The opinion of the court was delivered by: DEBEVOISE
I. Parties and Proceedings
Plaintiffs in these consolidated actions, Theresa O. Lillibridge and Dotti D. Jernigan Bryant, instituted suit under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e, et seq. ("Title VII"). Plaintiffs charge that the practice of defendant, International Schools Services, Inc. ("ISS"), of awarding to its overseas teachers two kinds of employment contracts having substantially different compensation and benefit provisions constituted unlawful discrimination against plaintiffs on the basis of sex.
Lillibridge and Bryant were teachers employed by ISS at the American School in Isfahan, Iran. Each was hired in Iran at a time when she was married to a person employed in that country either by Bell Helicopter International, Inc. or Grumman Aerospace Corporation, each of which provided goods and services to the Iranian government. Both Lillibridge and Bryant were hired pursuant to what has been called, in this case, a "local-hire" contract, one of the two kinds of contracts which ISS entered into with teaching personnel at the American School. The other kind of contract has been referred to in this case as the "ISS-sponsored" contract, under which an employee received benefits substantially greater than those received under the local-hire contract.
ISS is a private, non-profit corporation organized under the laws of the District of Columbia, with its headquarters in Princeton, New Jersey. ISS works by contract with overseas governments or corporations to operate schools for children of American employees overseas. The services it provides are educational consulting, school operation, education staffing, purchasing, procurement and financial management.
The case was tried without a jury, and decision was reserved. This opinion constitutes this Court's findings of fact and conclusions of law.
The school term for the American School ran from September of one year through June of the next year, and the staff went on annual leave for the summer months. The American School operated until January 6, 1979, when it was permanently closed due to the revolution in Iran which began in late 1978.
All of the staff at the American School were compensated according to the same base salary scale, which varied depending upon (1) teaching experience and (2) educational achievement. The base salary scale is not an issue in this case.
In addition to base salary, all staff were offered certain other benefits. These benefits were:
1. A continuity incentive equal to 15% of base salary after three years of service and for each subsequent year thereafter;
2. ISS-paid major medical insurance, life insurance and long-term disability insurance;
3. Voluntary participation in a retirement plan. This was a TIAA/CREF plan. The staff member contributed a minimum of 5% of base salary to this retirement plan; if the staff member did this, ISS would contribute 10% of base salary;
4. Voluntary participation in Blue Cross/Blue Shield. ISS would pay 50% of the premium and the staff member would pay the other 50% of the premium.
Teachers at the American School taught under two kinds of contracts-local-hire contracts and ISS-sponsored contracts.
Regardless of the kind of contract, the duties of the teachers did not differ. Persons who had ISS-sponsored contracts received additional allowances. These additional allowances were as follows:
1. An overseas allowance paid monthly and equal to 25% of base salary. This was for each member of a teaching couple as of the school year commencing September, 1978, and to one member of the teaching couple prior to that date;
2. A transportation allowance of $ 150 per month to help offset the costs to be incurred because it was prohibitively ...