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March 23, 1992



The opinion of the court was delivered by: HARRY D. LEINENWEBER

This court has previously ruled in favor of plaintiff, Equal Employment Opportunity Commission (the "EEOC"), in the liability phase of this Title VII pattern and practice race discrimination action. The matter is now back before the court for rulings on the damage phase. After the parties had briefed the damage phase, but before the court had ruled, the Seventh Circuit handed down its decision in EEOC v. Chicago Miniature Lamp Works, 947 F.2d (7th Cir. 1991), which in many respects is factually similar to this case. The court asked the parties to brief the issue of whether Chicago Miniature required any modification of the court's previous rulings in this case. The parties have now done so. After reviewing these briefs, the court will make no change in the Findings of Fact and Conclusions of Law in the liability phase as a result of the decision in Chicago Miniature.

 Chicago Miniature

 In Chicago Miniature, as here, the trial court found in favor of the EEOC on a pattern and practice disparate treatment claim based mainly on statistical evidence. The Seventh Circuit reversed the disparate treatment claim because the EEOC had failed to prove discriminatory intent. The statistics the EEOC relied upon were seriously flawed because they mis-identified the relevant labor market. The district court had concluded that the relevant labor market was the City of Chicago and thus it compared the hiring rates of blacks and non-blacks of Chicago Miniature with the percentage of black entry level workers in the City of Chicago during the relevant periods. Thus, Chicago Miniature was held liable because there was a relatively small percentage of blacks in its applicant pool as compared to the percentage of entry level black workers in Chicago. The appeals court ruled that this analysis was faulty because considerations of "applicant preference" were ignored by the trial court. Interest in the jobs at issue, it held, is an important consideration for proof of a Title VII pattern and practice case. 947 F.2d at 301-302. Specifically, the trial court did not consider commuting distance and language fluency requirements as factors in the relevant labor market. 947 F.2d at 302. The court pointed out that low paying, unskilled jobs were more likely to be filled by those living closer to the site of the job. It also pointed out that Chicago Miniature's lack of an English fluency requirement would make the jobs there especially attractive to certain non-black ethnic groups. 947 F.2d at 302-303.

 Here, however, the EEOC did not ignore commuting distances. The EEOC's expert, Pierre de Vise ("de Vise "), relied on statistics, including the percentages of black machine operators in an one mile radius of O&G Spring and Wire Forms Specialty Company ("O&G"), and in the eight zip codes surrounding O&G, weighted by the percentage of applicants to O&G actually residing in the respective geographic areas. Thus, de Vise was in a position to compare the actual applicants and hires of O&G with the labor market consisting of a geographic area where O&G's applicants and employees actually resided. Also, unlike in Chicago Miniature, de Vise used a category of "black machine operators" for comparisons rather than "black civilian workers." 947 F.2d at 303. Further, Chicago Miniature had a record of employing blacks in positions in question which O&G did not have. No matter what the relevant labor market might be determined to be, under all labor markets testified to had substantial numbers of blacks in them. Finally, this court did in previous orders, and does in this order, take into account the foreign language factor which the court in Chicago Miniature did not do. See FF No. 37 and supra.

 Proposed Final Order

 The EEOC has filed a proposed final order granting relief. O&G has filed numerous objections to this proposed final order. The court has considered the arguments of counsel on both sides, and the precedent of Chicago Miniature, and has determined that it must make some specific findings with respect to the extent of the discrimination and the extent of the wages lost to the discriminates.

 The Black Hiring Shortfall

 The court was not satisfied with the statistical evidence of either party as it related to O&G's black hiring shortfall. The court found that the jobs in question at O&G were low-skilled kick and punch press operators where past experience, while desirable, was not necessary. (FF No. 10). The court further found that two specific employment practices were responsible for the statistical deviation between O&G's percentage of black employment and that of the relevant labor market. The specific employment practices were recruitment by word -of-mouth and walk-in hires. (Memorandum Opinion, Jan. 26, 1990, p.4) pp.4 and 7). The court found that the EEOC failed to carry its burden of persuasion that O&G's business justification for recruitment by word-of-mouth was pretextual. (Memorandum Opinion, Jan. 26, 1990, p.4) The court, however, found that O&G's walk-in hiring practice, because it resulted in zero black hires, constituted a pattern and practice of disparate treatment and its arguments to the contrary were pretextual. Id., p.7. It was O&G's inability to explain this "inexorable zero" of black employment that sealed its fate in this respect, particularly because many of its hires were walk-ins and not word-of-mouth hires. However, the court did not quantify the exact black employment shortfall due to O&G's pattern and practice of employment discrimination because such a specific finding was not necessary at the liability phase.

 O&G admits, and the evidence justified, the court's finding that approximately two-thirds of the hires during the relevant time period were walk-ins off the street, and approximately one-third of the hires were the products of word-of-mouth recruitment. (Memorandum Opinion, Jan. 26 1990, p.5). Since all punch and kick press operators at the beginning of the period in 1979 were white, in all probability the word-of mouth recruits at the beginning of the period would also be white. However, the walk-in applicants would be expected to mirror the racial makeup of the relevant labor market. The data from the available applications indicate that this was, indeed, the fact. (Memorandum Opinion, p.5). However, had O&G hired black walk-ins as expected, word-of-mouth recruitment would have begun to extend to blacks. In fact, this is what appears to have happened after 1985. (FF No. 40, n.1).

 Therefore, the court finds that the statistical evidence should be applied as follows to determine the black hiring shortfall. For the time period in question (1979 through 1985), O&G hired 87 people for the jobs at issue. Approximately two-thirds, or 58, would have resulted from walk-in hires and one-third, or 29, resulted from word-of-mouth recruitment. O&G should have hired blacks from the walk-ins at the rate of 22-1/2 percent (de Vise's most conservative estimation of the number of blacks in the relevant labor market (FF No. 24)). Twenty-two and one-half percent of 58 equals thirteen.

 Calculations of Back Pay

 The EEOC proposes that the back pay award should be calculated by taking the total value of wages and fringe benefits actually earned by the 87 hires during the period commencing October 22, 1982 through the present, multiplied by the black hiring shortfall percentage. The court and O&G, however, disagree. The EEOC proposal fails to credit O&G with "interim earnings or amounts earnable with ...

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