Full opinion text
FINDINGS OF FACT AND CONCLUSIONS OF LAW NEWCOMER, District Judge. This class action was brought on behalf of black persons employed by the Vertol Division of the Boeing Company. (“Boeing Vertol” or “Company”). The plaintiffs alleged that the Company had engaged in racially discriminatory employment practices, in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and the Civil Rights Acts of 1866 and 1871, 42 U.S.C. §§ 1981, 1985. The action was bifurcated, and the liability issues were tried beginning on June 30, 1975, and concluding on October 6, 1975. At the outset of the trial, the parties notified the Court that the plaintiffs and the defendant Union (Local No. 1069 of International Union, United Automobile, Aerospace and Agricultural Implement Workers of America) had reached a tentative settlement. The procedures of Rule 23 of the Federal Rules of Civil Procedure are now being implemented with regard to this settlement. Thus, this opinion concerns only the issue of the Company’s liability for employment discrimination under the statutes cited above. FINDINGS OF FACT I. Preliminary Facts 1. The Boeing Company is a corporation organized under the laws of the State of Delaware and doing business in the Commonwealth of Pennsylvania and the City of Philadelphia. Boeing Vertol, a division of the Boeing Company, is an employer engaged in interstate commerce, and maintains facilities in Ridley Township, Delaware County, Pennsylvania. 2. Plaintiffs Mamie Croker, Eric P. Travis, Chivis Davis, Sr., Robert W. Debose and Leolin Dockins are employed by Boeing Vertol as production and maintenance employees and are all members of the Negro race. 3. On or before June 19, 1968, plaintiffs Travis, Davis, Debose and Dockins each filed charges with the Equal Employment Opportunity Commission (“EEOC”) alleging a violation of their rights by both Boeing Vertol and the Union under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e •et seq. Plaintiffs Travis, Davis, Debose and Dockins were notified on December 21, 1971, of their right to bring suit in a United States District Court, and on January 11, 1972, they intervened as individual plaintiffs in this action. 4. On or about October 2, 1968, plaintiff Croker filed a charge with the EEOC alleging a violation of her rights by both Boeing Vertol and the Union under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. By letter dated August 6, 1971, the EEOC notified Ms. Croker that she was entitled to bring suit in a United States District Court, and she filed this action on September 2, 1971. II. History and Description of Boeing Vertol 5. In March of 1960, the Boeing Company acquired the Vertol Aircraft Corporation, a company engaged in manufacturing helicopter aircraft. Since its acquisition by Boeing, Boeing Vertol has been primarily a helicopter manufacturer, with nearly all its output being purchased by the United States Department of Defense. 6. As a major government contractor, Boeing Vertol has had to comply with nondiscrimination and affirmative action requirements. See 41 C.F.R. § 60-1 et seq. Boeing Vertol has been subject to annual audits of its employment practices and employment statistics by the Office of Federal Contract Compliance, (“OFCC”). The OFCC has never determined that Boeing Vertol should be prevented from obtaining government contracts. 7. Boeing Vertol has always had to compete with other helicopter manufacturers for defense contracts. In order to obtain contracts, the company must maintain quality and meet delivery schedules. 8. Quality is important because failure of a critical part may result in a crash. To ensure that there are no defects in workmanship, nearly ten percent of Boeing Vertol’s manufacturing workforce is devoted to inspection. In addition, the overall skill and experience of the workforce is important. 9. Boeing Vertol’s inability to meet delivery schedules has resulted in lost business in the past. Consequently, the constant need to meet schedules is a very important consideration in Boeing Vertol’s production program. 10. Boeing Vertol, like other firms, must maintain reasonable costs to meet competition. Cost control requires that only essential production man-hours be used in the production process. 11. Boeing Vertol’s efforts to maintain quality, schedules, and costs have affected its employment practices. Thus, Boeing Vertol normally hires employees for specific job openings, and whenever possible, it hires people of proven skill and experience. Boeing Vertol also has developed employment structures designed to accommodate varying production schedules and manpower needs. 12. The fact that nearly all of Boeing Vertol’s business is with the Defense Department has caused fluctuations in the size of its workforce depending on the demands of national defense. Thus, Boeing Vertol employed less than 2500 persons in 1960, and approximately 12,500 in 1967. Total employment subsequently declined to approximately 5,200 by the end of 1972, and may be even lower at the present time. Varying Defense Department demands also have caused a great deal of employee movement within the plant as employees are hired, promoted, layed off or transferred. Because a great number of employees were hired between 1960 and 1963 and during late 1965 and 1966, these early years to a great extent determined the employment picture at Boeing Vertol until the present time. 13. The helicopter aerospace industry requires the services of scientists, engineers, finance personnel, computer and data processing staffs, and other skilled employees. Nearly two-thirds of the workforce consists of highly skilled employees. 14. For payroll administrative purposes, Boeing Vertol divides its workforce into five groups: general salary employees, production and maintenance employees (“P & M”) (represented by the Union), guards and firemen (represented by separate unions), management, and other exempt salary employees. On the basis of functions, Boeing Vertol’s workforce can be divided into three broad areas: Manufacturing, Engineering and Other (professional, office clerical and service). These broad areas are further divided on the basis of various major and minor functions. In addition, employees are divided into labor grades by rate of pay. The 13 P & M labor grades represent a specific rate of pay, while labor grades for other employees represent a range of pay. 15. Engineering accounts for about twenty percent of Boeing Vertol’s employees. This category includes engineering specialties, such as aeronautical, mechanical, and electrical engineering, and also employees in other scientific areas, such as physics and chemistry. 16. Manufacturing covers about sixty percent of the jobs at Boeing Vertol, and consists of all P & M jobs that are directly related to the actual manufacture of helicopters, including production and maintenance supervisors. 17. The remaining category of jobs (“Other”) includes a variety of occupations ranging from traditional clerical positions to professional jobs. All of the jobs in this category are non-Engineering and are not subject to the collective bargaining agreement between the Company and the Union. 18. P & M jobs are by far the largest group within manufacturing, constituting between forty and fifty percent of Boeing Vertol’s total employees. P & M employees have been covered by collective bargaining agreements between the Union and Boeing Vertol or its predecessors since 1956. Under the terms of the present agreement, there are more than 200 different job classifications, each of which has a labor grade assigned to it. 19. Job classifications are grouped into job occupations, which include both “A” and “B” classifications carrying different labor grades for the same occupation. Job classifications are also grouped into 61 job families on the basis of common functional skills. Some job classifications appear in more than one job family, and an employee in such a classification has promotional rights in all the job families in which his classification appears. The job family structure was introduced in 1956, and has been continued through all collective bargaining agreements since that time. The job families are divided between a manufacturing seniority unit and an inspection seniority unit. This separation reflects the independence of the quality control jobs, although there is no special reason for maintaining the separation. Openings in inspection jobs usually are filled by employees from the manufacturing unit rather than new hires. A job family structure such as the one at Boeing Vertol is the usual method of organizing P & M workers throughout the aerospace industry. 20. Learners are persons hired as P & M employees to train for a particular job classification. Learners receive a special rate of pay which progresses upward to the assigned rate for that job classification. At the end of a prescribed progression period, a learner must be promoted to the job for which he has been training, unless he has been terminated. A learner can be promoted by his supervisor before the end of this progression period, although there are no written standards concerning such promotions. Employment of learners is limited by the need to maintain quality control. Large numbers of learners can be hired only when production levels are sufficiently high to permit work to be broken down into simple functions. 21. A leadman is a P & M employee within one of the usual job classifications, who is paid an additional ten or fifteen cents per hour to perform some extra duties. Leadmen are selected by the first level supervisors. Although there are no written standards governing the selection process, the Company’s description of the leadman position requires five or more years in the occupation. Supervisors exercise their own discretion in selecting lead-men, and seniority is not a factor. 22. Boeing Vertol’s production units are organized on the basis of shops, with groups of shops forming a shop unit. Shops are headed by first-level supervisors, with general foremen above them, and superintendents above the general foremen. Sometimes a unit chief or manager is above the superintendent. III. Hiring Procedures 23. Boeing Vertol exercises its own discretion in hiring new employees, since the hiring process is not controlled by any collective bargaining agreement. All persons are required to fill out applications before they are hired. Persons hired can be divided into “new hires” (persons who have never before been employed by Boeing Vertol) and “rehires” (persons who previously have been employed by the Company). 24. When a person is hired he receives a “company service date” based on his date of hire. Company service dates are adjusted upwards to reflect any time the person was off the payroll, and they are based on an employee’s most recent date of hire, even if the employee is a rehire. Similarly, seniority dates for P & M employees are based on, the date of an employee’s most recent hire. Although company service dates are adjusted upwards for the time an employee is on layoff, P & M seniority dates are adjusted only for time in which an employee does not accrue seniority. Since P & M employees accrue seniority while on layoff, an employee’s seniority date can differ from his adjusted company service date. Under the collective bargaining agreement, a person who is rehired is treated as if he were a new hire, since he gets no credit for past service with the company. Employees who are laid off retain recall rights for a certain period of time. If an employee is recalled during this time, he is not a rehire, but simply a recalled employee. In other words, he retains his former seniority date. 25. If a job opening at Boeing Vertol is not filled by a present employee, a requisition notice is sent to the employment office. The requisition notice, especially for non-P & M jobs, sets forth the job requirements and qualifications as determined by the supervisor. For P & M jobs, written job descriptions for every job classification already exist and they establish the training and experience requirements for each job. Until 1973, a supervisor could name on the requisition notice a suggested candidate for a vacancy. One reason for discontinuing this practice was its potential for bias against minorities. 26. In order to fill job vacancies, Boeing Vertol sometimes placed newspaper advertisements for particular job classifications. These advertisements usually stated a specific number of years of prior experience as a requirement for employment. 27. Persons who come in to the employment office are advised by a receptionist of any job openings that might fit their background. Some of these persons then are interviewed by personnel interviewers in the employment office, who review their applications and advise them of job openings related to their qualifications. Other persons may not be interviewed and may not even file applications, since they may leave if the receptionist tells them there are no openings to fit their qualifications. 28. The Company keeps employment applications on file for at least one year, and these applications are supposed to be considered for any job openings within a year following the date of application. In practice the evidence showed that most positions are filled by persons who applied within a few days of the date they are hired. 29. The employment office refers applicants to the supervisor who has the job opening, and the supervisor normally makes the actual decision as to who will be hired, after interviewing the candidates. In making this decision, line supervisors essentially rely on their own subjective judgment. 30. An employee is placed into a particular job family on the basis of the job classification he is hired into. Most applicants specify a particular job or occupation in their application for employment, and most new employees receive that job choice. However, a particular job choice may be specified only because the interviewer or receptionist told the applicant that that job was available. 31. Testing has never been an important factor in determining who will be hired at Boeing Vertol. Testing for P & M jobs was discontinued in 1962. Other written testing was discontinued in 1968 because an internal company study indicated that the tests might not be accurate and might adversely affect minorities, and the Company could not justify the expense of validating the tests. 32. An internal company study conducted in 1973 concluded that there was inadequate documentation to evaluate the performance of line supervisors in matching an applicant’s qualifications to job requirements. 33. No validation studies have been performed on the Company’s P & M job descriptions, experience requirements, selection criteria or methods, or any employment tests. IV. Promotion and Transfer Procedures 34. For P & M employees, promotion and transfer is controlled by the collective bargaining agreement between the Company and the Union. When a job opening occurs in any job classification, employees who have a right to the job must be considered first. This category includes employees who previously have been bumped out of the job and employees who are on layoff but still have recall rights. If there are no employees in this category, then persons must be considered for the opening in the following order: (1) employees in a lower job classification within the same job occupation; (2) employees in the next lower job classification within the same job family, with employees in each job classification separately considered before those in a lower job classification are considered; (3) employees who have filed written promotion requests; (4) employees who have filed written lateral transfer requests; (5) new hires. Within each category, employees are considered in an order based on plant-wide seniority. Employees in the lower ranking groups will not be considered at all once the available openings have been filled. 35. Employees outside the job family where the vacancy occurs are not considered unless they previously have filed promotion or transfer requests. A written promotion request can only be filed for a job classification with a higher labor grade in a different job family. A lateral transfer request can only be filed for a job classification with an equal labor grade in a different job family. A transfer request is not considered until ten days after it is filed. Since February, 1973 P & M employees also can request transfer to a lower graded job in a different job family. Both promotion requests and lateral transfer requests are valid for one year, although they may be refiled when they expire. Before 1968, an employee could have only two requests of each type pending at any time. Since 1968, an employee can have four requests of each type pending at any time. A promotion request becomes void if an employee’s status changes so that transfer to the requested job would not give the employee a higher labor grade. Similarly, a promotion to a higher labor grade or the granting of one transfer request voids any other pending lateral transfer requests. After a promotion review list has been issued for a particular job vacancy, no new promotion or lateral transfer requests are considered for that vacancy. Because there may have been a problem with supervisors failing to file promotion and transfer cards for employees, in November of 1968 procedures were changed to provide that a copy of the request be returned to the employee after filing. An advantage of the Company’s promotion and transfer policies is that employees can be considered for P & M positions when a vacancy occurs, without having to continually check job postings to determine if a vacancy exists. 36. Job vacancies are not posted at Boeing Vertol, although the Union has always requested job posting. Nevertheless, some employees may learn of vacancies from supervisors or through the grapevine and so be able to file a promotion or transfer request for a particular opening. 37. The general procedure when a job vacancy occurs is for the first level supervisor to notify the manpower control office. That office then issues a promotion review list setting forth in sequence the groups of employees who are to be considered for that job. Usually, the supervisor reviews the promotion review list and makes the selection. The supervisor’s choice depends primarily on his own subjective judgment. After the supervisor makes his selection, he returns the marked up promotion review list to the manpower control office, which processes the changes. 38. In making a selection, the supervisor rates the employees within a group on their interest and qualifications for the job. The supervisor’s selection is based on his knowledge of the employee and the requirements of the job to be filled. According to the collective bargaining agreement, a P & M opening is to be filled on the basis of skill and ability, with seniority being given full consideration and prevailing when skill and ability are equal. Since a person with less seniority may have more skill and ability, the most senior employee in the group being considered should not always be selected, even if he has the basic qualifications. In most cases, however, the most senior employee is selected. 39. Although the supervisors have a great deal of discretion in filling vacancies, certain restraints are built into the system. A first-line supervisor is accountable if his unit fails to meet production demands. Consequently, it is in his interest to see that the best employees are promoted. Supervisors may have to justify their promotion decisions to employees who were passed over, and other employees. In addition, foremen and general foremen also have to justify their promotion and transfer decisions to the Labor Relations office and the Human Relations office if a grievance is filed. When a grievance is filed, a Labor Relations representative reviews with the supervisor his reasons for denying the promotion, and attempts to insure that the right employee is promoted. The Company is motivated to monitor the promotion process carefully, because it can be liable for an award of back pay if the wrong person is promoted. 40. The Company performed a study of all promotion review lists used in 1972. In that year, 115 employees (11 blacks, 104 whites) were promoted. 28 employees (6 blacks, 22 whites) were passed over as not interested, and 9 employees (all white) with more seniority were passed over because their supervisors rated them as insufficiently qualified. 41. A P & M employee can change job families only by means of a promotion or transfer. When an employee does change job families, he retains his accumulated seniority after the promotion or transfer. There is no policy against transfer between job families, and in fact, many employees do change job families. 42. Certain general practices are followed in the promotion and transfer of non-unionized employees, although no collective bargaining agreement defines these procedures. Before November of 1973, these procedures were very informal. Generally the supervisor with the vacancy would consider employees within the same minor function for the vacancy, then employees in related minor functions within the same major function, then employees in related major functions, then employees in other major functions, and finally new employees. Job openings were not posted, and there was no bidding procedure or systematic review of potentially qualified employees. 43. Since November, 1973, vacancies in non-unionized jobs are filled according to new written guidelines. These provide that after employees with recall rights, employees in the next lower grade classification within the same major function are considered, followed by employees with pending transfer requests. If the opening has not been filled from employees in these groups, then the job opening is posted and any employee in the plant can apply and will be given equal consideration for the position. 44. The decision concerning who will be selected to fill an opening depends on the subjective judgment of the supervisors, who determine the job requirements and needed qualifications. The job descriptions for non P & M jobs are not kept up to date and have never been validated. 45. Since 1973, promotions and transfers in engineering jobs have been decided on the basis of an employee’s education and experience, and his demonstrated proficiency in completing work assignments. Job openings in the engineering area generally have been publicized by the Company. The plaintiffs presented no evidence showing that black engineers received fewer promotions than whites. In fact, as early as 1967, minority engineering employees who had the potential for advancement were specially identified. 46. Supervisors in engineering are chosen primarily on the basis of proven technical ability, although the selection procedures must remain flexible because the duties of an engineering supervisor vary with changing design schedules. Candidates for supervisory positions in engineering are reviewed by at least two managers and often by the Director of Engineering. 47. Management positions at Boeing Vertol traditionally have been filled by promotion from within the Company rather than by hiring new employees as managers. Thus, P & M supervisors normally are promoted from employees in the P & M unit. There are no written standards governing the promotion of employees to supervisory positions, although an employee’s rate of progression since being hired is one factor that is considered. Other factors normally considered include desire to be a manager, ability to get along with people, experience in a “lead” capacity, personal contacts, respect of peers, personal habits, attitude toward the Company, and knowledge of the organization and product. 48. Since 1963, all employees promoted to supervisory positions must be approved by a Supervisory Selection Board. The members of the Board are high level production superintendents. The Board considers each candidate’s background and experience against the job requirements in order to decide which candidate to recommend, and its decision is made by majority vote. Normally the shop with the opening nominates several candidates for consideration. However, in instances where the superintendent with the opening does not know a well qualified person from another shop, the Board might recommend a candidate who was not nominated originally by the shop with the opening. Employees also sometimes nominate themselves for a supervisory opening, although there are no special procedures for self-nomination. 49. Beginning in April, 1967, the Supervisory Selection Board was required to consider black candidates whenever a supervisory position was to be filled. Company supervisors and foremen were urged to identify minority employees who should be considered for promotion. Although there were no blacks on the Supervisory Selection Board, starting in 1967 black management employees participated in Board meetings to assist in consideration of black candidates, and since 1973, a representative of the Human Relations Office frequently attended Board meetings. 50. The collective bargaining agreements provided for a freeze on supervisors’ seniority that was in effect from 1965 to 1971. During that time, a P & M employee who was promoted to a supervisory position retained his P & M seniority but did not accumulate additional seniority while he was a supervisor. This policy discouraged employees from accepting supervisory positions, particularly after 1967 when the Company’s employment began to decline. 51. In 1972, Boeing Vertol reviewed its method of selecting supervisory personnel. This study concluded that the selection process relied too much on the unsupported opinion of line managers and that the process excluded many potential candidates from consideration and had the inherent weakness of perpetuating individual bias. The supervisory selection committee recommended that a procedure be established for self-nomination in order to assure consideration of a broader group of employees. The committee also criticized the restrictive membership of the selection boards, and noted the lack of clarity concerning job requirements and duties of first line managers. The lack of clarity causes selection criteria to vary depending on who is making the selection, and also makes it difficult to evaluate the selection process. Finally, the selection committee noted that personal preference was the most common basis for selecting supervisors, even though decisions based on preference may overlook skill requirements and permit discrimination purposely or inadvertently. V. Reductions in Force 52. A reduction in force is necessary whenever there are too many employees in a particular job classification. For P & M employees, the collective bargaining agreement provides that learners and probationary employees are laid off first (no matter what their seniority), followed by the least senior employee in the job classification. Such an employee has the option of taking a position in the next lower job classification within the job family if there is an employee with less seniority who can be bumped. Although an employee can bump down through all the job classifications within his job family, he cannot bump an employee in another job family, no matter how great his seniority. However, if a sur- . plus employee has been unable to bump any employee in the job classifications within his job family, he can enter the labor pool if he has more seniority than the least senior employee in that unit. If an employee who bumps down is unable to perform adequately, he may be placed on layoff status, at which time he forfeits recall rights. If a surplus employee cannot find another position by bumping another employee, then he will be laid off. Of course, an employee can choose to be layed off instead of bumping down to a lower job classification, and a surplus employee layed off either voluntarily or involuntarily retains recall rights and rights to his old job. A P & M employee with five or more years seniority has recall rights up to five years, and other P & M employees have recall rights up to three years. 53. Layoffs of non-unionized employees are not controlled by a written agreement. Nevertheless, non-unionized employees have informal recall rights, and seniority is an important factor in deciding who will be laid off. VI. Discipline Procedures 54. Records of reprimands and disciplinary actions are kept by means of employee reports, which are issued by first level supervisors in the P & M unit. Discipline is on a progressive system, from oral warnings, to reprimands, disciplinary actions, and discharges, although immediate discharges may be given for serious infractions. There are no written standards concerning the issuance of employee reports, so that the subjective judgment of the supervisor is controlling. The goal of the Company’s disciplinary system is to provide employees with an opportunity to correct deficiencies in work or behavior. 55. Employee reports are signed by the affected employee, and copies are placed in the employee’s central personnel folder and the employee’s shop folder, which is kept by his supervisor. In addition, the employee himself gets a copy. If an employee does not receive an employee report for a period of ten months, all preceding employee reports should be expunged from his record, and notices to expunge are sent to the Personnel Department and to the relevant shop supervisor. However, there is no system to check if the reports actually are removed from the shop files, and in fact, some employee reports are not removed and may be considered improperly. In making promotion and transfer decisions, supervisors may consider any and all employee reports in the employee’s file, although reports based on workmanship are given primary consideration. 56. To insure that the disciplinary system is as fair as possible, Company rules are posted so that employees should know them, and the rules specify the appropriate punishment for particular kinds of behavior. Disciplinary actions must be cleared through the Labor Relations office, which attempts to insure a uniform application of disciplinary rules. Thus, a supervisor cannot write an employee report and put it in an employee’s official file without getting the approval of a Labor Relations representative. 57. The most common cause for issuing an employee report is absence from work. Attendance data is collected in the Company’s computer system, which records the times that employees clock in. Each day an Exception Report is prepared which lists those employees who are absent or late. Exception Reports are verified by supervisors, and Exception Reports are consulted before an employee report is issued on the basis of attendance. Actual issuance of an employee report on the basis of attendance is in the discretion of the supervisor. 58. Because discipline was a serious problem in the late 1960’s, the Company began a practice of not giving disciplinary layoffs if the reason for the layoff was absenteeism. The Company also instituted a special procedure in 1968 to insure that blacks were represented in disciplinary cases which could lead to discharge. In addition to a black representative on behalf of the union, a black employee would attend the hearing on behalf of management. The Company’s administrative procedures also provided that claims of discrimination would be investigated by the Human Relations Department. VII. Statistical Evidence — Hiring 59. Plaintiffs’ statistical expert was Dr. John DeCani, Chairman of the Department of Statistics at the University of Pennsylvania. Dr. DeCani discussed the statistical significance of various disparities between whites and blacks at Boeing Vertol. According to Dr. DeCani, a disparity is statistically significant if it is not attributable to chance based on a probability standard of five percent or less. 60. The percentage of Blacks as part of the total number of employees at Boeing Vertol has varied from a low of 4.0 percent in 1962 to a high of 8.4 percent in 1968. Since 1968, the percentage of Blacks has declined somewhat. 61. Boeing Vertol is located within the Philadelphia Standard Metropolitan Statistical Area (SMSA), and the Philadelphia SMSA is an appropriate geographic area to use for census comparisons. In the Philadelphia SMSA in 1970, Blacks made up 17.5 percent of the total population and 16.14 percent of the civilian labor force over 16 years of age. 62. There is a statistically significant disparity unfavorable to blacks between the percentage of blacks employed at Boeing Vertol between 1962 and 1973 and the percentage that should be expected according to the percentage of blacks in the Philadelphia SMSA. 63. However, a comparison of the racial composition of the persons actually hired and the Philadelphia SMSA yields different results. Of the total number of P & M hires between 1965 and 1974, 17.9 percent were black. Between 1965 and 1968, 16.6 percent of P & M hires were black. These figures exceed the percentage of blacks in the Philadelphia SMSA work force (16.14 percent). The percentage of bláck P & M hires for individual years exceeded the percentage of blacks in the Philadelphia SMSA in 1967,1968,1969,1971,1973 and 1974, and exceeded the percentage of blacks in Delaware County in 1965,1966,1967,1968,1969, 1971, 1973 and 1974. For total Company new hires since 1970, the percentage of blacks was as follows: All Races Black Percentage Black 1970 40 3 7.5 1971 208 29 13.9 1972 233 29 12.4 1973 581 82 14.1 1974 631 144 22.8 TOTAL 1693 287 16.9 64. The plaintiffs presented evidence comparing the racial composition of the persons hired and the persons applying for administrative and office positions. The earliest data available for office and administrative applications was for 1971, and showed that 27.6 percent of the applicants for such positions were black, while only 9 percent of those hired were black. Based on the actual black hiring rate for office and administrative positions in earlier years, similar disparities adverse to blacks would exist unless the black application rate was far lower than the 27.6 percent actually recorded in 1971. The actual percentages of black administrative and office new hires since 1971 were as follows: All Races Black Percentage Black 1970 12 1 8.3 1971 65 8 12.3 1972 161 17 10.6 1973 110 22 20.0 1974 181 37 20.4 529 85 16.1 65. The plaintiffs presented evidence comparing the racial composition of the persons hired and the persons applying for P & M positions: Total hired Negro Hired, Percent Negro Applied, Percent Smallest Negro Application Rate which would indicate a significant disparity adverse to Negroes in hiring 1960 256 4.7 (Unknown) 7.5 1961 995 6.4 8.0 1962 1490 6.5 8.0 1963 1941 6.5 7.5 1964 482 5.0 7.0 1965 1537 10.7 12.5 1966 3635 14.9 16.5 1967 1634 20.2 22.0 1968 990 26.6 33.1 29.0 1969 543 20.4 36.0 23.5 1970 33 9.1 31.2 22.0 1971 77 32.5 37.3 41.0 The last column on the above table provides figures calculated by Dr. DeCani representing the smallest hypothetical application rates which would reflect a statistically significant disparity adverse to negroes based on the percentage of negroes actually hired. Although the percentage of applicants who were negroes is unknown for years before 1968, the hypothetical application percentages show that a significant disparity adverse to negroes would exist unless the actual percentage of negro applicants was far lower than 31.2 percent, the lowest actual negro application rate recorded in any year. For years where the actual application rate was available, a statistically significant disparity adverse to blacks was present in 1968, 1969 and 1970. 66. Boeing Vertol’s 1973 and 1974 affirmative action reports to the United States government set forth the availability of minority group members for various categories of employees, using a national recruiting area for management and professional or technical employees, and the Philadelphia SMSA for all other employees: Minority Availability 1973 1974 Management 4.7 3.7 Exempt Prof./technical 3.2 4.6 Exempt administrative 7.2 7.5 General salary 14.2 13.7 P & M 14.2 20.7 Total work force 10.3 15.2 The Company’s 1973 Report showed that minorities were underutilized in all major categories in 1972. The Company itself admitted in its 1970 and 1971 reports that minorities were underutilized in most occupational categories. 67. The plaintiffs presented evidence concerning Boeing Vertol’s utilization of blacks in various categories of employees: Negro Percentage of Management Payroll Negro Percentage of Technical & Administrative Payroll Negro Percentage of General Salary Payroll Negro Percentage of P & m"Payroll 1965 0.2 1.0 1.5 7.8 1966 0.2 0.9 1.8 11.0 1967 0.8 0.9 2.7 12.8 1968 1.0 1.1 3.8 14.2 1969 0.9 1.1 4.5 13.0 1970 1.3 1.0 3.1 9.0 1971 1.4 0.8 5.3 8.0 1972 2.4 1.7 5.8 9.0 1973 3.3 3.0 6.6 10.1 68. The plaintiffs also presented statistics on the utilization of minorities in certain categories of employees between 1962 and 1964: Percentage of Minorities in Management Payroll Percentage of Minorities in office and clerical jobs 1962 1.35 2.39 1963 0.395 2.913 1964 0.312 2.99 69. The utilization statistics generally show that much smaller percentages of blacks or minorities were employed by Boeing Vertol between 1962 and 1973 than were available by the Company’s own estimates in 1973 or 1974. Of course, minority availability could have been lower before 1973, since no estimates were made before that year. I also note that the 1973 and 1974 estimates pertained to all minorities, while the utilization data provided above for 1965 to 1973 pertained only to blacks. 70. At trial, the Company presented a labor market availability and manpower utilization analysis performed by Dr. Seymour Wolfbein, Professor of Economics and Dean of the School of Business Administration at Temple University. Dr. Wolfbein is a nationally recognized manpower expert, with wide experience in the fields of manpower utilization, labor employment patterns and labor statistics. The type of analysis performed by Dr. Wolfbein is used by governmental agencies and manpower experts to determine if minorities are underutilized in terms of their availability. 71. In performing his analysis, Dr. Wolfbein first grouped the various jobs existing at Boeing Vertol from January 1, 1963, through December 31, 1974 into standard occupational classifications. Then he compared the Company’s utilization of blacks with the expected utilization rates based on the availability of blacks in the appropriate labor market. In terms of geographic areas Dr. Wolfbein used the Philadelphia SMSA or the entire United States, whichever had the highest percentage of blacks for the particular occupation. 72. Dr. Wolfbein calculated the availability of blacks in various occupations on the basis of census figures showing the percentage of blacks among those employed in that occupation. These figures did not include persons who might have been qualified for a particular occupation, but were listed as unemployed by the census. Including these persons would have increased the percentage of blacks available in many occupations. In calculating the Company’s utilization rates for particular occupations, Dr. Wolfbein did not include employees classified as learners, although persons who originally had begun as learners but had been promoted to regular positions were included. Consequently, the utilization rates include persons who were trained by the Company, while the availability rates include only persons who were employed in a particular occupation. 73. Dr. Wolfbein did a detailed analysis for the years 1968, 1970 and 1974. (See Defendant’s Exhibits 4, 5 and 6). According to his calculations, ideal utilization of blacks (i. e. utilization of blacks equal to their availability) would have resulted in a black employment percentage of 7.20 percent, 6.93 percent and 6.5 percent in each of those respective years. The actual black employment for the occupations analyzed was 7.38 percent, 5.31 percent and 8.4 percent respectively. Although actual utilization of blacks sometimes fell below the ideal for particular occupations, these occupations were distributed across all occupational groups, so that there was no evidence of any pattern of discrimination. Based on the results of the manpower utilization analysis, Dr. Wolfbein concluded that there was no evidence of any pattern of racial discrimination at Boeing Vertol in the period 1965 through 1974. 74. Plaintiffs presented evidence based on Dr. Wolfbein’s analysis which pointed out the particular occupational categories in which blacks were underutilized by Boeing Vertol. Underutilization of blacks was statistically significant for one or more years between 1965 and 1971 in the following occupations: “painters,” “checkers, examiners and inspectors,” “other craftsmen and kindred,” “other metal craftsmen,” “machinists, job and dye,” “other clerical,” “secretaries, steno and typists,” “secretaries,” “office machine operators,” “other professionals, technical and kindred,” and “guards and watchmen.” 75. The plaintiffs also presented the testimony of Dr. Marc Rosenblum, a labor economist, who further analyzed the occupational categories that had been used by Dr. Wolfbein. Dr. Rosenblum included experienced unemployed persons in his analysis. After combining census occupational categories into broader standard groupings, Dr. Rosenblum testified to statistically significant disparities adverse to blacks in these occupational groupings: In Dr. Rosenblum’s opinion, the disparities shown in the above tables indicate an underutilization of blacks in these occupational areas. Moreover, the underutilization may be understated, since several of the categories do not take into account the transferability of skills from other census categories. 76. The defendant presented statistical evidence through Dr. William C. Stewart, Professor of Statistics at Temple University. Dr. Stewart measured changes in the percentage of black employees within each standard census occupation that occurred between 1965 and 1974. Dr. Stewart found that the percentage of black employees in the various occupations increased from one year to the next far more often than it declined. Dr. Stewart concluded that in the period 1965 to 1974 there was a statistically significant upward trend of black employment at Boeing Vertol, spread across all Census occupational groupings. The only exception to this upward trend were in the two lowest Labor Grades (1 and 2) and in Labor Grade 11. The increases in black employment were especially pronounced between 1965 and 1968, a period in which the Company’s-employment increased substantially. During this period, blacks represented approximately 19 percent of all new employees. 77. In addition to analyzing employment statistics, Dr. Stewart also performed a study of work transportation patterns in the area where Boeing Vertol is located, based on the 1970 Census Urban Transportation Planning Package. This study showed that few people from Philadelphia work in Delaware County. Most people who work in Philadelphia use public transportation, while most people who work in the Ridley Township area drive to work because of the inadequacy of public transportation. Other evidence showed that approximately 60 percent of Boeing Vertol’s employees reside in Delaware County. This evidence indicates that statistics on the availability of blacks in the Philadelphia SMSA may overstate the actual availability of blacks to Boeing Vertol, since a large proportion of the available black employees in the Philadelphia SMSA live in the City itself, while the workforce in Delaware County is only 6.7 percent black. 78. The learner program at Boeing Vertol provided on the job training by regular employees and supervisors. Through this program, the Company successfully trained a large number of employees who had little or no prior experience. Since learners made up a significant part of the total P & M workforce from 1960 to 1968, many of the regular employees after that time originally had been hired as learners. The racial composition of the learners from 1963 to 1974 was as follows: Total Learners Percent Negro 1963 132 3.0 (minority) 1964 142 0.7 (minority) 1965 449 8.0 1966 735 12.0 1967 548 20.25 1968 337 27.89 1969 25 40.0 1973 5 20.0 79. For each year from 1963 through 1966, there is a statistically significant disparity adverse to blacks between the rate of black participation in the learner program and the percentage of blacks in the civilian workforce in the Philadelphia SMSA. On the other hand, of the total number of learners hired between 1965 and 1968, 16.18 percent were black. This percentage exceeds the percentage of blacks in the civilian workforce in the Philadelphia SMSA (16.14 percent) and in the Delaware County workforce (6.27 percent). 80. The plaintiffs presented rebuttal testimony through Dr. Rosenblum concerning the appropriate labor market for the Company’s learner jobs. Based on the fact that in a study of several hundred learners, more than 80 percent were between the ages of 20 and 34 and had attained between 1 and 4 years of high school, Dr. Rosenblum limited the labor pool to persons with these characteristics. Including an adjustment for census undercounting, Dr. Rosenblum concluded that blacks constituted 24.7 percent of the available workers for learner jobs. In calculating this figure, Dr. Rosenblum arbitrarily defined the labor market in terms of age and education, and he did not determine if the learners he analyzed were representative - of the entire learner program. 81. A comparison of the learner workforce at Boeing Vertol to the labor market as defined by Dr. Rosenblum indicates a statistically significant disparity adverse to blacks in every year from 1963 through 1967. In addition, the percentage of blacks in the learner program in each year from 1963 through 1968 is well below the percentage of blacks among the persons who actually applied for jobs at Boeing Vertol in 1968 (33.1 percent). 82. Boeing Vertol has made various efforts to recruit more black employees. The Company has contacted black-oriented organizations such as the Opportunities Industrialization Center, the Urban League, the Council for Equal Job Opportunity, and even the EEOC, and has on occasion notified these organizations of its manpower needs and openings. Boeing Vertol has placed advertisements in predominantly black circulation news media for positions such as secretaries. In 1968 the Company participated in a special Program of the Department of Labor designed to provide jobs for “hard core” unemployed. Approximately 100 such employees, many of whom were black, were placed in P & M positions. The Company worked with the Chamber of Commerce, the National Alliance of Businessmen and the Chester Neighborhood Youth Corps to provide training, guidance and jobs to young people and hard-core unemployed. The Company also participated in a joint program with the predominantly black Simon Gratz High School in Philadelphia. This program was designed to demonstrate to black students that blacks could escape the inner city and work in large industrial establishments. However, apparently only one participant in this program was ever hired by Boeing Vertol. 83. In order to increase the supply of housing for blacks in its immediate area, Boeing Vertol obtained pledges of non-discrimination from local relators who advertised in any Company communication media. 84. Boeing Vertol has had difficulty in recruiting black engineers, primarily because of the small number of black engineering graduates. Many of the Company’s engineering jobs require backgrounds in basic engineering as well as knowledge of engineering specializations. Candidates for advanced engineering positions are expected to have an engineering degree and advance training or experience. The demand for black engineers meeting these requirements far exceeds the supply. Statistics from organizations such as the Engineering Manpower Commission and the College Placement Council show that minorities, including blacks, made up only 1.3 percent of all engineering graduates in 1974. The United States Census reported that between .9 and 3.3 percent of the persons employed in various engineering fields in 1970 were black males. 85. Since 1970, the percentage of blacks among total engineering new hires was as follows: Percentage All Races Black Black 1970 3 0 0.0 1971 38 0 0.0 1972 45 11 24.4 1973 134 8 6.0 1974 42 6 14.3 TOTAL 262 25 9.5 86. Boeing Vertol has made special efforts to attract black engineering graduates. As early as 1963, the Company’s recruitment teams regularly visited predominantly black engineering schools such as Howard University and Hampton University. The Company emphasized that it was an Equal Employment Opportunity employer and encouraged applications from qualified minority persons. Boeing Vertol stressed the same theme in its advertising. Furthermore, it advertised in black-oriented media such as The Philadelphia Tribune, Project Magazine and Ebony, and listed its engineering openings with black employment agencies and other sources. Beginning in 1974, the Company instituted a program in which black high school graduates were given financial help and work exposure to stimulate their interest in engineering studies. 87. In 1974, Boeing Vertol recruited at over 33 colleges and made 33 engineering job offers, of which 5 were to black candidates. Between 1970 and 1974, nearly ten percent of all engineers hired were black. VIII. Initial Placement and Racial Distribution within the Workforce 88. Plaintiffs claim that those blacks who were hired were placed in lower labor grade than whites. For all new hires into P & M positions in 1967 (over 1300 persons) the median labor grade for whites was grade 6, and for blacks, grade 5. 89. Analyses of 50 whites and 50 blacks hired in 1962 and in 1966 and selected at random revealed that persons hired as learners were placed in higher labor grades than non-learners. They also showed that persons with a high school education were more likely to be selected as learners than persons without a high school education. In addition, the 50/50 studies generally showed that blacks were placed in lower labor grades than whites. 90. The Company presented an analysis of the initial placement of employees hired in 1971 which showed that the differences in placement between blacks and whites were due primarily to different job preferences, since most new hires were placed according to their choice. For example, Boeing Vertol hired 19 plumbers in 1971. All of these employees had prior plumbing or pipefitting experience, and all but one indicated plumbing as a first choice. Although the Company did not perform a similar study for other years, the plaintiffs presented no evidence to indicate that placement practices were different in other years. 91. Disparities also appear in the placement of whites and blacks in learner occupations, even though no prior experience or skill is required for learners: Whites Blacks Percent of Learners 58% 71% below labor grade 56 in 1966 Percent of Learners 52% 64% below labor grade 56 in 1967 Percent of Learners 48% 63% below labor grade 55 in 1968 Percent of Learners 80% 100% below labor grade 54 in 1969 92. Boeing Vertol analyzed its 1967 learner program for Sheetmetal Assemblers B. 201 whites and 73 blacks participated in the program. The analysis showed that 51 ■ percent of the blacks and 40 percent of the whites completed the program, and that both whites and blacks who completed the program spent an average of 189 days in the program before being promoted. 93. Plaintiffs presented statistical evidence concerning the labor grade distribution of whites and blacks in P & M jobs in various years: Median White Labor Grade Median Black Labor Grade 1965 7 5 1967 7 5 1969 7 5 1971 7 1974 6 In each of the five years studied there was a statistically significant disparity adverse to blacks in terms of distribution by labor grade. 94. The same disparity adverse to blacks still existed when seniority was held constant in studies of the P & M workforce at the end of 1968 and 1973. In these studies the P & M employees were divided into 16 groups for 1968 and 26 groups for 1973, with each group of employees having approximately the same seniority date. For every group in 1968 and nearly every group in 1973, whites had a higher average wage than blacks. For all P & M employees in 1968 the average wage for whites was $3.75 per hour, and for blacks, $3.52 per hour. In 1973, the average wage for whites was $4.90 per hour, and for blacks, $4.77 per hour. 95. The plaintiffs also presented evidence concerning the labor grade distribution in groups of occupations in 1968. In the census occupational category of “operatives,” the median white was at labor grade 7, and the median black at labor grade 5. In the census occupational category “crafts,” the median white was at labor grade 9, and the median black at labor grade 7. A further analysis of narrower occupational groupings within the operatives and crafts categories showed statistically significant disparities adverse to blacks in 4 of the 6 groups large enough to test. 96. The plaintiffs presented evidence comparing the average gross earnings of white and black P & M employees: White Black 1968 $7,751. $8,354. 1971 $7,552. $7,295. 1973 $11,802. $11,408. These figures show statistically significant disparities adverse to blacks in gross earnings. 97. The plaintiffs also presented evidence concerning the labor grade distribution of non-P & M employees. At the end of 1967, blacks were in lower labor grades than whites in the general salary, management and exempt administrative and professional categories. The same statistically significant disparities, adverse to blacks, were present in 1978. An analysis of the general salary payroll in 1968, 1971, and 1974 showed that the median labor grade for blacks was one grade lower than the white median. 98. The Company presented two statistical studies of actual promotions of 50 blacks and 50 whites hired in 1962 and 1966 respectively, and still employed by the Company in 1969. In both of these groups, whites initially were placed in higher labor grades than blacks. However, for both groups, blacks and whites showed the same average increases in labor grade as of 1969. This result was confirmed in other statistical studies. 99. Although the plaintiffs presented evidence showing disparities between blacks and whites in terms of average labor grades and wages, these disparities did not increase between 1968 and 1973. In fact, during that time period, the average hourly wage of black employees increased by $1.25 per hour while the average for white employees increased only by $1.15 per hour. Similarly, in the same time period, the average annual wage of black P & M employees increased by $3,657, while the average wage increase for white P & M employees was only $3,448. 100. The plaintiffs presented evidence concerning the racial composition of the leadmen. The evidence generally showed that fewer blacks were leadmen than would be expected on the basis of the number of blacks in P & M jobs. Actual Black Leadmen Expected Black Leadmen 1965 22 52 1967 40 65 42 76 66 16 13 16 1972 13 1973 16 20 1975 14 25 An analysis of the leadmen at the end of 1967 also showed that on average, whites had been with the Company for one year less than blacks at the time they were selected as leadmen. 101. The Company introduced a statistical study purporting to show that employees generally have six or more years of Company service when they are appointed as leadmen. This study is not entirely persuasive, however, because it was based on the difference between the employee’s company service date and his most recent appointment to leadman, rather than his first appointment. Nevertheless, it may be appropriate to compare the percentage of black leadmen to the percentage of black employees having the necessary experience, rather than to the percentage of blacks in the entire workforce. This is especially true in view of the substantial increase in the numbers of black employees in the late 1960’s. Company records show that in December, 1968, blacks constituted about eight percent of all P & M employees having five or more years of experience. The percentages of leadmen who were black in the period 1966-1969 was as follows: Number of Leadmen Percentage of Black Leadmen 487 6.36 533 7.5 1968 564 7.45 509 7.46 102. The plaintiffs presented evidence of the racial composition of the supervisory workforce. Based on the percentage of blacks in the entire workforce (from which many managers are chosen), this evidence indicated that far fewer blacks held managerial positions than would be expected: Total Management Black Managers Expected Black Managers (Based on Black percentage of total workforce) 1962 787 11 (minority) 31 1963 1013 4 (minority) 42 1964 961 3 (minority) 40 1965 930 2 44 1966 1083 2 73 1967 1147 9 87 1968 1237 12 105 1969 1119 10 86 1970 634 8 34 1971 559 8 27 1972 581 14 32 1973 696 23 48 103. The plaintiffs also presented evidence of the racial composition of P & M managers. In calculating an expected number of P & M managers, the plaintiffs assumed that the proportion of P & M managers to the total number of managers would be the same as the proportion of P & M employees to the total number of employees. The plaintiffs also assumed that all actual black managers were in P & M. The plaintiffs’ calculations showed that far fewer blacks held management positions in the P & M unit than would be expected, based on the percentage of blacks in the P & M workforce: Estimated Actual Number of Black P & M P & m Managers Managers Expected Black P & M Managers, (Based on Black Percentage of P & M Workforce) 1965 491 35 1966 577 59 Estimated Number of P & M Managers Actual P & M Managers Expected Black P & M Managers, (Based on Black Percentage of P & M Workforce) 1967 609 9 73 1968 646 12 85 1969 568 10 68 1970 310 26 1971 263 8 20 1972 254 14 21 1973 326 23 32 104. Although the number of black managers has been fewer than expected when compared with the number of blacks in the workforce, the disparity may be somewhat exaggerated by the increases in black employees in the late 1960’s. An employee ordinarily is not promoted to supervision until he has been with the Company a few years. Consequently, the percentage of black managers should be compared to the percentage of blacks with the necessary experience, which generally is lower than the percentage of blacks in the workforce. For example, at the end of 1968, about eight percent of employees having five or more years with the Company were black. Using plaintiffs’ figure of 568 P & M managers in 1969, imposing a requirement of five years experience for managers would reduce the expected number of black managers from 68 to 45. 105. The percentage of black managers at Boeing Vertol has been rising steadily since 1967. The percentage of supervisory appointments offered and accepted by black employees has exceeded their representation in the workforce since 1967. From the beginning of 1967 through the summer of 1968, blacks constituted 19 percent of the appointments to P & M supervision. In P & M, blacks have constituted 16 percent of all supervisory selec