APPEAL from the Circuit Court of Du Page County; the Hon. JOHN
TESCHNER, Judge, presiding.
MR. JUSTICE WOODWARD DELIVERED THE OPINION OF THE COURT:
This case involves an appeal from a decision of the Fair Employment Practices Commission (FEPC) which held that Eastman Kodak Company (Kodak) had failed to comply with the FEPC's rules and regulations and therefore was not eligible for government contracts. Kodak appealed under the Administrative Review Act, and the trial court reversed the FEPC's decision. The FEPC has appealed.
Companies doing business with the State of Illinois must comply with certain fair employment requirements as a condition precedent to being awarded public contracts. (Ill. Rev. Stat. 1977, ch. 48, par. 854.) The statute requires that the companies not commit unfair employment practices and that they take affirmative action to insure no unfair employment practice is committed; it also provides that no contract shall be awarded until the FEPC has certified that the employer has not violated its rules. The FEPC is also authorized to issue rules and regulations to enforce and administer the public contract provision. Ill. Rev. Stat. 1977, ch. 48, par. 854A.
Pursuant to its apparent statutory authority, the FEPC issued rules and regulations for the enforcement of the public contracts provision. The rules require the employer to examine various job classifications to determine if the company is underutilizing minorities. (Rules and Regulations, art. IV, § 4.1(b).) Underutilization is to be determined by comparing the percentage of minorities in the employer's work force with the percentage of minorities within a reasonable recruitment area. (Rules and Regulations, art. IV, § 4.2(a).) If the employer is underutilizing minorities, then the employer is required to take appropriate affirmative action to rectify this condition. Rules and Regulations, art. IV, § 4.1(b).
Kodak submitted an employer report for its Oakbrook facility in September 1974 in order to be qualified for government contracts. The report stated that Kodak employed 722 people of whom 91 or 12.6 percent were minorities. The FEPC calculated a minority employment of 11.9 percent, as it classifies only black and Spanish people as minorities. Kodak defined its recruitment area to be all of Du Page County plus that portion of Cook County south of Devon Avenue, west of Harlem Avenue, and north of 95th Street. Kodak's facility is located approximately seven miles from the eastern border of the recruitment area and 17 miles from the area's western border. There are 4.3 percent minorities in this proposed recruitment area.
On October 28, 1975, the FEPC found Kodak to be in noncompliance for failing to submit an acceptable affirmative action program. In a hearing before an administrative law judge, the FEPC introduced evidence which showed the location of the facility within the recruitment area; that 47 percent of Kodak's employees resided outside the recruitment area; that 19 percent of Kodak's employees resided in the city of Chicago (Kodak's witness stated that 23 percent of the employees lived in the city of Chicago); and that about 40 percent of the applicants for employment in the first six months of 1975 resided outside the recruitment area, and 13 percent of the applicants were Chicago residents. The FEPC then presented its conclusion that the Chicago standard metropolitan statistical area (SMSA), consisting of Cook, Lake, McHenry, Kane, Du Page and Will counties, is the appropriate recruitment area for Kodak.
Kodak's evidence showed that it employed 528 people in the Oakbrook facility at the end of 1975, of whom 15 percent were minorities. Only 350 employees were recruited "locally," of whom 8.2 percent were minorities. Kodak presented evidence that its efforts to recruit minorities from Chicago had been unsuccessful in the past; that in 1975, 33 percent of its new employees were minorities; that its turnover rate is less than 3 percent per year; and that only .6 percent of the city of Chicago's workers are employed in Du Page County. On October 6, 1976, the administrative law judge issued her recommended opinion that Kodak's recruitment area was unreasonable and that if Kodak failed to adopt the standards set forth by the FEPC, the order of noncompliance should stand.
A hearing was held before the FEPC and on August 17, 1977, the FEPC issued its order sustaining the administrative judge. It also ruled that it had the statutory authority to promulgate the rules and regulations in issue. Kodak sought administrative review, and on November 21, 1978, the circuit court reversed the FEPC on the ground that it had exceeded its power in establishing a recruitment area broader than the one Kodak established. The court also concluded that Kodak's recruitment area was reasonable. This appeal followed.
The first issue is whether the rules and regulations set forth by the FEPC were within the FEPC's statutory authority. Kodak contends that the FEPC had the authority to issue rules and regulations involving affirmative action, but only in order to prevent individual acts of discrimination. Kodak claims the promulgated rules exceed this authority since they are directed at preventing group discrimination.
The power to make rules and regulations must be granted by statute. (Northern Illinois Automobile Wreckers & Rebuilders Association v. Dixon (1979), 75 Ill.2d 53, 387 N.E.2d 320.) Furthermore, an agency may not expand its statutory authority in exercising its rule making authority. (Northern Illinois Automobile Wreckers & Rebuilders Association v. Dixon.) However, the grant of authority to an agency carries with it the power to do what is reasonably necessary to perform the powers and duties specifically conferred. (Commonwealth Edison Co. v. Pollution Control Board (1974), 25 Ill. App.3d 271, 323 N.E.2d 84, aff'd in part (1976), 62 Ill.2d 494, 343 N.E.2d 459.) In determining the scope of the grant of authority, the purpose of the legislation must be considered. Northern Illinois Automobile Wreckers & Rebuilders Association v. Dixon.
The Fair Employment Practices Act (Ill. Rev. Stat. 1977, ch. 48, par. 851 et seq.) provides in section 4:
"Every contract to which the State * * * is a party shall be conditioned upon the requirement that * * * the contractor * * * shall not commit an unfair employment practice in this State as defined in this Act, and shall take affirmative action to insure that no unfair employment practice is committed." (Emphasis added.) (Ill. Rev. Stat. 1977, ch. 48, par. 854.)
Section 4A of the Act grants the FEPC the authority to promulgate rules and regulations for the enforcement and administration of the public contract provision of the Act. (Ill. Rev. Stat. 1977, ch. 48, par. 854A.) Section 4A also provides:
"No contract shall be awarded by the State to any employer found by the Commission to have violated its rules and regulations until the Commission shall ...