U.S. v. Trucking Employers, Inc.

Citation561 F.2d 313,182 U.S.App.D.C. 315
Decision Date29 June 1977
CourtU.S. Court of Appeals — District of Columbia Circuit

Eric Schnapper, New York City, with whom Wiley Branton, Atlanta, Ga., was on the brief, for appellants in No. 76-1571.

William B. Gould, Stanford, Cal., with whom Anthony G. Amsterdam, Stanford, Cal., and Melvin L. Wulf, New York City, were on the brief, for appellants in No. 76-1577.

Debra A. Millenson, Atty., Equal Employment Opportunity Commission, Washington, D. C., with whom Earl J. Silbert, U. S. Atty., Beatrice Rosenberg, Atty., Equal Employment Opportunity Commission, and David L. Rose, Atty., Dept. of Justice, Washington, D. C., were on the brief for federal appellees.

Michael J. Gallagher, Kansas City, Mo., with whom Raymond F. Beagle, Kansas City, Mo., was on the brief, for appellees Arkansas-Best Freight Systems, Inc., et al.

David Previant, Milwaukee, Wis., Robert M. Baptiste and Roland P. Wilder, Jr., Washington, D. C., were on the brief, for appellee International Brotherhood of Teamsters.

Charles P. O'Connor, Harry A. Rissetto and David B. Pittaway, Washington, D. C., were on the brief, for appellees Smith's Transfer Corp. et al.

Richard D. Brew and Plato E. Papps, Washington, D. C., entered appearances for appellee International Association of Machinists and Aerospace Workers.

Before ROBINSON, ROBB and WILKEY, Circuit Judges.

Opinion for the Court filed by WILKEY, Circuit Judge.

WILKEY, Circuit Judge:

The Government and representatives of the trucking industry negotiated a partial consent decree aimed at eliminating alleged industry-wide discrimination based on race and national origin. The decree and its implementation are challenged by intervenors. The primary question presented by these consolidated appeals is whether the District Court should have approved the decree prior to the resolution of the transfer and seniority issues which still divide the parties.

I. PROCEDURAL BACKGROUND

On 20 March 1974 the United States filed a complaint under Title VII of the Civil Rights Act of 1964 1 and Executive Order 11246 against seven named trucking companies, 2 individually and as representatives of a class of over 300 trucking companies, against Trucking Employers, Inc., the International Brotherhood of Teamsters, the National Over the Road and City Cartage Policy and Negotiation Committee, and the International Association of Machinists. The complaint alleged that the defendants had engaged in systematic discrimination against black and Spanish-surnamed employees and applicants, the most important relating to the separation of employees into two classes, "over-the-road drivers" and "city drivers." 3 Employment as an over the road driver is more desirable; discrimination is alleged to have occurred in original hiring, permitted transfers from one class to another, and the maintenance of seniority after transfer.

Simultaneously with the filing of the complaint the United States and the seven named companies submitted to the District Court a partial consent decree, which was approved that same day. The partial consent decree purports to resolve all issues between the parties, except the seniority rights of employees who elect to transfer or who have previously transferred to the job of over the road driver. Among other things, the decree contemplates that the companies will solicit from their minority employees a waiver of certain rights under Title VII in exchange for cash payments ranging from $150 to $1,500. On 10 September 1974 the Government and six of the named defendants filed a stipulation setting forth the procedure the companies would follow in soliciting the waivers as well as the content of the proposed notices and releases. 4

By 2 October 1974 two groups of plaintiffs in pending private Title VII actions against one or more of the named defendant companies had moved to intervene and to set aside the partial consent decree. The first group of intervenors (Johnson intervenors) contended that the proposed waivers were invalid. The second group of intervenors (Jones intervenors) not only attacked the validity of the waivers, but also challenged the entire partial consent decree as inadequate. The District Court granted both motions to intervene, but limited intervention to the question of the validity of the waivers.

The court held that the waivers were not per se unlawful, but approved changes in the notices suggested by the intervenors designed to assist employees in making a voluntary and knowing waiver decision. Subsequently, in response to intervenors' motion for clarification in light of United States v. Allegheny-Ludlum Industries 5 and Albemarle Paper Co. v. Moody, 6 the District Court explained that its approval of the compensation procedure meant that the court was satisfied with the settlement's "overall fairness to beneficiaries and consistency with the public interest" and that "the average compensation . . . (was) not, in the context of the overall provisions of the Consent decree, 'a mere pittance.' " Both groups of intervenors appealed and the appeals were consolidated for argument.

II. EFFECT OF THE DECREE AND ISSUES RAISED

At the heart of the Government's complaint is the allegation that black and Spanish-surnamed Americans historically have been excluded from jobs as road drivers and discriminatorily assigned to less well paying jobs in the trucking industry. The consent decree in large part seeks to remedy these alleged industry-wide discriminatory hiring practices. Thus, the decree provides that minority employees of the affected class 7 will be given an opportunity to transfer to an over the road job. In addition, companies may elect to participate in a compensation procedure under which minority employees who indicate an interest in transferring to an over the road position as well as prior transferees 8 will be offered monetary compensation if they will execute a waiver of potential back pay claims for discrimination occurring prior to the effective date of the decree. An employee of the affected class who waives these rights will receive $150 immediately if he was hired between 1 January 1971 and 31 December 1972, $300 if hired between 1 January 1969 and 31 December 1970, and $500 if hired before 1 January 1969. If the employee later succeeds in transferring to a road driver job he will receive an additional $300, $600, and $1,000, respectively. Prior transferees who accept the settlement will receive comparable cash payments.

Significantly, the District Court was asked to approve this compensation procedure prior to the resolution of the issue of whether employees who transfer to over the road driver positions will be allowed to carry over accumulated company seniority. While an employee need not transfer to an over the road job until the seniority issue is resolved, he must immediately decide whether to accept the monetary compensation and thereby waive his potential back pay claims. Furthermore, if an employee should decide to transfer to an over the road job prior to the resolution of the seniority issue, he will lose all accumulated seniority for purposes of bidding, layoff, and vacation schedule selection, subject to any future adjustments resulting from resolution of the seniority issue.

In Franks v. Bowman Transportation Co. 9 the Supreme Court detailed the critical importance of seniority in the trucking industry. "(It) determines the order of layoff and recall of employees. Further, job assignments for (over the road) drivers are posted for competitive bidding and seniority is used to determine the highest bidder. As (over the road drivers) are paid on a per mile basis, earnings are therefore to some extent a function of seniority." 10 Thus, with less seniority not only will a minority driver earn less, but he may not be employed at all. Moreover, in addition to being most vulnerable to layoffs the minority driver without seniority carry-over may have to spend considerable time on the extra board with little or no work available to him. In light of the basic importance of seniority carry-over, we think the failure to resolve that issue places two legal impediments to court approval of the proposed compensation procedure: the District Court's required determination of overall fairness, and the employees' required capacity to make a knowing and voluntary waiver.

III. DISTRICT COURT DETERMINATION OF OVERALL FAIRNESS

As the District Court recognized, and as the Fifth Circuit has held, prior to approving a consent decree a court must satisfy itself of the settlement's "overall fairness to beneficiaries and consistency with the public interest." 11 In order to satisfy itself of the overall fairness of this settlement to minority employees, the District Court was required to examine the adequacy of the compensation being offered in exchange for the waiver of back pay claims. We reject at once the argument that a court must withhold approval of a compensation procedure simply because employees are not offered amounts that they might recover in fully litigated Title VII suits. Rather, taking into account that conciliation is the preferred means of eliminating discrimination, see Alexander v. Gardner-Denver Co., 12 and recognizing the wide variation in the individual situations of minority employees, the court might well approve a settlement that offers considerably less than what a particular employee who could prove discrimination in a private Title VII suit might recover. 13

As all parties recognize, the consent decree does not bind any...

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