11 Fair Empl.Prac.Cas. 553,
UNITED STATES of America, Plaintiff-Appellant,
v.
UNITED STATES STEEL CORPORATION et al., Defendants-Appellees.
John S. FORD, et al., Plaintiffs-Appellants, Clifford Craig
and L. G.Phillips, Movants-Appellants,
v.
UNITED STATES STEEL CORPORATION et al., Defendants-Appellees.
No. 73-3907.
United States Court of Appeals,
Fifth Circuit.
Oct. 8, 1975.
Beatrice Rosenberg, Asst. Gen. Counsel, EEOC, Washington, D. C., Robert T. Moore,, Louis G. Ferrand, Employment Section, Dept. of Justice, Washington, D. C., Wayman G. Sherrer, U. S. Atty., Birmingham, Ala., for United States.
James K. Baker, Oscar W. Adams, Jr., U. W. Clemon, Birmingham, Ala., Barry Goldstein, William L. Robinson, Jack Greenberg, New York City, for John S. Ford, and others.
Demetrius C. Newton, David H. Coar, Birmingham, Ala., for C. Craig & L. G. Phillips.
Jerome A. Cooper, Birmingham, Ala., Michael H. Gottesman, Washington, D.C., for United Steelworkers of America.
James R. Forman, Jr., W. K. Murray, Birmingham, Ala., for U. S. Steel.
Appeals from the United States District Court for the Northern District of Alabama.
Before THORNBERRY, MORGAN and CLARK, Circuit Judges.
THORNBERRY, Circuit Judge:
These appeals arise from a sharply-contested employment discrimination case which involves over 3,000 black steelworkers. The proceedings below culminated in a decree, entered May 2, 1973, in which District Judge Pointer ordered major changes in the seniority structures at the nine plants of defendant United States Steel Corporation's Fairfield Works, Birmingham, Alabama. Of main interest for present purposes, Judge Pointer found that the Fairfield seniority systems (occupational, line of progression, and departmental) products of collective bargaining between the company, the United Steelworkers of America, AFL-CIO, and various locals operated to lock blacks into lower-paying and less-desirable jobs, and thus perpetuated the effects of the company's pre-Title VII active racial discrimination in hiring and initial assignments. The district court ordered implementation of a broad scheme of plant service seniority, rate retention ("red circling"), racial quotas for hiring and promotion, and other remedies designed to eradicate continuing impediments to blacks' reaching their "rightful places." Those measures are not before us for review, as the defendants did not appeal from the court's findings or the decree.
A number of complaints were consolidated below for trial. Out of six certified private class actions brought pursuant to 42 U.S.C. § 2000e-5 and 42 U.S.C. § 1981, involving 464 black employees, the district court awarded back pay to sixty-one members of three classes (the Hardy, McKinstry, and "original" Ford classes). No appeals were taken with respect to those three classes. The government also litigated a "pattern or practice" suit, 42 U.S.C. § 2000e-6, and sought back pay for the approximately 2,700 remaining blacks in the Fairfield production and maintenance workforce. This prayer was denied, and is the subject of the present appeal.
The government, however, has withdrawn its appeal in favor of the nationwide steel industry settlement, to which United States Steel and the Union are parties. See United States v. Allegheny-Ludlum Industries, Inc., 5 Cir. 1975,
The now-unchallenged facts which supplied the bases for findings of liability on the part of the company and the unions, and hence the works-wide injunctive relief, are reported with the opinion of the district court, United States v. United States Steel Corp., N.D.Ala.1973,
On remand, a variety of additional determinations must be made before this case will be capable of assured resolution. We therefore vacate the denial of back pay to the group on whose behalf the government sought back pay below (the "new" Ford class), and remand for further proceedings consistent with this opinion and other controlling authority. On remand the district court should carefully redetermine the propriety of the amorphous "new" Ford class in light of the consequences of binding such a group to a final judgment. Also, specific findings should be made with regard to the availability of back pay and certain of the defendants' special defenses. Finally, it is necessary that the district court reexamine its legal approach in the context of the foregoing tasks. The existing analysis is no longer acceptable if ever it was to justify a generalized conclusion that back pay should not be awarded to victims of employment discrimination. To the extent that the trial court may conclude that additional back pay is now warranted, it should proceed to Stage II of the bifurcated class action procedure, discussed infra. At that point it should invite the parties' proposals for computation and distribution, and select a reasonable method for making the affected class whole, while avoiding as far as possible the "quagmire of hypothetical judgments."
We are of the view that the present record in the Craig appeal presents essentially a grievance by ore miners generally the use of plant age instead of company age for seniority purposes rather than a complaint by blacks that whites were discriminatorily favored in promotion and regression. The testimony relevant to intervenors' application indicated that the focal feature of the seniority system affected the 593 whites and 331 blacks in the same manner: all lost company (ore mine) seniority when assigned to Fairfield Steel Plant. The district court correctly determined that this does not present a palpable Title VII dispute. "The Act does not require a remedy for those not discriminated against." Gamble v. Birmingham Southern R.R., 5 Cir. 1975,
We now proceed to outline the parameters of the district court's inquiry on remand.
I. THE "NEW" FORD CLASS ACTION
Judge Pointer's designation of the "new" Ford class dovetails with his most complicated set of findings and reasons for denying back pay to the class's members: "failure of proof" or "equitably determining the true balance of interests."
It is simply unclear whether the district court believed that individual awards of back pay to class members must be predicated on proof of each discriminatee's personal economic loss and racially-discriminatory causation at the liability stage (Stage I) of the trial. Appellant Ford argues that Judge Pointer did so believe, and certain portions of the opinion support the argument. E. g., id. at 1058 & n.35. On the other hand, the court in fact proceeded to a second, individualized stage, see Baxter v. Savannah Sugar Refining Corp., 5 Cir. 1974,
As if to illustrate this justification for denying back pay, Judge Pointer considered several possible methods by which back pay arguably might have been awarded to the members of the "new" Ford class. He rejected these approaches as either inequitable and lacking in probative value (gross comparison of average black and average white earnings in the line of progression); inequitable and overly speculative (factor out the chance of bidding into jobs that turned out less advantageous in the long run); or inequitable and unduly complex in terms of time and expense (use complete hindsight to flow chart all historical vacancies and operational levels; hypothetically assign the most senior blacks to the openings that turned out to be most advantageous). Id. at 1060-61. The latter two methods would yield similar, if not identical results, and probably either would have led in some instances to the quagmire, see Pettway v. American Cast Iron Pipe Co., 5 Cir. 1974,
Appellant Ford strongly contends that the district court's denial of back pay to the larger class of nonrecoverees reflects a manifestly erroneous reliance on "difficulty of ascertainment," a theory which this court has discredited as a general defense to back pay liability. E. g., Johnson v. Goodyear Tire & Rubber Co., 5 Cir. 1974,
(1) unrealistic exactitude is not required, (and) (2) uncertainties in determining what an employee would have earned but for the discrimination, should be resolved against the discriminating employer.
Pettway, supra,
Hence, the decision below yields an anomalous contrast. The evidence demonstrated that, since 1965, certain features of the seniority systems had operated widely to reduce blacks' mobility to better jobs in production and maintenance units, including supervisory positions and trades and crafts, and furthermore to deny blacks the training and preparation necessary for advancement to the better jobs. The district court found that those features perpetuated the effects of past discrimination in violation of Title VII and ordered injunctive reforms. In three relatively small departmental classes, moreover, the court could identify specific features which had caused economic losses to the classes, and awarded back pay to certain class members after taking additional evidence. Nowhere did the court draw a qualitative distinction between the discrimination practiced against the small classes and that practiced against the "new" Ford class, yet it denied back pay throughout the latter group. Thus, the only distinction of substance followed from the district court's inability to discern causal factors as to the larger group's losses in the sense that damages, to be compensable, must be the result of a legal wrong and not some other cause. This inability may have been compounded by a misunderstanding of the role of individual proof at the liability stage (Stage I).
We believe that both of these difficulties can be largely obviated on remand by the fundamental expedient of reexamining the scope of the "new" Ford class. In a conscientious effort to eliminate multiplicitous litigation by binding the otherwise unrepresented employees to a Rule 23(b)(2) class judgment in which able counsel on both sides had vigorously and thoroughly litigated the issues, the district court created a class which it found in essence to be so diverse and unmanageable that the effects of unlawful discrimination could not be separated from other plausible, but not demonstrably unlawful, causes of members' reduced earnings. On remand the district court should conduct a hearing and take evidence as to the propriety of the "new" Ford class, its scope in terms of the ingredients of the judgment, if any, by which it ought to be bound, and its size and membership. General guidance is contained in our en banc opinion, Huff v. N. D. Cass Co., 5 Cir. 1973,
Inasmuch as the issues already have been thoroughly litigated, at least from the standpoint of basic liability and systemic injunctive relief, the district court need not fear to tread preliminarily on the merits of a classwide request for back pay. The question on remand will be comprehensive and multifacited: the extent to which the "new" Ford class is maintainable in a "meaningful and manageable" sense as a class action seeking monetary relief. Huff, supra. As a corollary matter, the court should consider the adequacy of the representation, F.R.Civ.P. 23(a)(4), which in this court has been impressive. In this respect the court should consult Huff, supra, Johnson v. Georgia Highway Express, Inc., 5 Cir. 1969,
If the district court again concludes that the "new" Ford class action should go forward, the matter will not then be ended, nor will it automatically be appropriate to proceed to Stage II, as described in Baxter, supra. It seems to us that much trouble might be eliminated though we encourage the district court's independent judgment on the point by the use of subclasses under Rule 23(c)(4). See the discussion in Nix v. Grand Lodge of Int'l Assn. of Machinists, 5 Cir. 1973,
It appears that the district court's principal difficulty with the "new" Ford class was its size and diverse composition. Those aspects have made meaningful review equally problematic for this court. A large variety of employment practices coalesced to greater and lesser degrees to affect groups of black employees across different plants, departments, job classifications, and earned seniority levels throughout Fairfield Works. In considering whether to designate subclasses for the purpose of back pay, the district court has at its disposal the injunctive decree of May 2, 1973, the decree's Appendices, and the parties' lengthy stipulation which describes the seniority and job classification systems during Fairfield's history up to the trial. These items provide substantial assistance in identifying those departments and lines which were affected by specific practices ordered enjoined, and the contexts and effects of the unlawful practices. The district court by now is intimately familiar with the case and should encounter no impassable obstacles in drawing subclass lines on the basis of the objective commonality of particular seniority effects as to given groups of employees. We believe that this approach may greatly facilitate the court's determination of the groups of employees within the larger class who are entitled to proceed to Stage II and the presentation of individual back pay claims. Likewise, it should provide this court with a complete picture of the district court's mental processes in the event this lawsuit again comes before us.
In conclusion to this part we dispose of several arguments which are ancillary to the basic class action problems. Initially, we reject appellee United States Steel's argument that appellant Ford lacks standing as a matter of law to represent any class of black employees broader than the " original" Ford class, in which his personal back pay claim has been satisfied. The scope of Mr. Ford's standing is a matter which the district court should address in the first instance as an element of the inquiry on remand. The court should consider the question in light of Jenkins, supra, and Long v. Sapp, 5 Cir. 1974,
II. BACK PAY
In Part I we summarized the chief reasons upon which the district court denied back pay to the "new" Ford class: the inability to identify and distinguish the various causes of class members' economic losses, perhaps with some emphasis on the difficulty of ascertaining the amount of compensable damages. Just as the court's discussion of these problems is unclear, it is also unclear whether Judge Pointer's concern lay with the proof of economic injury to the class, or with the absence of each member's individual proof at the liability-injunction stage (Stage I). The court also gave other, less prominent reasons for denying back pay: lack of bad faith on the part of the defendants; good faith efforts to comply with the law together with reliance on judicial and administrative decisions which had given positive treatment to steel industry seniority systems; the absence of unjust enrichment to the defendants; and the breadth of other affirmative relief.
As general or complete defenses to recovery of back pay by any employee, the district court's reasons must fail. Controlling precedent disposes of absence of bad faith, no unjust enrichment, and broad injunctive relief as a counterweight for denial of back pay. See Albemarle Paper Co. v. Moody, --- U.S. ---, ---,
Also to be rejected are the burden of proof-equitable balance justifications mentioned earlier, along with the reliance theory, which we treat infra as a special defense. With regard to the proof problems, the inquiry and procedure we suggested in Part I should assist the court on remand in identifying particular groups of employees who are entitled, one-by-one, to present personal claims for back pay. Not unreasonably at the time of his decision, Judge Pointer read certain language in our Georgia Power opinion,
This holding (in Johnson v. Goodyear ) is entirely consistent with, and flows from our decision in Georgia Power that the presumption in favor of a member of a class discriminated against does not per se entitle an employee to back pay without some individual clarification. (citing Georgia Power,
Instead, in an effort to relieve tension between management difficulties with numerous, sometimes diverse claimants and Title VII's policy of compensation for discrimination-caused economic injuries, this court has established a bifurcated approach in class actions seeking back pay. At Stage I the class must demonstrate a prima facie case of employment discrimination. Sometimes statistical evidence alone will suffice; on other occasions live testimony or additional exhibits may be necessary. At all events, however, the stress at Stage I is upon demonstration of the defendant's broad employment policies and practices, the defendant's rebuttal and business necessity defenses, and the inferences which remain at the close of the evidence. See United States v. T. I. M. E. D. C., 5 Cir. 1975,
Thus, the focus at the close of Stage I is still upon the class, as opposed to any particular putative member. As we noted earlier, once the class has proven a prima facie case of discrimination as was done below then it is presumptively entitled to move into Stage II with the presentation of individual back pay claims. Johnson v. Goodyear, supra. This presumptive entitlement serves the important function of filling the logical hiatus between large-scale practices and statistically significant effects, which were shown at Stage I, and individual members' claims for sums of money due, which have not yet been demonstrated. At this point the basic question which seemingly perplexed the district court arises: may the court, consistently with the "make whole" purpose of back pay, require a class or subclass to demonstrate some tangible economic loss as a class or subclass, attributable to one or more proven discriminatory practices? In other words, may the court condition the presumption upon some quantifiable showing of causation between inequitable conduct and economic injury-in-fact to an objectively and empirically homogeneous group qua group?
We need not further constrict the district court's statutory discretion by saying that it may never do so under any circumstances. Logically, a suit that proceeds as a class action for monetary relief necessarily contemplates some degree of proven economic damage to the class in general, as a result of the defendant's violations. Where, as here, the circumstances of a large class action raise occasional issues of alternative causation as with the bidding system and the irregular correspondence between hourly wages and job classification some minimal burden on a given group may be appropriate. On the other hand, the fact that a defendant has managed to discriminate against many people instead of a few is no ticket to freedom from liability to those who suffered less than the most obvious victims. "Important national goals would be frustrated by a regime of discretion that 'produce(d) different results for breaches of duty in situations that cannot be differentiated in policy.' " Moody, supra, --- U.S. at ---,
With these considerations in mind, and cognizant of our responsibility to "maintain a consistent and principled application of the backpay provision," Moody, supra, --- U.S. at ---,
On remand the district court should reconsider its approach to back pay for the "new" Ford class in light of the preceding discussion. The procedures suggested in Part I, supra, may well facilitate the court's task. Considerations of judicial efficiency are important, but there is no reason why the need for efficiency cannot be reconciled with what is by now a nearly certain, if not "automatic or mandatory," duty to award back pay to discriminatees who can prove their entitlement to monetary recovery. Cf. Moody, supra. In the event the court again decides that any particular group within the affected class should not go forward to Stage II, it must carefully articulate its findings and conclusions. Id. --- U.S. at --- n.14,
Insofar as the district court may conclude that additional back pay is now in order, the burden-of-proof rules respecting individual claims are set forth in Baxter,
After consulting Pettway, supra,
On the other hand, the remainder of "the key" is to avoid "the unfair exclusion of claimants by defining the class or the determinants of the amount too narrowly." Id. Quite probably there are some aggregations of claimants, similar in plant seniority and ability, each of whom might reasonably be slotted into the same historical vacancy and awarded a "winner-take-all" sum of back pay. Obviously, this cannot be done if the court is to remain faithful to the actual experience in the plant. Such a situation calls forth the "quagmire of hypothetical judgment" for which Pettway,
Of course, the pro rata method will seldom, if ever, work out as conclusively or as simply as the example. The threshold determination of the eligible group of employees will often present complex factual issues. The court that opts for a pro rata method will have to deal with tediously-computed fractional constants in most cases. By suggesting such a method we do not intend to exclude other reasonable alternatives, for we recognize that "the trial court will often have the keener appreciation of those facts and circumstances peculiar to particular cases." Moody, supra, --- U.S. at ---,
As a caveat to our discussion of back pay, we add a few remarks which are necessary to place this matter in full perspective. On December 19, 1974, Judge Pointer entered, as between the government and the defendants, an amendment which conformed the May 2, 1973 Fairfield decree to the industry-wide consent decrees which we upheld in United States v. Allegheny-Ludlum Industries, Inc., supra. The amendment provides that the back pay under Consent Decree I shall become available to eligible Fairfield employees (1) upon "exhaustion of all appellate proceedings" in Allegheny-Ludlum, in which appellant Ford is an intervenor challenging the settlement's legality; and (2) "upon receipt of a remand, if any," from this court in this appeal. Thus, it is clear that the back pay provision of Consent Decree I will not apply to Fairfield Works unless and until both conditions are met. Timewise, there is no way to foretell how quickly the back pay under the settlement will become available at Fairfield, nor could we predict how quickly any class or subclass involved in this appeal might reach the stage of individual back pay relief. Either could involve anywhere from a few weeks to many months. Nevertheless, we point out that the liability stage of the trial in this case was completed almost a year prior to the entry of the consent settlement. Under these circumstances, we conclude that those Fairfield employees who fall within the description of a class or subclass duly certified by the district court on the remand of this case, pursuant to F.R.Civ.P. 23(b)(2), shall look at all times to this case for their back pay. In specific instances this case may yield more money than the consent decree; in others it may yield less. Yet, insofar as this action continues toward final repose as a Rule 23(b)(2) class action, there will be no "opting out" by individual class members at any point. LaChapelle v. Owens-Illinois, Inc., 5 Cir. 1975,
III. OTHER DEFENSES AND RELATED ISSUES
Both the company and the union seek to escape back pay liability to the members of the "new" Ford class by way of certain affirmative defenses. Unlike the generalized pleas to equity which we dismissed earlier, however, these defenses to the extent they are valid either do not call for a blanket denial of back pay to all discriminatees, or else they merely entail equitable apportionment of eventual back pay responsibility as between the defendants.
The company relies on a mass of pretrial and post-trial exhibits which purportedly demonstrate significantly higher black, as opposed to white, rates of refusal to bid on entry-level jobs in the line of progression, voluntary freezing in lower jobs following advancement into the line, and waivers of promotional opportunities under the court-reformed seniority system. The company seeks to use this evidence primarily in an effort to block the class, or particular groups within it, from reaching the individualized back pay stage. This, we conclude, the exhibits cannot accomplish. Initially, there is at best only a tenuous logical connection between the failure of isolated blacks to promote and the issue of economic injury to the broader class of blacks on account of unlawful discrimination. Judge Pointer found that Fairfield's numerous forms and subforms of occupational, line, and departmental seniority operated to perpetuate the effects of the company's pre-Title VII active racial discrimination in hiring and initial assignments. The company does not question those findings on appeal. Additionally, we must recognize that victims of discrimination frequently hesitate to move into new jobs when, as at Fairfield, the price of mobility is loss of seniority earned in a former position. See United States v. Jacksonville Terminal Co., 5 Cir. 1971,
On the other hand, we do not wish to demean whatever evidentiary value the company might be able to extract from its exhibits in terms of class or subclass mitigation, as in Judge Pointer's method of awarding back pay among the members of the "original" Ford class. Nor do we intend to subtract from the probative value of any particular employee's declination of a promotional opportunity, either before or after the institution of reformed seniority. In either case it is more likely with the evidence than without it that the employee would have refused the promotion under any circumstances, in which event he should not receive damages for the wages waived. We simply note that these are questions to be considered by the district court on remand. The applicable burden-of-proof rules are those laid down in Johnson v. Goodyear and Baxter, supra.
In contrast to the company, the union does not rely so much upon factual arguments as upon a rather fragile theory of the law. Essentially, the union contends that any discrimination for which it may be responsible was the result of good faith efforts to comply with the law, undertaken in reliance upon earlier lower court and administrative decisions which had given positive treatment to similar seniority systems at other basic steel production facilities. Specifically, the union points to Whitfield v. United Steelworkers, 5 Cir. 1959,
The appellants characterize the union's theory of a "unique" steel industry litigation history as an elaborate appeal to the "unsettled state of the law" a theory which we have thoroughly rejected as a defense to back pay liability under both Title VII and Section 1981. See Johnson v. Goodyear, supra,
At least since July 2, 1965, the effective date of Title VII, the employers of this nation have been on notice that employment discrimination based on race, whether overt, covert, simple or complex, is illegal. In this case, the employer has been violating the Act as to some employees since that date. If we were to accept the employer's position the effective date would be advanced at least to the date of the Griggs (Griggs v. Duke Power Co.,
Accord, Pettway, supra,
Title VII applies, of course, to unions which are parties to the collective bargaining agreement as well as to employers. See Johnson v. Goodyear, supra, at 1381; Carey v. Greyhound Bus Co., 5 Cir. 1974,
Nevertheless, one legitimate defense of sorts remains available to the union with respect to back pay liability. In the three private class actions in which Judge Pointer awarded back pay below, the International was absolved of back pay responsibility because it "was not really responsible for the practices giving rise to the three back-pay awards."
IV. CONCLUSION
We have given careful consideration to all other contentions on appeal and find them to be without merit.1 For the reasons discussed heretofore the Craig appeal is dismissed. The decision of the district court denying back pay, which was brought forward by the Ford appeal, is vacated and remanded for further proceedings consistent with this opinion.
Notes
For example, we note that the company's request for a trial by jury has been foreclosed in this circuit by Johnson v. Georgia Highway Express, supra,