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Commonwealth of Pennsylvania and Raymond Williams v. Local Union 542

argued: September 17, 1986.


Appeal from the United States District Court For the Eastern District of Pennsylvania, Civil Action No. 71-2698.

Author: Stapleton

BEFORE: ADAMS and STAPLETON, Circuit Judges and COWEN, District Judge.*fn*


STAPLETON, Circuit Judge.

In these consolidated appeals, Local Union 542, International Union of Operating Engineers, ("Local 542" or "the Union") challenges the district court's extension of an injunctive decree first imposed on the Union in 1979, after a finding of intentional employment discrimination by the Union against minority workers. Specifically, the Union objects to the minority job referral levels that the extended decree requires. Because we do not believe that the district court abused its discretion in extending the decree, including its referral requirements, for two additional years, we affirm.


The elaborate factual foundation for holding the Union liable in this case is recited at length in previous opinions that have emerged from this fourteen-year-old litigation. The Union here challenges only the extended injunction imposed after the district court determined that the initial decree's requirements had not been met. Because the factual background is set forth extensively in prior opinions, we can treat the long history of this case briefly. The most relevant facts for this appeal are the lower court's findings of continuing discrimination and the provisions of the extended decree.

The district court in 1978 found Local 542 liable for intentional, classwide discrimination against minority workers in violation of both Title VII and 42 U.S.C. ยง 1981. Commonwealth of Pennsylvania v. Local Union 542, Int'l Union of Operating Engineers, 469 F. Supp. 329 (E.D. Pa. 1978), aff'd, 648 F.2d 922 (3d Cir. 1981) (en banc). The court found discrimination by the Union in entry into the Union as well as in job referrals from the Union's exclusive hiring hall. Id. The court then entered an injunctive decree, effective November 7, 1979, to remedy the Union's unlawful conduct. Commonwealth of Pennsylvania v. Local Union 542, Int'l Union of Operating Engineers, 502 F. Supp. 7 (E.D. Pa. 1979) (the injunction), aff'd, 648 F.2d 922 ; Commonwealth of Pennsylvania v. Local Union 542, Int'l Union of Operating Engineers, 488 F. Supp. 988 (E.D. Pa. 1980) (opinion in support of the injunction), aff'd, 648 F.2d 922 . Contractors that relied on Local 542's hiring hall were initially found vicariously liable by the district court, but the Supreme Court reversed this holding, General Building Contractors v. Pennsylvania, 458 U.S. 375, 73 L. Ed. 2d 835, 102 S. Ct. 3141 (1982), thus invalidating the part of the injunctive decree that applied to the class of contractors. After this decision the obligations of the Union remained unchanged, except for the decree modifications discussed below.

The injunctive decree's ultimate objective was to achieve, at the end of its life, a level of hours worked by minority Union members commensurate with the percentage of minority persons in the local workforce population. The decree established a different hours goal for each of five districts where the Union operated. The hours goals increased over the five-year period of the initial decree. To assure that the hours goals would be met, the district court imposed subsidiary obligations on the Union. One of the subsidiary obligations, the referral level (specified for each district), established the rate at which minority members were to be referred to jobs from the Union hiring hall. "Referrals" include dispatches from the hiring hall's out-of-work lists and recalls of preferred employees by employers.

The Union's collective bargaining agreements give employers the right to recall a preferred employee during a 90-day period after the employee is laid off by the employer. Thus during the recall period the employer can hire a Union member who is out of work but has worked previously for the employer, giving the employer some control over who is sent from the hiring hall. If the employer does not recall a particular worker, the Union dispatches a member from its out-of-work list.

At the outset, the referral levels of the injunction (i.e., the ratio of minority referrals to total referrals) were set at the same percentage as the yearly hours goals for each district (i.e., the ratio of minority hours worked to total hours worked), with a provision in the injunction that referral levels could later be increased if necessary to achieve the appropriate level of minority hours worked. To reach a desired level of minority work hours, referral levels must be set higher if the number of hours worked per referral is on the average higher for white workers. In this case, white Union members have consistently been referred to longer jobs. When the district court found that the initial referral levels resulted in a shortfall in minority hours worked, the court altered the referral obligations. Thus in 1983, the court set aside 22% of the referrals in District 1 for minority workers during the last two years of the initial decree, instead of 18%, the ultimate hours-worked goal for that district. In 1984, the court raised the referral level in District 1 to 40% for the remainder of the initial decree's life. Of the injunction's five districts, District 1 is the district with the greatest percentage of minorities, 18%, in its workforce population.

As the years of the initial decree passed, the Union met neither the referral nor the hours-worked specifications of the decree. The Union also did not comply with integrated membership and validation requirements. The Master, appointed by the district court to oversee implementation of the decree, conducted evidentiary hearings in early 1985 and issued a detailed report that recommended inter alia extending the time period of the decree. The Master's Report states,

The purpose of the Judgment and Decree was to assure the plaintiff class of adequate representation within the construction industry and more particularly in the endeavors of Operating Engineers . . . This purpose has not been met. The Court found that the plaintiff class was entitled to this injunctive relief, and it is the finding of the Master after these years of experience, that the plaintiffs are still entitled to that relief and that the percentages mandated by the Court are reasonable goals.

App. at 31. On July 30, 1985, the district court heard argument on whether to accept the Master's recommendations. At the conclusion of this argument, the court issued an order dated August 1, 1985, extending the injunctive decree for two years, to August 31, 1987, subject to modifications to be made by the court. An order dated October 9, 1985, sets out the district court's findings and its modifications of the injunction. The Union appeals from the August 1 and October 9, 1985, orders.

The district court found "a serious shortfall" in the amount of work done by minorities during the last two years of the initial decree, the time period during which minorities were to achieve work levels commensurate with the number of minorities in the local workforce population. App. at 671. The court calculated that from September, 1983, to May, 1985, minority workers in District 1 and District 5 lost $4,101,727.00 in wages because of discrimination in the allocation of the Union's work. App. at 672. Furthermore, the court found that since it had ordered 40% minority referrals for District 1, the referral level "actually decreased to 26.5 percent in year 5 from 27.47 percent in year 4." App. at 673 (emphasis in original). The court concluded that the Union "has continued to use the hiring hall as a tool of discrimination." App. at 676. It also found that "Local 542, in blatant and confrontational contempt of the court mandates, has failed to do any of the validation work required of it." App. at 677 (emphasis in original). Finally, the court held the Union "in contempt for failing to satisfy court mandates respecting work levels for minorities, as well as its failure to do the validation work." App. at 677. Judge Bechtle reasoned,

The degree of improvement is patently and substantially out of proportion to the levels of compliance that could have been achieved with the resources and experience, and time allowed by the court to perform. The Union's efforts have been mediocre, lackluster and, in the Court's view, calculated to show the minimum of change at the least cost to the Union's continuous program of wearisome and intentional racial discrimination.

App. at 677-78 (emphasis in original).

The extended decree has as its ultimate goal, as did the initial decree, minority work hours that reflect the number of local minority workers. To assist the Union in complying with the decree and ending discrimination, the extended decree requires the appointment of a Hiring Hall Monitor. It also orders Felix Manual Lopez, Ph.D., to formulate a validation plan for non-discriminatory entry and promotion standards, at the Union's expense.

In addition, the extended decree maintains for two years the referral requirements established in 1984 -- 40% minority referrals in District 1, for example, and 17% in District 5. Because Judge Bechtle found "that the employer recall provision in the collective bargaining agreement has had, and will continue to have, a material adverse impact on the Union's ability to meet the goals of the Decree," however, he ordered that the recall provision be altered to restrict recalls to within 30 days from previous employment with a particular employer. As noted earlier, the collective bargaining agreements as signed by the contractors and the Union give the employers the recall privilege for 90 days. In modifying the initial decree Judge Bechtle further provided,

The Hiring Hall Monitor will have the authority to approve of or disapprove of all referrals, including hiring hall dispatches and employer recalls. The Hiring Hall Monitor's authority to approve a recall request by an employer which extends beyond the thirty (30) day recall period set by this Decree, shall be limited to "truly extraordinary circumstances."

App. at 681.

The Union in these appeals challenges the extended referral requirements, arguing that the District 1 hiring hall must under the extended decree dispatch minority workers at a rate of 70%, that the referral requirements unjustifiably hurt white workers who may not have benefited unfairly from discrimination in the past, and that the employers, not the Union, are responsible for the minority work shortfall. The Union emphasizes the Master's finding with respect to the last years of the initial decree:

There were, in fact, enough minority operators available for work so that the 40 per cent referral could be met. In order to achieve that, in excess of 70 per cent of all dispatches would have to be minority operators . . .

Certainly, the fat that it would require in excess of 70 per cent of all dispatches from the hiring hall to be given to minorities and that each one of those dispatches would have required a job of some 199 hours in length, is evidence of the difficulty the Union experiences in trying to comply. The plaintiffs point out, however, that such an effort on behalf of the Union was not even tried. There was at no time dispatches of minorities approaching 70 per cent even though the testimony indicates there were minorities available for work, many on the out-of-work list, that could have been dispatched in order to meet the quotas. It is also obvious to all parties involved and, essentially agreed to, that had the contractors been kept in the case, sharing the responsibility with the Union for meeting the hours and wages goal, that the effort would have been less onerous.

App. at 18, 26 (emphasis in original). The high dispatch level required to meet the decree's referral goals resulted from the employers' practice of more frequently recalling white workers. Because the practice of favoring whites for recalls continues, argues the Union, the extended decree imposes an unfair burden on Local 542 and on its white workers who are not recalled regularly. The Union presents itself as powerless to control the employers' right to recall:

The recall right is a contractual prerogative that is jealously guarded by the employers, and plaintiffs offer no evidence to suggest that the Union has even been deemed to have the right to reject a recall that is requested within the period specified by the contract (originally 90 days, and now 30 days). Nor does anything in the Decree purport to authorize the Union to disregard the employers' contractual right to recall employees.

Appellant's Reply Brief at 13-14 (footnote omitted). Local 542 asks this court to vacate the extended decree's referral requirements and to instruct the district court to set such requirements no higher than the percentage of minority members in the Union membership of each district.


Local 542 does not challenge the district court's power to modify and extend its injunction. See United States v. United Shoe Machinery Corp., 391 U.S. 244, 252, 20 L. Ed. 2d 562, 88 S. Ct. 1496 (1968) (district court should modify decree if required result not achieved). Nor does the Union dispute the proposition that the Supreme Court has approved the use of affirmative, race-conscious remedies for persistent employment discrimination under some circumstances. See Local 28, Sheet Metal Workers v. EEOC 478 U.S. 421, 106 S. Ct. 3019, 92 L. Ed. 2d 344 (1986) (holding that race-conscious goals are among tools available to judges devising remedies for Title VII violations, and citing Pennsylvania v. International Union of Op. Engineers, 770 F.2d 1068 (CA3 1985) (this case), as example). Finally, the Union does not challenge the district court's findings of fact as clearly erroneous. The Union does assert, however, that Judge Bechtle abused his discretion when he extended the race-conscious referral goals for two years, based on the injunction's failure so far to achieve its goal of equal employment opportunity.

We review the district court orders for abuse of discretion. Franks v. Bowman Transportation Co., 424 U.S. 747, 770, 47 L. Ed. 2d 444, 96 S. Ct. 1251 (1976) (fashioning employment discrimination remedy invokes equitable discretion of district court). Under the abuse of discretion standard, we may reverse the lower court only if the extended decree is arbitrary, capricious, or irrational, or it employs improper standards, criteria, or procedures. See Hoots v. Commonwealth of Pennsylvania, 703 F.2d 722, 725 (3d Cir. 1983). As the plurality opinion in Local 28, Sheet Metal Workers emphasizes, the district court's discretion "should be guided by sound legal principles." 106 S. Ct. at 3050.

Justice Brennan's opinion and Justice Powell's opinion in Local 28, Sheet Metal Workers, together expressing the views of five members of the Court, focus on several factors to be considered in determining the propriety of race-conscious, prospective relief for Title VII violations. The affirmative race-conscious remedy in that case fit within Title VII's authorization because it (1) addressed persistent, egregious, or pervasive discrimination, (2) was flexible in application, (3) constituted a temporary measure, and (4) failed to trammel unnecessarily the interest of white workers. 106 S. Ct. at 3050-52 (Brennan, J., joined by Marshall, J., Blackmun, J., and Stevens, J.); see also 106 S. Ct. at 3054 (Powell, J., concurring in the judgment) ("in cases involving particularly egregious conduct a District Court may fairly conclude that [a negative] injunction alone is insufficient to remedy a proven violation of Title VII. This is such a case."). In addition, the plurality found that the remedy satisfied "even the most rigorous [equal protection] test - it is narrowly tailored to further the Government's compelling interest in remedying past discrimination." 106 S. Ct. at 3053 (Brennan, J., joined by Marshall, J., Blackmun, J., and Stevens, J.). The plurality explicitly declined to hold, however, that this most stringent test was in fact the proper test to be applied in analyzing the constitutionality of race-conscious remedial measures. 106 S. Ct. at 3052-53. In his determination that the remedy in Local 28, Sheet Metal Workers was narrowly tailored, Justice Powell relied on the lack of any other effective remedy, the temporary nature of the remedy, the direct relation between the goal and the percentage of minorities in the relevant workforce, the flexible application of the remedy, and its failure to disadvantage white workers. 106 S. Ct. at 3055-57.

We examine the remedy in this case to see that it meets Justice Brennan's four criteria for an appropriate remedy under Title VII and, as did the plurality, we assume that the Constitution requires a narrowly tailored remedy. Although the referral levels here seem at first blush to be a more drastic remedy than the 29% membership goal in Local 28, Sheet Metal Workers, careful examination of the circumstances shows that this remedy is not at variance with the analysis used by the Supreme Court to uphold the membership goal. In addition, the Union, focusing on injury to white workers and lack of fit between remedy and problem, has raised no consideration unanticipated by the Court in Local 28, Sheet Metal Workers.

Each factor that led to the affirmance in Local 28, Sheet Metal Workers is also present in the case before us. First, Judge Bechtle's memorandum in support of his orders makes clear that extending the decree addresses persistent discrimination. He found that the hiring hall still serves as a "tool of discrimination." App. at 676. The referral requirements have been extended by Judge Bechtle in an effort to end at last the Union's proven discriminatory ways. Therefore, they are not merely racial balancing measures, measures that the Court in Local 28, Sheet Metal Workers indicated would be inappropriate under Title VII. 106 S. Ct. at 3038 (Brennan, J., joined by Marshall, J., Blackmun, J., and Stevens, J.) (citing legislative history).

Second, Judge Bechtle treats the referral requirements as flexible goals rather than as strict quotas that can, in and of themselves, result in Union contempt citations. In its October order the district court held the Union in contempt for failure to achieve work levels that, given the actual circumstances, could have been achieved. Neither the failure to meet the minority hours goals nor the failure to meet the subsidiary referral goals mechanically triggered the contempt ruling. Rather, the court sanctioned the Union for efforts "calculated to show the minimum of change at the least cost to the Union's continuous program of wearisome and intentional racial discrimination." App. at 677-78. Furthermore, the court has been flexible in setting the Union's referral requirements and in aiding compliance with them. Because the court found that the recall privilege frustrated the Union's performance under the decree, it restricted this privilege in the course of extending the decree. The court also stated that it would reevaluate the recall privilege's impact after the 30-day time limit went into effect, and that it would make further adjustments if necessary. App. at 675. Referral levels have been repeatedly ...

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