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July 18, 1983

ELBERT G. GREEN, Individually and ROBERT DANLEY, Individually and as the Representative of Persons Similarly Situated

The opinion of the court was delivered by: NEWCOMER


 Newcomer, J.

 This employment discrimination class action was tried to the Court in December, 1982. The following shall constitute my Findings of Fact and Conclusions of Law.

 Findings of Fact

 1. This is a Title VII and § 1981 class action brought on behalf of all black persons who unsuccessfully sought employment at the Fairless Hills, Pennsylvania plant of United States Steel Corporation ("USS") between July 11, 1972 and the present. The class described above was certified by Order dated August 26, 1980.

 2. The defendant, USS, is a corporation doing business in the Commonwealth of Pennsylvania, in many other states, and in foreign countries. Throughout the class period, USS owned and operated steel manufacturing and other facilities located in Fairless Hills, Pennsylvania and employed from 7,000 to 10,000 persons there. USS is an "employer" within the meaning of Title VII. (Unless otherwise specified, references hereinafter to USS shall be understood to refer specifically to the Fairless Hills facilities of USS.)

 3. Named plaintiff Elbert Green is a black male who unsuccessfully sought employment as a laborer in USS's Production & Maintenance department ("P & M") by application dated April 11, 1973. On May 7, 1973, Green filed with the Equal Employment Opportunity Commission ("EEOC") a timely charge of race discrimination in employment against USS, and subsequently he received a notice of his right to sue in federal court.

 4. Green was an unnamed member of the plaintiff class of unsuccessful black job applicants at USS in Dickerson v. United States Steel Corp., C.A. No. 73-1292, a Title VII and § 1981 race discrimination suit.

 5. On November 29, 1976, following the severance of the applicant class from the Dickerson lawsuit, Green filed this action on his own behalf and on behalf of the applicant class.

 6. Named plaintiff Robert Danley is a black male who unsuccessfully sought a P & M job by application dated June 4, 1976.

 7. Danley was also initially an unnamed class member in Dickerson. Following his receipt of notice of the severance of the applicant class from that action, Danley filed with the EEOC a timely charge of race discrimination in employment against USS and received a notice of his right to sue in federal court.

 8. When Green filed this action on behalf of the applicant class, Danley became an unnamed class member. On January 10, 1979, Danley filed a motion to intervene as a named plaintiff. Prior to a ruling by the Court, the parties stipulated that Danley could serve as Green's co-representative of the applicant class.

 9. By a Memorandum and Order dated August 29, 1979, I entered partial summary judgment in favor of USS on Green's individual claim. Discovery had established that Green had falsified his employment history on his job application. I held that this evidence satisfied USS's burden of articulating a legitimate, nondiscriminatory reason for its failure to hire Green. I reserved for trial the questions whether plaintiff was qualified for the job for which he applied; whether USS was hiring anyone for those jobs at the time he applied; whether it was hiring for those jobs immediately after his rejection; and whether, if plaintiff could establish a prima facie case, plaintiff could establish that USS's articulated reason for rejecting him was a standard applied equally to all races or was, rather, a mere pretext for racial discrimination.

 10. In my August 26, 1980 class certification order, I ruled that Green could not serve as a class representative because his claim, presenting the narrow and atypical issue whether USS had uniformly and nondiscriminatorily rejected applicants who falsified their job applications, was not appropriate for class treatment. Danley thus became the sole class representative, and Green remained a named plaintiff on his individual claim only.

  11. At trial, plaintiffs presented no evidence relevant to Green's individual claim.

 12. On the first day of trial, plaintiffs narrowed their case to include only those blacks who unsuccessfully sought employment in P & M jobs during the class period. Plaintiffs also indicated that they were not pressing their case as to the years 1975, 1980, and 1981, when very little hiring was done for P & M jobs at Fairless Hills, or as to the years 1976 and 1977, when plaintiff's evidence showed that a moderate amount of hiring was done but that blacks were hired at levels close to or exceeding their representation in the applicant pool. Plaintiff's case therefore focussed on the question whether USS unlawfully discriminated against black P & M applicants at Fairless Hills in the years 1972-74, 1978, and 1979.

 13. Plaintiff Danley did not testify at trial, and plaintiffs presented no proof directly relating to him as an individual, other than his application for employment and a stipulation relating to his satisfaction of the jurisdictional prerequisites. His application date of June, 1976 places him among those class members who applied to USS at a time when plaintiff's statistical evidence shows that USS was hiring blacks at rates equalling or exceeding their representation in the applicant pool.

 14. Plaintiffs presented the testimony of two unnamed class members, Christine Davidson and Frederick Wright. Ms. Davidson, a black woman, submitted an application for a P & M job on August 24, 1976. She had a GED degree, vocational training, and a record of steady employment. Mr. Wright, a black man, submitted an application for a P & M job on June 8, 1977. He had several years of college education, prior work experience as a laborer, and a record of steady employment before, during, and after college. Although both Ms. Davidson and Mr. Wright possessed the qualifications necessary to be considered for employment in an entry-level P & M job, neither was hired by USS. Thereafter, USS continued to hire persons for entry-level P & M jobs.

 15. The P & M job category is the largest at USS. Approximately 95% of new hires (that is, people hired from outside the company rather than promoted or transferred from within) in P & M during the class period were hired for the position of laborer, an entry-level unskilled job. About 4% of new hires were for skilled jobs in the trade and craft category, although USS usually filled these positions through its internal apprenticeship programs. P & M jobs other than those in the laborer or trade and craft categories were customarily filled from within the plant, by a posting and bidding system, although in rare instances individuals were hired from outside to fill such jobs.

 16. Approximately 15% of new P & M hires during the class period were hired for summer jobs. Virtually all of these jobs were in the laborer category.

 17. USS's minimum hiring criteria for all P & M positions remained constant throughout the class period. Anyone hired had to be at least 18 years old, pass a physical examination, and be able to read safety signs (a requirement so minimal that defendant's witnesses could recall no one ever having failed to meet it). Additional minimum requirements applied to those seeking skilled trade and craft jobs. However, as long as an applicant met the three minimum requirements described above, there was no single quality or trait which would make an applicant ineligible per se for a laborer job. Cf. P-55 *fn1" (USS policy restricting employment of relatives within a single supervisory unit); P-56 (USS policy stating that USS would "usually" not consider applicants who had been convicted of arson, malicious destruction of property, or acts of sexual perversion); P-57 (USS policy stating that alien applicants should be required to produce appropriate documentation).

  18. In its newspaper advertisements for laborers, USS stated that there was "no experience necessary," and that USS required only "common sense and a desire to work" (P-114). In fact, many of those hired into P & M laborer jobs during the class period had no prior work experience. USS expected new hires for P & M jobs other than those in the trade and craft category to learn any skills necessary to perform their jobs, or other jobs they might be promoted into, through on-the-job training or classroom instruction provided by USS.

 19. Throughout the class period, USS's official policies relative to hiring new employees were set forth in the following documents: Exhibits P-43, P-53, P-54, P-55, P-56, P-57, P-58, P-59, and P-64. Exhibit P-43, entitled Procedure for Uniform Employment Practices, set forth USS's official policy of nondiscriminatory hiring of the best qualified candidates.

 20. USS did not conduct any training sessions to indoctrinate the many individuals responsible for implementing its hiring policies as to their meaning and application.

 21. During the class period, USS received written employment applications on a variety of different forms, all of which requested the applicant to list basic background information concerning schooling, prior employment, military record, age, physical condition, and whether the applicant had any relatives in USS's current or past work force. Such applications were received by mail or hand-delivery, or might be filled out in USS's personnel office by individuals who stopped by to inquire about employment. USS accepted new applications from persons who had previously applied but had not been hired.

 22. Upon receiving a job application, USS's practice was to record it in a business record called the Job Applicant Log ("JAL"). The following information was entered in the JAL from each application: date of application; name of applicant; EEOC code (indicating race and sex); job applied for; and comments.

 23. Separate JALs were prepared for summer applicants for 1972, 1973, and 1974, the only years during the class period in which USS made summer hires.

 24. Larry Edwards, who was USS's Supervisor of Employment until 1975 and General Supervisor of Personnel thereafter, and Mabel Williams, who became Supervisor of Employment when Edwards was promoted in 1975, both instructed personnel office employees repeatedly to maintain the JALs as promptly and accurately as possible.

 25. On occasion, a backlog of one or more weeks developed in the entry of application information into the JAL. All such information was, however, ultimately entered into the JALs. Any errors in, or omissions from, the JALs were due merely to normal clerical mistakes. From their personal experience with the JALs, Mr. Edwards and Mrs. Williams believed that no errors or omissions in the JALs occurred in a racially disproportionate manner. That is, they understood that blacks were included in the JALs with the same frequency as non-blacks.

 26. In interrogatory answers, USS stated under oath that information concerning applicant flow should be obtained from the JALs (USS's Response to Interrogatory 4 of Plaintiffs' Third Set of Interrogatories). At trial, Mr. Edwards testified that all existing information on applicant flow at USS during the class period is in the JALs. During the class period USS used applicant flow data from the JALs to defend against 43 EEOC charges of race discrimination in hiring. USS also used applicant flow data derived from its JALs to prepare its Affirmative Action Quarterly Reports (AAQRS), which it filed with the United States government pursuant to certain consent decrees entered into in the course of prior litigation.

 27. Mr. Edwards and Mrs. Williams reviewed newly submitted applications from time to time and would occasionally single one out for special consideration. One reason why an application might receive special consideration would be that the applicant had a relative employed at USS. Such applications were moved ahead of other applications and placed immediately in the "ready" file -- that is, the file of processed applications which had been cleared as worthy of consideration and which were ripe for the scheduling of an interview.

 28. The "comments" section of the JALs contain occasional entries indicating that Edwards had given the applicant special consideration.

 29. Those applications which were not placed immediately into the "ready" file were placed into general application files which were segregated according to the EEOC category and job preference of the applicant. An inexact system of prioritizing was employed with respect to applicants who fell into more than one category. For instance, a black male veteran's application might be filed in the "black males" category or the "veterans" category or might be duplicated and filed in both. USS also often duplicated and cross-filed applications of individuals who applied for more than one type of job, for example, Production & Maintenance or Clerical & Technical.

 30. Prior to about 1977, USS followed a general policy of considering for employment persons whose applications had been submitted to USS within the previous twelve months. Therefore, the general application files were reviewed periodically to remove those applications which were more than a year old. In about 1977, USS adopted a policy in which applications were supposed to be considered for employment for only 120 days, unless renewed by the applicant by a telephone call or visit to the plant. That 120-day policy was not consistently followed, however. Even after 1977, applications were considered for hiring purposes beyond the 120-day period, and they were kept in the general application file for one year.

 31. USS personnel clerks and interviewers, with the supervision of Mr. Edwards and Mrs. Williams, were responsible for pulling applications from the general applications files and placing them in the "ready" file. The clerks were instructed to maintain a "good mix" of applications in the "ready" file -- that is, the "ready" file was to contain representative applications from each of the EEOC categories so that those called in for interviews would be a racially balanced group. Mr. Edwards testified that he instructed the personnel department employees to see that 20-30% of those interviewed were minorities.

 32. USS hired applicants in response to personnel requisitions submitted to the personnel department by the various operating departments. Upon receiving a personnel requisition, USS's personnel clerks or interviewers would select the approximate number of applications from the "ready" file which experience told them was necessary to yield the desired number of hires. These applicants were then contacted and invited to schedule interviews.

 33. USS personnel department employees compiled a business record called the Daily Call-In List reflecting the names of applicants scheduled for interviews and the dates of their interviews. After 1974, the Daily Call-In List included a notation of the race of each applicant interviewed.

 34. Some applicants scheduled for interviews did not report for the interview and were eliminated from consideration. A record was kept reflecting which applicants did not report for interviews.

 35. When an applicant showed up for a scheduled interview, his or her preliminary interview was conducted by a USS personnel department interviewer. The applicant was then interviewed by the foreman or general foreman of the operating department which had requisitioned employees. The foreman or general foreman had the authority to reject the applicant, or to accept him or her, subject to the applicant's successfully completing a physical examination. When a foreman or general foreman turned an applicant down, Mr. Edwards or Mrs. Williams would sometimes review the reasons for the rejection and possibly refer the same applicant to another operating department which needed new employees for another interview.

  36. Over the class period, between 50 and 100 USS foremen or general foremen and some 12-15 USS personnel department interviewers interviewed applicants for work at USS. During that period, for example, one foreman conducted some 600 interviews.

 37. Although the USS Procedure for Uniform Employment Practices required all interviewers to be trained, USS did not train its interviewers other than through on-the-job exposure to other interviewers' techniques. Nor did USS have any minimum education or work experience requirements for persons hired as interviewers.

 38. Despite the requirements in the Procedure for Uniform Employment Practices that "an investigation is to be made of each individual being considered for employment" (P-43, para. I), USS made no such investigations.

 39. When making hiring decisions, USS's evidence was that its interviewers evaluated applicants using the following hiring criteria: education; work experience; attitude; initiative; personality; ability to take directions; alertness; intelligence; physical fitness (that is, physical restrictions); ability to communicate; military experience or training; vocational training; ability to meet work schedules; prior criminal record; familiarity with industrial or factory work; interest; prior employment history at Fairless Works; personal references; citizenship or alien status; having a relative in the USS work force; and age. Most of these criteria are wholly subjective. As to those criteria which can be objectively measured, such as education and work experience, USS employed no uniform system in assessing one applicant's qualifications vis-a-vis another's. Nor were the various interviewers and foremen trained in any way as to what the different criteria meant or how to implement them uniformly, although many of them are vague and all are subject to differing interpretations.

 40. USS took no steps to validate its hiring criteria or to ascertain whether they were job-related.

 41. USS's own Procedure for Uniform Employment Practices cautioned against testing applicants for "mental alertness and general ability" unless those factors were demonstrated to be work-related. (P-43, para. H.3.)

 42. Under consent decrees entered into in the course of prior litigation, USS was bound not to use employee selection criteria "unless such procedures have been validated in accordance with the Equal Employment Opportunity Commission's 'Guidelines on Employee Selection Procedures' (29 C.F.R. § 1607)." (P-112, pp. 431:139 and 431:151.) USS made no attempt to validate its employee selection criteria in accordance with EEOC regulations.

 43. USS's Procedure for Uniform Employment Practices requires written documentation of the reasons why any applicant is rejected. (P-43, paras. D.8, G.3, J.3.) The policy requires such documentation "to substantiate conformity with the code of nondiscriminatory treatment . . . of applicants," (P-43, paras. D.3), to provide "a later justification of selection should it be questioned," (P-43, para. G.4), and to serve as "check points to insure that the processing described in (P-43) is completed for all new employees" (P-43, para. J.3.a). Despite the Procedure's requirement for documenting the reasons an applicant was not hired, USS only unevenly and imperfectly recorded those reasons. Nor did USS's personnel department regularly review the reasons for rejection that were occasionally recorded. Finally, most of those documents which did contain interview comments were destroyed by USS.

 44. Contrary to the requirements of its own personnel policies, USS maintained no system to determine whether its subjective hiring criteria were being fairly and nondiscriminatorily applied to all applicants.

 45. Applicants who successfully completed the interview procedure were extended job offers conditional upon passing a physical examination.

 46. Besides those applicants who were scheduled but did not report for interviews, some applicants voluntarily withdrew at some stage of the interview/physical-examination process. Others would decline job offers when they were made, or would accept offers but fail to report for work when scheduled.

 47. When an individual was hired and reported for work, he or she would be recorded in a business record called the Daily Employment Report (DER). Those who failed to report as scheduled would be logged in with notation "DNS" (for "did not start"). The DER recorded the following information about those hired: pay number; name; starting date; employee status; department; race code; remarks; supervisor; and social security number.

 48. USS prepared AAQRs for P & M applicants and hires for the periods January 1, 1972 -- December 31, 1973 and July 1, 1974 -- April 30, 1982. The JALs and DERs were key data sources for these reports, which USS filed with the United States Government.

 49. USS destroyed thousands of job applications submitted during the portion of the class period prior to 1975, although EEOC regulations require the maintenance, during the pendency of a charge of discrimination, of application forms completed by the unsuccessful applicant and by all other candidates for the same position for which the aggrieved person applied and was rejected. Prior to some point early in 1975, applications which did not result in employment were not retained. USS retained most applications filed thereafter, although some were lost due to clerical error.

 50. USS interviewers sometimes used interview sheets to take notes of information gathered during applicant interviews. USS preserved certain interview sheets for successful applicants during the class period, but destroyed all interview sheets for unsuccessful applicants.

 51. During the class period, USS conceived of its obligation not to discriminate against racial minorities in hiring as an obligation to hire minorities in proportion to their representation in the work force in Bucks (Pennsylvania), Burlington (New Jersey) and Mercer (New Jersey) Counties. USS's corporate headquarters approved the practice of setting minority hiring goals by reference to the percentage of minorities believed to be in the geographically defined labor market. Over the class period, USS's goals for minority hiring, derived from labor market data relating to the three-county area, varied between 9.5% and 11.5%.

 52. USS's personnel department employees reviewed the DER periodically to see what percentage of minorities was being hired. When USS wanted to change the percentage of minorities hired, it would simply change the percentage of minorities scheduled for interviews. For example, Mr. Edwards testified that in 1976, when USS was defending against many charges of race discrimination, and when it was under pressure to increase the number of blacks in its apprenticeship programs in order to meet its obligations under the consent decrees referred to earlier, USS consciously increased the percentage of minorities scheduled for interviews in order to achieve a higher percentage of black hires. It was necessary to increase the number of black laborers in order to increase black representation in the apprenticeship programs because the latter were stocked from the ranks of laborers and other P & M workers. USS in fact achieved a dramatic increase in its percentage of black hires in 1976, as was shown by the statistical evidence discussed below. Mr. Edwards admitted that the increase in black hires in 1976 was not due to USS's receipt of applications from blacks with better qualifications.

 53. In setting its hiring goals for minorities, USS paid no attention to the percentage of minorities in the applicant pool.

 54. In support of their claim, plaintiffs presented the testimony of a statistical expert, Dr. Samuel Litwin, who analyzed USS's hiring practices. Dr. Litwin's report was plaintiffs' Exhibit 122. Dr. Litwin's studies addressed the question whether the hiring practices and policies of USS during the class period had a statistically significant disparate and unfavorable impact on black applicants.

  55. Dr. Litwin's studies were based on the most accurate USS data available. Dr. Litwin received data derived from USS's JALs and DERs in computer-readable form. He and those working under him then verified the accuracy of the data supplied by USS, line-for-line, against the actual JALs and DERs. Where the JALs and DERs did not provide complete information because records had been destroyed, Dr. Litwin used data derived from USS's Affirmative Action Quarterly Reports ("AAQRs") and a document prepared by USS Employee Relations staff assistant Kevin Goodwin in 1978 ("the Goodwin Report"). Finally, Dr. Litwin obtained random samplings of actual job applications from the years after February, 1975 (prior applications having been destroyed), the Daily Call-In Logs, and the "DNS-DNR" file, which listed those applicants who either did not report for a scheduled job interview or did not start work as scheduled after accepting a job offer. These sources were used to supplement and check the reliability of data obtained from the JALs, DERs, AAQRs, and the Goodwin Report.

 56. Dr. Litwin included in his studies a correction factor to correct for clerical errors in recording the race code of applicants.

 57. Using available USS employment records, plaintiffs established that 49,585 applications for P & M positions were submitted to USS in the period from July 11, 1971 through 1982. Of this total, 12,857 P & M applications, or 25.9%, were submitted by blacks. Information about applications submitted during the years 1973 through 1982 was obtained directly from the JALs prepared by USS. USS destroyed the JAL for 1972. Information about applications submitted during 1972 was therefore obtained from the 1972 AAQRs, which USS prepared from the 1972 JAL and DER for submission to the U.S. Government. Because USS considered applications to be eligible for employment for one year and because the class period for hiring begins on July 11, 1972, the appropriate applicant pool in this case commences with applications filed after July 11, 1971. Information about applications submitted during the last half of 1971 was obtained from the Goodwin Report, a group of documents USS prepared in 1978 from the JALs and other USS records for submission to the EEOC in defense of 43 charges of race discrimination. The Goodwin Report states the number of P & M applications submitted to USS in 1971. 58. The applications data plaintiffs developed from USS business records show, by year, the following number of applications (total and black) submitted for P & M positions: TOTAL BLACK YEAR APPLICATIONS APPLICATIONS %BLACK 1971 (July-Dec.) 1,210 280 23.1% 1972 3,953 801 20.3% 1973 5,059 1,222 24.2% 1974 8,985 1,925 21.4% 1975 1,328 267 20.1% 1976 7,022 2,233 31.8% 1977 5,119 1,389 27.1% 1978 10,191 2,969 29.1% 1979 6,665 1,762 26.4% 1980 23 6 26.1% 1981 26 3 26.1% 1982 4 0 0 All Years 49,585 12,875 25.9%


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