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EEOC v. O & G SPRING & WIRE FORMS SPECIALTY CO.

January 26, 1990

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff,
v.
O & G SPRING AND WIRE FORMS SPECIALTY COMPANY, Defendant


Harry D. Leinenweber, United States District Judge.


The opinion of the court was delivered by: LEINENWEBER

HARRY D. LEINENWEBER, UNITED STATES DISTRICT JUDGE

 In this Title VII action the court on December 14, 1988, entered Findings of Fact and Conclusions of Law that defendant, O & G Spring and Wire Forms Specialty Company ("O & G"), "(1) be found liable for discriminating against blacks as a class on account of their race in both recruitment and hiring for certain entry level factory jobs which amounted to a pattern and practice of disparate treatment of blacks, and (2) be found liable for having established and carried out policies and practices of recruitment as to such jobs that had a disparate adverse impact on blacks which constituted a pattern and practice of discrimination for the years 1979 through 1985." 705 F. Supp. 400 (N.D. Ill. 1988). (Findings of Fact and Conclusions of Law, pp. 22-23)

 On May 22, 1989, the court denied O & G's motion for a new trial but modified the Findings of Fact and Conclusions of Law to make clear that the Equal Employment Opportunity Commission ("EEOC") had proved a pattern and practice of discrimination on both disparate impact and disparate treatment theories by a preponderance of evidence.

 Now O & G has brought the decision of Wards Cove Packing Co. v. Atonio, 490 S. Ct. 642, 109 S. Ct. 2115, 104 L. Ed. 2d 733 (1989), to the court's attention and suggests that the conclusions in this case can no longer stand. The parties have extensively briefed this case, as well as the Seventh Circuit cases of Evans v. City of Evanston, 881 F.2d 382 (1989) and Allen v. Seidman, 881 F.2d 375 (1989), which have offered insight on how to interpret Wards Cove. These cases collectively hold that in addition to showing a imbalance between the racial composition of the qualified persons in the labor market and the qualified persons holding the jobs at issue, a plaintiff in disparate impact cases must identify specific employment practices that impact a protected group. Once the plaintiff has done so a burden of production falls on the employer to demonstrate a "legitimate employer purpose" for the suspect employment practice and it is no longer necessary that the practice be "essential" or "indispensable". Wards Cove, 109 S. Ct. at p.2126. Once the employer has met this burden of production, the plaintiff must establish by a preponderance of the evidence that either the employer's alleged business justification is a pretext for unlawful discrimination or that alternative practices are available that will achieve the same business ends with less racial impact. Id., at 2125.

 With these principles in mind, we shall review the evidence offered in this case. First, although the relevant labor market for O & G was never clearly established by plaintiff (Findings of Fact, Nos. 20-23, 29-31, 36-37), the court found that there were significant numbers of blacks in the labor market serving O & G. (Finding of Fact No. 40) Second, the EEOC established that a specific employment practice, viz., recruitment by word of mouth communicated through its current employees, had a substantial disparate impact on minority employment because a large percentage of its employs were white. *fn1" (Finding of Fact No. 16). Third, O & G established several business justifications for its recruitment procedure, viz., it cost no money; it produced a high percentage of Polish immigrants with high school technical training which insured O & G of a pool of people that would be willing to work under bad conditions and low pay; it provided people with technical training, while unneeded for the jobs at issue, nevertheless created a pool of employees that could be promoted from within to the more skilled positions without the necessity of a formal training program. (Finding of Fact Nos. 37-39)

 Upon reconsideration the court feels that its Findings of Facts show that O & G did establish legitimate business reasons for recruiting workers for its unskilled positions by word of mouth. This practice provided O & G with a ready source of employees who would be willing to work at low pay and under the poor conditions that its jobs offered. Further, the Polish-born workers for the most part had received technical training in school in Poland that served O & G well in providing it with a supply of workers who could graduate to the more skilled positions without having to institute a formal training program or seek outside recruitment.

 Therefore, on reconsideration, the court finds that the EEOC did not carry its burden of persuasion on its claim that the specific hiring procedure employed by O & G, namely, recruitment by word of mouth, did not have a legitimate business purpose or that alternative means were available to achieve the same business ends with less racial impact.

 However on the claim of disparate treatment, the court notes that O & G itself claims that a majority of its employees hired during the relevant period were walk-ins off the street. (See Defendant's Memorandum in Response, pp. 3-6). In fact, O & G contends that approximately two-thirds of its hires during the relevant period were obtained in this manner. During this period in question (1979 through 1987) ninety-nine people were hired for the low-skilled positions in question. Of these, only five were black and all of the blacks were hired during the last two years of the relevant period, which was after the EEOC filed this discrimination claim. Findings of Fact Nos. 12 and 14. Furthermore, available applications *fn3" indicate that at least one-eighth of the applicants were black. (Findings of Fact No. 13) If the word of mouth applicants are factored out, the percentage of black "walk-in" applicants off the street rises to almost 20 percent, near to what Dr. de Vise said was the percentage of the relevant labor market. (Findings of Fact Nos. 19-23) O & G put forth several justifications for its failure to hire a single black walk-in during the period 1979 through 1985. It only hired walk-ins from applications that had been accepted during a two-week "window" period because the type of workers from whom it received applications were very transient and it would be a waste of time to work form applications which were stale. The EEOC's labor market statistics were too imprecise to rely on, although its expert, Dr. Glen Meyers ("Meyers"), failed to provide alternative statistics. (Findings of Fact Nos. 29-30). *fn4" Finally O & G claimed that the blacks who did apply were interested in immediate work only, and when none was available, did not want to fill out applications, but were content to request validation of their unemployment compensation work search forms.

 The court however found that the EEOC's statistical evidence, while not perfect, nevertheless established a profound imbalance between the relevant market and O & G's hires. (Finding of Facts No. 40) In addition, EEOC's statistics certainly meet the minimal requirements of Wards Cove by comparing apples to apples. 109 S. Ct. at p.2122. O & G did not offer alternative statistics but was content to rely on its criticism of those offered by the EEOC. See Allen v. Seidman, 881 F.2d at 379. The statistical probability using standard deviation analysis of no black hires during the period 1979 through 1985 was infinitesimal. Finding of Fact nos. 25 and 40. The Court finds therefore that the EEOC identified a specific employment practice of O & G, i.e., walk-in hires, which O & G utilized in a discriminatory manner to refuse to hire black applicants. Thus, the EEOC also established causation, Watson v. Ft. Worth Bank & Trust Co., 487 U.S. 977, 108 S. Ct. 2777, 2788, 101 L. Ed. 2d 827 (1988). O & G plainly and simply refused to hire blacks for the unskilled positions. The proof was in the statistical probabilities. As stated in Wards Cove,

 
"Where 'figures for the general population might . . . accurately reflect the pool of qualified job applicants.' cf. Teamsters v. United States, 431 U.S. 324, 340, n. 20, 97 S. Ct. 1843, 1856 n. 20, 52 L. Ed. 2d 396 (1977), we have even permitted ...

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