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Sears, Roebuck and Co. v. Eckerd

decided: April 25, 1978.

SEARS, ROEBUCK AND CO., PLAINTIFF-APPELLEE, CHARLES W. DAHM, O.P., INTERVENOR-PLAINTIFF-APPELLANT,
v.
JACK ECKERD, ET AL., DEFENDANTS-APPELLEES



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 76 C 2444 - Frank J. McGarr, Judge.

Cummings and Tone, Circuit Judges, and Campbell, Senior District Judge.*fn*

Author: Cummings

CUMMINGS, Circuit Judge

In July 1976, Sears, Roebuck and Co. filed a verified complaint for declaratory judgment and injunction against the General Services Administration (GSA) and five federal officers.*fn1 Sears alleged that a portion of its business consists of contracts or subcontracts with federal agencies so that it complies with Executive Orders 11246 and 11375*fn2 and the Regulations thereunder*fn3 requiring Government contractors to submit equal employment opportunity reports and other information to the Department of Labor's Office of Federal Contract Compliance (OFCC) and its Compliance Agencies. According to the complaint, the GSA is Sears' Compliance Agency. Sears has been required to submit GSA Standard Form 100-s (EEO-1's) and Affirmative Action Programs (AAP's) to the Government covering Sears' entire corporate domestic operations and each of its individual domestic establishments. Sears had also supplied other documents on a confidential basis to the Government to demonstrate its compliance with the applicable Executive Orders and Regulations.

Sears also alleged that in February 1973, the Secretary of Labor issued regulations providing that EEO-1's and AAP's will be disclosed (with exceptions) to requesting persons. In February and March 1976, the GSA informed Sears that under the Freedom of Information Act (5 U.S.C. § 552), Father Charles W. Dahm of the Dominican Order had requested copies of Sears' 1974 AAP's for its corporate headquarters in the Sears Tower in Chicago, Illinois, and that GSA intended to furnish this information to him. He had also asked for headquarters EEO-1's and supporting documents (App. 28).

According to this reverse Freedom of Information Act complaint, in June and July 1974, the GSA's Chicago Field Contract Compliance Office, pursuant to a complaint of Women Employed, undertook a compliance review of plaintiff's Sears Tower facility, and Sears tendered to the GSA investigator its 1973 and 1974 EEO-1 reports and other employment statistics (presumably already in other Government files) for its national headquarters and was assured by the investigator that the data would remain confidential. Consequently, in late March 1976, Sears filed objections to the proposed disclosure with the GSA, but those objections were overruled by the GSA's Director of Contract Compliance, causing Sears to appeal his decision to the Director of the OFCC. However, on June 24, 1976, the OFCC Director upheld the decision to disclose the data, stating that it would be released on July 8, 1976.

The complaint was filed six days before that deadline and charged that 18 U.S.C. § 1905 prohibits the disclosure of such confidential statistical data and that exemption (b)(3) of the Freedom of Information Act (5 U.S.C. § 552(b)(3), note 5 infra) therefore exempts the data from disclosure.*fn4 Consequently, Sears sought appropriate declaratory and injunctive relief. On July 2, Sears was granted a temporary restraining order which was continued in effect until the hearing on its motion for a preliminary injunction.

After hearing five witnesses on August 6, 1976, the district court rendered oral findings of fact and conclusions of law in favor of Sears. Three weeks thereafter, the court handed down its formal findings of fact and conclusions of law and granted Sears a preliminary injunction. In its findings of fact, the court reiterated the principal contents of Sears' verified complaint and noted that on February 25, 1976, Sears had tendered Father Dahm "cumulative national and Chicago area statistical information concerning the racial and sexual composition of Sears' workingforce" but that Sears had declined to provide him with the requested Sears Tower headquarters data alone. The court also found that Sears classified the Sears Tower headquarters information as confidential.

The district court concluded that if this data were disclosed, Sears would suffer irreparable injury "both economically and in terms of its present and future public relations." The court noted that the defendants and Father Dahm would not be subjected to prejudice by the grant of a preliminary injunction because the data requested was out of date "and the national and Chicago area data voluntarily provided by Sears should be sufficient to assess Sears' equal employment commitment and progress."

Judge McGarr held that 18 U.S.C. § 1905 prohibits the GSA from disclosing such information and that there is a reasonable probability that Sears will eventually prevail on its claim that the information is exempt from disclosure under exemption (b)(3) of the Freedom of Information Act. On December 7, 1976, Father Dahm was given leave to intervene as a plaintiff in this action. Thereafter he moved to dissolve the preliminary injunction, but his motion was denied on February 15, 1977, resulting in his taking this appeal. We vacate the order granting the preliminary injunction.

Sears seeks to justify the district court's order by contending that the (b)(3) exemption and 18 U.S.C. § 1905, taken together, forbid disclosure and provide a basis for an implied cause of action. We disagree with both contentions.

I. Is Disclosure Forbidden by Statute ?

Relying solely on the (b)(3) exemption in this Court,*fn5 Sears argues that the documents requested here are "specifically exempted from disclosure by statute" for purposes of that exemption because they consist of "confidential statistical data" forbidden from disclosure by 18 U.S.C. § 1905, a criminal statute restricting disclosure of confidential information by federal employees.*fn6 Section 1905 provides:

"Whoever, being an officer or employee of the United States or of any department or agency thereof, publishes, divulges, discloses, or makes known in any manner or to any extent not authorized by law any information coming to him in the course of his employment or official duties or by reason of any examination or investigation made by, or return, report or record made to or filed with, such department or agency or officer or employee thereof, which information concerns or relates to the trade secrets, processes, operations, style of work, or apparatus, or to the identity, confidential statistical data, amount or source of any income, profits, losses, or expenditures of any person, firm, partnership, corporation, or association; or permits any income return or copy thereof or any book containing any abstract or particulars thereof to ...


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