United States v. Lee Way Motor Freight, Inc.
625 F.2d 918, 20 Fair Empl. Prac. Cas. (BNA) 1345, 1979 U.S. App. LEXIS 11699 (1979)
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Rule of Law:
A facially neutral employment policy, such as a rule prohibiting transfers between job departments, constitutes an unlawful employment practice under Title VII of the Civil Rights Act of 1964 if it perpetuates the effects of an employer's past, pre-Act discrimination and is not justified by business necessity.
Facts:
- Prior to the Civil Rights Act of 1964, Lee Way Motor Freight, Inc. maintained a practice of hiring black employees almost exclusively for lower-paying 'city driver' and menial positions, while reserving the more desirable and higher-paying 'line' or 'over-the-road' driver jobs for white employees.
- Lee Way maintained a strict 'no-transfer' policy that prohibited employees in one department, such as city driving, from transferring to another department, such as line driving.
- As a result of these two policies, black employees hired into inferior positions were effectively 'locked in' and prevented from obtaining the better jobs historically reserved for whites.
- After the Civil Rights Act became effective in 1965, statistical evidence showed Lee Way continued its discriminatory hiring patterns, with a gross underrepresentation of black employees in line driver, mechanic, and clerical positions across its system.
- The company applied its minimum employment standards, such as height requirements and road tests, more strictly to black applicants than to white applicants, many of whom were hired despite not meeting all stated qualifications.
- Numerous qualified black individuals who applied for line driver and other traditionally white jobs were rejected, often being falsely told that no vacancies existed while white applicants were being interviewed and hired for those same positions.
Procedural Posture:
- Following a prior, separate suit by private individuals (Jones v. Lee Way), the United States filed this action against Lee Way Motor Freight, Inc. in U.S. District Court, alleging a system-wide 'pattern and practice' of racial discrimination.
- The Equal Employment Opportunity Commission (EEOC) was later added as a co-plaintiff.
- The district court bifurcated the trial and, after the first phase on liability, entered findings that Lee Way had engaged in a system-wide pattern and practice of discrimination against blacks.
- The court then appointed a Special Master to hold hearings and issue a report recommending specific relief for individual victims of discrimination.
- The Special Master filed a report, which was then remanded by the district court for reconsideration in light of intervening Supreme Court decisions.
- After the Master filed a revised report, the district court heard objections and entered a final judgment awarding back pay and other relief to dozens of individual claimants.
- Lee Way Motor Freight and the defendant Teamsters Union appealed the district court's final judgment to the U.S. Court of Appeals for the Tenth Circuit. The government filed a cross-appeal on several remedial issues it lost at the trial level.
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Issue:
Does a company's facially neutral 'no-transfer' policy, which prevents employees from moving between job categories, constitute an unlawful employment practice under Title VII when it perpetuates the effects of the company's past, pre-Act racial discrimination in hiring and job assignments?
Opinions:
Majority - Judge William E. Doyle
Yes, a company's facially neutral 'no-transfer' policy constitutes an unlawful employment practice under Title VII when it perpetuates the effects of past discrimination. The court reaffirms its prior holding in Jones v. Lee Way that the policy is illegal because it freezes the status quo of the company's prior discriminatory hiring practices. While the policy affects both white and black city drivers, it is discriminatory as applied to black drivers because they were involuntarily segregated into those inferior positions due to their race, whereas white drivers were there by choice. The Supreme Court's decision in Teamsters v. United States, which protects bona fide seniority systems, does not apply here because a no-transfer rule is not a seniority system. The government successfully established a prima facie case of a 'pattern and practice' of discrimination through overwhelming statistical evidence and anecdotal testimony, which shifted the burden to Lee Way to prove its individual employment decisions were made for lawful reasons, a burden it failed to meet.
Concurring-in-part-and-dissenting-in-part - Judge Barrett
This opinion concurs with the majority's finding that Lee Way engaged in unlawful discrimination and that the back pay awards to individual victims are supported by the record. However, it dissents on several points. First, it objects to the majority's characterization of Lee Way as continuously and maliciously discriminatory, pointing to the trial court's finding that the pattern and practice ended when the suit was filed. Second, it argues that back pay awards should have been reduced by the amount of road expenses (meals, lodging) that drivers would have incurred, to prevent a windfall. Finally, it dissents from the majority's decision to remand the case for further consideration of multiple ancillary issues, arguing that the appellate court should confine its review to the central merits and defer to the lower court's resolution of these other matters after such protracted litigation.
Analysis:
This decision is a significant reaffirmation of the 'perpetuation of past discrimination' theory under Title VII, solidifying that facially neutral policies are illegal if they lock in the effects of prior discriminatory acts. It demonstrates the crucial role of statistical evidence in establishing a 'pattern and practice' of discrimination, which in turn shifts the evidentiary burden to the employer to justify its actions on a case-by-case basis. The case also clarifies that the protection afforded to 'bona fide seniority systems' under Teamsters is a narrow exception and does not shield other neutral policies, like a no-transfer rule, that have a discriminatory effect. For students, it illustrates the broad, equitable power of federal courts to craft detailed 'make-whole' remedies, including extensive back pay, to eliminate all vestiges of systemic discrimination.
