657 F.2d 962 (8th Cir. 1981), 80-1100, Setser v. Novack Inv. Co.

Docket Nº:80-1100.
Citation:657 F.2d 962
Party Name:Chester W. SETSER, Appellant, v. NOVACK INVESTMENT COMPANY, f/k/a Western Trucking Company and Alvin S. Novack, Appellees.
Case Date:July 21, 1981
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

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657 F.2d 962 (8th Cir. 1981)

Chester W. SETSER, Appellant,


NOVACK INVESTMENT COMPANY, f/k/a Western Trucking Company

and Alvin S. Novack, Appellees.

No. 80-1100.

United States Court of Appeals, Eighth Circuit

July 21, 1981

Submitted May 19, 1981.

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Michael J. Hoare, argued, Chackes & Hoare, St. Louis, Mo., for appellant.

H. Kent Munson, argued, Stolar, Heitzmann, Eder, Seigel & Harris, St. Louis, Mo., for appellees.

Before LAY, Chief Judge, and HEANEY, BRIGHT, ROSS, STEPHENSON, HENLEY and ARNOLD, Circuit Judges, En Banc. [*]

LAY, Chief Judge.

We rehear a portion of this case en banc in order to reconsider important questions regarding the permissibility under 42 U.S.C. § 1981 of race-conscious affirmative action plans designed to remedy racial imbalance in a private employer's work force. The en banc court did not review the panel's opinion of January 26, 1981, in respect to parts I and III, Setser v. Novack Investment Co., 638 F.2d 1137, 1139-43, 1146-47 (8th Cir. 1981). Part II, id. at 1143-46, of the original opinion, is ordered vacated and the judgment amended to reflect our en banc holding.

On rehearing we address the following issues: (1) whether section 1981 prohibits all race-conscious affirmative action; (2) whether the standards for reviewing affirmative action under title VII govern the review of such plans under section 1981; (3) what are the plaintiff's and defendant's burdens of persuasion and producing evidence in a case where the employer asserts the treatment of plaintiff was pursuant to an affirmative action plan.

The Legality of Affirmative Action Programs under Section 1981.

In McDonald v. Santa Fe Trail Transportation Co., 427 U.S. 273, 96 S.Ct. 2574, 49 L.Ed.2d 493 (1976), the Supreme Court held that section 1981 prohibits discrimination against whites, but did not reach the issue of whether the section prohibited all affirmative action. Id. at 281 n.8, 96 S.Ct. at 2579 n.8. Read broadly, McDonald may suggest that all preferential treatment on the basis of race is impermissible. 1 Such a broad reading, however, would be unwarranted in view of subsequent decisions, where seven members of the present Court have sustained affirmative action in other circumstances. 2

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Underlying the Civil Rights legislation of the 1860s and 1960s is the judgment that a just and harmonious society requires the eradication of racial discrimination. The progress in eliminating racial barriers in employment has been slow. The eloquent separate opinion of Justice Marshall in University of California Regents v. Bakke, 438 U.S. 265, 98 S.Ct. 2733, 57 L.Ed.2d 750 (1978), chronicles our Nation's record of discrimination. Id. at 387-96, 98 S.Ct. at 2797-2802. Many obstacles to achieving equal employment opportunities remain, as do many traditionally segregated job categories. The Nation's early perception in the school segregation cases taught us these obstacles are unlikely to be overcome merely by the prohibition of present and future discrimination. 3 As Justice Blackmun observed in Bakke, "In order to get beyond racism, we must first take account of race. There is no other way." Id. at 407, 98 S.Ct. at 2807. See also Fullilove v. Klutznick, 448 U.S. 448, 522, 100 S.Ct. 2758, 2797, 65 L.Ed.2d 902 (1980) (Marshall, J., concurring). With regard to title VII, Justice Brennan stated in United Steelworkers v. Weber, 443 U.S. 193, 99 S.Ct. 2721, 61 L.Ed.2d 480 (1979):

It would be ironic indeed if a law triggered by a Nation's concern over centuries of racial injustice and intended to improve the lot of those who had "been excluded from the American dream for so long," 110 Cong.Rec. 6552 (1964) (remarks of Sen. Humphrey), constituted the first legislative prohibition of all voluntary, private, race-conscious efforts to abolish traditional patterns of racial segregation and hierarchy.

Id. at 204, 99 S.Ct. at 2728.

It would indeed be more ironic if the Civil Rights Act of 1866 was used now to prohibit the only effective remedy for past discriminatory employment practices against blacks and other minorities, when the Act was virtually useless to prevent the occurrence of such discrimination for more than a century. On this basis, several other federal courts have upheld affirmative action plans against section 1981 challenges since Weber. Local 35 v. City of Hartford, 625 F.2d 416, 425 (2d Cir. 1980); United States v. City of Miami, Florida, 614 F.2d 1322, 1326, rehearing granted, 625 F.2d 1310 (5th Cir. 1980); Detroit Police Officers' Ass'n v. Young, 608 F.2d 671, 691-92 (6th Cir. 1979), cert. denied, --- U.S ----, 101 S.Ct. 3079, 69 L.Ed.2d --- (1980); Baker v. City of Detroit, 483 F.Supp. 930, 980 (E.D.Mich.1979). We conclude that the Supreme Court, by approving race-conscious affirmative action by employers in Weber, implicitly approved the use of race-conscious plans to remedy

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past discrimination under section 1981. To open the door for such plans under title VII and close it under section 1981 would make little sense. The prohibition under section 1981 of affirmative action plans permissible under title VII would bar a remedy Congress left within the discretion of private employers when it passed title VII. Weber, 443 U.S. at 207, 99 S.Ct. at 2729. Such a result "would augment the powers of the Federal Government and diminish traditional management prerogatives while at the same time impeding attainment of the ultimate statutory goals." Id.

The Supreme Court recognized in Weber that defining the standard for determining permissible racially preferential action by private employers is a more difficult task. 4 We are mindful that "(i)n fashioning a substantive body of law under section 1981 the courts should, in an effort to avoid undesirable substantive law conflicts, look to the principles of law created under title VII for direction." 5 This directive is all the more important for determining standards for affirmative action. Divergent standards under the two statutes would render employers unable to remedy some past discriminatory practices, even though the practices were in violation of title VII. Consequently, some effects of employment segregation would be "locked-in." Id. at 215, 99 S.Ct. at 2733 (Blackmun, J., concurring). Moreover, by equating the affirmative action standards of title VII with those of section 1981, we obviate the employer's risk of inconsistent obligations. Private

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employers already face a dilemma: they risk termination of federal benefits and liability for past discrimination against blacks, for failing to institute an affirmative action plan, and they face liability to whites for any voluntary preferences adopted to remedy past discrimination. If section 1981 prohibited what title VII permitted with respect to racially preferential remedies, the private employer's ability to conform its conduct to federal discrimination statutes would become more complicated and uncertain than it already is.

Prima Facie Case of Reverse Discrimination.

The proof required to establish a prima facie case of discrimination will necessarily vary in different factual situations. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 n.13, 93 S.Ct. 1817, 1824 n.13, 36 L.Ed.2d 668 (1973); Person v. J. S. Alberici Construction Co., 640 F.2d 916, 918 (8th Cir. 1981). "A prima facie case under McDonnell Douglas raises an inference of discrimination only because we presume these acts, if otherwise unexplained, are more likely than not based on the consideration of impermissible factors." Furnco Construction Corp. v. Waters, 438 U.S. 567, 577, 98 S.Ct. 2943, 2949, 57 L.Ed.2d 957 (1978). Weber holds, however, that consideration of race is a permissible factor when that consideration is designed to remedy a "conspicuous racial imbalance in traditionally segregated job categories." 443 U.S. at 209, 99 S.Ct. 2730. Consequently, in a reverse discrimination case, where the evidence shows that plaintiff's treatment by the employer was pursuant to a bona fide affirmative action plan, the satisfaction of the four part McDonnell test will not necessarily show a prima facie violation. This must follow because a race-conscious choice by reason of a remedial affirmative action plan is legitimate under title VII or section 1981.

The first burden on the employer in a reverse discrimination suit is to produce some evidence that its affirmative action program was a response to a conspicuous racial imbalance in its work force and is remedial. Some indication that the employer has identified a racial imbalance in its work force is necessary to ensure that new forms of invidious discrimination are not approved in the guise of remedial affirmative action. There is no fixed formula for the type or nature of the evidence sufficient to meet the employer's burden. A showing of a conspicuous racial imbalance by statistics is sufficient, even if the statistics employed would not be sufficient to show a prima facie violation of title VII. 6 Evidence that the employer implemented its plan in response to findings of a racially imbalanced work force by a federal or state agency or in adherence to a court order, whether entered by consent or after contested litigation, would be sufficient to meet the employer's burden of producing some evidence of a remedial purpose. The employer's internal investigation and analysis of its work force which results in a conclusion of a racially imbalanced work force would satisfy the employer's burden. This list of ways to meet the employer's burden of producing some evidence of a remedial purpose is merely suggestive, not exhaustive, of appropriate methods.

The second burden on the employer in a reverse discrimination suit is to produce some evidence that its affirmative action plan is reasonably related to the plan's...

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