Hodgson v. Security National Bank of Sioux City, 71-1216.

• Decision Date: 22 May 1972
• Docket Number: No. 71-1216.,71-1216.
• Citation: 460 F.2d 57
• Parties: James D. HODGSON, Secretary of Labor, United States Department of Labor, Appellant, v. SECURITY NATIONAL BANK OF SIOUX CITY, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

460 F.2d 57 (1972)

James D. HODGSON, Secretary of Labor, United States Department of Labor, Appellant, v. SECURITY NATIONAL BANK OF SIOUX CITY, Appellee.

No. 71-1216.

United States Court of Appeals, Eighth Circuit.

Submitted January 10, 1972.

Decided May 22, 1972.

Mack A. Player, Atty., U. S. Dept. of Labor, Washington, D. C., Peter G. Nash, Sol. of Labor, Bessie Margolin, Associate Sol., Carin Ann Clauss, William H. Horkan, Attys., United States Dept. of Labor, Washington, D. C., Harper Barnes, Regional Sol., for appellant.

George F. Davis, Dewie J. Gaul, Sioux City, Iowa, for appellee.

Before MATTHES, Chief Judge, BRIGHT, Circuit Judge, and WEBSTER,^* District Judge.

BRIGHT, Circuit Judge.

The Secretary of Labor brought this action for an injunction and other relief against the Security National Bank of Sioux City, Iowa (Bank), to remedy the latter's alleged violations of the Equal Pay Act of 1963, 29 U.S.C. § 206(d) (1). The complaint charged the Bank with paying female paying-and-receiving tellers less than men doing equivalent work. The Bank sought to distinguish the male from the female employee by labeling the former "management trainees." The district court, in an unreported opinion, upheld this distinction as a valid exception to the equal pay provisions of the Act, and denied the Secretary any relief. The Secretary promptly appealed. For the reasons stated below, we reverse.

The appellee Bank operates a main office and two branches in Sioux City, Iowa. At the main office, the Bank provides fifteen teller windows for paying-and-receiving purposes. About half of these teller windows had been staffed by men. Between January 1, 1961, and July 12, 1967, the Bank hired forty-nine men and thirty-eight women to work as paying-and-receiving tellers. Until August 3, 1964, the basic starting rate for women ranged between $225 and $275 per month, while men were paid $300 or more per month. From August 3, 1964, to July 12, 1967, the starting salary for women ranged from $235 to $275 per month, while men were paid $350 or more per month. This difference in salary did not rest upon any difference in job requirements or performance; the Bank stipulated that, during the period here in question, "the work of its women employees in the paying-and-receiving teller cages, and the work of its male employees, while working in said paying-and-receiving teller cages, was equal with respect to skill, effort, responsibility, and working conditions." Nor were the salary differences attributable to disparate experience or educational qualifications, since some of the women who the Bank hired at a lower rate possessed more education, and in some instances, more banking experience, than better paid males engaged in the same kind of work.¹

According to the provisions of the Equal Pay Act,² no difference in wage rate may exist as between a male and female employee when both perform work "which requires equal skill, effort, and responsibility * * * under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex * * *." 29 U.S.C. § 206(d) (1) (1963). The Bank relies on this last enumerated exception to justify the lower wage rate paid to women tellers.

The Secretary of Labor, in defining the scope of the four exceptions to the equal pay provisions of the Equal Pay Act, has specified in an interpretive bulletin that the requirements for an exception are not met "unless the factor of sex provides no part of the basis for the wage differential." 29 C.F.R. 800.142.³ We are mindful that interpretive bulletins of a governmental department charged with the administration of a federal law should be given weight and serve as guidance to the courts. See Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944); United States v. American Trucking Associations, Inc., 310 U.S. 534, 549, 60 S.Ct. 1059, 84 L.Ed. 1345 (1940); and as to the regulations under the Equal Pay Act, Hodgson v. Fairmont Supply Co., 454 F.2d 490, 497-498 (4th Cir. 1972); Schultz v. First Victoria National Bank, 420 F.2d 648, 653 n. 7 (5th Cir. 1969).

Both parties to this appeal rely upon provisions of the Secretary's interpretive bulletins. The Bank asserts that its disparate wage treatment between male and female employees is based on a "factor other than sex," within exception (iv) of the Act,⁴ since all of the higher paid males working as paying-and-receiving tellers allegedly qualified as "officer material" under the management training program. The Bank contends that because women characteristically had been uninterested in management positions, it was unavoidable that only men entered its management training program.

According to testimony of Bank officers, this program contemplated that qualified applicants would train as paying-and-receiving tellers by a systematized rotation among the teller windows, and at the end of eighteen to twenty-four months, might be transferred into other jobs leading to management positions. This program was unwritten until September 1966, eight months after the Labor Department began investigating the Bank.⁵

Against this factual background, the district court made the following determinative findings:

4. Said male employees were employed as management trainees.

5. The management trainees were interested in a career in banking, understood that they were to receive management training and were qualified by reason of experience and education and the training given them substantially followed the program in existence at the Bank.

6. The rotation of the management trainees was clearly distinguishable from the female teller employees.

The court then concluded:

Defendant has established by a preponderance of the evidence that it had a bona fide management training program with a differential based on factors other than sex.

We must disagree with this determination. In the light of the Secretary's interpretive bulletins and the construction which the courts have given to the Equal Pay Act, the Bank's "management training program" does not fall within an exception to the equal pay provisions of that Act.

A separate interpretive bulletin of the Secretary specifically discusses employee training programs⁶ in terms of recognizing the validity of an inequality in wage rates between the sexes for equal work on a temporary basis while trainees gain experience in various types of work within an employer's establishment. The bulletin very clearly advises that training programs appearing to be "available only to employees of one sex will, however, be carefully examined to determine whether such programs are in fact bona fide." Moreover, in an establishment where a differential has been paid to employees of one sex because "traditionally, only they have been considered eligible for promotion to executive positions," that practice represents a discrimination based on sex in violation of the Act, in the absence of a bona fide training program. 29 C.F.R. 800.148.

The Secretary contends that the Bank's "training program" does not qualify as a "bona fide training program" and, in any event, the exception is inapplicable because only men were traditionally considered promotable to executive positions. The Secretary argues that the trial court gave no analysis to the underlying facts in reaching a conclusion contrary to the Secretary's position.

We turn, therefore, to a consideration of the "training program." The underlying facts reveal that in most instances, male employees were unaware that any training program existed. In certain instances where "training" was mentioned, the male applicant received only assurances of advancement, as a hope for the future, provided "everything worked out." In almost every instance when the Bank wrote for recommendations concerning a prospective male employee, the Bank made reference to the proposed employment as that of teller. The "trainees" did not rotate through various departments of the Bank in order to acquire detailed knowledge and comprehension of the Bank's whole operation, but rather, the rotation was confined to various paying-and-receiving windows. None of the male employees during the period here in question followed the specific rotation of the Bank's written management training program. The female tellers, too, followed a random rotation among the various paying-and-receiving windows. The rotation of male, as well as female, personnel appears to have been geared to the personnel needs of the Bank, and not to training requirements.

Additionally, and most importantly, no woman ever qualified as a management trainee. Several of the women employees working as tellers possessed college backgrounds and extensive working experience, which clearly should have qualified them for the same employment status as men with similar backgrounds who were working at paying-and-receiving windows. Yet, only men received the better wage as "management trainees."⁷

Although the vice-president of the Bank testified that the management training program was open to both sexes, the Bank produced no testimony showing that it had ever offered management training to any woman. Its officers explained that females, who may have possessed college training and satisfactory prior working experience, were not considered for management training because of pregnancy or transfer of their husbands outside of the Sioux City area. These officers had commented to an investigator for the Labor Department that men possessed a greater potential for service to the Bank. In sum, the Bank claimed that, because of their sex or marriage status, none of the female employees hired during the period in question offered any potential for long-term employment. Thus, the Bank felt justified in soliciting and hiring women as...