United States v. Hayes International Corporation

• Decision Date: 22 February 1972
• Docket Number: No. 71-1392.,71-1392.
• Citation: 456 F.2d 112
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. HAYES INTERNATIONAL CORPORATION et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

456 F.2d 112 (1972)

UNITED STATES of America, Plaintiff-Appellant, v. HAYES INTERNATIONAL CORPORATION et al., Defendants-Appellees.

No. 71-1392.

United States Court of Appeals, Fifth Circuit.

February 22, 1972.

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Wayman G. Sherrer, U. S. Atty., Birmingham, Ala., Robert T. Moore, David W. Allen, David L. Rose, Dept. of Justice, Washington, D. C., for plaintiff-appellant.

Drayton Nabers Jr., Joseph F. Johnston, Birmingham, Ala., John A. Fillion, Associate Gen. Counsel, Solidarity House, Detroit, Mich., Bernard G. Link, Baltimore, Md., for defendants-appellees.

Before GEWIN, GOLDBERG and DYER, Circuit Judges.

DYER, Circuit Judge:

In this employment discrimination case the district court found that a transfer plan instituted by Hayes in 1968 gave incumbent negro employees all the relief they were entitled to under Title VII of the Civil Rights Act of 1964, that no unlawful discrimination existed in the current hiring and recruiting practices, and refused to consider the question of back pay because the issue was not presented by the Attorney General at the trial. We remand with directions to amend the transfer plan, review the clerical and technical hiring practices and try the back pay issue on its merits.

Hayes operates a plant in Birmingham, Alabama, for the manufacture, refurbishing and repair of military aircraft. When the company began its operations in 1951 all negroes hired were placed in separate lines of progression and seniority divisions in the production and maintenance unit. This was allegedly done because none of the negroes who applied had any experience or qualifications for technical jobs and it was felt by the management that it would be better to segregate them so they would not have to compete with the more experienced white people. This situation continued until 1962 when Hayes transferred thirteen negroes to all white jobs.

In October, 1965, shortly after the effective date of the 1964 Civil Rights Act, Hayes reached a peak employment of 5,200. Since that time there has been a general reduction in force except for some sporadic rehiring in early 1966. At the time this suit was filed there were 1781 employees in the production and maintenance unit of which 145 were negro. 122 of these negroes were in all negro jobs.

In 1966 a discrimination charge against the company was filed with the Equal Employment Opportunity Commission. In an effort to dismantle its segregated lines of progression, Hayes and the union, in their March, 1968 collective bargaining agreement, placed one negro line of progression in a seniority division¹ that contained five all white lines of progression. Other all black jobs were merged into a line of progression that had previously been predominantly white. Hayes had also begun to hire whites for the historically all negro jobs and hire negroes for jobs that had formerly been all white. The EEOC recommended a transfer plan for the negro employees who were in the all negro jobs. Conciliation conferences between the Commission and Hayes broke down in March, 1968 and suit was filed by the Attorney General under Title VII of the Civil Rights Act of 1964, 42 U.S.C.A. § 2000e-6(a),² alleging discrimination against negro employees in the company's hiring practices and by limiting them to the lower rated jobs in all negro lines of progression in violation of 42 U.S.C.A. § 2000e-2(a).³

In April, 1968 a plan similar to the one recommended by the EEOC was adopted by Hayes for the benefit of all negroes in predominantly negro jobs who were hired prior to March 28, 1968. After studying the personnel files of the 141 employees eligible under the plan Hayes determined that none of them were qualified to be transferred to any jobs above the entry level. These employees were afforded the option of transferring to any entry level job for which they were qualified after all other employees had exercised their rights under the collective bargaining agreement. Each employee was informed which of the 57 entry level jobs he was qualified for and was allowed to state his preference as to those jobs. As vacancies occurred, the employees who stated a preference for those vacancies were by seniority offered the job. If an employee did not wish a transfer or declined an offer Hayes was not obligated to make further offers. However, many of the employees were allowed to return to the program after they had first refused a transfer. Once accepted, the employee retained his previous wage rate if the new pay grade was less and retained his plant seniority for promotional purposes.

After Hayes had initiated this transfer plan the Attorney General applied for a preliminary injunction which was denied. The denial was reversed on appeal. United States by Mitchell v. Hayes International Corp., 5 Cir. 1969, 415 F.2d 1038. This Court found that the transfer program may have been unduly limited because it offered only 57 out of a possible 140 jobs and because the employees were given only one opportunity to transfer; that past employment statistics demonstrated illegal hiring practices; and that remanning, recall and layoff rights in the collective bargaining agreement might also show the effects of past discrimination had continued. Upon remand a hearing on the merits was held rather than upon the application for a preliminary injunction. The district court concluded that the transfer plan adequately provided an opportunity for negroes to attain their "rightful place"⁴ and that current recruitment and hiring practices did not violate Title VII. All relief was denied, including a post-trial request for back pay which was refused on the ground that the Attorney General had failed to present the issue during the trial.

THE TRANSFER PLAN

Under the Hayes transfer plan 95 of the 141 eligible employees desired transfers. Of the 95, 59 had accepted transfers into formerly predominantly white lines of progression at the time of the final hearing in November, 1969.

The Attorney General attacks the plan as inadequate for the following reasons: (1) the plan limited the transferees to entry level jobs in the production and maintenance unit although some of them were qualified for other jobs; (2) the plan provided for a single opportunity to accept or decline a transfer; (3) remanning and downgrading practices would continue the effects of past discrimination of the transferees and because of this many of those eligible declined the opportunity to transfer.

Hayes had obviously discriminated against negroes in the past by segregating them in lower paying all negro lines of progression. By remaining in these lines they continued to be affected by the past discriminatory practices since they were not in a position to compete with other employees for the better paying jobs for which they may have been qualified. Current promotion practices and other rights granted employees, in so far as they may limit the transfer program by imposing barriers to the incumbent negroes' opportunity to achieve their rightful place consistent with their ability and plant seniority, are in themselves Title VII violations. See United States v. Jacksonville Terminal Co., 5 Cir. 1971, 451 F.2d 418, 439-440; Local 189, United Papermakers & Paperworkers v. United States by Mitchell, 5 Cir. 1969, 416 F.2d 980, 991, cert. denied, 397 U.S. 919, 90 S.Ct. 926, 25 L.Ed.2d 100. Affirmative action is necessary to remove these lingering effects. See United States v. National Lead Co., 8 Cir. 1971, 438 F.2d 935, 937; Parham v. Southwestern Bell Telephone Co., 8 Cir. 1971, 433 F.2d 421, 427; Local 53, International Association of Heat & Frost Insulators & Asbestos Workers v. Vogler, 5 Cir. 1969, 407 F.2d 1047, 1052. Recommendations for change were first made by the EEOC in the form of a proposed transfer plan. A variation of this plan was implemented by Hayes. The plan seems to be working well; however, it is deficient in several respects.

Although Hayes appears to have made an effort to eliminate the effects of past discrimination through the transfer plan, it has limited the transfer opportunities to entry level jobs in the production and maintenance unit. The district court found that " . . . The limitation of jobs offered to entry level jobs denied no affected class employee transfer opportunities consistent with his seniority and qualifications." There appears to be contradictory evidence to this all inclusive finding. Harris, the assistant director of industrial relations at Hayes, testified both in court and in his deposition that under the contract with the union there could be no transfers to an "A" job as long as there are "B" people qualified to perform the "A" job. This rule played an important role in the selection of jobs that were made available in the transfer program. According to Harris this meant that an upper level job could not be considered for the transfer program as long as there were qualified individuals in the job below.⁵ This method of selection would obviously preclude an incumbent negro's transfer to a job which he is qualified to perform and senior enough to be preferred. The fact that a contract required this limitation is not a justification if it is discriminating. United States v. Jacksonville Terminal Co., supra, 451 F.2d at 454.

To determine vacancies in this manner is to let the old job seniority criterion denounced in Quarles v. Philip Morris, Inc., E.D.Va.1968, 279 F.Supp. 505, 513 in through the proverbial back door. The court must determine not only whether the seniority and ability of the incumbent negroes entitle them to existing vacancies but must also insure that potential vacancies are not foreclosed by criteria that puts the negro at a disadvantage due to past discriminatory practices.

Other evidence simply confuses this issue. Ford, an assistant director of industrial relations, testified that under the collective bargaining agreement no employee could be transferred...