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Wattleton v. International Brotherhood of Boiler Makers

August 16, 1982


Appeal from the United States District Court for the Eastern District of Wisconsin. No. 75 C 746 -- John W. Reynolds, Chief Judge.

Cummings, Chief Judge, Posner, Circuit Judge, and Leighton, District Judge.*fn*

Author: Leighton

LEIGHTON, District Judge.

In this appeal by a local union of blacksmiths, we are asked to resolve two issues. First, whether the district court's findings of fact concerning the seniority system contained in the union's collective bargaining agreements with the Ladish Company of Cudahy, Wisconsin are clearly erroneous. Second, whether the district court erred in concluding that the seniority system in question is not bona fide within the meaning of Section 703(h) of Title VII because it was negotiated and maintained for the purpose, and with the intent and effect, of discriminating against Negroes employed by Ladish.

We hold that the district court's findings are not clearly erroneous; they are supported by substantial evidence in the record. And, in our judgment, the court was correct in concluding that the union's seniority system is not bona fide within the meaning of Section 703(h) of Title VII. Therefore, we affirm the district court. The following is a summary of its findings.


The Ladish Company is a major employer in the Milwaukee, Wisconsin area, the plant here involved being in Cudahy, a Milwaukee suburb. The company produces and finishes metal products; it does significant contractual work for federal agencies and has been in production since 1927. Ladish is a unionized employer; and during the time relevant to this case, it has had collective bargaining agreements with seven unions. However, the only one in this appeal is the appellant, Local #1509 of the International Brotherhood of Boiler Makers, Iron Ship Builders, Blacksmiths, Forgers and Helpers (hereafter referred to as the Blacksmiths).

Prior to World War II, few Negroes lived in the Milwaukee area. But in the post-war period, they began to migrate from the Deep South and settled in and around the city where their population increased steadily. They were limited in the purchasing of homes and the renting of apartments to areas of Milwaukee where living arrangements were substandard; and at the same time, there were racially discriminatory practices against Negroes in employment opportunities, in the location of schools, and in everyday social contacts. And at Ladish's Cudahy plant, no Negroes were employed prior to 1948; but their number in the workforce increased as the years progressed into the '50's.

The minimum ability requirements for the greatest majority of jobs in the Ladish plant were simple literacy and good health. Although the company sought skilled craftsmen to fill certain of the journeyman jobs and apprenticeable trades, most of its employees at the entry level were hired with little, if any, skills; consequently, most of them learned while on the job. The Negroes hired between 1948 and 1968 were neither less skilled, less qualified, nor less apt to learn job skills than were the Caucasians hired during the same period. All Negroes, however, were assigned jobs in the Machinists' unit, assignments that were solely made by Ladish, intentionally and based on race. The jobs to which the Negroes were assigned were mainly as grinders and truckers: the dirtiest, lowest paid, and least desirable.

During the same period, Caucasians hired by Ladish were assigned jobs in the Blacksmiths' bargaining unit, and under the jurisdiction of other union locals. It was Ladish's policy to allow inter-bargaining unit transfers by all of its employees during the period in question; but the seniority system maintained by the Blacksmiths and the other unions discouraged transfers by employees who had been with the company for a significant period of time because the result subjected an employee to possible layoff, or forced him to accept the least desirable job in his new unit. At various times from August 1949, Caucasian employees of Ladish transferred from jobs within the jurisdiction of other bargaining units to those within the jurisdiction of the Blacksmiths, all of them, for a period at least, utilizing their carry-over seniority for layoff and recall purposes. However, no Negro employee succeeded in effecting such a transfer despite existing advantages in jobs under the Blacksmiths.

In 1973 and 1974, the Office of Federal Contract Compliance (OFCC) conducted an audit of Ladish's Cudahy facility which included an analysis of the company's then existing workforce. In response to OFCC requests, and in compliance with its obligations as a federal contractor, Ladish prepared detailed information concerning its employees. It listed all of Cudahy's hourly employees hired from August 1948 to December 1967, the distribution of those hirings by bargaining units, a list of those minorities the company hired prior to January 1, 1968 who were still employed in 1974, and a distribution of the company's hirings by bargaining unit. The audit eventually focused on whether Ladish's then existing workforce had an "affected class"; that is, a class consisting of employees who by virtue of past hiring discrimination, and by the nature of the limited seniority carryover provisions of the pertinent collective bargaining agreements, were in a position that they continued to suffer the present effects of past racially discriminatory acts. Based on its audit, its examination of documents and evidence furnished by Ladish, OFCC concluded that an affected class existed at Ladish, consisting of all Negroes who were hired by the company prior to January 22, 1968, and who were placed by Ladish in jobs under the jurisdiction of the Machinists.


Shortly after the OFCC reached the conclusion that Ladish had an affected class of Negro employees who had suffered employment discrimination, the first of 18 Negroes employed by Ladish filed a charge of employment discrimination with the Milwaukee office of the Equal Employment Opportunity Commission, naming as respondents the Ladish Company and the seven unions with which it had collective bargaining agreements. He alleged that:

Prior to 1968, Ladish Company maintained a segregated hiring policy wherein all Black workers were hired into Union contracted Machinists jobs, which were the lowest paying jobs available at the Company. Such a policy has led to a current and continuing system of discrimination in seniority, wages and promotion. As a Black employee, I and others similarly situated, have been discriminated against as a result of Ladish's past policies of segregated hiring and ...

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