Watkins v. Scott Paper Co.

• Decision Date: 29 April 1976
• Docket Number: No. 74--1001,74--1001
• Citation: 530 F.2d 1159
• Parties: 12 Fair Empl.Prac.Cas. 1191, 11 Empl. Prac. Dec. P 10,880 Eligh WATKINS et al., Individually and on behalf of other persons similarly situated, Plaintiffs-Appellants-Cross-Appellees, v. SCOTT PAPER COMPANY et al., Defendants-Appellees-Cross-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1159

530 F.2d 1159

12 Fair Empl.Prac.Cas. 1191,

11 Empl. Prac. Dec. P 10,880

Eligh WATKINS et al., Individually and on behalf of other persons similarly situated Plaintiffs-Appellants-Cross-Appellees, v. SCOTT PAPER COMPANY et al., Defendants-Appellees-Cross-Appellants.

No. 74--1001.

United States Court of Appeals Fifth Circuit.

April 29, 1976.

J. U. Blacksher, Mobile, Ala., Kent Spriggs, Tallahassee, Fla., Jack Greenberg, Morris J. Baller, New York City, for Watkins and others.

Richard A. Gladstone, E.E.O.C., Washington, D.C., Amicus Curiae.

Frank McRight, Mobile, Ala., John Vanderstar, Washington, D.C., for Scott Paper Co.

Benajmin Erdreich, John C. Falkenberry, Birmingham, Ala., for United Paperworkers International Union.

Appeals from the United States District Court for the Southern District of Alabama.

Before WISDOM, GEWIN and AINSWORTH, Circuit Judges.

WISDOM, Circuit Judge:

This case presents, once again, the difficulties inherent in an employer's obligation to comply with Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, by undoing the effects of past racial discrimination in employment.

Five named plaintiffs brought this suit as a class action on behalf of an 'affected class' of black employees at the Mobile, Alabama pulp and paper mill of Scott Paper Company (Scott). ¹ The defendants are Scott, the United Paperworkers International Union (UPIU), and UPIU Locals 421, 423, 575 and 873. After a lengthy trial, the district court ruled for the defendants on almost all issues. ² On appeal, ³ we reverse.

I. THE FACTS

Scott purchased the pulp and paper mill in 1954. As of June 1972, 3,440 employees worked at the plant, which transforms wood into assorted types of paper products. The mill is organized into Production and Maintenance Departments. From the wage earners' perspective, the higher-paying, skilled craft jobs (welders, pipefitters, machinists, carpenters, sheet metal workers, brick masons, and painters) in the Maintenance Department are more desirable than the jobs in the Production Department. Within each department, jobs are functionally divided into lines of progression, or groups of related jobs in which an employee moves from lower-paying to higher-paying and more responsible jobs.

From the time the mill began operating in 1940, until 1963, job opportunities were segregated on the basis of race. Black employees were channeled into lower paying, more physically demanding jobs. For example, blacks were prohibited from working on crews that operated the paper machines, excluded from training opportunities in the Maintenance Department, and precluded from entering the line of progression that would have enabled them to advance to jobs such as 'crane operator' and 'woodroom yard operator'. Instead, blacks were limited to such jobs as 'laborer'. This system of job segregation was reinforced by union policy of maintaining segregated locals. The economic impact of this discrimination was, of course, substantial. As of June 1, 1972, the average rate of pay of affected class members was about $0.47 an hour less than the average for whites. More importantly, a comparison of average wage rates between members of the affected class and their white 'contemporaries' hired between 1940 and 1954 shows that the average differential was more than $1.00 an hour. ⁴

Scott does not deny that discrimination existed. It asserts, however, that it wanted to integrate its work force as early as 1955, that it then pledged to do so, probably in response to presidential executive orders. ⁵ Scott says that it could not do so 'rapidly . . . in view of then-prevailing attitudes'. In 1961 Scott announced that no job would be barred to any employee or applicant because of race. Despite this apparent compliance with its 1955 pledge, no blacks began to work in formerly all-white jobs. Only in 1963, after Scott placed four blacks into previous white jobs, did the pattern of strict segregation begin to fade. Although about one-third of the affected class members had transferred to previously all-white jobs by 1968, the majority had not.

The probable reason for the failure of more affected class members to transfer is that in 1963, when the white lines of progression in the production department were 'opened' to the class, Scott imposed a high school education requirement for transfers between lines of progression. ⁶ This requirement served to lock many affected class members into their inferior, black jobs. ⁷ Scott also imposed upon would-be transferors in 1963 the requirement that they achieve a passing score on the Kopas Aptitude Test. Finally, an age limit on transferors further hindered Scott's efforts to comply with its 1955 pledge to provide equal employment opportunities. The result of the various limitations upon transfer was that, by May 1969, only seven black employees hired before 1963 had transferred into formerly white lines of progression.

At that time, however, the so-called Memorandum of Understanding went into effect. ⁸ The negotiated Memorandum was a result of the efforts of the Department of Labor's Office of Federal Contract Compliance (OFCC) to bring Scott into line with Executive Order 11246. It provided, among other things, that affected class members could transfer into formerly white lines of progression with '(Q)ualification requirements . . . no higher for any employee than for employees working in the line who were hired at approximately the same time'. The Memorandum allowed affected class members to compete within formerly white lines of progression on the basis of their mill seniority, thus seeming to comport with the Title VII remedies afforded in such cases as Local 189, United Papermakers and Paperworkers v. United States, 5 Cir. 1969, 416 F.2d 980, cert. denied, 1970, 397 U.S. 919, 90 S.Ct. 926, 25 L.Ed.2d 100. The plaintiffs, however, contended that the Memorandum was inadequate in itself and, in any event, was inadequately put into effect. The specifics of this contention, with additional facts, are set forth below.

In addition to complaining about discrimination with respect to transfer opportunities within Scott's Production Department, the plaintiffs sued to enjoin the alleged discriminatory operation of Scott's system of transfers into the Maintenance Department. Scott imposed upon such transfers the high school diploma requirement and the Kopas Aptitude Test requirement in 1963, as it did for transfers within the Production Department. In 1968, Scott switched to the Wonderlic Test at the OFCC's suggestion, but retained and still retains the diploma requirement. In 1970, Scott again switched tests, this time to a battery--the Scott Battery--that had been 'validated' ⁹ by an expert industrial psychologist. ¹⁰ The plaintiffs contended that these requirements have a significant discriminatory impact on blacks, and that Scott had not shown these tests to be sufficiently job-related to justify their use.

The plaintiffs also alleged that Scott's system of selecting salaried supervisors discriminates against blacks. Although there is no assertion that Scott intended to discriminate, the appellants contend that the appointment procedure, which relies heavily upon the recommendations of front-line supervisors based on allegedly 'vague and elusive' standards, is inherently discriminatory.

Finally, the plaintiff class claimed an award of back pay, regardless of Scott's good faith.

One of the plaintiffs, Will Robinson, charged Scott with firing him because of his race.

II. THE LITIGATION BELOW

The district court found for Scott and the defendant unions on virtually every contested point. In an extensive opinion, relying heavily upon the defendants' post-trial brief, the district court found that the Memorandum of Understanding, as carried out by the defendant Scott, 'successfully assured the affected class members that their opportunities for advancement at Scott would in no way be limited by any continuing effect of past discrimination'. The court held that 'general statistical information' was not relevant, nor was information showing how many affected class members had actually taken advantage of the opportunities offered them, when the employer had provided new opportunities that were 'legally adequate'.

The district court found that the statistics the plaintiffs produced, showing the difference in test scores and passing rates between blacks and whites in competition for Maintenance Department jobs, were too insubstantial to show that the tests had an adverse impact on blacks. The court found, however, that, even if there was an adverse impact, the tests were lawful for the defendant's expert had adequately demonstrated the job-relation of the Scott Battery.

The district court found that Scott did not discriminate against blacks in supervisor selection. The court found that first-line superiors did not have the ability to control who was selected for supervisory jobs, and the court approved the qualifications Scott requires of candidates for such positions, as required by business necessity.

As a result of these findings and the additional fact that Scott had not intended to discriminate and had acted all along in good faith and with the purpose of promoting equal employment opportunities, the district court denied back pay to the plaintiff class. ¹¹

Finally, the court held that the action taken by Scot against Will Robinson was justified by 'repeated instances of negligent work performance'.

III. PRODUCTION DEPARTMENT-INTERPRETATION OF THE MEMORANDUM OF UNDERSTANDING

A. General Remarks

In Johnson v. Goodyear Tire & Rubber Co., 5 Cir. 1974, 491 F.2d 1364, 1367, we observed that 'federal remedial legislation has created a right of action ensuring that a discriminatee may be made whole for an employer's misconduct'. (Emphasis added.) Accordingly, we have condemned 'neutral practices of . . . departmental seniority system(s) and . . . posting and...