Furnco Constr. Corporation v. Waters – Oral Argument – April 17, 1978

Media for Furnco Constr. Corporation v. Waters

Audio Transcription for Opinion Announcement – June 29, 1978 in Furnco Constr. Corporation v. Waters

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Warren E. Burger:

We will hear arguments next in Furnco Construction against Waters.

I think we will wait a little bit until the stadium is cleared.

Mr. Kaplan, I think you may now proceed whenever you are ready.

Joel H. Kaplan:

Thank you, Your Honor.

Mr. Chief Justice and May I please the court.

This case concerns several issues regarding alleged racial discrimination in hiring and recruiting under civil rights laws, principally, Title 7, 1964 Civil Rights Act.

More particularly, the case brings into focus questions relating to, one, what constitutes legitimate non-discriminatory reasons for refusing to hire minority applicants under McDonnell Douglas?

Second, the standard of review to be applied by Court of Appeals after District Court has found an employer’s refusal to hire were legitimate and non-discriminatory.

Also, the Court of Appeals’ authority unrestrained by either the evidence in the record or the District Court’s finding to create its own hiring system.

Third, it deals with the use and probative value of statistics by a defendant in Title 7 cases.

And, particularly whether under Title 7, a hiring process which resulted in the hiring of black bricklayers, far in excess of their statistical availability in the relevant labor market can be fragmented into its various subparts.

Finally, it raises the issue of whether discriminatory intent or motive or essential elements to a prima facie case of disparate treatment under McDonnell Douglas.

The genesis of this case is the relining of the blast furnace by Furnco at Interlake, Inc. in the late summer and early fall of 1971.

Performing this work, Furnco hired fire bricklayers, a very unique bricklaying craft.

The agencies confronting Furnco in performing this work, in terms of the speed it had to perform it, in terms of the quality of the work that had to be performed and the risks of doing it in untimely or improper manner are set forth at length in our brief and also in the District Court’s findings that need not be recounted here.

In meeting these needs, Furnco, through its Job Superintendent, followed three fundamental hiring policies.

First, it only hired bricklayers known by its superintendent or recommended to them as such to be experienced and highly competent in this unique skill of bricklaying.

It essentially hired bricklayers with a proven track record of skill and ability.

Second, it did not accept applications from anyone.

It did not hire at the gate.

It is undisputed that neither Blacks nor Whites were hired at the gate.

William H. Rehnquist:

Would you not have to add that of the fire bricklayers known to the superintendent that two Blacks on the list known to him were not hired?

Joel H. Kaplan:

That is not true, Your Honor.

William H. Rehnquist:

Is that not true?

Joel H. Kaplan:

That is not true.

It is alleged.

I think you are referring to both the amici’s and the respondent’s point that Mr. Samuels and Mr. Smith were not hired.

The first point issued in our reply brief we pointed out at length is that Donald Samuels had never worked for days, as I questioned in their by myself, “did you ever worked for Mr. Dacies?”

Answered “no, I had not.”

So, he had never worked for Mr. Dacies.

Joel H. Kaplan:

The second gentleman, Mr. William Smith, was hired on this job.

William H. Rehnquist:

But after other White people who were not on the list?

Joel H. Kaplan:

No, Your honor.

The evidence shows that Mr. Smith had worked for Mr. Dacies previously.

At one point, Mr. Dacies had met Mr. Smith at the job site and said words in effect “Smithy, what are you doing here?

Go home.

I am going to hire you.”

The evidence shows that Mr. Smith was hired in a non-discriminatory sequence of hiring.

He was hired before White bricklayers.

For example, he was hired before seven White bricklayers who were purportedly on this list and worked longer than 11 White bricklayers who were purportedly on this list.

But he was not on the list?

Joel H. Kaplan:

I think the list is really a red heiring in this particular case.

The list signified persons who were known by Dacies.

Mr. Dacies had Mr. Smith’s name in his head rather than on a piece of paper.

He was hired because he knew Dacies.

He was hired in a manner that was not dissimilar to the way White bricklayers were hired.

In that regard, the evidence showed that Blacks worked on the average, the same number of days as White bricklayers and were hired throughout the whole sequence of the job.

The third policy pursued by Furnco in hiring on this job was that it sought to recruit and hire Black bricklayers who were experienced and skilled in fire bricklayering in numbers substantially in excess of their statistical presence in the relevant labor force.

The District Court found and the evidence showed that during the relevant time period, 5.7% of the bricklayers in the relevant labor market were Black.

On the Interlake job, Furnco worked Black bricklayers 13.3% of the man-days.

Essentially, Black bricklayers worked on this job at two-and-a half times their availability in the labor force.

Mr. Kaplan, I want to be sure I understand your answer to Justice Rehnquist’s question.

Are you saying that Smith and Samuels were on the list or that there was no list?

Joel H. Kaplan:

I am saying Samuels had never worked for Dacies.

John Paul Stevens:

I understand.

Okay, let us take Smith.

Joel H. Kaplan:

The list were various scraps of paper that Mr. Dacies kept that contained the names of various bricklayers he had worked with and who were skilled in firebricking.

Mr. Smith’s name was not on that list.

It was not on a scrap of paper.

However, Mr. Smith was known by Mr. Dacies and he was hired because he was known by Mr. Dacies.

Joel H. Kaplan:

To get right to that issue then of the list that seems to be all pervasive in this case, the all-White list is a very catchy slogan.

It is wholly unrelated to this case.

It is a red herring.

Is it correct that there were writings on pieces of paper and only names of White persons were on those writings?

Joel H. Kaplan:

That is true.

However, prior to the job, Mr. Dacies was instructed by the company’s General Manager to make sure that Black bricklayers were hired on this job in numbers substantially in excess of their ability in the labor force.

Mr. Dacies wanted new Black bricklayer prior to this job and, prior to the job, contacted another Furnco Superintendent in the area to obtain the names of other Black bricklayers.

Is there any explanation of why he did not write his name down?

Joel H. Kaplan:

There is none.

He was never asked that question, Your Honor.

The critical point is that prior to the hiring of bricklayers in this job, Mr. Dacies had the names of Black and White bricklayers.

He was hiring from an integrated pool.

By hiring from this integrated pool, the evidence shows that he was able to accomplish an integrated workforce, integrated in terms of days’ work, in terms of numbers hired, in terms of every conceivable way.

One additional point, there is no showing that this purported all-White list was the exclusive avenue for obtaining work in this job.

It was only one of several recruitment sources used by the Job Superintendent in hiring on this job.

The very fact that Blacks were hired in the numbers, they were evidences that fact that it was not exclusive, that being on the list was not a prerequisite for being hired.

Were any Whites hired who were not on the list?

Joel H. Kaplan:

Yes, one, who was recommended.

There were two people recommended by person working on the job and one White was.

As I was noting, the District Court had found that the hiring policies we pursued on this job were legitimate, non-discriminatory and had ruled in our favor against all eight plaintiffs.

The Court of Appeals reversed this at three and affirmed this to five.

The Court of Appeals, in doing so, completely ignored the legitimate non-discriminatory nature of Furnco’s hiring on this job.

Its decision is totally at odds with the evidence before the District Court.

It also chose to ignore the statistics in this case demonstrating the absence of racial discrimination.

This court has often said that in racial discrimination cases, statistics tell much.

Here, they tell that Furnco’s hiring policies were non-discriminatory.

William H. Rehnquist:

I suppose an employer could, in a market where there were 20% Blacks in the pool, have employed 30% and, nonetheless, if a Black came to him and sought employment and the employer told the Black “I am not going to hire you because you are Black,” the fact that he was above the pool ratio would not excuse him.

Joel H. Kaplan:

I understand that, but that is not the case here.

The case is whether or not you can infer racial discrimination from what is going on.

I think what statistics said that in the absence of such blatant kinds of purposeful discrimination, “no Blacks need apply.”

Joel H. Kaplan:

There was no sign at the gate “Blacks need not apply.”

In the absence of direct evidence, statistics tell you what is the environment in which hiring and employment decisions are being made.

I suggest that the statistics in this case tell that the environment in which the hiring was going on was not that Furnco was discriminating against Blacks but that Furnco was purposely seeking Blacks out, purposely trying to recruit Blacks.

This is best evidenced, I think, by the statistics.

Thurgood Marshall:

Would it have been better if he had a list of those Blacks?

Joel H. Kaplan:

I do not think that makes a difference, Your Honor.

Thurgood Marshall:

He did have a list of the White ones.

It would have been wonderful if he had an integrated list.

But since he had a White list, would it not have been better if he had all?

Joel H. Kaplan:

But, I do not think it would have made a difference in this case.

Certainly, the form of it would have been “he has got an integrated list.

That looks nicer.”

But, the form of it makes no difference in the substance.

The point is that Blacks were hired early on in this job and hired throughout the period of the job.

There was no evidence that they were disparately treated in terms of the time they worked on the job.

Their absence from the list is a matter of form.

It is not a matter of substance of racial discrimination.

Mr. Kaplan, let me just follow up if I may.

I do not mean to suggest this is what the facts show, because the facts are rather quite confused in this case.

But, assume that the evidence did show that the company hired what it regarded to as an appropriate quota of Blacks and it thought that it had met its affirmative action or obligation or something of that nature.

Thereafter, would it be obligated with the remaining people it had hired, it would be obligated to take Blacks and Whites indiscriminately, would it not?

What is your position on that?

Joel H. Kaplan:

There was no quota at play here.

That is considered, for example, by the amici, the government and the EOC.

What the evidence shows is that there was a pool of bricklayers, Black and White, and that we pulled people out of the pool to hire.

You are answering my hypothetical question by saying it is not this case.

I just want to get your legal position.

Assume that you did affirmatively hire, say 15 or 20 or whatever the percentage might be, and got that number of Black workers on the job.

Having done that and, say, you have another 80% to hire.

Would it be your view that you could then say “we will hire only Whites” in the other 80%?

Joel H. Kaplan:

No, I would not.

I see.

Warren E. Burger:

Would you be taking a risk if you did, of having an attack made by the 80% that you were discriminating and using a quota system?

Joel H. Kaplan:

I would think that there would be a great risk in that regard.

But, the point is that that really what we are talking about in those cases are selection that we are selecting people solely because of their skin color.

I think what is occurring here is recruitment of Blacks and Whites and bringing them into a pool and then taking bricklayers out of the pool.

Is the important thing in this case not that you do not have to hire at the gate?

Joel H. Kaplan:

Yes.

Is the important thing to you to sustain this case not as though the list were not there at all?

Joel H. Kaplan:

That is absolutely correct, Your Honor.

Then if you lose the case on these two just because there was a list, that is not such a big deal for you, is it?

Joel H. Kaplan:

It is a big deal in that neither one of them was discriminated against, Your Honor.

If they were not discriminated against because the company does not have any obligation to hire at the gate and can have this key man-selection system, so to speak, that is one thing.

But, its the only reason they were discriminated against is because the foreman had a list on which there were no Blacks, that maybe important to you but it does not undermine the —

Joel H. Kaplan:

Undermine the essence of the hiring system.

Yes.

Joel H. Kaplan:

That is correct, Your Honor.

But, I want to go back to that list.

Particularly, again, Samuels never worked for Mr. Dacies and his exclusion from Dacies’ mind or list is obvious, because he has never worked for him.

Mr. Smith had worked for Dacies previously.

Mr. Dacies meets Mr. Smith at the job site and says “Smithy, go home.

I am going to hire you.”

He hires him and he hires him, as the evidence shows, as part of a non-discriminatory sequence of hiring.

There is no showing that Mr. Smith should have been the first person hired.

If he did not have to be the first person hired, when did he have to be hired?

I suggest the evidence shows that Blacks were hired throughout the period of the job.

That makes all the difference in the world.

Mr. Smith was not hired at the end of the job because he was Black.

There were Blacks hired early on.

He was just hired towards the end of the job because that was the way it happened.

Is there an issue in this case that even if there had not been a list that you were discriminatory or your client was discriminatory?

Is there an argument?

Joel H. Kaplan:

Apparently, there were some arguments made about a refusal to hire at the gate was discriminatory or a refusal to take applications was discriminatory.

I do not believe that they raised any issues of discrimination for the very basic reason that there is no showing of disparate racial impact here.

On the contrary, the evidence points in exactly the opposite direction.

Warren E. Burger:

Does it make any difference that this finding by the District Court differed from that of the Court of Appeals because the Court of Appeals undertook and superimposed its findings on the record over the District Court?

Joel H. Kaplan:

I think what was going on here, Your Honor, is that the Court of Appeals did not apply a proper standard of review and, in fact, applied no standard of review and rather created its own hiring system and created facts that were not in existence.

For example, they say that “we see nothing in the record to show that our hiring system that we created out of thin air is infeasible.”

The point of the matter is, is that every single person who testified and who had any experience as a mason contractor said that they would have hired the way we hired and there was no evidence whatsoever that their “feasible” system was in fact feasible, but anybody had ever built a blast furnace that way.

To make the point about the statistics in this case, that is in the impact of the statistics here of using the Castaneda and Hazelwood methodology, the statistic show that Blacks were hired at 14 standard deviations greater than the expected number.

That does not show purposeful discrimination.

It shows purposeful bringing Blacks in.

Back to the all-White list for a moment.

Concentrating on the all-White list is wrong not only because there was an integrated pool prior to the job, but it also represents an attempt to fragment and parsed the hiring process to look at each individual source of hiring and saying “what is the racial, ethnic, sexual, religious composition of that?”

rather than looking at the results of the entire hiring process.

I suggest that that kind of parsing up is not only inconsistent with the case law, but leads to ludicrous results.

That, no employer in this country would not have a hiring system that did not discriminate if that was a rule.

It would be impossible to have any source that precisely reflected that kind of protected category makeup.

Indeed, there is no evidence to show that the hiring system found “feasible” by the Court of Appeals or urged by the Court of Appeals would have passed muster under that kind of standard.

One of the fatal defects of the Court of Appeals’ system is that there is no showing that it would have created job opportunities for Blacks in excess of what our system created.

In fact, the evidence is exactly the opposite.

That if you had a completely random system, as the Court of Appeals seem to say we need it, that only 5.7% of the mandates in the job would have been worked by Blacks instead of our 13.3%.

William H. Rehnquist:

Is that a sufficient answer to a Title 7 claim if an employer refuses a Black a job specifically on the ground that he is Black, for him to say “Look, I am already 20% over the pool”?

Joel H. Kaplan:

I agree with you.

That is not a sufficient answer where he says “I am not going to hire you because you are Black.”

But, that is not the case here.

William H. Rehnquist:

Do you not have two basically different kinds of cases?

One is the Griggs case where you are talking about disparate impact, and the other is the McDonnell Douglas where you are talking about racially motivated refusal to hire.

Joel H. Kaplan:

That is right.

The Court of Appeals said this case fell under McDonnell Douglas.

Joel H. Kaplan:

In doing so, I think it made two fatal errors, first of all, in saying that there was ever a prima facie case of discrimination in the first place.

I think what McDonnell Douglas says is how were similarly situated Whites treated?

The answer is, similarly situated Whites who appeared at the gate seeking employment —

Blacks?

Joel H. Kaplan:

I am sorry?

Blacks?

William H. Rehnquist:

No, Whites.

Joel H. Kaplan:

No, similarly situated Whites.

That they had disparate treatment.

The evidence showed that Whites appearing at the job site gate did not get jobs.

There was never a prima facie showing of discrimination and nor was there a showing of discrimination.

But did the Court of Appeals not say that a hiring scheme, hiring only employees known to the superintendent was too fraught with potential discrimination to be permissible?

Joel H. Kaplan:

It may have been fraught with discrimination.

But did they hold that?

Joel H. Kaplan:

What they said is that a subjective hiring system mends itself to discrimination.

There were two difficulties with that.

One, that there is no evidence in this case of discrimination and the cases of this court, and all the other courts, so that you may have a subject of hiring system as long as it does not–

Suppose there had been no petition for certiorari and you are operating under the Court of Appeals’ judgment and its opinion.

Could you have maintained this system without a list, so called?

After the Court of Appeals’ opinion, just told your superintendent to go hire but be fair.

Joel H. Kaplan:

I think our hiring, in the first place, was fair.

The question is whether we would have had to take applications at the gate.

That is what I am asking you.

Joel H. Kaplan:

I understand that.

Under the Court of Appeals’ opinion.

Joel H. Kaplan:

Under the Court of Appeals’ decision, we would have had to take applications at the gate.

So there is an issue here.

You are attacking that, I take it.

Joel H. Kaplan:

Absolutely.

I suppose the other side is defending that.

Joel H. Kaplan:

That is absolutely correct.

There must be an issue here then.

Joel H. Kaplan:

There is.

The question relating prior thereto was to the list, Your Honor.

There is no showing that if we had hired at the gate, that it would have resulted in the same kind of non-discriminatory hiring that we in fact had on this job.

We were talking about the fragmenting of the hiring system.

It seems to me that Title 7 does not prescribe that there are good hiring systems and bad hiring systems in terms of the kinds of ways you recruit workers.

It does not say you have to go to help wanted ads or TV advertising or write letters to every potential applicant.

It says “whether or not the sources that you chose or the recruitment sources you use, whether or not those are discriminatory or non-discriminatory, whether or not they have a disparate impact on Blacks or any other protected minority.”

The answer in this case is that the selection of recruitment sources that we chose did not have such a disparate impact and that to fragment and parse up the system totally distorts the hiring process.

One of the points also raised in the certiorari petition that I would like to comment on for a moment is the question of whether intent or motive is a necessary element to a prima facie case under McDonnell Douglas.

I believe that such a showing is necessary to show that there is a nexus between the prohibited criteria and the action taken, that there is a nexus between refusing to hire a Black and the fact that you are refusing to hire him on that prohibited basis.

I think that the showing of intent and motive are necessary element of the most analogous statute, such as the National Labor Relations Act.

But, obviously, in order to prove a tenor of motive it is almost inevitably necessary to rely on circumstantial evidence.

Joel H. Kaplan:

That is right.

What I am suggesting here is that the circumstantial evidence in this case completely dispels any notion that persons were hired or not hired because of their skin color.

That evidence, again, is not only the statistics and the non-discriminatory sequence of hiring, but also the treatment of Blacks on the job.

No discriminatory discharges, layoffs, no denial of benefits, nothing of that nature.

Mr. Kaplan, going back to the hiring at the gate point, I am just trying to remember.

Does the evidence tell us when a man applied at the gate and was told “we do not take applications at the gate,” did the company tell them how he should apply?

Joel H. Kaplan:

Mr. Dacies, who was the superintendent, did not talk to anybody at the gate other than Smith.

These people went up to the gate and they were, in a sense, locked out.

Was there any procedure for letting them know who they should write to or anything like that?

Joel H. Kaplan:

No, for the simple reason that we did not take applications from anybody.

Except when Smith showed up, Dacie said “Smithy.”

Joel H. Kaplan:

“Go home.”

“Go home.”

Joel H. Kaplan:

There was not really an application.

He said that I intend to call you and the District Court credited that testimony.

Warren E. Burger:

Mr. Miner?

Judson H. Miner:

Mr. Chief Justice and May it please the court.

The issue of this all-White list is not a red heiring in this case.

That is precisely why this lawsuit was brought.

This company has, for years, hired through Mr. Dacies.

Mr. Dacies is a White superintendent who has run jobs and worked on jobs. He has worked with competent Whites and competent Blacks since 1958 and he never put a Black man on his list.

He used that list not to fill isolated jobs but to fill, in this instance, 90% of the jobs.

According to his testimony, he used it to fill every job except in those instances where his boss said “on this job, Mr. Dacies, you must hire some percentage of Blacks.”

In that instance, he went out and recruited some Blacks to fill some jobs in alternative methods.

It is not a small little practice.

It is the practice that this man testified, he used to fill all the jobs.

He testified that he could do it that way because he had ample names on his list and that this work was so lucrative that he had no trouble going out and recruiting people to come and work for him.

There are three basic facts in this case.

Number one, the plaintiffs in this case are fully qualified and competent bricklayers.

They are men who have worked in this industry between 18 and 30 years.

Consequently, all of the discussion in defendant’s briefs about the skills necessary to perform this kind of work do not apply to these plaintiffs because they are fully skilled.

They simply want the opportunity to use those skills on jobs run by Furnco.

Secondly, there is not piece of evidence in this record that a single bricklayer hired on this job was as qualified or more qualified than the Blacks that were seeking work at this job.

William H. Rehnquist:

This is not a class action.

Judson H. Miner:

No, it is just an individual brought by those Blacks who sought to get on this particular job.

The man selected to run this job was Mr. Dacies.

He had unfettered discretion as to who he would hire and how he would hire for all but those limited number of jobs for which he was ordered to hire some number of Blacks.

It is apparent from this record that the Blacks that were hired come only from two sources.

Number one, he testified that when he got on the job and he was told to hire some Blacks, he told his boss “I do not know the telephone numbers of any Blacks, therefore I called Mr. Abanski at another job that Furnco was running.”

Mr. Abanski says “I will see if I have some who could do the work.”

Then, Mr. Abanski subsequently sent him some names.

Furnco proudly tells us that these are examples of people that Dacies knew and that he hired because he knew him.

They give us three examples.

They tell us “that is Mr. Branch.”

They tell us “that is Mr. Jones and that is Mr. Smith.”

As to those three people, the record shows that Mr. Jones testified that he was never called by Dacies.

Judson H. Miner:

He got a telephone call one night from his superintendent on the other job and they said “you better get over to the Interlake job tomorrow,” and he reported to work the next day.

Nobody disputed that testimony.

The supervisor and Mr. Jones disputed that testimony.

Mr. Branch is not a bricklayer.

He was called a gun-eyed man.

There is nothing in the record as to why Mr. Branch was selected to go and perform the gun-eyed work on this job.

As to Mr. Smith, we will show in our argument that he was not selected with the Whites who were on Mr. Dacies’ list.

Thirty-seven Whites who had not sought work on this job were put to work before Mr. Smith.

Is it your position that the company must take applications?

Judson H. Miner:

No.

It is our position that has a — we cannot look at the application end of it in isolation.

A company that has systematically excluded Blacks from its primary source of employees must provide some alternative for minority people to make their credentials known.

I suppose your answer is at least Furnco, after the Court of Appeals’ opinion any way, would be required and your position is that it must take applications.

Judson H. Miner:

Let me just define, perhaps for a moment, what does “hiring at the gate” means.

When I say take applications, I would say, yes, if taking applications means offering some alternative so that minority people can demonstrate that they have all the skills requisite to this kind of work.

You are saying that any company that gives its superintendent Cart Blanche authority just to go out and hire his workforce.

They tell him “we need 100 persons.

Now, go out and hire them.”

He just hires from people that he knows.

It just so happens, that he hires 10 Negros out of 100.

You would say that is an invalid system.

Judson H. Miner:

No.

Warren E. Burger:

You can finish your response to that at 1:00, counsel.

You were in the process of responding to Mr. Justice White.

Mr. Miner, you may continue.

Byron R. White:

What was the question?

Judson H. Miner:

I believe the question was whether a company had turned over a hiring into a superintendent and he, in fact, hired in a fair manner and resulted with 10% Black labor force but they did not accept applications whether the refusal to take applications was legitimate.

I assume the question is not that 10% is a representative population.

Our position would be, no.

What makes the refusal to accept applications improper is the fact that the other side of the coin is an intentionally discriminatory mechanism that is historically excluded Blacks to that time.

Byron R. White:

Do you think the Court of Appeals would agree with your answer?

Judson H. Miner:

Yes, because what the Court of Appeals said is contained in, I think, page A6 of the Appendix.

It is in one paragraph.

What that paragraph said was “in light of historical discrimination, in light of historical unequal treatment of Blacks,” I think they must have meant by Dacies because that is the only evidence in this record.

A practice is prima facie racial discrimination if it refuses to consider minority job seekers when the alternative is to hire off an all-White discriminatorily created list.

William H. Rehnquist:

The Court of Appeals gave this answer 13 years after the enactment of Title 7.

Do you think it will be entitled to give the same answer, say, 23 years afterwards?

Judson H. Miner:

If this job had been initiated in 1981, and in 1981, the evidence was that Mr. Dacies had worked from 1958 to 1981 without Blacks and Whites and his list was all White, and it was in 1981 that his boss said “now, we will start hiring Blacks.”

Byron R. White:

But he did not hire only Whites.

Judson H. Miner:

He hired only Whites off of his list.

Byron R. White:

I know but he hired Blacks and Whites.

Judson H. Miner:

That is right, but there are two segments of this hiring process.

Byron R. White:

So what if he hired Whites off of his list and Blacks off of somebody else’s list?

Can the Whites sue the other fellow?

Judson H. Miner:

You have that case, I think, before you right now and I think that there will just be a whole number of factors that go to determine whether the —

Byron R. White:

Suppose he did hire Whites off of his list and Blacks off of somebody else’s list.

Judson H. Miner:

If what he had done was either abolish the intensity of discriminatory practice.

Byron R. White:

Which was what?

Judson H. Miner:

Which was the creation and use for at least 90% of the jobs of an all-White list or he had integrated the pool.

In other words, he had created an opportunity for minority people to get their names before him and in some representative number so that, indeed, he now had a totally integrated and properly constituted pool.

Then, we would have a different case.

But, we do not have that.

What we have is a case where 90% of the jobs are filled by the superintendent who he calls off of his all-White list and 10% of the jobs are filled through referrals from other superintendents.

Byron R. White:

Suppose Dacies has a list of 100 Whites and his boss gives him a list of 100 Blacks.

He says “we need 100 people.

Go out and hire them.

Hire the Blacks off of this list and Whites off of that list.”

He went ahead and did it.

Judson H. Miner:

If the effect of that was, indeed, to abolish the practice and was to totally integrate the pool of people among whom the selections were being made, we would have a different problem.

But, that is not what happened here.

Judson H. Miner:

What in fact happened was he had an all-White list that was used to fill a significant percentage of jobs.

His boss said “fill 10% of your jobs with these minority people so that we had integrated the workforce but there is no evidence that we had integrated in any way the process that went into the filling of those jobs.”

Warren E. Burger:

How do you reconcile what you are saying now with the figures, the statistical factors, in this case?

What I hear you saying makes me think I read a different record from the one that I should have read.

What about the record in this case of actual hiring?

Judson H. Miner:

The record in this case is that there were three phases of hiring.

There was hiring that went on prior to the end of September in 1971.

During that period of time, according to Mr. Dacies’ testimony, he fills 37.

Warren E. Burger:

What about this particular job that we are talking about?

Judson H. Miner:

This is what I am talking about, this job.

This job during the first segment through the end of September he hires 41 bricklayers.

37 of them are Whites who he calls off of his list.

Four of them are Blacks who come to him through another superintendent, Mr. Abanski.

One of them is the brother of one of those fellows.

That is the first phase.

Then, we get a telephone call from Mr. Wright who is his boss.

According to Mr. Dacies, Wright called him and said “there is going to be some allegation or something and here are six or eight Black names,” and he hires those people during the second phase.

Then, the third phase of the job is after he hires them, he reverts to his old practice and fills the last seven jobs, again, off of his list and they are all White.

All I am saying is that there is nothing in this evidence that suggest that that practice was either abolished or neutralized.

We do have, through the so-called Affirmative Action Program, some Blacks being transferred to this job site.

You are suggesting then that any particular Black or indeed all Blacks are to be considered for every particular position.

Judson H. Miner:

I am suggesting that, certainly Blacks who come to the job site and certainly Blacks who have worked for Mr. Dacie before and went to the trouble of coming to the job site to get on should be considered.

I am suggesting that if the alternative to rejecting other Blacks who had tried to seek out jobs is to revert to this all-White intentionally created list, then they too have a claim that they too should have been considered.

But your evidence is that he just had a White list.

Is that your basis for saying he was intentionally discriminatory?

Judson H. Miner:

The evidence is that he, since 1958, had worked with competent Whites and competent Blacks and that he had never put a Black man on his list.

In fact, we asked him whether he had ever hired a Blackman prior to 1969.

He said, no.

Then, there is some question confusing as to whether he claims he had hired a Blackman on a job in’69.

Although at that time, he had no Blacks on his list, so if he did hire him, he would have had to hire him at the gates.

William H. Rehnquist:

From ‘58 to ’64 he was under no obligation to hire.

Judson H. Miner:

That is right.

We are not suggesting he was, but he worked with Blacks at least two or three jobs after ’64 and he still had never put a competent Black man on his list.

Mr. Miner, are you arguing that the process if discriminatory is all that one must find regardless of the effect?

Judson H. Miner:

No.

I think that there has to be an effect, but I think that we have effect in this case.

Let us assume that instead of ending up with 13.5% Black, the contractor has said “I want at least 50% Black.

Mr. Superintendent, you go ahead and recruit your force anyway you think best so long as you meet that standard.”

If he had met it in this case with, say, 50-50 in terms of ratio or portion with the labor market at a of figure of 10%.

It obviously had an effect but not favorable.

Would you say that was all right or not?

Judson H. Miner:

There are two levels of analyses.

One is under McDonnell Douglas.

We are not looking at actual effect.

We are looking at whether there was some unequal treatment.

I would say that if a employer had a device that was intentionally discriminatory and it excluded qualified Blacks from 50% of the jobs that its use for 50% of the jobs is still discriminatory as to Blacks who were seeking those jobs.

If, in fact, no Blacks are available and if in fact what happened was that they had to go out and recruit to fill all the jobs, then we would have a different story.

But if, in fact, they needed 100 people and 100 Blacks came and applied and they were all qualified and they hired 50% of them because they were told to have 50% Blacks but they excluded the other 50% because their hiring mechanism excluded Blacks, then those 50% who were excluded would have a claim.

Even though 300 very highly qualified White applicants had also applied?

You are just assuming all-Black applicants.

Judson H. Miner:

I am assuming all-Black applicants.

If there are White applicants, then it becomes a question as to the facts of that particular case.

What is the percentage of Blacks and Whites?

What evidence is there that the intentionally discriminatory device is excluding the Blacks, is keeping the Black off of the job site?

Warren E. Burger:

Are these figures that your friend gave us erroneous?

Did he give us some wrong figures here today in his oral argument?

Judson H. Miner:

In terms of the number of people on the job, during the first phase of the job, the number of Blacks hired is approximately 10%.

There is a dispute as to what the relevant labor market is.

The Trial Court had not permitted us to offer evidence as to what we thought the relevant labor market was which was made up of the particular Bricklayers’ Union.

Warren E. Burger:

What are the findings of the District Court in that respect?

Judson H. Miner:

The District Court adapted data that was introduced by the defendants after he had rejected our data as to what the racial composition of the Union that was responsible for that jurisdiction.

Warren E. Burger:

Do we have to accept the findings of the District Court or did you bring that issue here?

Judson H. Miner:

Pardon?

Warren E. Burger:

Did you bring that issue here?

Judson H. Miner:

The Court of Appeals held that the judge abused his discretion in refusing to consider our evidence and therefore, in effect, set aside.

But, those statistics were not pertinent to their analysis.

The reason for that was that the Seventh Circuit applied a strict McDonnell Douglas analysis and, as this court has said, under the McDonnell Douglas case statistics are not controlling.

They may be relevant but the question was Dacies’ motive.

Why was Dacies’ list all-White and why did Dacies fill 90% of those jobs off of his all-White list even though during that period Mr. Smith is there whom he has worked with on four separate occasions, whom he knows to be fully qualified?

Other Blacks are there seeking work and he does not hire them.

He hires 37 Whites after Mr. Smith has come to the job site and those 37 were all on his list and none of them had sought work.

The statistics of Furnco’s hiring as a result of orders from their boss does not tell us anything about Dacies’ motive.

In fact, the only thing that tells us about Dacies’ motive is Dacies’ conduct at the job site.

The evidence there is that Dacies was evasive to the Blacks who came.

He was deceitful.

He told Blacks that he was not hiring when he was hiring.

He never told a single Black that this was not the way.

As I understand it, your colleague on the other side would seem to concede that Dacies had said to one of these fellows “I am just not ready to hire you yet.

I am not just hiring Blacks.

I just do not want to hire any Blacks right now.”

Turned these people away and when they had not hired the Whites.

That kind of intention of discrimination would not be cured by any kind of proportional hiring.

Do you understand that?

Judson H. Miner:

That is right.

Is this an argument over when there is a justifiable inference of an intentional discrimination?

Judson H. Miner:

I do not think there is any dispute.

I do not think there is much room for dispute over the inference.

The fact is that the man, to the extent that he had unfettered discretion.

What the District Court find?

Judson H. Miner:

Pardon?

What did the District Court find?

Judson H. Miner:

The District Court makes no findings about the existence of the list.

The District Court makes no findings about any of the elements of the hiring practice.

The District Court focuses just on the refusal to hire at the gate and then makes some conclusion or findings.

Did they find that there was no intentional discrimination?

Judson H. Miner:

I think that the District Court’s findings simply said that the practice was non-discriminatory and was necessary without getting into any of the elements and the subsidiary facts that went into the whole hiring practice.

That was all lost over by the Trial Court and that is where the Seventh Circuit differs.

The Seventh Circuit went to the specific facts that related to the hiring practice.

These facts were un-controverted and were all in the record.

They were not dealt with the files.

Based on those un-contradicted facts, they concluded that the real problem was not the no hiring at the gate but the fact that no hiring at the gate was just the other side of the claim, the use of the all-White list.

In 90% of the cases, Blacks were turned away in favor of Whites who were on this list because, for 20 years, this man had never put a Black bricklayer on his list.

William H. Rehnquist:

Did the Court of Appeals itself make a specific finding that Dacies’ refusal to hire Blacks was racially motivated?

Judson H. Miner:

I think they did.

I think that is what the Seventh Circuit said.

William H. Rehnquist:

That should not be a “think” question.

Judson H. Miner:

What they say is that in light of the historical discrimination.

What they must mean in that is Dacies, because it is Dacies that all the focus is on.

They do not, in their opinion, say “in light of Dacies’ intention of discrimination.”

But, they do talk about “in light of the historical discrimination, the refusal to consider these people at the job site when the alternative is to hire off an all-White list is discriminatory.

I think we are going to read that as referring to Mr. Dacies.

I would interpret it to say “yes, that practice is intentionally discriminatory.”

Mr. Miner, the District Court found, and I am looking at finding number 15 on page 18, that Furnco’s hiring policies and practices, and I skipped a few words here, were neutral.

Again, I skipped a part of it.

There is no evidence that these policies and practices either way pretext to exclude Negro bricklayers.

All had a disproportionate impact or effect on Negro bricklayers.

Did the Court of Appeals conclude and state that there was no substantial evidence to support those factual findings?

Judson H. Miner:

What the Seventh Circuit said was that those findings do not deal with the subsidiary facts that went into the explanation of how that hiring practice worked.

Looking at those facts that explain the intricacies of the hiring practice which the Seventh Circuit found to be perfectly clear, the Seventh Circuit said that they were discriminatory, that they were not job related, and that they indeed did exclude Blacks from every job filled off of that list.

Was any specific finding by the Court of Appeals that the findings of the fact by the District Court were not supported by evidence?

Judson H. Miner:

No, there is not.

The Seventh Circuit goes off on other facts.

It says that these are the relevant facts to the proper analysis of this case.

This is what the plaintiff has been focusing on from day one and these facts are undisputed.

The District Court never deals with these things.

The District Court’s facts, and we spell this out in our briefs, I think are certainly suspect.

The problem with these facts, there are findings in it that are, we had argued, were clearly erroneous.

They do not become relevant to the Seventh Circuit’s analysis of the case.

But, the judge says that the practice of the industry were statued.

The judge objective himself and excluded evidence throughout the trial as to what the practices of the industry were.

He makes a finding that Dacies’ practice is efficient and effective.

The only question in the whole trial was a question of me to Mr. Dacies.

Do you have any reason to believe that your practice is more efficient or more effective than any other practice?

The judge objected.

For the defendant, he did not answer the question.

The judge, in his findings, has a finding that Dacies’ practice is more efficient and more effective than any other practice.

I think, in fact, there is some question as to whether those findings deserve the traditional way.

But, the Seventh Circuit did not get to that point because, in light of their analysis of the problem, they did not have to reverse any of the judge’s findings of fact.

They were able to base it exclusively on un-contradicted facts that were on the record that explained in detail the hiring practices of this company.

William H. Rehnquist:

But a moment ago you said the Court of Appeals, at least inferentially, found that Dacies’ refusal to employ was racially motivated.

Judson H. Miner:

That is correct.

William H. Rehnquist:

And here, my brother Powell has pointed out to you a finding by the District Court that it was not racially motivated.

So, the Court of Appeals did have to upset that finding in the District Court in order to justify your argument.

Judson H. Miner:

I guess that is right.

There is a conflict there and I think that simply goes out from the fact that the District Court just did not weigh any of the facts that led to the conclusion that there was intentional discrimination which is the creation and use of this list.

Warren E. Burger:

It seems to be quite crucial to your position that there is something wrong and illegal about not hiring at the gate.

Judson H. Miner:

If the other side of the coin is to fill either all jobs of an intentionally discriminatory device or, certainly, the majority of those jobs when other jobs are merely filled because the boss says “get certain numbers of Blacks in a certain number of these jobs.”

Warren E. Burger:

That brings us back to the objective evidence again on the statistics, does it not?

You certainly have to put those two things together.

Judson H. Miner:

I do not think so, because the question then is there were two people doing the hiring.

Judson H. Miner:

There is Mr. Dacies who is hiring 90% of the people off of his list and there is his boss who is, in effect, transferring some number of Blacks to the job site.

The overall statistics may well tell us a lot about what Furnco’s ultimate goal is.

They do not tell us anything about Dacies.

They do not tell us anything about why Dacies met Mr. Smith at the job site on the day when this job was starting and he is under directions to get 16% Blacks and he does not hire Mr. Smith.

He does not ask Mr. Smith “who are these other Blacks here?

Are they competent bricklayers?

I am supposed to find Black bricklayers.”

We asked him why he did not and he said “I do not hire at the gate.”

That is not a sincere answer to the problem.

It was true, as a matter of fact.

There was no hiring at the gate of Blacks or Whites.

Judson H. Miner:

But he knew Smith and he knew Smith’s qualifications.

And Smith was hired.

Judson H. Miner:

But not until after.

But not at the gate.

Judson H. Miner:

That is right.

Whites too, but he certainly did not hire them at the gate.

Judson H. Miner:

Pardon?

He had knew a lot of Whites he did not hire at the gate.

Right.

Judson H. Miner:

I would submit that there is no evidence in this record that Whites came to the gate.

The evidence in this record is that, historically, this is the way Blacks have gotten work in this industry.

They had gone from job site to job site.

The no hiring at the gate policy is Dacies’.

It is not Furnco’s.

Every Black who testified in this trial, who had worked in the firebrick industry had only gotten on the job because he had gone to a job site and he was hired then.

Not one Black before this trial had ever received a telephone call from a superintendent saying “come on out, Mr. Smith or Mr. Samuels, I have got a job going.”

That is how Blacks got jobs.

It was Dacies who imposed as an absolute policy the refusal to consider people at the gate and the alternative for him in filling 90% of the jobs was his all-White list.

But Dacies is not the defendant here, Furnco is.

Judson H. Miner:

But Dacies is their agent who is given the responsibility.

We are talking about the overall hiring by Furnco.

Judson H. Miner:

We parsed out and focused on Dacies because that is the way their hiring operation is handled.

It is part of it.

Judson H. Miner:

That is right.

It was from Dacies’ list and part of it was from some other source.

Judson H. Miner:

Our contention is still, one as Dacies’ portion is intentionally discriminatory and excludes all Blacks.

Warren E. Burger:

When Dacies does it, it is Furnco’s action, is it not?

Judson H. Miner:

I think so.

Warren E. Burger:

Why the separation of Dacies and Furnco?

It is all Furnco, is it not, no matter who does it?

If you had 10 different men doing the hiring, if they are all agents and servants of Furnco, why is that relevant at all?

You may be showing that Mr. Dacies has some wrong attitudes, but Furnco is the party in interest here.

Judson H. Miner:

But Furnco adapts those attitudes because it is Furnco who’s Vice President, never really supervises, never made any inquiries as to how Dacies was hiring.

They had no mechanism for determining whether in fact Dacies was relying primarily on Whites or whether Dacies’ primary practices would lead naturally to an integrated workforce.

They had given him his head and he had basically unfettered discretion to hire who he wanted to.

Consequently, I think they are responsible for his actions.

In the case of Smith, we submitted that there was a clear instance of intentional discrimination because he had worked for Dacies.

The primary argument of the defendant is that the exclusion from the list was not discriminatory as to Mr. Smith, primarily because he was not part of the so-called Batiste litigation that was a settlement negotiation that was going on.

In fact, when he was not the list, he was on Mr. Dacies’ hit.

The fact is, number one, it is factually wrong.

Mr. Smith was, prior to the Batiste settlement negotiation and that is spelled out in detail in an affidavit that is part of the record in a motion in limine in which plaintiff’s counsel and Mr. Glick spells out that the settlement negotiations are not limited to this Batiste case but they involved a case called Orphan v. Furnco.

Smith is a party to that litigation.

Smith was involved in some of those negotiations.

Smith’s name does not come to Dacies until precisely the same time that Wright calls Mr. Dacies and says “we should hire six or eight people.”

Furthermore, it is absolutely clear from this record that by not being on the list, Smith had a handicap.

He was not going to be considered and 37 Whites were considered and the only thing they had different from him was that they were on the list.

They had never sought to get work.

Mr. Smith had sought to get work.

It seems to me that the burden was theirs to show that even if he had been on the list, he would not have been hired any earlier.

Judson H. Miner:

They certainly could not have established that because, at the time he was applying and making himself available, they were looking for bricklayers.

They hired 41 after he first made himself available and they were told to get 16% Blacks.

I think the only conclusion to draw is if he had been on the list, he would have been hired earlier.

Thurgood Marshall:

Where did this 16% come from?

Judson H. Miner:

The General Manager testified that he called.

Thurgood Marshall:

It does not say where he got it from.

Judson H. Miner:

No.

Thurgood Marshall:

It came on there.

Judson H. Miner:

It came on there.

The second question is how the use of that list affects someone like Mr. Nemhard.

How about Samuels?

Judson H. Miner:

We think that Mr. Samuels was at that job.

We think that the evidence in this case was that Samuels worked at the US Steel Southworks job.

Mr. Dacies worked the US Steel Southworks job.

Mr. Dacies takes credit for having worked at that job when several Blacks were there.

Mr. Samuels was one of the first Blacks hired on that job.

Mr. Samuel says “I did not work for Mr. Dacies,” when he was asked that question.

It turns out, in fact, he was hired by Mr. Larkin and he worked for Mr. Larkin.

But, to clarify that, I asked Mr. Dacies “name the Blacks who were on that job when you were there.”

The imposing counsel objected.

Now, they say “had we not objected and had we let him answer that question, he would have said no and he would not have named Samuels” and they pointed out some interrogatories which were not in the record.

I would say that, based on the evidence we have where Samuels was on that job, Dacies says there were several Black men there and Samuels was one of the first there.

It is more likely than not that they were there together.

But, the Trial Court made no finding on that important question.

I do not think that the evidence in the interrogatories disputes particular in light of their objection to my question.

Does Samuel’s case depend whether or not he was?

Judson H. Miner:

No, even if he was not in Smith’s class, he is in the same position as Nemhard.

As for Nemhard, we would submit that the intentional discrimination still exclude him from the job.

The analysis goes something like this, Mr. Dacies created an all-White list during the period prior to this job.

His intention in creating that list was not limited to excluding the Smiths and people he worked with in the past.

Judson H. Miner:

His intention is just as much to have an all-White list to use in the future and, therefore, to exclude those Blacks who will come down the road in the future for jobs that he is looking at.

Consequently, when he applies that list to a Black who is coming down in the future, that race is a factor in the decision of the use of that list, viz-a-viz that Black.

Furthermore, the other side of the coin, once as this court has said in Keys, when you have intentional discrimination as to one side of a practice, you have to infer discrimination to the other side of the practice.

The other side of the practice is the no hiring at the gate.

The inference of that intentional discriminatory is fully buttressed by Mr. Dacies’ treatment of the Blacks who came to the job site.

His deceptive treatment of them, his refusal to tell them how they can go about getting jobs, he almost runs Nemhard over with his car.

Smith testifies at a later date that he had a conversation with Dacies in which Dacies said “if you had not been with those other guys, I would have hired you.”

This is certainly not consistent with an attitude of a man who is out to offer a new equal opportunity to Blacks looking for work.

Warren E. Burger:

Mr. Kaplan, do you have anything further?

Joel H. Kaplan:

I have a few points to make, Your Honor.

First of all, in response to Mr. Justice Rehnquist, the Seventh Circuit deals at A7 of the Appendix to the petition for certiorari.

It says “the historical inequality of treatment of Black workers seems to establish that it is prima facie racial discrimination, etcetera.”

There is no reference to Dacies’ list.

There is no reference to any overturning of the District Court’s findings that there was no pretext, no intentional discrimination.

That is number one.

Mr. Kaplan, let me just interrupt.

You said no reference to the list?

Joel H. Kaplan:

No, no reference to that there was any intentional discrimination going on.

But they are concerned in regard to Dacies.

What they seem to be concerned about was societal discrimination against Black workers.

That is how I read the sentence, Your Honor.

But the sentence is dealing specifically with Furnco rather than with society at large.

Joel H. Kaplan:

No, I do not think so.

I do not think that is true.

I do not think it does not refer to Black job seekers on this job.

It says how else will qualified Black applicants be able to overcome the racial imbalance in a particular craft, itself, to results of past discrimination?

That is not relating to Furnco.

But the part of the sentence you left out was prima facie racial discrimination to refuse to consider the qualifications of a Black job seeker before hiring from an approved list containing only the names of White bricklayers, and that is talking about Furnco.

Joel H. Kaplan:

Yes, but that is based on the historical inequality treatment.

Is that the history of the industry as a whole or Furnco?

Joel H. Kaplan:

That is what I assume it is and there is no evidence in the record about the history of the industry as a whole.

But there is evidence in the record about an approved list containing names of White bricklayers that Furnco had.

Joel H. Kaplan:

That is true.

That Mr. Dacies had it.

Second point, the evidence is to the US Steel job.

Mr. Smith was specifically recruited.

He did not have to go to the gate to be hired.

He was specifically recruited.

On page five of our reply brief, question, “Did Mr. Larkin who was the assistant superintendent had, in fact, specifically sought you out because you had worked for him before?

Answer, “Yes” from Mr. Smith.

I think the briefs satisfy my concerns to record that this court be fully apprised with the record.

The point I want to come back to is how should Furnco have hired on this job?

The EOC and the US Government concede that our hiring system was legitimate and non-discriminatory.

The District Court had found beyond a reasonable doubt that our hiring system was legitimate and non-discriminatory, that it met Furnco’s business needs as well as not discriminating against Blacks.

There is no evidence in the record that the system found “feasible” by the Seventh Circuit would have met our business needs and have led to as many Blacks being hired.

Indeed, the vice of the Furnco’s hiring system, the Seventh Circuit said that it was subjective, that somehow the job superintendent was making subjective judgments.

But, the vice of the Seventh Circuit’s system is that it is equally subjective.

Indeed, it is even more subjective than our system.

Our system was premised upon knowledge of a person’s ability to do this very specialized skill.

It was not premised upon what strangers had to say in terms of recommendations.

I would like to make one last point.

There is no evidence in the record that Furnco had ever engaged in any discrimination prior to this job.

There is no finding of any court or administrative agency that has been upheld that Furnco had discriminated against.

The accusation is totally false.

Given the backdrop of no discrimination and the statistics on this job and the legitimacy of the hiring system in terms of meeting our business needs, I do not believe that there was any racial discrimination in this case and I respectfully request that you reverse the Court of Appeals as to those three respondents.

Thank you.

Warren E. Burger:

Thank you, Gentlemen.

The case is submitted.