444 F.2d 791 (4th Cir. 1971), 15098, Robinson v. Lorillard Corp.

Docket Nº:15098, 15099.
Citation:444 F.2d 791
Party Name:Dorothy P. ROBINSON et al., Appellees, v. LORILLARD CORPORATION et al. (two cases), Appellants.
Case Date:July 01, 1971
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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444 F.2d 791 (4th Cir. 1971)

Dorothy P. ROBINSON et al., Appellees,

v.

LORILLARD CORPORATION et al. (two cases), Appellants.

Nos. 15098, 15099.

United States Court of Appeals, Fourth Circuit.

July 1, 1971

Argued Feb. 11, 1971.

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Sammie Chess, Jr., High Point, N.C., J. LaVonne Chambers, Adam Stein and Robert Belton, Charlotte, N.C., and William Bennett Turner, San Francisco, Cal., on brief for the appellees and cross-appellants.

C. Allen Foster and Thornton H. Brooks, Greensboro, N.C., on brief for appellants and cross-appellees.

James F. Carroll, New York City, Robert G. Sanders and Larry Thomas Black, Charlotte, N.C., on brief for the Union as appellant and cross-appellee.

Stanley P. Hebert, Gen. Counsel, and Julia P. Cooper, Chief, Appellate Section, Equal Employment Opportunity Commission, on brief, and David W. Zugschwerdt, Atty., Equal Employment Opportunity Commission, for amicus curiae.

Before SOBELOFF, Senior Circuit Judge, and BRYAN and BUTZNER, Circuit judges.

SOBELOFF, Senior Circuit Judge:

This is a class action arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. Plaintiffs are representative members of the class comprised of those Negro employees hired prior to May 31, 1962, into the blending, cutting, service, and shipping and receiving departments of the Lorillard Corporation plant in Greensboro, North Carolina. The Lorillard Corporation is named as defendant, as are the Tobacco Workers International Union and its Local No. 317, the bargaining representatives for the employees of the Greensboro plant. At issue is the validity, as applied to the above class, of the departmental seniority system provided by the collective bargaining agreement for the plant.

From 1956, when Lorillard's Greensboro plant began operation, until May 31, 1962, Lorillard practiced overt racial discrimination in hiring. Five departments were all-white; Negroes were hired only into blending, cutting, service, and shipping and receiving-- the four departments containing the lowest paying, least desirable jobs in the plant. The first collective bargaining agreement, negotiated in 1957, adopted a departmental and job seniority system which determined all important employment rights on the basis of length of service within a department and within a job classification in the department. Transfers between departments were explicitly prohibited. 1

This departmental seniority system remained in effect unaltered until 1962 when it was amended to allow interdepartmental transfers to employees willing to forfeit accumulated seniority and begin as new employees in the department to which they were transferring. The 1962 agreement also abolished job seniority, providing instead for job openings to be filled by the most senior interested employee within the department, regardless of what specific jobs he had previously held.

In 1965, the provisions governing transfer between departments were further modified to allow a transferring employee, laid off because of low seniority in his new department, to return to his old department and maintain his original departmental seniority there. Otherwise, the 1962 transfer restrictions were retained-- allowing transfers only when openings were available and only to the lowest paying, entry level jobs. The new collective bargaining agreement negotiated in 1968 made no further changes in the seniority and transfer provisions.

The District Court found the departmental seniority system in violation of the law because it poses a continuing

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discriminatory barrier to those Negroes who began work at the plant subject to Lorillard's discriminatory hiring policy prior to May 31, 1962. Therefore, the court ordered (1) modification of the transfer restrictions to permit employees to transfer to a different department to fill vacancies which may occur and, after a residency period of thirty days in the new department, to exercise their full employment seniority for all purposes, (2) adoption of 'red circling' to allow a transferring employee to continue his old wage rate in effect until rising in his new department to a position paying an equal or greater wage rate, and (3) payment of back pay to members of the affected class. The District Court declined to award counsel fees as costs to the plaintiffs.

The defendants appeal the finding of discrimination and the award of damages. Plaintiffs appeal the denial of counsel fees. We affirm the judgment of the District Court with regard to those issues raised by the defendants, reverse the portion of the judgment denying counsel fees, and remand for assessment of damages and costs.

I. The Existence of Unlawful Racial Discrimination.

The Civil Rights Act of 1964 does not prohibit or provide a remedy for acts of discrimination which occurred prior to July 2, 1965. Thus, Lorillard's present hiring policies are not at issue here because there is no evidence of record to establish the existence of a discriminatory hiring policy any later than the spring of 1962. However, 'while it is true that the Act was intended to have prospective application only, relief may be granted to remedy present and continuing effects of past discrimination.' Griggs v. Duke Power Co., 420 F.2d 1225, 1230 (4th Cir. 1970). 2 The seminal opinion on this subject is Quarles v. Philip Morris, Inc., 279 F.Supp. 505 (E.D.Va.1968). In that case Judge Butzner of our court, sitting as a district judge by designation, considered carefully the arguments to the contrary and concluded:

The plain language of the act condemns as an unfair practice all racial discrimination affecting employment without excluding present discrimination that originated in seniority systems devised before the effective date of the act.

* * * The history leads the court to conclude that Congress did not intend to require 'reverse discrimination'; that is, the act does not require that Negroes be preferred over white employees who possess employment seniority. It is also apparent that Congress did not intend to freeze an entire generation of Negro employees into discriminatory patterns that existed before the act.

279 F.Supp. at 515-516.

The record amply supports the findings of the District Court that Lorillard's departmental seniority system has a continuing discriminatory impact on the class represented by the plaintiffs.

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First, because the 'white' departments are the better paying ones, the whites hired into those departments under the discriminatory hiring policy are presently receiving higher rates of pay than Negroes hired at the same time into the other four departments. Furthermore, if all barriers to transfer were removed, under a departmental seniority system the plaintiffs will always suffer a real economic handicap in the better paying departments. As transferees they are treated as new hires for departmental seniority purposes, while white coworkers hired at the same time have departmental seniority coextensive with their total employment seniority.

Nor have all barriers to transfer been removed. Since transferees are treated as new hires in the departments to which they are transferring, they start in entry level jobs at entry level pay rates. Thus, while a new department may offer a better long-range future, the immediate effect of transferring is acceptance of a substantial reduction in rate of pay, possibly for an extended period.

The defendants raise several arguments to counter the reasoning of Quarles and the numerous cases that have followed Quarles. Chief among them is the assertion that Lorillard's departmental seniority system is dictated by business necessity and intended to serve a legitimate business purpose. The terms 'business necessity' and 'business purpose'-- used interchangeably in the briefs-- do not represent identical concepts; nor are they equally relevant in assessing the validity of an employment practice. The distinction between them is best explained and understood by examining, first, the Title VII intent requirement, and second, the range of practices prohibited as unlawfully discriminatory under Title VII.

A. Intent.

Employment discrimination suits initiated by private individuals are governed by § 706 which provides in § 706(g) for equitable relief if the court finds that a defendant 'has intentionally engaged in or is intentionally engaging in' an unlawful employment practice. 3 Although defendants in Title VII cases have sought to establish that this portion of the statute requires that plaintiffs prove the existence of a discriminatory intent, the correct interpretation is that which Judge Wisdom gives in Local 189, United Papermakers and Paperworkers, AFL-CIO, CLC v. United States, 416 F.2d at 996:

The statute, read literally, requires only that the defendant meant to do what he did, that is, his employment practice was not accidental. The relevant legislative history * * * bears out the language of the statute on that point. 4

The Supreme Court has conclusively adopted this interpretation in Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971):

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

* * * Congress directed the thrust of the Act to the consequences of employment practices, not simply the motivation.

401 U.S. 424, 91 S.Ct. at 853. Thus the presence in a respondent's mind of a 'business purpose'

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rather than a...

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