed.2d 147 (1974). In that case the aggrieved 
employee, prior to commencing a Title VII action, instituted 
arbitration which would be "final and binding upon the Company, 
the Union, and any employee or employees." 39 L.Ed.2d at 154.

-  21 -



The arbitrator found there was no racial discrimination, and 
the employer argued that the employee, by submitting his claim 
to binding aribtration, had waived his rights to sue under
Title VII. The Court held:

We are unable to accept the proposition that 
petitioner waived his cause of action under 
Title VII. To begin with, 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 re­
present a congressional command that each 
employee be free from discriminatory practices.
. . .  In these circumstances, an employee's 
rights under Title VII are not susceptible to 
prospective waiver.

39 L.Ed.2d at 160. The prospective aspects of the waiver in the 
instant case are, like the waiver in Alexander, clearly unlawful.

The waiver in Alexander was prospective in the sense that, 
although the act of discrimination occurred before the purported 
waiver, the employee committed himself in advance to obtaining 
only so much relief as the arbitrator would thereafter award.
The dismissed employee in Alexander had no better idea whether the 
arbitrator would give him his job back than the employees in this 
case know whether the Decrees will succeed in getting them to 
their rightful place as soon as possible. Moreover, the court 
in Alexander noted that, even had the arbitrator awarded partial 
relief, the waiver could not deprive the employee of the right 
to sue for additional relief. See 39 L.Ed.23 at 159-169, n.l4.

2 Interference With Independent Remedies
In enacting the Civil Rights Act of 1964 Congress indicated 

that it considered the policy against discrimination in employment

-  22 -



to be of the "highest priority". Johnson v. Georgia HighwaY 
Express, 498 F . 2d 714 (5th Cir. 1974); see, Newman 
Park Enterprises, 390 U.S. 400, 402 (1968). In this case
legislative enactments "have long evinced a general intent to 
accord parallel or overlapping remedies against discrimination." 
Alexander v. Gardner-Denver Company, 39 L.Ed.2d 147, 158 (1964). 
Among the multiplicity of independent remedies established by 
law are (1) private litigation under Title VII, 42 U.S.C. 
§2000e-5(f); (2) investigation by the EEOC, followed by con­
ciliation efforts if the agency finds there is probable cause 
to conclude there is discrimination, 42 U.S.C. §2000e-5(b); (3)
"pattern or practice" suits by the United States, originally 
prosecuted by the Department of Justice and now handled by the 
EEOC; (4) enforcement of Executive Order 11246 and 42 C.F.R.
Chapter 60 by the Office of Federal Contract Compliance and the 
Secretary of Labor'. In enacting Title VII in 1964 Congress 
expressly rejected an amendment which would have made Title VII 
the exclusive federal remedy for most employment discrimination. 
110 Cong. Rec. 13650-52 (1964) Senator Clark, one of the
sponsors of the 1964 Act, stressed that Title VII "is not xn- 
tended to and does not deny to any individual rights and remedies 
which he may pursue under other federal and state statutes 
110 Cong. Rec. 7207 (1964).

Despite this clear legislative history, employers urged 
repeatedly but unsuccessfully in the years after the enactment 
of Title VII that the consideration of a charge of discrimination

- 23 -



in one forum precluded consideration of the same charges in another
In TTnited States v. Operating Engineers, Local___̂ , 4 EPD 1[7944
(N.D. Cal. 1972), the employer argued that where the United
States had brought a pattern or practice suit and entered into
a consent decree, private litigants could not sue for additional
relief. The Court rejected that position:

This court does not believe that the Government can conclusively bind private 
plaintiffs pursuing parallel actions, sim­
ply by joining in a consent decree. There 
is no statute which precludes private suits 
from proceeding —  even as class actions -- 
simultaneously with pattern or practice suits 
brought by the United States pursuant to 42 _
U.S.C. §2000e-6. . . .  It is the Government s
position that private and public suits under 
Title VII are separate and independent
entities, because the United_States is_. • ___ _1 -i 1 r> i“ or* p <5 i" in itSprccecc-Liiy ^suit as well as the rights_of minority group 
members, while private plaintiffs are^re­
presenting the m.inority group members 
interests only. . . • Title VII actions will
be discouraged if class action rights are 
cut off abruptly by a Government settlement.
This possibility is especially strong in cases like the present one, where private suits 
were filed prior to the Government's action.
If this Court gives substantial weight to the 
consent decree in the instant case, future 
Title VII private plaintiffs will become wary 
of acting until they are certain the United 
States will not be joining in the suit or is 
not interested in settlement.

4 EPD, pp. 6504-05. In Williamson v. Bethlehem Steel Corp­
oration, supra, the employer and union argued that an employee 
could not maintain a private action because the United States 
had already litigated to judgment a pattern and practice action

- 24 -



involving the same alleged discrimination. The Second Circuxt
rejected that contention:

For purposes of res judicata or collateral 
estoppel, the private citizens in this case 
are not bound by the Attorney General s ̂ 
action in the former case since they neither 
were parties to it. . . nor have interests such
as to be in privity with the Attorney General.Under Title VII since its inception, 
moreover, the individual has played a signifi- 
cant role in its enforcement. Jenkins v. United,
Gas Corp., 400 F.2d 28, 32 (5th Cir. 1968) . . .
While the 1972 amendments authorize the -tqual 
Employment Opportunity Commission to bring a 
Title VII suit in the name of the Government, individuals not party to_the Coiranission 
proceedings may institute a suit despite any 
legal action taken by the Commission or the 
Attorney General.

The purpose of permitting the individual 
who has been discriminated against to seek 
relief v'herf̂  thp Government has omitted to do so 
possibly for reasons such as its lack of know­
ledge, legal strategy, or lack of_enforcement 
staff —  is plainly to make certain that the 
individual employee is projected.

488 F.2d at 1203-04. See also Leisner v. New York Telephone.
Company, 358 F.Supp. 359 (S.D.N.Y. 1973).

The federal courts have rejected a variety of other 
attempts to curtail the independence of these overlapping 
remedies. In Boles v. Union Camp Cor£. , 5 EPD ^(8051 (S.D. Ga. 
1972), the company unsuccessfully contended that it was not 
subject to suit under Title VII because its seniority practices 
had been developed under the supervision and with the approval 
of the Office of Federal Contract Compliance.

- 25 -



contending that private settlements, 
such as its Affirmative Action Program, are 
favored by the law and should be encouraged 
bv the courts. Union Camp argues that active 
supervision by Compliance officers removes any 
necessity for judicial overseeship since every claim of racial discrimination an injunc­
tion could cover has been eliminated under the 
Program....

An affirmative action program entered into 
bv a Title VII defendant-employer and approved 
bv the Office of Federal Contract Compliance 
pursuant to Executive Order 11246 is not a con- 
slusive defense to an action filed under that 
Title by private plaintiffs.

5 EPD at p. 6838. This Court rejected a similar defense of 
O.F.C.C. approval in Pettway v. American Cast Iron Pipe Company / 
494 F.2d 211, 221, n.21 (5th Cir. 1974). In E.E.O.C. v. Eagle 
Iron works, 367 F.Supp. 817, (S.D. Iowa 1973), the court held

. n - r-.i ■; -I- v(̂ -i nrr (-Viaraesthat tne commission couxu ----.........^
which had already been the subject of an unsuccessful private 
Title VII action. 367 F.Supp. at 821. Three circuits have re­
jected the contention that adjudication of a charge of dis­
crimination under the national labor laws precludes litigation 
regarding the same alleged discrimination under Title VII.
Taylor v. Armco Steel Corporation, 429 F.2d 498 (5th Cir. 1970); 
miner v. E.I. du Pont Co., 432 F.2d 12 5 (6th Cir. 1971); Norm^ 
V .  Missouri Pacific Railroad, 414 F.2d 73 (8th Cir. 1969).
The supreme Court has repeatedly rejected the argument that a 
finding by the EEOC cf no probable cause precludes an employee 
from litigating the merits of the same charge in federal court. 
McDonald Douglas Corp. v. Green, 411 U.S. 792, 798 (1973);

- 26 -



Alexander v. Gardner-Denver Company> 39 L.Ed.2d 147, 157 (1954); 
see also, TRobinson v. Lorillard Corg. , 444 F . 2d 791 (4th Cir. 
1971); Beverly v. Lone Star Lead Const. Cor£. , 437 F.2d 1136 
(5th Cir. 1971). As the Supreme Court indicated in Alexander, 
the general rule in employment discrimination litigation is that 
'■submission of a claim to one forum does not preclude a later
submission to another," 39 L.Ed.2d at 158.

Within the last several years Congress has rejected 
repeated efforts to limit this structure of independent reme­
dies. It was proposed, on the one hand, to make government 
lawsuits the exclusive remedy for employment discriminatxon. 
That proposal was rejected at the urging of the then Chairman
of the E.E.O.C. ;

Access to the judiciary in seeking redress ot 
grievances should not be reduced to a parens 
patriae type of right, assertable only by a 
government official acting on behalf of Aggrieved person's behalf. Every man deserves 
the right to seek his day in court, whether an 
administrative agency thinks his cause is ^us 
or not. The section 706 private action h s been an important source of Title VII law and 
well illustrates the value of continual plenishment of the legal framework from extra- 
governmental sources.^/

on the other hand, a second proposal would have made private 
Title VII actions the exclusive remedy. Senator Williams, speak­
ing in opposition to this proposed restriction, urged:

6 / Hearings before a Subcommittee of the House Co^ittee 
4  EaLation and Labor, 91st Cong., 2dSess., pp. 36-37^  EdScatioS and Labor, 91st Cong., Sess , pp. 36-1/ 
/iQfiQ 701 • Hearings before a Subcommittee of n n. ^Co^Ltel'ofbaio? and Public Welfare, 92nd Ceng., 1st Se
p. 63 (1971).

ss

_ 97 -



I believe that to make Title VII the ex­
clusive remedy for employment discrimination 
would be inconsistent with our entire legis­
lative history of the Civil Rights Act.

TO lock the aggrieved person into the 
administrative remedy would narrow rather than 
strengthen our civil rights enforcement efforts.
. . . [W]here one form of relief proves un­
responsive or impractical, or where the claim­
ant has a particular preference to bring his 
claim in a forum other than that which is most 
commonly used for claims of this kind, he 
should have that right.

The peculiarly damaging nature of employment 
discrimination is such that the individual who 
is frequently forced to face a large and power­
ful employer, should be accorded every protec­
tion that the law has in its perview, and that 
the person should not be forced to seek his 
remedy in one place.

Legialative History of the Equal Employment Opportunity Act of 
/ ̂ , P . .

Although Congress clearly intended to afford minority 
employees relief in both private and government litigation, the 
intent and effect of the proposed waiver is to force each employee 
afforded back pay to choose between those remedies. If an 
gfnployee wants back puy relief under the government action, he 
must relinquish his statutory right to bring a private action.
If an employee wants to reserve the right to pursue private 
litigation, he must relinquish his right to back pay relief 
under the goyernment action. The result is essentially that 
rejected by Congress in 1970-1972, to make either government 
litigation or private litigation the exclusive remedy available.
In Hutchings v. United States Industries, Inc., 428 F.2d 303

- 28 -



(5th Cir. 1970), the employer argued that an aggrieved em­
ployee was or could be required to chose between his remedy 
under Title VII and his union grievance procedure. This Court 
rejected that argument:

If the doctrine of election of remedies is 
applicable to all Title VII cases, it applies 
only to the extent that the plaintiff is not 
entitled to duplicate relief in the private 
and "pioblic forums which would result in an 
unjust enrichment or windfall to him.

428 F.2d at 314. In Alexander v. Gardner-Denver, the Supreme
Court noted that the doctrine of election of remedies was
inapplicable to suits under Title VII, since it "refers to
situations where an individual pursues remedies that are
legally or factually inconsistent". At least 5 other circuits
have refused to apply the doctrine of election of remedies to
Title'VII actions. See Bowe v. Colgate-Palmolive Co., 416
F.2d 711, 714-175 (7th Cir. 1969); Macklin v. Spencer Freight
Systems, Inc.., 478 F.2d 979, 990-991 (D.C.Cir. 1973); Voutsis
V. Union Carbide Corp., 452 F.2d 889, 893-894 (2d Cir. 1971),
cert, denied 406 U.S. 918; Newman v. Avco Corp., 451 F.2d 743,
746, n.l (6th Cir. 1971); Qubichon v. North American Rockwell
Corp., 482 F.2d 569, 572-573 (9th Cir. 1973).

If the award of relief in a government action can be con­
ditioned on a waiver of other statutory remedies, the Con­
gressional decision to establish independent remedies could and 
would be easily nullified. Whenever relief, however limited, was 
awarded in one forum, it could be conditioned on a waiver of the

- 29 -



right to proceed in all other forums. It is of no significance 
that in such a case, as here, the employee might be free to 
choose whichever remedy he preferred, for the policy of Congress 
was precisely that an employee not be required to make such a 
choice, see p. 23, supra. The contrary rule would readily 
enable employers and unions, through a minimum of additional 
paperwork, to overrule the decisions in United States_j/.
Operating Engineers, Local 3, 4 EPD 7944 (N.D. Cal. 1972) and 
Williams V. Bethlehem Steel Corporation, 468 F .2d 1201 (2d Cir. 
1972), c ^ .  denied, 411 U.S. 911 (1973). It is not coincidental 
that the discussions between the United Steelworkers and the 
defendant companies which led to these Consent Decrees and the 
waiver provisions began in the spring of 1973, about the same 
time that the Supreme Court denied the petitions for certiorari 
filed in Williamson by the United Steelworkers and Bethlehem 
Steel, both defendants herein. The public policy of the United 
States, as enacted by Congress and established by the federal 
courts, is that minority employees are entitled to pursue con­
secutively and cumulatively a variety of independent remedies.
It is this "knowing and voluntary" decision by the Congress, 
not any "knowing and voluntary" decisions by minority employees, 
that establishes the remedies available to enforce Title VII.
The executive branch has no authority to legislate through con­
sent decrees any different policy, and any waiver provision requir­
ing employees to choose among these remedies is null and void.

6a/ The Union has indicated that those discussions began "shortly 
■^ter" May 2, 1973. Brief for Union Defendants-Appellees,
vord V. united States Steel Corporation, No. 73-3907 _(5th^Cir.;, p , 14; denied in Williamson on April 15, 19/̂ 5.

- 30 -



3. Inadequate Back Pay Relief
The Consent Decrees provide that approximately thirty- 

one million dollars will be paid in back pay if all eligible 
minority employees execute the required waivers. There are 
about 60,000 minority and female employees eligible for back 
pay, and the total back pay fxmd is to be divided among them 
according to a formula set out in paragraph 18(e) of Decree I. 
Appendix, 57a - 59a. Although the total fund is substantial, 
it is an insignificant proportion of the annual profits of the 
nine major steel companies named as defendants: The average 
award per employee, approximately $500, is not great in 
comparison to back pay awarded in litigated cases. See e.g. 
Ford V. United States Steel Corporation, No. 73-3907 (5th Cir.) 
(60 minority employees awarded $200,000, an average of over 
$3,000 per employee). The government does not claim that the 
back pay to be offered will be equal to 100% of the amount to 
which each employee would be entitled if the government, or 
the employee, successfully litigated the back pay claim to 
final judgment. The size of the back pay, like the other 
provisions of the Decrees, is a compromise representing the 
best deal the government could get through negotiations.

Section 706(g) of Title VII authorizes an award of 
back pay to assure that, where an employee is discriminated 
against because of his race, he can obtain compensation equal 
to the difference between his actual salary and the wages he 
would have been paid had he been white. "The back pay award

- 31 -



is not punitive in nature, but equitable —  intended to 
restore the recipients to their rightful economic status 
absent the effects of the unlawful discrimination," Robxnson 
V. Lorillard Corporation, 444 F.2d 791, 802 (4th Cir. 1971), 
and to "economically elevate the victims to the status which 
is rightfully theirs, Johnson v. Goodyear Tire & Rubber Cp_̂, 
491 F.2d 1364 (5th Cir. 1974). The wages and back pay to be 
awarded to minority employees is a question consigned by 
Congress to the courts, rather than to the usual salary 
negotiations between employee and employer, because of the 
differences in bargaining power when "a single poor, ignorant 
employee with a grievance, not a sling shot in his hand, faces 
a huge industrial employer in this modern day David and 
Goliath confrontation . . . "  Pettway v. American Cast Iron 
Pipe Company, 411 F.2d 998, 1005 (5th Cir. 1969). The Con­
ference Committee which drafted the 1972 amendments to Title 
VII explained, regarding Section 706(g), declared

The provisions of this subsection are 
intended to give the courts wide discre­
tion exercising their equitable powers to 
fashion the most complete relief possible.
In dealing with the present section 706(g) 
the courts have stressed that the scope of 
relief under the section of the Act is tended to make the victims of unlawful dis­
crimination whole, and that the attainment 
of this objective rests not only upon the 
elimination of the particular unlawful 
employment practice complained of, but also 
requires that persons aggrieved by the con­
sequences and effects of the unlawful employ­
ment practice be, so far as possible, restored 
to a position where they would have been were 
it not for the unlawful discrimination.

118 Cong. Rec. 3642 (1972).

- 32 -



J j

The proposed back pay award does not raise minority 
employees to the economic level to which they are entitled. 
Minority employees, even after receipt of the award, will 
still have received less net wages for the relevant period 
than they would have had they been born white. The defendants 
may assert in some or even all cases that the back pay award 
equals or exceeds the total amount to which an employee was 
entitled. But the defendants also insist that, in order to 
receive this limited back pay, a minority employee must waive 
his right to litigate any claim that the back pay was 
inadequate.

Intervenors maintain that such a waiver, leaving 
minority employees with a net salary for the relevant period 
lower than that paid to whites similarly situated, is con­
trary to public policy and invalid. Where an Employee would 
have received $10,000 in wages had he been white, it is un­
lawful for the employee to receive only $5,000. That is true 
whether the $5,000 is composed of $5,000 in wages or $4,500 in 
wages and $500 in the form of a back pay "settlement."

A similar problem arises under the Fair Labor Standards 
Act when an employer who has paid less than the minimum wage 
thereafter pays an employee part of the difference between 
the minimum wage and the wage actually paid in return for a

7 / Back pay under Title VII is limited to the period 
beginning two years before the filing of a charge with the 
E.E.O.C. See Section 706(g), 42 U.S.C. §2000e-f(g).

- 33 -



waiver of the remaining balance. The federal courts have 
uniformly held that such a waiver is invalid, and that an 
employee can sue for the remainder. In Bingham y. Axrport 
Limousine Service, 314 F. Supp. 565 (W.D. Ark. 1970), the 
employee executed such a release in return for a payment of 
$500. The court held he could sue for the balance of the 
unpaid minimum wage.

The court agrees that the purposes of the 
Act would be nullified if employers were 
allowed to dimish their liability by 
persuading employees to release their right 
to recover unpaid wages and liquidated 
damages according to the Act in consideratxon 
of receiving payment of a sum less than that 
provided for by law.

314 F. Supp. at 573. In Baker v. California Shipbuildxng 
Corporation, 73 F. Supp. 322 (S.D. Cal. 1947) employees who
had executed a waiver in return for payments equal to two- 
thirds of the unpaid wages to which they were entitled were
permitted to sue for the remaining third.

The settlements are not legally binding on 
employees, and under applicable adminxstra- 
tive regulations and decisions they may 
recover for any unpaid wages plus liquidated
damages.

73 F. Supp. at 325. In Torres v. American Railroad Companjy 
of Porto Rico, 157 F.2d 255 (4th Cir. 1945), c ^ .  329
U.S. 782 { 1947), the employees executed releases in return 
for somewhat less than half the balance due them. The court
held that

even the existence of a dispute regarding 
coverage does not validate an agreement 
to accept less than the full statutory 
amount.

157 F.2d at 256.
_ 34 -



These decisions follow the decisions of the Supreme
Court in Brooklyn Savings Bank v. O'Neil, 324 U.S. 697 (1945)
and Schulte v. Gangi, 328 U.S. 108 (1946). In O'Neil the
employer obtained release of liability under the Fair Labor
Standards Act in return for a payment of $500. The Solicitor
General argued the waivers were invalid:

Although ordinarily the law permits parties 
to compromise their disputes, it is well 
established that a statutory right affecting 
the public interest may not be waived or 
released if such a release contravenes the 
statutory policy. . . .
These principles unquestionably preclude 
any legal surrender of the amount of the 
minimum wages and overtime compensation 
required to be paid by Sections 6 and 7 of 
the Fair Labor Standards Act. These sections 
make it mandatory that employers pay employees 
the specified minimim wages and overtime com­
pensation. Any conrracr, wherher by way of 
release or otherwise, whereby an employee is 
to receive less than the amounts prescribed 
in these sections is illegal. The decisions 
are substantially uniform to that effect,.

Brief for Amicus curiae. No. 554, October Term, 1944.
The Supreme Court agreed:

The legislative history of the Fair Labor 
Standards Act shows an intent on the part 
of Congress to protect certain groups of 
the population from sub-standard wages and 
excessive hours. . . . The statute was a 
recognition of the fact that due to the 
unequal bargaining power as between employer 
and employee, certain segments of the population required Federal compulsory legisla- 

• • • •
The same policy which forbids waiver of the 
statutory minimum as necessary to the free 
flow of commerce requires that reparations 
to restore damage done by such failure to 
pay on time must be made to accomplish Con­
gressional purposes. Moreover, the same

- 35 -



policy which forbids employee waiver of 
the minimum statutory rate because of inequality of bargaining power, prohibits 
these same employees from bargaining with 
their employer in determining whether so 
little damage was suffered that waiver of 
liquidated damage is called for.

324 U.S. at 704 - 708. In Schulte the employer argued that
v;aivers should be upheld where there was a bona fide dispute
as to whether the employer owed employees any back pay. The
court refused to sanction any exception.

In a bona fide adjustment on coverage, 
there are the same threats to the public 
purposes of the Wage-Hour Act that exist when the liquidated damages are waived.
We think the purpose of the Act, which we 

' repeat from the O'Neil case was to secure 
for the lowest paid segment of the nation's 
workers a subsistence wage, leads to the 
conclusion that neither wages nor the 
damages for withholding them are capable of 
reduction by compromise of controversies 
over coverage. Sucn a compromise thwarts 
the public policy of minimum wages, promptly 
paid, embodied in the Wage—Hour Act, by 
reducing the siom selected by Congress as 
proper compensation for withholding wages.

328 U.S. at 115-116.
The Federal courts have invalidated in a variety of 

circumstances waivers executed in return for partial payment
of sums due under federal law. In Philadelphia, etc._
Company v. Sch\ibert, 224 U.S. 603 (1912), an employee executed 
a waiver of his rights to sue for injuries under the Employers 
Liability Act of 1908 in return for $79. The court upheld the 
employee's right to sue for additional compensation on the 
ground that the payment and waiver were a device to enable 
the railroad to exempt itself from the provisions of the Act.

- 36 -



In Thomas v. United States, 200 F.2d 686 (1st Cir. 1952) the 
court allowed a suit for restitution of overcharges under the 
Housing and Rent Act of 1947, even though the tenant had inter 
alia, in exchange for payment of about one-third of the over­
charges, executed a general release and an Agreement for 
Judgment and Judgment Satisfied. The court of appeals held 
the release a legal nullity "because of its being contrary 
to legislative policy and the public interest." 200 F.2d at 
689. In Buford v. American Finance Company, 333 F. Supp. 1243 
(N.D. Ga. 1971) the plaintiff consumer had executed a release 
of her right to statutory damages, etc., under the Truth in 
Lending Act in return for $10. The court, relying on 0 •Neil 
invalidated the release.

The Trutn in Lending Act clearly contemplates 
substantial enforcement through individual 
consumers acting as "private attorneys- 
general." . . . In a similar FLSA case the
Supreme Court struck down a release of liquidated damages because permitting it 
to stand would have nullified the deterrent 
effect Congress plainly intended the civil 
remedy to have on employers. Brooklyn 
Savings Bank v. O'Neil.

333 F. Supp. at 1248
In providing employees with a variety of independent 

remedies Congress contemplated that the employee could 
cumulate remedies obtained in more than one remedial forum 
until full relief had been obtained. See pp. 23-25, 
supra. The Supreme Court noted in Alexander v . Gardner- 
Denver Company, 39 L.Ed. 2d 147, 159-60 (1974), that if

- 37 -



an employee obtained partial relief in an arbitration 
proceeding, he could still sue for additional relief under

Title VII.
[T]he relationship between the forums is 
complementary since consideration of the^ 
claim by both forums may promote the poli­
cies underlying each ... Nor can it be 
maintained that election of remedies is 
required by the possibility of unjust 
enrichment through duplicative recoveries.
Where, as here, the employer has prevailed 
at arbitration, there of course can be no 
duplicative recovery. But even in cases 
where the employee has first prevailed, 
judicial relief can be structured to avoid 
such windfall gains.

Suit for additional relief was held possible even though the 
employee had agreed that any arbitration award would be 
final. 39 L.Ed.2d at 153-154. This Court has also held that, 
where an employee wins relief in an arbitration proceeding, 
he may sue for additional relief under Title VII so long as 
he does not seek duplicate relief involving any unjust 
enrichment. Hutchings v. United States Industries, Inc.,
428 F.2d 303, 312 (5th Cir. 1970). Additional relief may 
also be sought to supplement relief obtained in a government 
pattern or practice suit, or in any other forum. Williamson 
V. United States Steel Corporation, 468 F.2d 1201 (2d Cir.

1972).
- 38 -



The same rule applies where relief was obtained in the 
initial forum by compromise rather than litigation to final 
judgment. ■ Consideration of expense, delay, and likelihood 
of success may make it desirable, for example, that an 
employee compromise a dispute in a particular forum. But

.a./
in so doing the employee waives, at most, not his right to 
further relief in a-11 forums but only his right to further 
relief in the particular forum involved. If an employee 
cannot be forced as a condition of winning partial relief in 
one forum to waive his rights to seek additional relief else­
where, it follows a fortiori that he cannot be required to
©X0c\it0 such, 3. W3XV0IT 3-s 3 con.dxti.on ot irccoxvxnQ̂  th© ssrn© ox f©w0x 
benefits under a compromise in that initial forum. Tf^ an employee

were owed $1,000 in back pay and obtained, through decision 
or compromise, $"500 in a pattern or practice suit, in an

3 / The employee could not, of course, make a valid 
prospective waiver of his right to pursue any remedy. 
Whether, or under what circumstances, such accrued back pay 
claims may be compromised as to a particular forum need not 
be decided in this case. See Voutsis v. Union Carbide, 
Corporation, 452 F.2d S8S, 894 (2d. Cir. 1971).

- 39 -



EEOC suit for him individually, in a proceeding under state 
anti-discrimination laws, an order of the National Labor 
Relations Board, through enforcement of Executive Order 
11246, or through a union arbitration proceeding, the 
employee would still be entitled to sue under Title VII for

the balance of $500.
With regard to back pay, the only right that an 

employee can waive in return for partial payment in a given 
forum is his right to seek additional relief in that forum, 
in the instant case the most that can be validly released is 
the employee’s right to additional back pay in a government 
pattern or practice action. To the extent that paragraph 
18(g) purports to require a waiver of any other rights, it 
is unlawful and must be stricken from the decree.

II r. Of Decrees I And II Unlawfully Requi^
.qtates To Oppose Private Litigation 

m-^ater Systemic Relief T h ^  Obtained By;
The United States Under The Decree_s.
Section C of Consent Decrees I and II require that, if 

a private litigant seeks more systemic injunctive relief than 
the government obtained through the negotiations leading to 
the Decrees, the United States is obligated to assist the 
defendants by opposing, in court, any such additional relief.

- 40 -



If a private individual seeks, in a separate 
action or proceeding, relief other than back 
pay which would add to or be inconsistent 
with the systemic relief incorporated in this 
Decree, the plaintiffs will undertake to 
advise the Court or other forum in which such 
private action or proceeding is brought that 
such relief in that action or proceeding is 
unwarranted.

Appendix, 18a, 70a. In a letter dated June 3, 1974, the
parties indicated that the United States is bound to oppose
such a private action even if the government believes the
additional relief is necessary.

[I]t is recognized by all parties to the 
Consent Decree that, as a result of unantici­
pated or changed circumstances, the plaintiffs' 
position in a particular case may not be that 
relief requested therein is pel' oe undesj-i'able 
or unnecessary. In those situations, the 
plaintiffs' commitment under paragraph C is 
to advise the Court in which the private action 
is pending that such relief is unwarranged in 
that action or proceeding. The point of para­
graph C is that even in those situations the 
Consent Decrees, in the opinion of the parties 
thereto, provide an appropriate mechanism for 
adopting corrective steps to overcome any 
shortcomings in the Decrees or in their 
implementation.

Appendix, 175a-177a.
Several questions regarding the precise meaning of this 
were not resolved in the District Court t (1) II  ̂priva.te 

litigant seeks additional relief in this case, through inter­
vention or otherwise, from the District Court for the Northern

- 41 -



District of Alabama, would that be a "separate action" which 
the United States must oppose? (2) Is the United States 
obligated only to urge the courts to postpone temporarily 
judicial proceedings so that the parties can attempt to 
resolve requests for additional relief under the Decree 
mechanisms, or is the United States required to urge the 
courts to permanently refuse to entertain such requests for 
relief? (3) If the United States successfully urges that a 
court defer to the Consent Decree enforcement provisions, is 
the United States then obligated to seek or present for con­
sideration under the Decrees the additional relief originally 
sought by the private litigant in court?

This provision of section C must be set aside because 
federal officials have no authority to consent to such an 
obligation, because the district court lacked jurisdiction to 
order it, and because the position for which the United 
States is required to argue is clearly inconsistent with 

Title VII.
The threshold question presented by this clause is 

whether a United States district court has jurisdiction to 
order the United States government, on pain of contempt of 
court, to take a particular legal position in other federal 
and state courts in other civil actions, the facts of which

- 42 -



are as yet unknown. The jurisdiction of the federal courts 
to issue orders against any party is strictly Ixmited to 
areas where such jurisdiction has been expressly established 
by statute. Sheldon v. Sill, 8 How. (49 U.S.) 440 (1850).
The facts alleged by the pleadings do not establish any 
cause of action against the United States on behalf of the 
defendants; the defendants filed no counterclaim for such 
relief or indeed any responsive pleading at all. Indeed, 
there are no facts which, if pleaded and proved, would pro­
vide a federal court to issue an injunction requiring the 
United States "to advise" another court or forum that certain 
"relief in that action or proceeding is unwarranted." Had 
the defendants in this action sued or counterclaimed for such 
relief, that claim would necessarily have been dismissed for 
lack of jurisdiction. In this case, however, the attorneys 
representing the government have consented to the entry of 
such an order. But the original parties may not by consent 
confer subject matter jurisdiction on the federal courts, 
and where they attempt to do so an intervenor may properly 
contest the existence of such jurisdiction. Cochrane 
W. F. Potts Sons & Co., 47 F.2d 1027 (5th Cir. 1931); 3B 
Moore's Federal Practice, 24.16 [2]. The district court neces­
sarily lacked the power or jurisdiction to enter an order

- 43 -



irecjuiiring ths United States to talce any position whatever 

in other litigation.
Nor could federal officials enter into an enforceable 

contract to talce any position in particular litigation.
Article II of the Constitution vests the executive power in 
the President and his subordinates, who are given unfettered 
(discretion as to what positions to argue in court and when 
to decline to take any position at all. That discretion is 
necessarily exercised in ways which reflect not only changes 
in circumstances over periods of time, but the policies of 
the national government chosen by the electorate. The present 
Attorney General, Mr. Saxbe, and General Counsel of the 
E.E.O.C., Mr. Carey, cannot obligate themselves, much less 
their successors, to take any position in future litigation.
The policies of the United States government must be determined 
in the light of the facts of each case and the applicable law, 
and cannot be predetermined by a contract which was estab­
lished in return for payments to minority steelworkers any 
more than in return for payments to a campaign committee.

The role which the United States is obligated to 
assume is inconsistent with the relevant statutes. The Equal

Employment Opportunity Commission, the Civil Rights Division, 
and the Office of Federal Contract Compliance were established

- 44 -



to prevent discrimination in employment— not to obstruct 
private efforts to end discrimination or to provide free 
legal aid for multi—billion dollar corporations. The 
limited resources available to these agencies are appropriated 
solely to support litigation on behalf of minority employees. 

Doubtless, Congress might have appropriated funds or estab­
lished an office to defend employers from whom excessive 
injunctive relief is sought, but Congress did not, and 
officials of the Departments of Justice and Labor and the 
Equal Employment Opportunity Commission are powerless to remedy 
Congress's refusal to do so. The defendants do not seek to 
regulate the position to be taken by the United States 
because defendants cannot afford to hire competent counsel 
or because the United St̂ -'tes is able to advance contentions 
which defendants cannot. Rather, the steel companies and 
union seek to purchase, for $31 million and other considera­
tion, the prestige of the government's civil right lawyers 
to obstruct efforts to obtain additional injunctive relief 
to remedy racial discrimination.

Section C is also inappropriate because it requires 
federal officials to advocate a position absolutely incon­
sistent with the provisions of Title VII. The parties insist 
that the government is not obligated to oppose additional

- 45 -



injunctive relief on the merits, but only on a procedural 
ground— that all claims for additional relief should be 
resolved under the Decrees by the Implementation Committees 
and the Audit and Review Committee. Section 706(f)(5) pro­
vides that any private action for additional injunctive 
relief must be tried at "the earliest practicable date," and 
while the court may defer proceedings pending "efforts of 
the Commission to obtain voluntary compliance," it may not 
defer such proceedings for more than 60 days. Section 706 
(f)(1). But the United States under Section C must urge the 
courts to postpone any consideration of claims for additional 
injunctive relief, not for 60 days, but indefinitely. Sec­
tions 706(f)(3) and (4) provide that the merxts of a claim 
for injunctive relief must be decided by a federal judge.
But Section C requires the government to urge that such 
claims be decided by committees dominated by representatives 
of the defendants, a type of forum expressly condemned by
the Supreme Court as untrustworthy. Glover v..._St. Louis-Sax^
Francisco Railway, 393 U.S. 324 (1969). The Commission and

9 / The Decrees do not provide that, if the Implementation 
~or Audit and Review Committees reject or fail to act on a 
request for additional relief, an aggrieved employee may then 
litigate that matter before the District Court for the 
Northern District of Alabama which approved the Decrees.

- 46 -



Departni0nt of Justic6 suggest that they acceded to a court
order requiring them to take these positions because they
believe that the procedures set up by the Consent Decrees,
rather than the litigation procedures set up by Title VII,
are the "appropriate mechanism" for ending discrimination.
Appendix, 17 7 a . But the decision as to what shall be
the appropriate mechanism is not to be made by attorneys of
the Executive Branch, it is a decision already made by

10/
Congress in favor of private litigation. . If the Attorney

9 / Continued
Section 706(f)(1), moreover, provides that venue of a Title 
VII action shall be in the district in which the discrimina­
tion occurred, where the employee would have worked but for 
the discrimination, or where the relevant records are kept.

the exception of the Fairfield Works of United States 
Steel plant and the Republic Steel's Gadsden and Thomas Works, the 
Northern District of Alabama is the wrong district for_ yenue pur­
poses, and an employee cannot be required to litxgate his claims
thousands of miles from his home, his job, or the relevant 
evidence.
Iq/ Congressional supporters of such judicial proceedings, 
as opposed to less formal agency proceedings, argued:

The appropriate forum to resolve civil rights 
questions, questions of employment discrimina­
tion as well as such matters as public 
accommodations, school desegregation, fair 
housing, and voting rights, is a court. Civil 
rights issues usually arouse strong emotions.
United States district court proceedings pro­
vide procedural safeguards; federal judges are 
well known in their areas and enjoy great

- 47 -



General or the Chairman of the E.E.O.C. believes that Congress 
erred in authorizing private litigation for injunctive relief, 
generally or in the steel industry in particular, that 
argument should be made, not to "the Court or other forum 
in which such private action or proceeding is brought," but 
to the Senate and House of Representatives.

S c r ees I And II Unlawfully Restrict The Power Of 
The E.E.O.C. To Maintain Actions Under Section 706 
jf) (1) Of Title VII Of The 1964 Civil Rights Act.
Section C of Decrees I and II provides that the Decrees

settle, as among the parties, all questions regarding past
acts of discrimination.

This Decree resolves all issues between 
plaintiffs and defendants relating to acts 
and practices of discrimination by the 
defendants to which this Decree is directed, 
as well as any future effects of such acts 
and practices and, with respect to such

10/ Continued

respect; the forum is convenient for liti­
gants and is impartial; the proceedings are 
public, and the judge has power to resolve 
the problem and fashion a complete remedy.
* * * The Federal Rules of Civil Procedure, 
with respect to discovery, would greatly 
facilitate the collection of evidence for trial.

H. Rep. No. 92-238, 92nd Cong., 1st Sess., p. 62. Virtually 
none of these characteristics of judicial proceedings are 
true of a decision by the Audit and Review Committee

- 48 -



imatteirs, cornplisncs with this Deciree shall bs 
deGined. to bs compliancs with Titls VII and. 
Executive Order 11245, as amended, and 7 shall 
be deemed to satisfy any requirement for 
affirmative action by defendants or any of 
them. The doctrines of res judicata and 
collateral estoppel shall apply to all plain­
tiffs with respect to all issues of law and 
fact and matters of relief within the scope 
of the complaint or this Decree-

Appendix, 18a, 70a. Although the first sentence appears, to 
limit the scope of this settlement to matters actually dealt 
with and nominally resolved by the Decrees, the second sen­
tence extends that effect to problems of discrimination 
alleged in the complaint but not resolved by the Decrees 

at all.
The types o^ discrimination alleged in the complaint is 

significantly broader than the forms of discrimination reme­
died by the Decrees. Paragraphs 15 and 16 of the complaint 
allege in the broadest of language that the defendants have 
engaged in acts, practices and policies which discriminate 
against minority and female employees in hiring, promotion, 
and terms and conditions of employment. Section C thus pre­
cludes the E.E.O.C. from obtaining relief for minority 
employees whose rights have been violated by the defendants 
but who have obtained no remedy under this Decree. The 
United States conceded in the District Court:

- 49 -



In the give-and-take of negotiation, the 
Government has surrendered the right to 
bring suit on charges of past discrimina­
tion unrelated to the systemic practices 
in the decrees (e.g., a suspension result­
ing from the alleged bias of a foreman).

Response of Plaintiffs to Motions for Leave to Intervene, 
p. 24. Precisely what other rights to sue the Government may 
have "surrendered" is not clear on the record in its present 
form, but the Decrees would appear to preclude the Commis­
sion from seeking (1) back pay or injunctive relief for any 
employee injured by a discrete, non-systemic act of dis­
crimination; (2) back pay or preferential hiring or seniority 
status for applicants previously rejected by defendants 
because of their race, sex, or national origin; (3) back 
pay for minority employees subjected to systemic discrimina­
tion since 1968; (4) back pay or injunctive relief for
employees subject to systemic dismissal because of their 
race, sex, or national origin. Not only must these rights 
go unredressed, but unless the victims of such practices also 
were victims of certain other systemic discrimination, they 

will receive no benefits whatever under the Decree.
Section 706(f)(1) of Title VII provides that, whenever 

the Commission is unable to secure voluntary compliance from 
an employer, the E.E.O.C. may bring a civil action for

- 50 -



injunctive relief, back pay, or other affirmative action. This 
provision was added to permit the Commission to represent the 
interests of minority employees who are frequently unable to 
bear "the burden of going to court, initiating legal proceedings 
by retention of private counsel, and the attendant time delays 
the legal costs involved . . . S. Rep. No. 92-415, 92nd Cong.,
1st Sess., p. 17. Congress contemplated that "the vast majority 
of complaints will be handled through the offices of the E.E.O.C. 
Legislative History of the Equal Employment Opportunity Act of 
1972, pp. 1772, 1847 (Remarks of Senator Williams).

The fatal defect in the provisions of Section C described
above is that the Commission, in negotiating relief for certain
employees, has abandoned its responsibilities to protect through

10a/litigation other employees. In terms of LLc Governitent' s own 
example, the Commission has agreed not to sue for a worker sus­
pended by a biased foreman in return for an award of relief to 
different employees. Whatever power the Commission may have to 
compromise the various claims of a particular employee, it cannot 
sacrifice the rights of one employee for the benefit of another. 
The code of Professional Responsibility expressly precludes an 
attorney from sacrificing the interests of one client to those of

10a/ congress established EEOC's right to litigate because it 
recognized the heavy burden on individuals who bring Title VII 
actions. see Pettway v. American Cast Iron Pipe Company, 411 F.2d 
998, 1005 (5th Cir. 1969).

- 51 -



others. ^ No responsible lawyer would entertain for a 
second a proposal that he refuse to represent one client in 
return for a settlement offer to a second client. Section C 
presents the Commission with just such a conflict of interest.

Both ordinary considerations of ethics, and the Commis­
sion’s responsibilities to each minority employee under 
section 706(f)(1), preclude the Commission from trading off 
the rights of one employee to obtain benefits for another. 
Certainly that is the case where an employer asks the Commis­
sion to abandon its duty to represent one group of minority 
employees in return for concessions of money or injunctive 
relief for another group of employees. The government should 
have rejected such a proposal out of hand, and Section C, to 
the extent that it requires such a result, is clearly unlawful

11/ Canon 5 provides "A lawyer should exercise independent 
^fessional judgment on behalf of a client." Disciplinary 
Rule DR 5-105(B) states "A lawyer shall not continue mul 
pie employment if the exercise of his independent profes 
sional j u ^ e n t  in behalf of a client will be or is l^T^ely 
to be adversely affected by his representation of 
client, except to the extent permitted under DR 5-105(C).

- 52 -



IV. Section 19 of Decree I Unlawfully Restricts the 
Power of the E.E.O.G. To Conciliate Charges of 
Discrimination Under Section 706 (b) of Title VII 
of The 1964 Civil Rights Act.
Section 706 (b) of Title VII requires that, when an 

employee files a formal complaint with the Equal Employment 
Opportunity Commission and the Commission concludes there 
is reasonable cause to believe the employer has engaged in 
discrimination, "The Commission shall endeavor to eliminate 
any such alleged unlawful employment practice by informal 
methods of conference, conciliation, and persuasion." 42 
U.S.C. §2000e-5(b). The responsibility of the Commission 
was understood by Congress, to encompass "informal mediation," 
"discussion —  give and take," and "negotiation toward an 
agreement" Legislative History of the Equal Employment 
Opportunity Act of 1972, pp. 1474-1476, The E.E.O.C. regula­
tions require the Commission to seek a "just resolution" in 
each case. 29 C.F.R. § 1601.22.

Section 19(a) of Decree I provides:
Promptly following the date of entry of this 
Decree, plaintiff Equal Employment Opportunity 
Commission shall review chargespending against 
any defendant. Such review shall identify all 
such charges alleging unlawful employment 
practices wholly within the scope of this 
Decree, Within 60 days after completion of 
such review, EEOC shall advise the charging 
party in each case so identified that, in view 
of the relief provided under this Decree, EEOC 
finds the practice complained of has been

- 53 -



resolved by this Decree and recommends to 
each such charging party entitled to back 
pay under this Decree that he accept such 
relief and execute the release.

Appendix, pp. 61a- 62a. This provision appears to contem­
plate (1) that the Commission will make no further effort at 
conciliation if a charging party indicates that he or she 
believes the Decree does not resolve his or her problem,
(2) that a charge will be treated as "wholly within the scope 
of the Decree"if it alleges the type of systemic discrimina­
tion to which the Decree is directed, regardless of whether 
the Decree actually solves or is likely to solve the problems 
q£ the charging party. There was no claim that the E.E.O.C., 
when it agreed to this provision, had reviewed all the pend­
ing charges to determine whether, in fact, there were no 
complaints "wholly within the scope" of the Decrees which 
would not be adequately remedied by the Decrees.

Such a requirement abrogates the statutory conciliation 
procedure. First, the Commission relinquishes any good faith 
mediating role. There is to be no "give and take" between 
employee and employer, no "negotiation." Instead the 
commission, acting on behalf of the defendant employers, is to 
offer the terms of the Decrees on a "take it or leave it basis 
Such a refusal to consider or discuss different or more partic­
ular relief in each individual case is precisely the same

- 54 -



attitude condemned as inconsistent with good faith nego­
tiation in M T..R.B. V. General Electric Companx- 418 F.2d 
736 (2d Cir. 1969), cert. 397 U.S. 955 (1970).

second, this approach is plainly inconsistent with the 
commission's obligation to attempt to negotiate a just reso­
lution of each charge. The instant Decrees represent, at 
best, the outline of/general proposal broadly drafted to 
co.er over 200 plants in 25 states. It cannot be seriously 
contended that such a nationwide decree could deal with, 
let alone resolve, the myriad of particular problems in each 
shop and office. Moreover in the instant case the Decrees 
are so vague that the commission has no way of )oiowing just 
what specific job opportunities the Decrees will afford to a 
plate ma*er in Pittsburgh or a janitor in LaOcawanna. Doubtless 
the commission's review will reveal instances where, although 

■ the charging party>as subjected to systemic discrimination, 
the Decrees will not resolve his particular problem. The 
commission cannot reasonably be required to urge in such cir­
cumstances that the charging party accept as a settlement 

Decrees which do not provide adequate relief.
The District court, moreover, lacked jurisdiction to enter 

any order restricting the responsibilities of the E.E.O.C. to 
seek to conciliate pending charges. Title VII establishes no

- 55 -



cause of action on betialf of employers or unions to require 
the Commission to press particular forms of settlement on 
charging parties. The only enforceable duty imposed on the 
Commission is to attempt to negotiate whatever conciliation 
agreement will fully remedy discrimination previously 
inflicted upon each aggrieved employee according to the 
facts of his particular case. In cases where the Commission 
concludes that the Decrees will in fact resolve an employee's 
problems, it should so advise the employee. Where the 
Commission concludes an employee needs additional or incon­
sistent relief, it should seek to conciliate an agreement on 
that basis. But the District Court cannot control the 
Commission's approach to conciliation, and the Commission 
cannot commit itself in advance to any position irrespective 
of the facts of each particular case. For these reasons 
Section 19 of Decree I is unlawful.
V. Section C of the Decrees and Section 16 of Decree I

Unlawfully Limits The Authority of The Office of Federal 
Contract Compliance and the Secretary of Labor.
Since 1941 a series of Executive Orders have forbidden 

contracting agencies of the federal government to enter into 
contracts with employers who discriminate on the basis of race, 
See E. 0. 8802 (1941), E. 0. 9346 (1943), E. 0. 10308 (1951),
E. 0. 10479 (1953), E. O. 10557 (1954), E. 0. 10975 (1961),

E. 0. 11246 (1965). The most recent Executive Order, E. 0.
- 56 -



11246, placed primary responsibility for enforcing this 
rule on the Secretary of Labor. The Secretary has in turn 
delegated many of his responsibilities to the Office of 
Federal Contract Compliance within the Department of Labor.
41 C.F.R., Chapter 50. The O.F.C.C. in turn has transfered 
certain functions to the particular federal agency contracting 
with any given employer. 41 C.F.R. 60-1.6. See generally 
F̂ -rkas V. Te^as Instrument, Inc., 375 F.2d 629 (5th Cir. 1967);
Farmer v. Philadelphia Electric Company, 329. F.2d 3 (3d Cir.

1964).
In addition to forbidding discrimination by federal con­

tractors, the Executive Order and regulations require those 
contractors to take "affirmative action to assure that appli­
cants are employed, and that employees are treated during 
employment, without regard to their race, color, religion, sex 
or national origin." E. 0. 11246, § 202(1); 41 C.F.R. §§ 60-2.1 
to 50-2.32. Contractors are required to file annually a 
detailed Compliance Report, E. O. 11246, § 203, 41 C.F.R. § 60-1.7, 
to file an affirmative action plan within 120 days of the recom­
mendation of each contract, 41 C.F.R. §§ 50-1.40, 60-2.1 to 60-2.32, 
and to permit on site inspection, 41 C.F.R. § 50-60.4(b). The 
Director of the O.F.C.C., or the contracting agency involved, 
must conduct at least annually a comprehensive Compliance

- 57 -



Review of these reports and other materials to determine 
whether major contractors are in compliance with the law.
41 C.F.R. §§ 60-1.20, 60-60.1 to 60-60.9. If the Compliance 
Review indicates the contractor is engaging in discrimination 
and the contractor refuses to alter his practices voluntary, 
the Director or Compliance Agency conducts a hearing on the 
relevant issues. 41 C.F.R. §§ 60-1.26, 60-30.1 to 60-30.35.
If, as a result of the hearings, the Secretary determines 
that the contractor is engaged in discrimination,, he then 
invokes one or more of a variety of sanctions, including in 
particular the cancellation of contracts with the offending 
employer. E. 0. 11246, § 209, 41 C.F.R. §§ 60-1.27. The 
primary method of enforcement of the Executive Orders is an 
administrative review and hearing regarding the employer s 
practices, followed by termination of the contract unless

• the discrimination is ended.
The complaint in this case alleges two causes of action: 

one, to enforce Title VII, by the E.E.O.C., and a second, to 
enforce Executive Order 11246, "in the name of the United States 
of America by William B. Saxbe, the Attorney General, on behalf 
of Peter J. Brennan, the Secretary of Labor." Appendix, 6a. 
Section C of Decrees I and II provides that, as to all plaintiffs, 
the Decrees are res judicata and resolve all issues relating

- 58 -



to the acts and practices of discrimination to which the 
Decrees are directed. Appendix, 18a, 70a. Section 

16 of Decree I further provides:
So long 3-s the defendants are in compliance 
with the provisions of this Decree and of 
Consent Decree II entered this date, the 
Secretary of Labor and the Office of Federal 
Contract Compliance shall rely upon the con­
tinuing audit of that compliance by Government 
representatives to the Implem.entation Com­
mittees and by the Government member of the 
Audit and Review Committee as adequate for pur­
poses of all compliance reviews under Executive 
Order 11246, as amended, at the pl^ts and 
facilities listed in paragraphs 3 (c) and (d).

Appendix, 54a-55a.
The combined effect of Sections C and 16 were not defi­

nitely established in the District Court. Their meaning, 
however, appears to include the following: (1) So long as
the defendants are in compliance with the Decrees, neither 
the Secretary of Labor, the O.F.C.C., nor any contracting 
agency can cancel or refuse to enter into a contract with the 
defendants on the grounds of racial discrimination within the 
scope of the Complaint or the Decrees; (2) Any charge that 
the defendants are in violation of Executive Order 11246 or 
the regulations thereunder must be decided, not by the O.F.C.C. 
or the Secretary of Labor, but by the Implementation and Audit 
and Review Committees, subject to judicial review, if the 
violation involves discrimination within the scope of the Complaint,

- 59 -



(3) The defendants are no longer obligated to provide the O.F.C.C., 
Department of Labor, or any contracting agency the information 
normally contained in Compliance Reports, except to the extent 
that the government member of the Audit and Review Committee, 
who may not be an employee of any of those agencies, requests 
information under Decree I, 515(b); (4) Neither the O.F.C.C.,
Secretary of Labor, or any contracting agency shall conduct 
compliance reviews of any of the plants subject to the Decrees 
2.t least as long as those Decrees remain in effect.

Doubtless the government negotiators concluded that, in 
return for dismantling the enforcement procedures established 
by Executive Order 11246 and Chapter 60, 41 C.F.R.,they could 
win additional concessions from the defendants in the form of 
injunctive or monetary relief. Any employer would certainly 
welcome such an ironclad eligibility for government contracts, 
or a change which placed primary responsibility for resolving 
questions of discrimination in coirmittees dominated by em­
ployers. The O.F.C.C. may have been relieved to be spared 
the paperwork of annual compliance reviews, and have welcomed 
the chance to renegotiate downwards the number of reports 
required by the Code of Federal Regulations. The Secretary of

- 60 -



Labor and the Attorney General may even have concluded, in 
good faith, that they could obtain more substantive relief 
through the informal and confidential procedures set up by 
the Decrees than they could under the more rigid structures 
established by the regulations and Executive Order.

But the regulations and Executive Order have the force 
of law. Farkas v. Texas' Instrument, Inc. 375 F.2d 629, 632 
(5th Cir. 1967); Hadnott v. Laird. 463 F.2d 304, 309, n. 13 
(D.C. Cir. 1972). Until the regulations or Executive Order 
are formally amended or rescinded, no federal official has 
the authority to disregard their commands. Service v. Dulles.
OC/I TT c  /I ncn\
^ ̂  'A 0 ̂  9 -m/ ^ / I

A similar question arose regarding school desegregation 
in Adams v. Richardson. 351 F. Supp. 636 (D.D.C. 1972), 480 
F.2d 1159 (D.C.Cir. 1973). In that case Title VI of the 1964 
Civil Rights Act, 42 U.S.C. § 2000d-l, required the termination 
of Federal assistance to segregated school systems when deseg­
regation could not be obtained by voluntary means. The Department 
of Health, Education and Welfare adopted a policy of seeking 
integration solely through negotiation aimed at voluntary 
compliance, and to disregard the other enforcement procedures 
established by Congress. The Court of Appeals for the District 
of Columbia, sitting ^  banc, held that the Secretary of Health,

- 61 -



Education and Welfare and the Director of HEW's Office of Civil
had unlawfully failed to enforce Title VI, and approved

an injunction directing them to initiate termination procedures.
The Act sets forth two alternative courses of 
action by which enforcement may be effected.
In order to avoid unnecessary invocation of 
formal enforcement procedures, it includes 
the proviso that the institution must first 
be notified and given a chance to comply 
voluntarily. Although the Act does not pro­
vide a specific limit to the time period with­
in which voluntary compliance may be sought, 
it is clear that a request for voluntary com­
pliance, if not followed by responsive action 
on the part of the institution within a rea­
sonable time, does not relieve the agency of 
the responsibility to enforce Title VI by one 
of the two alternative means contemplated by the 

---Statute. A consistent failure to do so is a dere- 
___liction of duty reviewable in the courts.

4S0 F.2d at 1163. The Court rejected the argument that the
_Department's decision not to enforce the law _ ] -
in the manner required by statute was a matter of unreviewable
discretion. 480 F.2d at 1161-61.

In Legal Aid Society y. Brennan, 8 EPD ^9483, (N.D. Cal.
1974) the Secretary of Labor and a contracting agency had approved 
affirmative action plans from 29 government contractors which 
did not meet the requirements for such plans established by 
Executive Order 11246 and 41 C.F.R. Chapter 60. The district 
court rejected the defendants' arg\iment that they had discretion 
to accept plans which did not meet the standards set in the 
regulation, concluding that the "defendants are charged with an 
enforceable legal duty to disapprove affirmative action programs

- 62 -



which do not comply. 8 EPD at p. 5182. The contracting
agency was directed to disapprove any plans not meeting the 
criteria established by the regulations.

To the extent that the government acceded to any of the 
modifications of the O.F.C.C. procedures as described supra, 
pp. 57-58 , they acted in excess of their authority. No contracting 
agency could bind itself to accept obedience to the Decrees as 
compliance with the Executive Order regardless of whether the 
j50C2̂00s worh. When a contractor mahes and the agency accepts a 
commitment to undertake such changes in personnel rules, the
regulations direct that

[t]he contractor shall be notified that making 
such commitments does not preclude future 
determinations of noncompliance based on a 
finding that the commitments are not sufficient 
to achieve compliance.

41 C.F.R. §60-1.20 (b) (Emphasis added). The government cannot
delegate to the courts, the Audit and Review Committee, or the
Implementation Committees responsibility for reviewing the
compliance of a contractor to determine whether, pursuant to
• a commitment or otherwise, the contractor is in compliance
with the Executive Order.

The Compliance Agency shall have the primary 
responsibility for the conduct of compliance 
reviews.

41 C.F.R. §60-1.20 (c) (Emphasis added). Nor can the government 
waive the requirement that there be compliance reviews; 41 
C.F.R. §60-1.20 (d) provides in absolute terms

- 63 -



No such contract [for more than $1 million] 
shall be awarded unless a,pre-award com­
pliance review of the prospective contractor 
and his ]<nown first-tier $1 million subcon­
tractors has been conducted by the compliance 
agency within the 12 months prior to the award.

Nor do the regulations confer on any contracting agency 
discretion to permit contractors to cease' filing compliance
Reports.

Each agency shall require each prime con­
tractor and each prime contractor and sub­
contractor shall cause its subcontractors 
to file annually on or before the 31st day of March, complete and accurate re­
ports on Standard Form 100 (E.E.O.-l) 
promulgated jointly by the Office of 
Federal Contract Compliance, the Equal 
Employment Opportunity Commission and 
Plans for Progress. . . .

41 C.F.R. §60-1.7(a) (Emphasis added).
No reason appears why the Secretary of Labor, Attorney 

General and United States of America have been joined as a 
plaintiff in this action except as a device to give the 
District Court jurisdiction to enter an order dismantling the O.F.C.i

- 64 -



procedures. The applicable regulations provide that, if the 
O.F.C.C. believes a contractor may be guilty of discrimination, 
the Office is to conduct a detailed hearing on the matter. 41 
C.F.R. §§60-30.1, et seq. If the Secretary of Labor concludes, 
on the basis of the hearing, that the contractor is engaging 
in discrimination, the Director of the O.F.C.C. may authorize 
one or more of six enforcement procedures:(1) publication of the 
name of the contractor as one not in compliance with 
Executive Order 11246; (2) direct contracting agencies to refrain
from entering into contracts with the contractor; (3) cancel 
existing contracts with the contractor; (4) refer the matter to the 
E.E.O.C. for proceedings under Title VII; (5) refer the matter 
to the Department of Justice for criminal proceedings; (6) refer 
the matter to the Department of Justice for proceeding to en:oin 
the contractors from violating the anti-discrimination provision 
of their contracts. 41 C.F.R. §60-1.27; E.O. 11246, §209 (a). 
Remedies (3) and (6) may only be invoked after "conference, con­
ciliation, mediation and persuasion" have failed. E.O. 11246,
§209 (b).

This action purports, in part, to be an action by the 
Department of Justice to enjoin the contracting steel companies 
from violating the anti-discrimination provisions of their 
contracts with the United States. Appendix, 6a, 12a.
But the complaint does not allege that any hearing was ever 
held regarding these companies by O.F.C.C. or any other con­
tracting agency, or that the Director as a result referred the

- 65 -



matter thereafter to the Department of Justice. And the 
jurisdictional prerequisite of §209 (a) is clearly not met; this 
obviously is not a case where litigation was necessary after 
efforts at negotiation between the government and companies had 
failed. On the contrary, it was only filed after those negotia­
tions had been successfully completed. This action was filed, 
not to litigate relief against an obstinant contractor who 
refused to meet his obligations, but to obtain a judicial 
imprimatur on a compromise originated by the defendants and 
already accepted by all parties. See Brief of Union Defendant- 
Appellees, p. 15, Ford V. united States Steel Corporation,
No. 73-3907 (5th Cir. ) . ^  '

ired the implementation nf the subcj-t-an —n a u  L.ne w  • X • ^

tive provisions of the Decrees, and the companies been unwilling 
to agree voluntarily, the O.F.C.C. had ample authority, after a 
hearing, to terminate all contracts with the defendants if they 
did not accede to such charges in their employment practices.
Such a hearing and threat of termination is the ordinary proce­
dure followed by the United States since the first Executive 
Order forbidding discrimination by federal employers. See e.g., 
Joyce V. McCrane, 320 F.Supp. 1284 (D.N.J. 1970). The government 
has rarely if ever resorted to court action to enforce the 
Executive Orders, Farmer v. Philadelphia Electric— ConpanY, 32 9 
F.2d 3 (3d cir. 1954), and had the defendants sought review of the 
decision by O.F.C.C., the scope of judicial review would have been 
extremely limited. Joyce v. McCrane, 320 F.Supp. 1284, 1289

-  6 6  -



(D.N.J. 1970). Even where a court refused injunctive relief 
to enforce an employer's contractual violations, the O.F.C.C. 
could effectively compel the same changes in personnel pro­
cedures by threatening a cancellation of federal contracts.

In sum, the Secretary of Labor, Attorney General and 
United States of America were improperly named as parties, since 
the circumstances necessary for such a suit to enforce a decision 
by the O.F.C.C. or Secretary of Labor are not met in this case. 
Since the District Court already had jurisdiction over the siob- 
ject matter pursuant to the E.E.O.C. cause of action under Title 
VII, the joinder of the other federal defendants served no purpose 
other than to permit the Court to enter an order binding O.F.C.C. 
on the merits or limiting its enforcement powers. The District
^ ---- -- —  —  --------- -------------..w— a- ̂  ̂  ^  U.X j j_ uiicaii

the E.E.O.C., and certainly lacked the power to alter in any 
particular manner the enforcement provisions regarding the O.F.C.C. 
and Secretary of Labor established by Executive Order 11246 and 
41 C.F.R. Chapter 60. Accordingly, paragraph 16 must be stricken 
from Decree I, the complaint dismissed insofar as it purports 
to state a cause of action on behalf of the United States, the 
Secretary of Labor, or the Attorney General, and the two Decrees 
modified accordingly.

- 67 -



VI. Peeress I and II Unlawfully Fail To
Provide For Adequate Judicial Supervision 
Of The Decrees.

Section 20 of Consent Decree I provides:
The Court hereby retains jurisdiction of 
this decree for the purpose of issuing any 
additional orders or decrees needed to 
effectuate, clarify or enforce the full purpose 
and intent of this decree.

Appendix, 63a. Consent Decree II contains a similar provision.
Both decrees authorize the Court to resolve questions regarding 
or arising under the Itecrees when the government and the 
defendants on the Audit and Review Committee cannot agree among 
themselves.

In the District Court, intervenors objected that these pro­
visions appeared to restrict the authority of the court to order 
additional relief that might appear necessary, in that (1) the 
Court could not order any additional relief, or take steps to enforce 
the existing provisions of the Decrees, unless asked to do so by 
the government or the defendants; and (2) in the event that such 
a request were made, the power of the Court would be limited to 
clarifying and enforcing the provision of the Decrees, even if 
those Decrees proved inadequate to end racial discrimination or 
the effects thereof. These limitations, intervenors claimed, were 
inconsistent with the responsibility of the court under Title VII 
to fashion a full and effective remedy. The defendants agreed 
that intervenors' construction of the decrees was essentially 
correct. The Union explained:

-  68 -



Implicit in this structure is that matters will 
not be brought before the Court to the extent 
that all parties on the Audit and Review Committee 
(including the Government) are satisfied that there 
is compliance with the Consent Decrees. One of 
the important considerations which induced the 
defendants to enter into the Consent Decree was 
the assurance that, to the extent the Government 
was satisfied as to compliance, the time, expense, 
and in-plant disquiet which results from judicial 
proceedings would be avoided.

Union Memorandxmi, pp. 14-15. Counsel for the companies explained
at the hearing of May 20, 1974.

I think there is a limitation on what the Court 
can do. I think the limitation is that the 
parties have reached an agreement, and that 
agreement cannot be modified without going through 
the machinery that is set up in the agreement . . .

As far as relief that you can grant, there is 
always an area where you take the four corners 
of the document and you read it and determine 
what it,means. And I think you can do whatever 
•it means and not anything else.

Transcript of Hearing of May 20, 1974, p. 175. See also Companies' 
Memorandum, p. 10.

The District Court correctly concluded that its statutory
responsibilities could not be so curtailed. it announced that
it would construe Decree I to permit the Court to look into
problems not raised by the parties:

I have been advised . . .  in argument that the 
Patties, at least the defendants, namely the 
companies and the unions take a very limited 
view of the effect of paragraph number 20. i 
believe it is of the consent decree number 1 
and the comparable provision of consent decree 
n\amber 2. If that provision so limits this 
Court that I exercise merely some dry trust 
arrangement subject to being initiated only if

- 69 -



there is disagreement among the A. & R. Committee, 
then I am persuaded that I must reject the agree­
ment, and that it would leave this case in a posture 
in which the basic enforcement technique and tools 
which are reposed in the A. & R. Committee would 
be those in which ten of the eleven members of 
the very persons against whom the charge is made 
that they have violated the law. That the United 
States would have one of those eleven members is 
not in my judgment adequate protection to see that 
this decree accomplishes and furthers, I should 
eliminate the word accomplish, but furthers the 
objective stated, namely the objectives of Title 
VII, the securing of appropriate relief within 
the framework of systematic basis for the companies 
involved.

Appendix, 160a-161a. The Court also asserted that, subject 
to prior notice and hearing to the parties, it had power to alter 
the Decrees to the extent necessary to assure that the objectives 
of Title VII were met.

My view of paragraph 20 is 
that if as in any injunctive decree where 
jurisdiction is being retained by the Court, 
there should be matters presented to the Court 
indicating that the overall objective and purpose 
of the decree is not being carried out, then upon 
due notice, due hearing and the like, the Court 
would continue to have jurisdiction over the 
matter. This is not to say that I anticipate 
any major changes or changes such as doubling the 
amount of back pay. if there were to be a question 
about back pay and the amcunt, it could only occur 
after an evidentiary hearing and perhaps involve 
even decisions involving- the proof of violation of 
the Act. There are other items, however, that might 
or might not require that type of full blown hearing, 
I would feel myself bound not to direct something 
that is fundamentally inconsistent with what the 
parties have agreed to except after full hearing.

Appendix, . 163a-164a.

- 70 -



Interveners also objected that the Decrees prevented 
the Court from carrying out its statutory obligations because 
the Decrees contained no reporting or other provisions to 
provide the Court with information as to the effectiveness of 
or compliance with the Decrees. The District Court took no 
steps to remedy this defect.

Under the Decrees in their present form the parties are 
•under no obligation to inform the Court whether the defendants 
comply with the Decrees or whether the relief provided by the 
Decrees proves adequate to end discrimination and to overcome 
the effects of past discrimination.

The system established by the Decrees is designed, not to
give -the Court information, but to confer upon each of the parties
an absolute veto over what information the Court can obtain.
If an employee files a grievance with the Implementation Committee,
that Committee - which has no government members - has no
obligation under the Decrees to refer the matter to the Audit
and Review Committee; the Decrees merely provide that the
Implementation Committee may do so. Decree I, section 13 (b)
Appendix, 52a-53a. Thus, the errployer and union at any given
plant - those with the greatest stake in preventing the Court
from learning that the Decrees are not working or are not being
enforced at that plant - can prevent the Court from learning about
that problem just by refusing to refer the matter to the Audit
and Review Committee. If the matter is referred to the Audit and

- 71 -



Review Committee and once again resolved in favor of the union 
and companies, the Court still will not learn of the problem 
unless the Government deigns to inform the Court about the matter. 
The Decrees do not require the defendant to provide any particular 
information to the government, and where the government requests 
and obtains information,it in turn has no obligation to provide 
that information to the Court. The District Court correctly 
concluded that it could not be prevented from acting on some 
problem merely because the parties declined to request any 
additional order, but the Court is equally powerless if the 
parties can refuse to tell the Court that the problem exists.

In Glover v. St. Louis-San Francisco Railway, 393 U.S. 324
(1969), the Supreme Court warned against giving any critical
role in the enforcement process to the very parties charged with
misconduct. In that case the defendant employer and union charged
with racial discrimination claimed that before instituting a civil
action the employee had to first exhaust certain administrative
remedies by and within the employer and union. The Court
■unanimously rejected that contention.

In a line of cases beginning with Steele v.
Louisville & Nashville R. Co. [323 U.S. 192 
(1944)], -the Court has rejected the contention 
that employees alleging racial discrimination 
should be required to submit their controversy 
to "a group which is in a large part chosen by 
the [defendants] against whom their real complaint 
is made." 323 U.S. at 206. And the reasons which 
prompted the Court to hold as it did about the 
inadequacy of a remedy before the Adjustment Board

- 72 -



apply with equal force to any remedy administered 
by the union, by the company, or both, to pass on 
claims by the very employees whose rights they 
have been charged with neglecting and betraying.

393 U.S. at 330-331. The situation created by the Decrees is 
significantly worse than that in Glover; not only must an employee 
first have his claim adjudicated by the persons chosen by the 
same union and employer he has charged with discrimination, but 
the employee cannot obtain court review of this obviously biased 
panel unless the alleged wrongdoers, in their unfettered discre­
tion, decide to allow it. With information restricted in this 
manner, the involvement of the Court in policing and adjusting 
the Decrees is no more than a charade perpetuated to give an 
appearance of legality to a settlement which is at best a very 
private arrangement between the government and the defendants.

In fashioning a remedy for discrimination under § 706 (g), a 
district court has broad authority and responsibility to fashion 
a remedial decree and to assure that the decree actually works.
"In formulating relief from such practices, the courts are not 
limited to simply parroting the Act's prohibitions but are 
permitted, if not required, to 'order such affirmative action as 
may be appropriate.'" Vogler v. McCarthy, 451 F.2d 1235, 1238 
(5th Cir. 1972). The effectiveness of injunctive relief in Title 
VII cases is inherently incapable of prediction. This is 
particularly true in a case such as this, where the Decrees leave 

many critical details to be decided later, often on a plant by

- 73 -



plant basis. See, e.g., Appendix, 26a, 35a-36a, 39a-40a, 43a- 
45a. In United States v. I.B.E.W., 428 F.2d 144 (6th Cir. 1970), 
the defendant union, after the commencement of the action, elected 
a new group of leaders committed to voluntary compliance with 
Title VII. The Sixth Circuit held that the district court could 
not merely accept the union's p?-omises to obey the law, but was 
obligated "to retain jurisdiction and to require the submission 
of reports and maintenance of records to insure compliance with 
the law." The district courts in Title VII cases have regularly 
retained such jurisdiction and ordered defendants to make detailed 
reports to counsel and to the court itself. See, e.g.. United 
States V. United States Steel Corporation, 5 EPD ^ 8619, pp. 7820-
7822 (N.D. Ala. 1973); United States v. Georgia Power Company,
7 EPD 5 9167, pp. 6890-92 (N.D. Ga. 1974); Hairston v. McLean 
Trucking Company, 7 EPD 5 9144, p. 8783 (M.D. N.C. 1974); United 
States V. Ironworkers, 5 EPD 5 7973 (W.D. Wash. 1972).

A similar policy has been applied in enforcing the commands 
of Brown V. Board of Education, 347 U.S. 483 (1954). In Green
V. School Board of New Kent County, 391 U.S. 430 (1968), the 
Supreme Court recognized there was no single standard foinn of 
relief which would predictably insure the disestablishment of 
state—imposed segregation. In addition, the Court instructed that

whatever plan is adopted will require evaluation 
in practice, and the court should retain jurisdiction 
until it is clear that state-imposed segregation has 
been completely removed.

- 74 -



391 U.S. at 439. In a companion case, the Court reviewed
a lower court decision which ordered into effect a particular
desegregation plan and then dismissed. Raney v. Board of
Education of the Gould School District, 391 U.S. 443 (1968):

[W]e hold that in the circumstances of this case, 
the district court's dismissal of the complaint 
was an improper exercise of discretion. Dismissal 
will ordinarily be inconsistent with the responsibility 
imposed on the district courts by Brown II. 349 U.S. 
at 299-301. -In light of the complexities inhering 
in the disestablishment of state-established segregated 
school systems. Brown II contemplated that the better 
course would be to retain jurisdiction until it is 
clear that disestablishment has been achieved.

391 U.S. at 449. See also Swann v. Charlotte-Mecklenburg Board
of Education, 402 U.S. 1, 21 (1971) .

In this case the district court retained jurisdiction but 
made absolutely no provision for "evaluation in practice" through 
reporting. Green v. School Board of New Kent County, 391 U.S.
430, 439 (1968). Under the Decree in its present form the District 
Court will never know whether the number of blacks in formerly all 
white departments increases or decreases, whether few or any 
minority employees succeed in transferring under the new seniority 
rules, whether most of those transferees still have not risen to 
their old salary level when their two years of rate retention 
expires, whether two-step bidding is adopted at any plants and 
if so, whether it proves more efficacious than three-step bidding, 
whether any existing departments are merged, whether rules

regarding temporary vacancies are changed, what affirmative action 
goals are established and whether they are met, what tests are used



and whether they exclude disproportionate numbers of non-whites, 
how many grievances of what types are referred to the 
Implementation Committees, how many employees reject back pay, 
or how many charging parties demand right to sue letters. In 
short, the Consent Decrees make no provision to assure that the 
district court will have the information it will need to assess 
the effectiveness of the Decrees and decide whether, on the

I
request of a party or sua sponte, modification or additional 
enforcement of those Decrees is necessary.

The District Court erred in approving Consent Decrees 
deficient in this respect, and the Decrees must be set aside 
unless they are modified to incorporate the necessary mandatory 
reporting provision.

- 76 -



B. THE DISTRICT COURT SHOULD NOT HAVE APPROVED
THE DECREES WITHOUT FIRST AFFORDING A REASON­
ABLE OPPORTUNITY AND INTERVENTION BY THE 
INTERESTED PARTIES

Discrimination in employment by federal contractors 
such as the defendant steel companies was first forbidden in 
1941 by Executive Order 8802. On July 2, 1965, the Depart­
ment of Justice received authority under section 707 of 
Title VII of the 1964 Civil Rights Act to maintain civil 
actions to remedy a "pattern or practice" of racial discrimi­
nation by private employers. Approximately 8 years later the 
United States began negotiations with the defendants regarding 
their continuing violation of federal law. During the period 
of these negotiations the same violations by the same defend­
ants were the subject of approximately a dozen ongoing private 
civil actions, involving perhaps a third of all minority 
employees of these defendants, and a substantial number of
complaints filed with the Equal Employment Opportunity Commis-

12/
sion by aggrieved employees pursuant to Title VII. Throughout 
these negotiations neither the plaintiffs nor the defendants under­
took to provide to minority employees, their counsel or other 
representatives, any information about or opportunity to participate

12/ The number and nature of these charges was never disclosed 
by the government to the District Court. The defendants have 
refused to disclose to intervenor the number or detail of pend­
ing litigation.

- 77 -



in those negotiations. A request for such information and 
opportimity by the National Organization for Women, as a 
charging party and counsel to certain litigants, was rebuffed 
by the Commission. Appendix, 85a-87a. Nor were such employees, 
counsel or representatives permitted to comment on the pro­
posed agreements before they were acceded to by the government 
or presented to the District Court.

When the Complaint in this action was filed on April 12, 
1974, the United States and the defendants were fully aware of 
the identities of the litigants, charging parties, and other 
affected minority employees. The parties were also well aware 
tnat the unprecedented provisions of the consent Decrees would 
be of grave concern to those interested parties. The circum­
stances clearly called for full disclosure to those parties of 
the terms of the proposed Decrees, and an opportunity to be 
heard before the District Court was asked to approve the 
Decrees. Instead, the plaintiffs and defendants deliberately 
sought and obtained judicial approval of the Decrees in an 
in camera proceeding on the same day the complaint was filed.

Within two weeks after the entry of the Consent Decrees 
the interveners, as a result of newspaper accounts of the case, 
moved to intervene. Over the objections of the defendant com­
panies, intervention was granted and the District Court

- 78 -



entertained on the merits the objections of the instant 
intervenors-appellants. As of the spring of 1974, however, 
none of the charging parties were advised by the Commission 
of the existence of this case or the possibility of interven­
tion. What information was then given to other litigants 
is not known to intervenors or disclosed to the District 
Court. The first time minority employees were formally advised 
of the existence of these Decrees was in early August, when a 
substantial number received a "Notice of Rights" mentioning 
the litigation. The Notice contained no information as to the 
name of the action, the court in which it was filed, or the 
possibility of intervention. What information may have been 
provided to litigants other than intervenors, in connection 
with the Notice or otherwise, is unknown. Charging parties not 
employed at the plants receiving the Notice still, so far as 
is known, do not know of these proceedings.

Section 706(f)(1) and § 707 of Title VII provide an 
absolute right to "person or persons aggrieved" to intervene 
in an action such as this by the Equal Employment Opportunity 
Commission. The right applies both to actions by the Commis­
sion for individual employees under section 706(f)(1), and 
pattern or practice suits under section 707. As the District 
Court correctly concluded, "persons aggrieved"

- 79 -



refers to those individuals vith respect 
to whom alleged discrimination by the 
defendants is within the scope of change 
which has heretofore been presented to the 
EEOC, without regard to when such charge^ 
was filed by them, by fellow employees with 
similar complaints, by an organization on 
their behalf, or by a member of the EEOC, 
and without regard to whether or not they 
are named plaintiffs or actual or putative 
class members in pending litigation.
Appendix, 186a.

congress, in establishing this right to intervene, doubtless 
intended that the intervenor have the same full rights to 
participate in the litigation as an original party. If the 
Commission proposes to settle an action on his behalf, the 
employee is certainly entitled to a role in the negotiations 
or an opportunity to comment on the proposed settlement before 
the Commission accepts it. Compare, In re Raa^ ,  71 F. Supp. 
678, 680 (S.D. N.Y. 1947). This provision reflects the fact 
that the real party in interest, whose right to work and to 
back pay are at stake, is the minority employee, and while the 
EEOC may be the nominal plaintiff, the suit is supposed to 
benefit not the Commission but the employee whose rights have 
been violated. The EEOC was authorized to commence civil 
litigation to advance the interests and needs of minority 
employees, and intervention was authorized as a safeguard to 
prevent the Commission from conducting or settling such liti­
gation in a manner advancing the prestige or social theories

-  80 -



of the Commission but inconsistent v/ith the interests of those 

employees.
This right to intervene is rendered nugatory if the 

Commission files and settles a Title VII suit on the same day.
By the time the "aggrieved persons" learn there is a lawsuit, 
it is too late to act: the negotiations are over, the Commis­
sion has bound itself to accept the decree, and the District 
Coiart has already signed it. If the employee thinks the Com­
mission has not obtained adequate relief and seeks to intervene, 
he will be met by the argument— advanced by the parties in the 
instant case— that intervention will not be allowed for the

b'

California Cooperative Canneries, 279 U.S. 553, 556 (1929);
11/

Keller v. Wilson, 194 A. 45 (Del. 1937). An employee's right 
to intervene should not depend on a race to the courthouse, 
Pvle-National Co. v. Amos, 172 F.2d 425 (7th Cir. 1949), par­
ticularly when the employee cannot learn about the race until 
after it is over, and among the parties against whom the 
employee must race is the Commission which is supposed to repre­
sent him. The right of intervention established by Title VII

13/ Intervention was granted in this case, not to litigate 
the merits of the controversy, but solely to contest the^ 
lawfulness of specific provisions of the Decrees. Appendix, 187a

- 81 -



is likely to be nullified when the Commission files and settles 
a civil action on the same day. Sections 706(f)(1) and 707 
require (1) that before the Commission settles a case, the 
affected employees must be afforded a reasonable opportunity 
to participate in the settlement negotiations or make known to 
the Commission their views on the proposed agreement, and (2) 
that the employees be afforded a reasonable opportunity between 
the filing of an action by the Commission and court approval 
of any consent decree to intervene and seek additional relief.

This problem is clearly one of continuing concern. On 
March 20, 1974, the United States commenced an employment dis­
crimination class action against 349 trucking companies, and 
simultaneously entered into a Partial Consent Decree with 
seven of the defendants. United States v. Trucking Employ_e_rs, 
Inc., C.A. 74-453 (D. D.C.). The government offered to enter
into the same Decree with the remaining 342 defendants, many 
of whom subsequently agreed to become subject to the Decrees. 
The Decree requires employees to waive their rights to pursue 
a private Title VII action as a condition of receiving back 
pay in the government's action, and further provides that its 
terms shall be binding "on all persons to whom the Court deter­
mines it to be applicable." At the time when the Decree was 
entered into and offered to the District Court for approval.

- 82 -



many of the defendant trucking companies were also defendants
in private civil actions under Title VII, several of them in
this Circuit. None of the private litigants or their counsel
were notified of the existence or terms of the Decree, prior
to the entry of the Decree, or of the government's offer of
the Decree to the 342 defendants who had not adhered to it as
of March 20, 1974. Only after a defendant adheres to the
decree is any notice given to the affected private litigants.

The Attorney General long ago required that proposed
antitrust consent decrees be made public at least 30 days

14/
before approval by a District Court. 28 C.F.R. § 50.1. 

prior disclosure of such proposed decrees:

14/ "(a) It is hereby established as the policy of the
Department of Justice to consent to a proposed judg­
ment in an action to prevent or restrain violations 
of the antitrust laws only after or on condition that 
an opportunity is afforded persons (natural or cor­
porate) who may be affected by such judgment and who 
are not named as parties to the action, to state 
comments, views or relevant allegations prior to the 
entry of such proposed judgment by the court.

"(b) Pursuant to this policy, each proposed consent 
judgment shall be filed in court or otherwise made 
available upon request to interested persons as 
early as feasible but at least 30 days prior to 
entry by the court. Prior to entry of the judgment 
or some earlier specified date, the Department of 
Justice will receive and consider any written comments.

- 83 -



The purpose of the new policy is to provide 
opportunities for comment or criticism from 
persons or firms who are not parties to an 
action in which a consent judgment is involved 
... by making the termis public before they 
become final ... it is our purpose to minimize 
any unforeseen adverse affect of a consent 
judgment. The 30 day period should allow com­
peting firms and other persons and agencies 
to comment and thereby to keep the Department 
and the Court fully informed of all relevant 
facts.

Department of Justice press release, June 29, 1961. This rea­
soning applies with particular force to the instant Consent 
Decrees. In an antitrust case, if the decree is inadequate, 
interested persons and firms can still enjoy all the limited 
benefits of the decree without losing their rights to pursue 
private litigation; in the instant case, since employees cannot

14/ Continued
views or relevant allegations relating to the 
proposed judgment, which the Department may, in 
its discretion, disclose to the other parties 
to the action. The Department of Justice shall 
reserve the right (1) to withdraw or withhold 
its consent to the proposed judgment if the com­
ments, views or allegations submitted disclose 
facts or considerations which indicate that the 
proposed judgment is inappropriate, improper or 
inadequate and (2) to object to intervention by 
any party not named as a party by the Government."

- 84 -



enjoy all the limited benefits of the Decrees without losing 
such rights, any inadequacy of the Decrees is far more harm­
ful to them. In an antitrust case the government makes no 
effort to prevent a private litigant from obtaining additional 
relief; in the instant case the United States is obligated to 
oppose any private litigation which seeks additional relief 
to remedy inadequacies of the government decrees. In the 
employment discrimination litigation, government action usually 
begins as a result of one or more complaints from aggrieved 
employees. Thus, in such employment cases, unlxke antitrust 
litigation, the identity and address of the private persons 
directly affected by and interested in the Decrees is already 
known to the government. There is no justification for failing 
to afford to aggrieved minority employees the same reasonable 
notice and opportunity to be heard as is already provided by 
the Department of Justice to multi-million dollar corporations.

15/ The EEOC can bring and settle an employment discrimina­
tion action under one of three circumstances. First, the 
Commission can sue on behalf of a specific employee who has 
filed a charge under section 706(b), see § 705 (f) (1). In 
such a case the Commission of course knows the name of the 
interested employee. Second, the Commission can intervene in 
a private pending action. See § 706(f) (1) . In such a case the 
names or identity of the original parties are of course known. 
Third, the Commission may bring a "pattern or practice" suit 
under section 707(a). As a practical matter, such suits are 
likely to occur, as here, only after the filing of private 
civil actions, of charges under section 705(b), or both.

- 85 -



Prior notice of proposed consent decrees would serve to 
avoid the problems which continue to plague this litigation 
regarding the precise meaning of the Consent Decrees. As is 
noted supra, intervenors were and are concededly uncertain as 
to the impact of certain critical provisions. Rule 59(c), 
Federal Rules of Civil Procedure, however, required intervenors 
to move at once to set aside the Consent Decrees. The District 
Court acknowledged that the Decrees were "somewhat open-ended" 
and that certain details had yet to be classified. Appendix,
188a. But, since the Decrees had already been approved, the 
Court felt compelled to pass at once on the motions to set
— _  -  -  X . V  — —  /-V  ■ *- ▼a o  XC4C V- l i e  v jx  e e S  w j-  u .i iw  x, «-ix ^ i i e x  s-/.*.

hearing. Appendix 156a. Any decrees of the complexity of 
those in the instant case will invariably call for clarifica­
tion of provisions left inadvertently or purposely unclear by 
the parties. Such clarification is more likely to occur through 
informal discussion prior to the entry of a decree than through 
the divisive process of protracted, and possibly unnecessary, 
litigation.

The need for notice and hearing is particularly great in 
the instant case because while the Decrees provide minority 
employees with certain new remedies, they also interfere sig­
nificantly with the pre-existing rights and remedies of those

-  86 -



employees. For minority employees who need additional injunc­
tive relief, the Decrees provide a substantial obstacle in 
the form of opposition by the Department of Justice. A minority 
employee victimized by non-systemic discrimination is deprived 
of the possibility that the Commission might bring a section 
706 action on his behalf. These and other adverse conse­
quences flow from an order issued by the District Court with­
out any notice or opportunity to be heard to those so harmed. 
Due process of law requires that the federal courts shall not 
take action with such a potentially adverse affect without such 
notice and hearing. Hansberry v. Lee, 311 U.S. 31 (1940).

_____ _  n  *    _      1 J  i ^  i ^  X .T  T N ^ T
W J -  J . c i x J L I 1 0 & S  j .  j .  w v ... c . o  o  '— u

are protected by Rule 19, Federal Rules of Civil Procedure, 
which would make a minority employee an indispensible- party 
if the decrees "may ... as a practical matter impair or impede 
his ability to protect his interest" in obtaining complete 
relief from racial discrimination. Rule 23 for similar reasons 
requires notice to class members in certain types of class 
actions. Rule 23(c) (2), Federal Rules of Civil Procedure.

The procedures leading to the signing of the Consent 
Decrees by the District Court raise difficult questions under 
Rule 19, Rule 23, and the Due Process Clause. These recurring 
problems are most appropriately resolved for future cases by

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an exercise of this Court's supervisory powers. The Courts 
of Appeals have inherent supervisory authority over the admin­
istration of justice in their respective circuits. Government. 
of the Virgin Islands v. Boddle, 427 F.2d 532, 534 (3rd Cir.
1970) ; United States v. Barber, 442 F.2d 517, 528 (3rd Cir.
1971) ; c.f., McNabb v. United States, 318 U.S. 332, 341 (1942). 
Exercise of such supervisory authority is particularly appro­
priate where it renders unnecessary a decision on a constitu­
tional question. Ashwander v. Tennessee Valley Authori.^,
297 U S 288, 345-48 (1936); United States v. Schiav£, No. 
■73_1855 (3rd Cir.) (opinion dated August 8, 1974) . In the

exercise of sucn supervxsory auunu-Lx -----  -
that whenever a consent decree is presented by the United 
States in litigation of public importance, the District Court 
shall not approve the decree unless, at least 30 days prior to 
such approval, notice of the proposed decree shall have been 
given to such persons interested in the subject matter of the 
decree, and in such manner, as shall appear reasonable under

16/ In Schiavo, the District Court, without a prior hearing^ 
^dered the Philadelphia Inquirer, on painof contempt, not to 
print certain facts regarding a pending criminal case. On 
appeal, the Third Circuit declined to resolve the First Amend 
ment question raised, concluding instead, "pursuant to our 
supervisory powers" that the District Court's order was proce- 
durally deficient because, inter alia, the newspaper had not 
afforded a reasonable notice and opportunity to be heard.
Slip opinion, p. 11-

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the circumstances,
17/

CONCLUSION

The history of these Decrees to date reveals all too
clearly the potential for abuse latent in their ambiguous
provisions. All the parties have repeatedly assured the
District Court that the Decrees would not affect pending '
private litigation, as assumption expressly aired in the

18/Court's opinion of July 17, 1974. But in Dickerson 
V. United States Steel, No. 73-1292 (E.D. Pa.), United 
States Steel has urged that the Decrees have "mooted" any

12/ This would normally require that such notice be given 
to parties to pending litigation or administrative complaints 
regarding the subject matter of the decree. Inhere the 
affected persons cannot be identified or are so numerous 
as to make individual notice unreasonable, other appropriate 
forms of notification may be fashioned by the District Court. 
1^ the instant case, for example, that notice might have been 
made through the Union newspaper, to the Union civil rights 
committee at each plant, to organizations of. minority steel­
workers, or to civil rights groups.
28/ "[T]his Court does not consider that the consent decree 
entered herein in any way bind either the private plaintiffs 
involved in other pending litigation or the courts in which 
such litigation is pending. This Court does not assume that 
there will be a lack of full and fair consideration by other 
courts of the issues before them, or a failure to grant such 
relief as is warranted." Appendix, 204a-205a.

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class action, and in Rodgers v. United Steel the company
have urged that all discovery should be halted for at least six

20/months because of the Decrees. In the District Court the
21/  22/  ■ _government and the union assured the Court that minority

workers would be informed of any pending private cases involving
their plants, but United States Steel vigorously opposed providing

23/just such infirmation in the Dickerson case. It is imperative that.
regardless of whether this Court approves the Consent Decrees, the
Court should delineate with precision the meaning of the provisions 
whose exact meaning was left unclear by the District Court.

1 ^  "The only conceivable basis for a class action would be 
a broad-based attack on, for example, seniority rules under 
23(b)(2) —  i.e., admitted action by a defendant affecting an 
entire class. Assuming arguendo that prior seniority procedures 
had any discriminatory impact, these issues as well as any right to 
bring a 23(b) (2) class action are now made moot by the Consent 
Decrees" Memorandum of U.S. Steel, p. 50. The brief stressed the 
duty of the government under Section C to oppose any additional reliei
2(y Nos. 74-1815-1816 (3d Cir.); 

No. 71-793 (W.D. Pa.)

21/ "For its part, the Government is amenable to communicating with' 
claimants in other suits through the appropriate court or counsel". 
Memorandum for Plaintiffs, p. 22.
22/ "At those plants where Title VII actions are already on file, 
the requisite information would also include advising the employee 
of the pendency of that action. . . . "  Memorandum for United 
Steelworkers, p. 22.

9 V  "[W]e are unwilling to agree, as you request, that you or any 
other counsel for plaintiffs in the Dickerson case are entitled to 
be named in any such notice or that reference is to be made to the 
existence of the Dickerson suit and the class which you seek to 
represent". Letter of Henty T. Reath to Edwin D. Wolf, May 7,
1974, pp. 102.

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For the above reasons the Court should reverse the 
decisions of the District Court of May 20, 1974 and June 7, 
1974, and remand this case with instructions to set aside the 
Consent Decrees as unlawful.

Respectfully submitted.

JACK GREENBERG 
JAMES M. NABRIT, III 
BARRY L. GOLDSTEIN 
CHARLES STEPHEN RALSTON 
ERIC SCHNAPPER 
MORRIS J. BALLER10 Columbus Circle 

Suite 2030
New York, New York 10019

OSCAR W. ADAMS,
JAMES K. BAKER 
U.W. CLEMON 
CARYL P. PRIVETT2121 Building - Suite 1600 

2121 Eighth Avenue North
B rTP T m  ̂ ZV 1

GERALD SMITH 
KENNETH JOHNSON 
NORRIS RANSEY711 St. Paul Street 

Baltimore, Maryland 21201
BERNARD D. MARCUS 
JOHN B. LEETE

415 Oliver Building 
Pittsburgh, Pennsylvania 15222

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GABRIELLE K. MCDONALD 
MARK T. MCDONALD

1834 Southmore Boulevard 
Houston, Texas 77004

NATHANIEL R. JONES 
WILLIAM D. WELLS 

N.A.A.C.P.
1790 Broadway
New York, New York 10019

J. RICHMOND PEARSON
1630 Fourth Avenue, North 
Birmingham, Alabama 35203

ATTORNEYS FOR APPELLANTS-INTERVENORS

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CERTIFICATE OF SERVICE

I hereby certify that on this 14th day of September, 1974,
two copies each of Intervenors-Appellants' Brief and Appendix
were served on counsel for the parties by United States mail,
air mail, special delivery, postage prepaid, addressed to:

Michael Gottesman, Esq.
Brehoff, Cushman, Gottesman & Cohen 
1000 Connecticut Avenue 
Washington, D. C. 20036
James R. Forman, Jr., Esq.
Thomas, Taliaferro, Forman, Burr & Murray
1600 Bank for Savings Building 
Birmingham, Alabama 35203
Marion Halley, Esq.
Equal Employment Opportunity Commission
Wash i p g + o n n _  20506