Hodgson v. Behrens Drug Company

• Citation: 475 F.2d 1041
• Decision Date: 07 March 1973
• Docket Number: No. 72-1680.,72-1680.
• Parties: James D. HODGSON, Secretary of Labor, U. S. Department of Labor, Plaintiff-Appellee, v. The BEHRENS DRUG COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

475 F.2d 1041 (1973)

James D. HODGSON, Secretary of Labor, U. S. Department of Labor, Plaintiff-Appellee, v. The BEHRENS DRUG COMPANY, Defendant-Appellant.

No. 72-1680.

United States Court of Appeals, Fifth Circuit.

February 12, 1973.

As Amended March 7, 1973.

COPYRIGHT MATERIAL OMITTED

Tracy Crawford, Tyler, Tex., Wilford W. Naman, Waco, Tex., for defendant-appellant.

Richard F. Schubert, Sol. of Labor, U. S. Dept. of Labor, Washington, D. C., M. J. Parmenter, Regional Sol., U. S. Dept. of Labor, Truett E. Bean, U. S. Dept. of Labor, Dallas, Tex., Carin Ann Clauss, Donald S. Shire, Anastasia T. Dunau, U. S. Dept. of Labor, Washington, D. C., for plaintiff-appellee.

Before RIVES, THORNBERRY and GOLDBERG, Circuit Judges.

RIVES, Circuit Judge:

In this case brought by the Secretary of Labor under the Fair Labor Standards Act, the district court found that Behrens Drug Company (hereinafter Behrens) discriminated against certain female employees by compensating them at a lower rate than their male counterparts. Behrens appeals, arguing that each contested male-female wage differential rests on legitimate grounds—that the males involved are either participating in a bona fide training program or performing unequal work.

The Equal Pay Act of 1963, 29 U.S.C. § 206(d)(1),¹ an amendment to the Fair Labor Standards Act of 1938, prohibits sex-based wage discrimination between employees performing equal work under similar conditions. The Secretary of Labor, commissioned champion of the female worker by the Act,² brought this action on behalf of several female employees in Behrens' Tyler, Texas, ware-house.

The district court, after finding that Behrens breached the Equal Pay Act, entered judgment enjoining Behrens from further violations of the Act's equal pay requirements and restraining the continued withholding of $17,423.99 in back wages found due as a result of Behrens' violations. The district court ruled that Behrens paid four separate categories of female workers a discriminatorily low wage. Behrens appeals the ruling as to each category.

I. ORDER CLERKS

For many years Behrens has employed females in its Tyler division warehouse as "order clerks." The principal responsibilities of an "order clerks" include: arranging merchandise on the warehouse shelves, filling customer orders by gathering the requested stock and sending it along to the "checker," and restocking the shelves. App. 211. Behrens admitted and the district court found that certain male employees, designated "sales trainees," performed work substantially equal to that of the female "order clerks" during the period in question. App. 211.

Behrens acknowledged that the male "sales trainees" were paid a higher wage than "order clerks" for doing the same work, but sought to justify this wage discrepancy as based on a bona fide training program, purportedly constituting a legitimate distinguishing factor other than sex.

29 U.S.C. § 206(d)(1) recognizes four exceptions to the general prohibition of disparate wage payments between workers of the opposite sex. The first three exceptions to the Equal Pay Act are specific (a seniority system, a merit system, and a system which measures earnings by quantity or quality of production), but the last is stated in general terms— "any other factor other than sex," 29 U.S.C. § 206(d)(1)(iv). 29 C.F.R. § 800.148,³ the Secretary's Interpretative Bulletin, expressly designates bona fide training programs as one factor other than sex which may validly produce a male-female wage gap. Behrens contends that its male "sales trainees" are all participants in a bona fide training program, providing a legitimate basis for their higher wage rate than that of female "order clerks."

In order to verify the structure of its training program, Behrens offered the testimony of its president, treasurer, Tyler division manager, and four salesmen.

Behrens' president, W. Lacy Clifton, admitted that his company's sales training program has never included a woman. App. 553. He sought to explain the program's male dominance by reference to its origin:

"I would say that when this program was started 1946 that females were never considered as suitable for traveling. . . . You think about putting a female out on a job where she might have a flat tire at night." App. 546.

In recent years, Clifton claimed, inclusion of females in the sales training program has been considered, and one woman, Annette Neeley, was offered a sales job on a temporary basis. Miss Neeley turned the job down for reasons which are contested.⁴ However, Clifton admitted that present company policy calls for active solicitation of young men as sales trainees, but not women, and Miss Neeley, while she was offered a sales job, was not offered a position as a sales trainee. App. 554.

The district court found and both parties, with minor exceptions, agree that the Behrens' sales training program has the following characteristics:

1) No written or formal plan of training;

2) a regular system of rotation through each of the different warehouse jobs with progression to the next position based on satisfactory familiarity with the position before it;

3) no specific identifiable point of termination;⁵

4) sales trainees are informed upon hiring that they are entering a training program;

5) some formal sales training, including meetings, study of sales literature and travel with current salesmen, is provided upon reaching the final job in rotation—the city order desk. Although the district court made no express finding on this point, testimony to that effect appears at App. pp. 580-582.

In addition, uncontradicted testimony established that a male trainee carries out productive work and rotates through the training program without regard to personnel needs, except that the final advance to the position of salesman is contingent upon an opening in that slot. App. 561, 562.

In the seminal case interpreting the bona fide training program exception to the Equal Pay Act, Shultz v. First Victoria National Bank, 5 Cir. 1969, 420 F.2d 648, this Court ruled that two separate male-dominated "executive training programs" for bank tellers did not constitute a factor other than sex which would permit payment of lower wages to female tellers not included in the training programs. Those particular programs were found to be merely "postevent justifications for disparate pay to men and women from the commencement of employment up through advancement." Shultz, supra, at 655.

The elements of the two bank training programs in Shultz, which that court listed as conclusive of their fatal imprecision, were:

1) Employees were not hired with the knowledge that they were trainees.

2) The plans were not in writing.

3) The "rotation" of trainees through the various bank positions did not follow any definite sequence, but depended on personnel needs.

4) No formal instruction was offered at either bank.

5) Neither program had ever included a woman.

6) Advancement to the next position was unpredictable and sporadic.

Faced with these amorphous bank training plans and strongly influenced by the fact that both programs excluded females, the Shultz court reasoned that judicial recognition of such programs would allow "the exception will swallow the rule" and effectively undermine the congressional purpose for passing the Equal Pay Act.⁶

A cursory comparison of the training programs belatedly offered as justification for the unequal pay in Shultz with the program at issue here reveals that the latter is far more concrete than were the former. The Behrens training plan is not a post-event justification. Behrens' sales trainees enter employment with explicit knowledge of their training status. They rotate through the initial warehouse positions without regard to personnel needs, and they receive some formal sales training while serving as city order clerks.

Yet, because of the crucial weaknesses in the Behrens training program, which will be treated subsequently, coupled with the genuine concern for women's rights which prompted the Act,⁷ we feel that the principles enunciated in Shultz are applicable here.

The Behrens sales training program suffers from two principal weaknesses. First, the Behrens trainee's ultimate advancement to the position of salesman depends on, not only satisfactory completion of the training program, but also the fortuitous event of a sales opening. In other words, the termination point of the program is not determinable prior to its actual occurrence, and that termination point is subject to the vagaries of the business climate and the company's personnel needs.

Second, the Behrens program is male dominated. No woman has ever participated in the program. While it is true that the issue of whether trainee positions should be open to women is a question to be ultimately resolved only in an action under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e (1970), in the manner pursued in Diaz v. Pan American World Airways, Inc., 5 Cir. 1972, 442 F.2d 385; see Hodgson v. Golden Isles Convalescent Homes, 5 Cir. 1972, 468 F.2d 1256, it is also true that "training programs which appear to be available only to employees of one sex will * * * be carefully examined to determine whether such programs are, in fact, bona fide." 29 C.F.R. § 800.148.

Male-dominated training programs subject to the close scrutiny required by § 800.148 have failed to pass appellate tests with increasing frequency. See Hodgson v. Security National Bank of Sioux City, 8 Cir. 1972, 460 F.2d 57, reversing a district court decision ruling that a male-dominated bank management training program was bona fide. See also Hodgson v. Fairmont Supply Co., 4 Cir. 1972, 454 F.2d 490, where the Fourth Circuit (reversing the district court) found a violation of the Equal Pay Act, and declined to recognize a sex-oriented sales training program.

The spirit behind the Equal Pay Act was eloquently depicted in Shultz...