Patterson v. American Tobacco Co.

WINTER, Circuit Judge: These appeals by American Tobacco Company (American) and Tobacco Workers’ International Union (Union) from the district court’s denial on the merits of their motion under F.R.Civ.P. 60(b) require us to decide whether our decision in Patterson v. American Tobacco Co., 535 F.2d 257 (4 Cir.), cert, denied, 429 U.S. 920, 97 S.Ct. 314, 50 L.Ed.2d 286 (1976), and the order of the district court implementing our views, must be modified to conform to the later decisions of the Supreme Court in International Brotherhood of Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 — 302 — (1977); United Airlines, Inc. v. Evans, 431 U.S. 553, 97 S.Ct. 1885, 52 L.Ed.2d 571 (1977); and Hazelwood School District v. United States, 433 U.S. 299, 97 S.Ct. 2736, 53 L.Ed.2d 768 (1977). The district court thought not, but we think that Teamsters requires further proceedings. We therefore affirm in part and vacate and remand in part. I. Briefly stated, the instant case is a consolidation of an action by EEOC and a class action by black employees to redress race and sex discrimination in working conditions at three facilities operated by American in Richmond, Virginia. The district court found that, before 1963, racial discrimination in hiring, promotion and working conditions was overt. The district court found no discrimination in American’s hiring practices after 1965, but it did find that, while promotional policies after 1968 were “facially fair and neutral,” they were discriminatory in operation because they served to perpetuate the effects of past discrimination. The district court granted sweeping relief; but, as modified by us, the relief granted was limited to (1) requiring American to post more definite written job descriptions when vacancies occurred; (2) requiring American to eliminate lines of progression in six of nine job groups; (3) requiring American to permit blacks in the prefabrication department in one branch to transfer to a job in the fabrication department at another branch without losing company seniority despite American’s longstanding policy disallowing interbranch transfers with retention of company seniority; (4) granting back pay to employees unlawfully denied promotion; and (5) requiring American to develop and apply objective criteria for appointing supervisory personnel. A fuller description of the facts, the district court’s decision and our views appears from our opinion in Patterson v. American Tobacco Co., supra. As needed, we will amplify our description of them elsewhere in this opinion. We turn to a consideration of the effect of each of the subsequently decided Supreme Court cases. II. So far as pertinent here, Teamsters concerned an employer who was a common carrier of motor freight with nationwide operations. The employer had been found to have engaged in a pattern and practice of employment discrimination against Negroes and Spanish-surnamed Americans in hiring line drivers. The members of these minority groups had been hired only in lower paying, less desirable jobs as servicemen or local city drivers. Thereafter they were discriminated against with respect to promotions and transfers because of the seniority system established by the collective bargaining agreements between the employer and the union. That system provided that a line driver’s seniority for competitive purposes, such as the order in which he may bid for particular jobs, is laid off or is recalled from layoff, dated from the date he became a line driver and not the date that he was initially employed if he had been employed originally as a city driver or serviceman. The Court had no difficulty in concluding that the vice of this seniority arrangement was that it “locked” minority workers into inferior jobs and perpetuated prior discrimination by discouraging transfers to jobs as line drivers, and the Court concluded that under Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971), the seniority system would be invalid, unless § 703(h) of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(h) required a different conclusion.1 From its review of the language of § 703(h) and its legislative history, the Court said that with respect to pre-Act discrimination “the unmistakable — 303 — purpose of § 703(h) was to make clear that the routine application of a bona fide seniority system would not be unlawful under Title VII.” 431 U.S. at 352, 97 S.Ct. at 1863. Stressing the language of § 703(h), however, the Court also held that the statute “does not immunize all seniority systems. It refers only to ‘bona fide’ systems, and a proviso requires that any differences in treatment not be ‘the result of an intention to discriminate because of race . or national origin. . . .’” (Emphasis added.) 431 U.S. at 353, 97 S.Ct. at 1863. The overall holding of the Court was that “an otherwise neutral, legitimate seniority system does not become unlawful under Title VII simply because it may perpetuate pre-Act discrimination.” 431 U.S. at 353-54, 97 S.Ct. at 1864. As construed by the Court in Teamsters, § 703(h) carves out an exception to the holding of Griggs that an otherwise neutral practice which perpetuates the effects of past employment discrimination is violative of Title VII. As we read Teamsters, this is a narrow exception, concerning only practices directly linked to “a bona fide seniority system.” Section 703(h) does not insulate an entire promotional system even if such system is facially neutral. At most, it insulates only the seniority aspects of the promotional system. Consequently, Teamsters requires no modification of the relief we approved with regard to job descriptions, lines of progression, back pay (except such awards as may have been founded upon American’s seniority system) or supervisory appointments. Only our decision to allow black employees to make interbranch transfers with the retention of company seniority impinges upon American’s seniority system. It is, therefore, only this aspect of the relief granted in Patterson that is called into question by Teamsters. In conforming our decision to Teamsters, we recognize the limitation of its holding that under § 703(h) only “bona fide” seniority systems insulate the present effects of pre-Act discrimination.2 In the instant case, the district court was equally aware of this limitation. It concluded, however, that American’s seniority system was not bona fide (1) “because this system operated right up to the day of trial in a discriminatory manner,” and (2) because “[t]his seniority system had a discriminatory genesis . [t]he background of labor relations of [American] and the seniority system clearly shows this to be true . . . [t]he record in this case clearly supports this finding.” While we agree with the district court that American’s seniority system would not be bona fide if it either currently served a racially discriminatory purpose or was originally instituted to serve a racially discriminatory purpose, we cannot sustain the district court’s ultimate findings in this regard. The district court made no subsidiary findings, either in its initial decision or in its ruling on the Rule 60(b) motions, to support its ultimate conclusions. It is thus impossible for us to tell upon what underlying facts the district court relied and whether proper statutory standards were observed. See Kelley v. Everglades Drainage District, 319 U.S. 415, 422, 63 S.Ct. 1141, 87 L.Ed. 1485 (1943); Schneiderman v. United States, 320 U.S. 118, 130, 63 S.Ct. 1333, 87 L.Ed. 1796 (1943); O’Neill v. United States, 411 F.2d 139, 145-46 (3 Cir. 1969); Woods Construction Co. v. Pool Construction Co., 314 F.2d 405, 406-07 (10 Cir. 1963); Knapp v. Imperial Oil & Gas Products Co., 130 F.2d 1, 3-4 (4 Cir. 1942). — 304 — It is not surprising that the district court’s findings in its original decision did not completely assay the field since Teamsters had not yet been decided. While ordinarily we would not think that F.R.Civ.P. 52 requires the same degree of specificity in findings of fact when a Rule 60(b) motion is denied on the merits as it requires in a non-jury trial, the fact is that in the instant case the decision in Teamsters intervened between the initial decision on the merits and the denial of the Rule 60(b) motions. Since the effect of Teamsters raised new and difficult issues, we think that we are justified in requiring full compliance with Rule 52. That compliance necessitates remanding the issue to the district court for further findings. On remand, the district court may reopen the record and receive additional proof with regard to the bona fides of American’s seniority plan since that issue emerged after the original record was made. III. We think that neither United Air Lines, Inc. v. Evans, supra, nor Hazelwood School District v. United States, supra, requires us to modify our original decision in the instant case. Evans held that Title VII was not violated by an employer which, consistent with its bona fide seniority system, declined to grant retroactive seniority to an employee who was rehired after having been earlier discharged as a result of a discriminatory practice, when that employee at the time of her discharge had failed to file a timely charge with EEOC. American and the Union contend that Evans stands for the proposition that American’s promotional system may not now be modified despite a finding of a Griggs violation, because plaintiffs failed to file a timely challenge to this system after its adoption in 1968. We do not read Evans so broadly. Evans dealt only with a one-time violation (a discriminatory discharge) which had a continuing effect only as the result of an otherwise neutral seniority system. It did not deal with a continuing violation such as a discriminatory promotional system where the discrimination continues from day to day and a specific violation occurs whenever a promotion is made. Evans does not purport to limit the broad remedial powers of a federal court. But for § 703(h) and its validation of the present effects of a bona fide seniority system, a court, in a proper case like the instant one, may still redress the present effects of past discrimination by requiring the modification of present practices which repeat that discrimination. Hazelwood was a case of racial discrimination in the employment of school teachers for public schools. So far as pertinent here, it held that (1) in determining from statistical proof whether a prima facie case of discrimination had been shown, the proper consideration was between the racial composition of the school district’s teaching staff and the racial composition of the qualified public school teacher population in the relevant labor market, and (2) if that comparison showed sufficient substantial disparity to constitute a prima facie case, the employer must still be given the opportunity to show that the disparity resulted from pre-Act hiring rather than illegal post-Act discrimination. That is, Hazelwood admonishes courts in Title VII cases to give careful consideration to post-Act hiring data. American and the Union contend that, when properly applied, Hazelwood requires the conclusion that the district court’s determination that American had practiced racial and sexual discrimination in the employment of supervisory personnel cannot stand and that that finding and the relief flowing from the alleged violation must be set aside. Essentially, their argument is that liability was found solely on statistics showing the percentages of blacks and females in American’s supervisory work force at various dates, but that there was no comparison with the relevant supervisory population nor were pre-Act supervisory appointments eliminated from the relevant statistics. To these contentions, there are various answers. As the district court recognized in denying the Rule 60(b) motions, Hazel305 wood is in part a decision as to what constitutes a prima facie case. In the instant case, American and the Union were not held to have violated the Act on the theory that a prima facie case was proved against them. They were given full opportunity to rebut the statistical proof, and they availed themselves of it. The total proof, even under Hazelwood, showed violations. In our earlier opinion, we disclosed our recognition of the total proof in discussing what relief would be appropriate. We stated our recognition that Title VII was not retroactive and that the racial and sexual percentages of appointments after Title VII became effective were the significant ones. 535 F.2d at 274. Nonetheless, we concluded that, notwithstanding that appointments since 1965 of qualified blacks and women exceeded the ratio of these groups in the workforce, American was not exonerated from a violation of Title VII because “[t]he tardy appointments of blacks and women to supervisory positions long after the passage of Title VII and the present lack of published job descriptions and objective selection procedures fully justify the injunctive relief the district court ordered.” 535 F.2d at 275. Hazelwood clearly recognizes the sufficiency of such proof. 433 U.S. at 309-10 n.15, 97 S.Ct. 2736. We therefore conclude that Hazelwood not only requires no modification of our prior holding with respect to supervisory personnel, but indeed reinforces our views. For these reasons, the order of the district court denying the motions of American and the Union under F.R.Civ.P. 60(b) on their merits is affirmed in part and vacated and remanded in part for further proceedings consistent with this opinion. AFFIRMED IN PART; VACATED AND REMANDED IN PART. Footnotes [1] In pertinent part, § 703(h) provides that “it shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment pursuant to a bona fide seniority . . . system . . . , provided that such differences are not the result of an intention to discriminate because of race, color, religion, sex, or national origin.” [2] Because in Teamsters it was conceded that the seniority system “did not have its genesis in racial discrimination, and . . . was negotiated and has been maintained free from any illegal purpose,” 431 U.S. at 356, 97 S.Ct. at 1865, the Court did not find it necessary to expound on the factors which make a seniority system “bona fide.” In approving the concession, the Court did state that the system applied to all employees, regardless of race or national origin, that all non-line drivers were locked into their positions, and that separate employment conditions for line drivers was “rational” under industry practice and precedents of the National Labor Relations Board. But it gave us and the other lower federal courts no additional guidance. We do not attempt an overall definition of “bona fide” at this stage of this case; we await the full development of the facts.