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April 25, 1991


William T. Hart, United States District Judge.

The opinion of the court was delivered by: HART


 The Equal Employment Opportunity Commission ("EEOC") contends that defendant University Club of Chicago (the "University Club") must file certain reports (EEO-1 Reports) that are required to be filed pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and applicable EEOC regulations. Title VII empowers the EEOC to require "every employer . . . subject to this title . . . [to] make such reports . . . as the Commission shall prescribe by regulation." 42 U.S.C. § 2000e-8(c). EEOC regulations require certain employers to file annual EEO-1 Reports, which include information regarding the employer's work force, including the racial and ethnic identity of its employees. 29 C.F.R. §§ 1602.7, 1602.13.

 The University Club is a nonprofit corporation, incorporated in Illinois, that is exempt from federal taxation. The University Club occupies a 13-story building located at 76 East Monroe Street in downtown Chicago, and also uses space in an adjoining building. The University Club was founded in 1889 for the purpose of promoting literature and art. While it still sponsors some programs consistent with that purpose, members are not required to participate in any activities promoting literature or art. The University Club presently provides dining room and restaurant facilities, lodging facilities, athletic and exercise facilities, business and private meeting rooms, a library, display and gallery rooms, and rooms for receptions and parties.

 The University Club admits members in a number of categories: resident, non-resident, director, privileged, foreign consular, foreign national, surviving spouse, military/service, and honorary. The Committee on Admissions has exclusive responsibility and authority for admitting resident and non-resident members. *fn2" As of June 30, 1990, the University Club had 1,953 resident members, 480 non-resident members, and 720 members in the other categories -- a total of 3,153 members. The University Club limits its membership to 2,150 resident members based on the number of people its facilities can accommodate. In the past, when the resident member limit was reached, the University Club continued to approve new members but did not inform them of their approval until there was room for additional members. No one has ever been rejected or asked to withdraw an application because of the ceiling on membership.

 To qualify to be a resident or non-resident member, the applicant is required to have an undergraduate degree from a qualified university or college. The list of qualified universities and colleges has, on a few occasions, been modified to add the school of a new applicant. Applicants who do not have a college degree can be admitted under other categories. Applicants must complete a nomination form and obtain supporting letters from three to five members, and then are interviewed by one to three members of the Admissions Committee. There is no express requirement as to the length of time the sponsor must have known the applicant, nor is there any express requirement as to what must appear in the letters of support. Applicants must be 21 years of age, but need not possess an interest in literature or art; need not have any particular academic background other than the undergraduate degree; and need not have been previously involved in any clubs, societies, or other social organizations. The Admissions Committee generally does not conduct any additional investigation of the applicant. A Membership Development Committee assists persons who do not know enough current members by acquainting them with persons who can be sponsors.

 In recent years, approximately 175 new members have been admitted each year. Since November 1986, no applicant has been voted down by the Admissions Committee. In the same time period, two or three persons were asked to withdraw their applications, one because the applicant had a reputation as a poor sport on the squash court and one or two others because they did not have an undergraduate degree. Thus, over 99% of applicants have been approved. As defendant contends, this could simply be because the sponsors screen out inappropriate applicants. However, no evidence is presented to support this contention. Instead, defendant has stipulated that the President of the University Club has actively encouraged members to nominate new members because it shows continued prestige of the organization and because the club has a financial need for the steady stream of revenues produced by new membership fees. Also, in the past several years, no member has been expelled and the only suspensions have been based on nonpayment of dues.

 Non-members are permitted to use the University Club's facilities. With minor restrictions, family members are allowed to use the facilities. Guests of members are allowed to use the facilities regardless of age, education, or any other qualification. This includes the issuance of guest cards for unrestricted use of the facilities regardless of whether the guest is accompanied by a member. Guest cards, however, are limited to two days for local guests and two weeks for out-of-town guests with additional yearly limitations for both categories. Members of approximately 60 reciprocating clubs throughout the country can also obtain guest cards. Persons with guest cards may host events at the University Club. There is no requirement that any member attend the event. Guests may use the University Club's dining facilities and lodging facilities. Use of the lodging facilities is promoted by advertisements in the dining facilities aimed at both members and guests. Guests pay a higher rate than members for the lodging facilities, a rate that is set to be comparable to equivalent hotel facilities in Chicago.

 University Club members host various social events and business meetings without any limitation on the number of guests invited other than the capacity of the facility being used. The purported sponsoring member need not directly book the event and when a guest books the event, the University Club's staff is not required to seek verification from the member named as the sponsor. The cost of sponsored events need not be billed directly to the sponsoring member, but may be billed to a third party who is the actual sponsor of the event. Any University Club member may sponsor parties for college or university alumni with no requirement that the member attend or even be an alumnus of the school.

 The University Club's manager, who is not a member of the University Club, annually hosts the Club Managers Association of America in connection with Chicago's restaurant show and convention. The Catering Executive Club has also held a dinner at the University Club that was hosted by another University Club employee who was not a member.

 For the past five to six years, a University Club member has sponsored the activities of an auction house which hosts four wine auctions and tastings per year. It is an invitation only event with the auction house determining whom it will invite. Its invitations are not limited to University Club members and no member may attend unless the member received an invitation.

 For the past four to five years, three electronics firms have used facilities at the University Club during Chicago's annual electronics show. They have displayed their equipment at the University Club with visits to the displays being limited to persons invited by the electronics firms. The University Club also regularly hosts amateur and professional squash tournaments sponsored by local and national squash organizations. Tournament participants may use the athletic and lodging facilities. No evidence is presented that these persons must be issued guest cards to make use of the facilities. This event, like much of the other use by guests, is a revenue generating event for the University Club.

 In 1986, the EEOC issued a policy statement setting forth a revised definition of a bona fide private membership club. EEOC Compl. Man. (BNA) N:3171-73 (July 1986) (Policy Statement N-915) ("Compl. Man."). Although defendant disagrees with the particular application of this policy statement to its situation, it does not dispute that the general principles contained in this policy statement accurately state the law. The policy statement was intended to be consistent with Quijano v. University Federal Credit Union, 617 F.2d 129 (5th Cir. 1980). As Quijano makes clear, "private membership club" as used in Title VII is a narrow term. Id. at 132. Clubs that may ...

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