E.E.O.C. v. Zia Co.

• Decision Date: 01 September 1978
• Docket Number: No. 76-1967,76-1967
• Citation: 582 F.2d 527
• Parties: 17 Fair Empl.Prac.Cas. 1201, 17 Empl. Prac. Dec. P 8426 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, Orlando S. Lopez and Jose G. Ortiz, Plaintiffs in Intervention, as toDefendant, Zia Company, v. The ZIA COMPANY and Los Alamos Constructors, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 527

582 F.2d 527

17 Fair Empl.Prac.Cas. 1201, 17 Empl. Prac.

Dec. P 8426

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant Orlando S. Lopez and Jose G. Ortiz, Plaintiffs in Intervention, as toDefendant, Zia Company, v. The ZIA COMPANY and Los Alamos Constructors, Inc. Defendants-Appellees.

No. 76-1967.

United States Court of Appeals Tenth Circuit.

Argued and Submitted Jan. 25, 1978.

Decided July 17, 1978.

Rehearing Denied Sept. 1, 1978.

Paul M. Mirengoff, Washington, D. C. (Abner W. Sibal, Joseph T. Eddins, Jr., Beatrice Rosenberg, Equal Employment Opportunity Commission, Washington, D. C., with him on the brief), for plaintiff-appellant.

Victor R. Marshall, Albuquerque, N. M. (William A. Sloan, Albuquerque, N. M., with him on the brief), of Rodey, Dickason, Sloan, Akin & Robb, P.A., Albuquerque, N. M., for defendants-appellees.

Before HOLLOWAY, BARRETT and LOGAN, Circuit Judges.

LOGAN, Circuit Judge.

This is an appeal from a judgment in an action brought by the Equal Employment Opportunity Commission (EEOC) against The Zia Company and its wholly-owned subsidiary, Los Alamos Constructors, Inc. (hereafter collectively referred to as Zia) under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e Et seq. The complaint alleged that Zia had been and was at the time of the suit discriminating against Spanish-surnamed persons and American Indians with respect to hiring, promotions and layoffs. From a judgment in favor of Zia, appeal was taken to this Court.

Appellant raises two issues in this appeal: Whether the District Court properly found that the EEOC had a duty to conciliate this case in good faith and here failed to meet that duty; and whether that Court's finding that the EEOC failed to establish discrimination in Zia's employment practices is supported by the evidence.

The suit stems from charges filed between 1969 and 1972 that Zia discriminated on the basis of national origin with respect to layoffs. The Commission's investigation led it to believe the charges were true. It then asked Zia to engage in conciliation discussions on April 19, 1973, with talks beginning two or three weeks after this Court's opinion on the class action aspects. Brito v. Zia Co., 478 F.2d 1200 (10th Cir. 1973).

Title VII places primary emphasis on conciliation to resolve disputes. The pertinent portions of the statute read If the Commission determines after such investigation that there is reasonable cause to believe that the charge is true, 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).

If within thirty days after a charge is filed with the Commission or within thirty days after expiration of any period of reference under Subsection (c) or (d) of this section, the Commission has been unable to secure from the respondent a conciliation agreement acceptable to the Commission, the Commission may bring a civil action against any respondent not a government, governmental agency, or political subdivision named in the charge. In the case of a respondent which is a government, governmental agency, or political subdivision, if the Commission has been unable to secure from the respondent a conciliation agreement acceptable to the Commission, the Commission shall take no further action and shall refer the case to the Attorney General who may bring a civil action against such respondent in the appropriate United States district court.

42 U.S.C. § 2000e-5(f)(1).

An affidavit filed by the Assistant Chief Counsel of the Energy Research Development Agency, formerly the Atomic Energy Commission (AEC), states "That the contractual relationship between defendants (Zia) and the AEC (now ERDA) is such that the AEC would pay any back pay settlement. Accordingly, any conciliation agreement entered into by defendant must first receive the approval of the AEC." The record demonstrates it was this referral-approval process between Zia and the AEC that foiled initial conciliation efforts and later led to disagreement about the EEOC's duty of good faith in the conciliation process. The facts leading up to conflict over the issue of good faith are important to our resolution of this case.

Pat Trujillo, the EEOC's conciliator for this case in the Albuquerque district office, sent Zia a proposed conciliation agreement on August 9, 1973, that contained the following boilerplate clause:

3. The Commission shall determine whether Respondent has complied with the terms of this agreement. In the event the Commission shall determine that the Respondent has failed or refused to comply with the terms of this Agreement, the Commission shall within a reasonable time after discovery of such failure or refusal, notify the Respondent in writing of its determination. If within thirty days after receipt of such determination the Respondent has failed to comply with the terms of this Agreement, or show good cause why he should not comply, all waivers, releases and covenants not to sue shall be null and void, and such failure or refusal to comply shall be deemed Prima facie evidence of breach of this Agreement. . . .

Zia submitted its proposed conciliation agreement on August 13, 1973, that omitted all language concerning determination of breach of the agreement. Several phone calls took place during this time in which Tom Robles, the EEOC Albuquerque District Office Director, had agreed to modify the EEOC's proposed Paragraph 3 to read, "The Commission shall determine whether the Respondent has complied with the terms of this Agreement," and eliminated the provision making the Commission's determination presumptive evidence in court. Zia's manager, Wendell Miller, found the modified EEOC conciliation proposal acceptable and requested authority from the AEC to sign it. The AEC would not give its approval and instead recommended several other changes. When Zia communicated this to Mr. Trujillo and invited the EEOC to accept Zia's proposed agreement, Mr. Trujillo said the Zia proposal was unacceptable. Zia and the AEC discussed the matter again and wrote Mr. Trujillo another time and requested changes in the EEOC proposal. Trujillo called Zia officials soon thereafter and said he felt conciliation had failed and was going to recommend suit. Zia's attorney passed this along to the AEC immediately.

The conciliation negotiations then took place directly between counsel for the AEC and Mr. Robles. When nothing productive resulted Mr. Robles mailed three letters of failure of conciliation on October 25 and 26 and November 9, 1973, stating the matter would be referred to the litigation section unless halted by Zia's decision to reopen conciliation within five days. Zia never responded, at the direction of the AEC.

Leonard Jacobvitz, counsel for AEC, sent a memo to AEC Washington headquarters on November 20, 1973, noting that conciliation had failed, that the EEOC planned a suit in the matter and requested any help the Washington office could provide "in getting EEOC at the Washington level to delete the objectionable language" from its proposed conciliation agreement. In mid-January, 1974, the AEC communicated to Mr. Jacobvitz that discussions with the EEOC in Washington had failed to get the objectionable paragraph deleted because it was "their minimal requirement and they will not alter it," the exact position taken by Mr. Robles throughout conciliation. In this January letter the Office of General Counsel for the AEC recommended signing the agreement because, "In our opinion the agreement could be signed in its present form without any significant danger of future complications." The letter also communicated the EEOC's concern "that AEC's attitude (about conciliation) tended to impede rather than further E.E.OC's (sic) efforts to compel Zia's compliance with the law."

It was not until February 12, 1974, that the Area Manager for the AEC gave Zia's manager, Wendell Miller, permission to sign the EEOC's proposed conciliation agreement. The AEC recognized in that letter that Mr. Miller had recommended signing the agreement on September 4, 1973, some six months earlier. By this time the Zia matter had been referred to EEOC's Denver Regional Litigation Center for review of potential litigation possibilities against Zia. After the AEC gave Zia permission to sign the agreement, Mr. Miller asked his in-house counsel, L. J. Maveety, to send a letter to Mr. Trujillo reopening the conciliation. The Albuquerque District Office attempted to reopen those negotiations by requesting the Denver Office return the file, but the Regional Director of EEOC said the matter was now out of the conciliation stage and Mr. Robles' hands.

While the Zia officials requested reopening of conciliation, the Acting Regional Attorney of the Denver Regional Litigation Center, Peter Sanchez-Navarro, Jr., sent Mr. Maveety a letter notifying Zia of the Commission's authorization to bring suit. He enclosed a copy of the complaint his office planned to file and offered to discuss "the possibility of a voluntary resolution of the suit by Consent Decree . . ." From then on Zia was out of the picture in terms of letter writing and negotiations, with the AEC counsel's office undertaking all communications about the suit with Nancy Bragg, the case trial attorney. Illustrative of the meetings and of the relationship between AEC, Zia, and the EEOC is the following excerpt from an internal AEC memorandum in evidence:

Representatives of ALO and LAAO met with EEOC in Denver on March 1, 1974. AEC representatives explained to EEOC the relationship between AEC and its operating contractors and advised them that any backpay settlement agreed upon would be funded by AEC. Our representatives also advised EEOC that if AEC could be presented with convincing evidence that violations of the Civil Rights Act had occurred and that a proposed settlement figure...