User:Sammielh/AT&T Sex Discrimination Case

EEOC v. American Telephone & Telegraph Co. F.E.P. 431:73; Civil No. 73-149 (E.D. Pa.) was a consent decree entered into between the Equal Employment Opportunity Commission (EEOC) and American Telephone & Telegraph (AT&T) on January 18, 1973, to address systemic discrimination in the company against women and minority employees. The settlement ultimately led to AT&T agreeing to pay $15 million in back pay and $23 million in raises to these workers, as well as setting goals for hiring women and minorities for craft and managerial positions and for hiring men for clerical and telephone operator positions. This case was described as "the largest and most impressive civil rights settlement in the history of this nation".

Women in the Bell System
American Telephone & Telegraph (AT&T) was the largest private employer in the United States at the time of the case. The company had twenty-three subsidaries providing telephone services nationwide, which were referred to as Bell Operating Companies (BOCs), as well as AT&T Long Lines, Western Electric and Bell Labs.

In 1970, AT&T was the largest employer of women in the United States. Despite this, the company was highly segregated, with 80 percent of female employees working in one of three classifications. In the nationwide Bell System, women made up 99.9 percent of telephone operators, 99 percent of service representatives and 93 percent of clerical and stenographic staff. Meanwhile, craft jobs — such as frameman — were classified as male positions, with women filling only 2.9 percent of roles. Black employees held less than 2 percent of craft positions and 1.2 percent of managerial or sales positions. Despite the passage of the Equal Pay Act of 1963 and the Civil Rights Act of 1964, in 1973, women in full time employment were still making only 57 percent of the salary of their male counterparts. At AT&T, operators were paid on average $95 a week in 1969 (equivalent to $ in ), whereas craft positions were paid twice as much.

Civil Rights Act and the Equal Employment Opportunity Commission
Although Title VII of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of race, sex, religion and national origin, it was not originally intended to cover sex discrimination. This amendment was originally proposed by representative Howard W. Smith, which some historians speculate was intended to kill the bill, but it was strongly supported by representative Martha Griffiths and ultimately passed. Title VII protected approximately 63 million employees, the majority of whom were employed in the private sector.

The Act followed conventional wisdom of the day, that discrimination was primarily the result of a series of individual actions, and relied on the employing organization to comply with the new law. It established a federal agency, the Equal Employment Opportunity Commission (EEOC), which had a mandate of enforcing Title VII, albeit with few enforcement powers and very little funding. It was intended to intervene only in exceptional circumstances and to approach cases through a conciliatory frame. Where this failed, the EEOC could refer cases to the Department of Justice (DOJ), which had the power to file claims in "pattern or practice" cases. Otherwise it was up to the aggrieved party to bring an action directly where the formal procedure failed. For this reason, the EEOC was often nicknamed the "toothless tiger".

[BFOQ - page 22 and 84 in Stockford]

The Bell System employed 700,000 workers, representing one percent of the American workforce, but comprised seven percent of the EEOC complaints in 1970. [...] In the 1969 case of Weeks v. Southern Bell Telephone & Telegraph Co., a female plaintiff brought a discrimination case on her own behalf alleging that AT&T had discriminated against female employees by blocking their access to craft jobs. This lawsuit, which allowed Lorena Weeks to obtain a job as a switchman, was a landmark sex discrimination case. [Inspired by her case,] the National Organization for Women (NOW) had orchestrated a nationwide protest against the company, creating a dedicated task force to document discriminatory practices. [Frustration with EEOC - page 23 of Stockford]

Affirmative action [141-142 Stockford]

The General Services Administration (GSA) was in charge of regulating government contractor's compliance with employment discrimination legislation for the Office of Federal Contract Compliance Programs.

Legal proceedings
In 1970, David A. Copus was a civil rights lawyer with the EEOC, working to determine which cases should be referred to the DOJ under Title VII and writing amicus briefs on behalf of the agency to support women and minorities appealing unfavorable court rulings. He had been looking for a route to challenge AT&T for discriminating against Black women and was inspired by a petition of the Washington, D.C. chapter of the Urban League, which argued before the local Public Service Commission that Potomac Electric Power Company should not receive a rates increase until it addressed its discrimination against Black employees. When AT&T requested a nine percent rate increase in September, Copus realized that he could challenge the company through its regulator, the Federal Communications Commission (FCC), arguing that the company, as a public monopoly, could not increase its rates until it addressed its discriminatory practices against women and minorities. The FCC drafted regulations that had gone into effect on August 5, 1970, requiring the companies it monitored to prohibit employment discrimination. This allowed telephone companies to lose their license for breaching these new regulations.

On November 18, 1970, Copus convinced the chair of the EEOC, William H. Brown III, to back his case against AT&T. He worked with Susan Deller Ross and Larry Gartner, lawyers in the EEOC's General Counsel's Office, to draft a petition for the FCC, urging them to reject the rates increase. They found evidence in the annual reports that AT&T completed with the statistics on their minority employees, the previously filed complaints against the company and discriminatory recruiting practices. Copus was inclined to focus on discrimination against Black employees, evidenced by Bernard Anderson's The Negro in the Public Utility Industries, whereas Ross was convinced that women were most affected by the company's policies. The petition accused AT&T of "pervasive, system-wide and blatantly unlawful discrimination in employment against women, blacks, Spanish-surnamed Americans and other minorities". It argued that the company had breached the due process clause of the Fifth Amendment to the United States Constitution. It was delivered to the FCC on December 10, 1970, and the regulator sent a copy to AT&T. The company responded immediately by calling a press conference and arranging a New York Times interview. The CEO, H. I. Romnes, appointed William C. Mercer, vice president for personnel, to lead AT&T's response to the petition. The resulting five-page report denied the charges before arguing that the FCC was not the correct agency to determine issues of employment discrimination. The company argued that the only jobs which remained segregated by gender were those with a legitimate BFOQ. This response was sent back to the FCC on December 18, 1970. During this time, various civil rights groups petitioned the FCC, claiming the rates increase would violate the Communications Act of 1934 and the Fifth Amendment. AT&T proposed to the FCC that the issue of employment discrimination was separate from the rates case and on January 12, 1971, the FCC announced that it would support a rates increase of four percent. The agency decided to hold hearings on the higher rate, while separate hearings would take place to discuss the company's employment practices.

Pre-trial preparations
Frederick W. Denniston was appointed as the FCC hearings examiner. He scheduled the hearing for March 29, 1971, with the first prehearing conference on February 22, 1971. Copus met with Hal Levy, the attorney for AT&T, and Dave Cashdan, the lawyer representing multiple civil rights groups including NOW and the NAACP, to discuss how the discovery stage would progress. The charges involved all 22 operating subsidiaries of the company, aggravating the workload on AT&T to disclose documents. Ultimately Copus was successful in postponing the hearing indefinitely to allow time for the documents to be compiled. He convinced Brown to establish an EEOC task force for the AT&T case, comprising Copus, Gartner, Bill Wallace, Randy Speck and Marjie Fagan. On April 15, 1971, the EEOC published a prehearings memorandum that set out their charges against AT&T, alleging that the company practiced disparate impact, where policies affect different groups unequally, and institutional discrimination, where policies are so fundamental to a company's operations that they are seen as part of the culture even if they are discriminatory. As the case began to shift focus from discrimination against minorities to women, the team recruited witnesses, including Weeks and other female AT&T employees who had been denied promotions.

The formal FCC hearing was rescheduled to begin on January 31, 1972. The EEOC were tasked with producing a written case on December 1, 1971, which they titled A Unique Competence. The document focused primarily on sex discrimination, evidencing a shift in attention, although it also evidenced the company's attitude towards Black and Hispanic employees. The EEOC ultimately concluded that "[t]he Bell monolith is, without a doubt, the largest oppressor of women workers in the United States". The EEOC case outlined the forms of discrimination, including recruitment materials which listed operators positions for women and craft positions for men, separate hiring processes for male and female applicants, informal and daunting procedures for promotion, and no guarantee that women would retain their jobs after taking maternity leave. Similar forms of discrimination against Black and Hispanic employees were noted in the report, with 40 percent of the company's Black employees working in the Traffic Department as white employees were 4.7 times more likely to be promoted to a management position. AT&T had been working to address these aspects of its culture since at least 1965 but the publication of the EEOC's case inspired more progress, as management focused on rectifying the very issues that had been identified.

Hearings
The hearings began with the testimony of Speck as the lawyers for AT&T argued that the findings of fact prepared by EEOC should be excluded, although the conclusion was ultimately inconclusive and the company were left exclude individual documents. Sandra and Daryl Bem testified on a study that they had conducted in connection with the case, preparing three sets of "sex-biased, sex-neutral, or sex-reversed" classified ads to determine whether they had an impact on whether high school students would be more likely to apply for jobs targeting their gender. Only five percent of female students indicated that they would apply for craft jobs focused on men, as opposed to 45 percent if the jobs were targeted to women, and similar results were identified in male students and operator or service rep jobs.

Judith Long Laws testified that AT&T was segregated by sex, impacting wages and hopes of promotion. She proposed solutions to these issues, recommending that women be hired for technical and management positions and that men be hired as operators. Anderson then testified that the company had not made enough progress on hiring Black employees. Further witnesses testified on the company's maternity leave policy, recruitment, hiring tests, and the salary gap between traditionally male and female jobs. Weeks and Helen Roig also took the stand to speak about their respective successful discrimination claims against AT&T.

The hearing relocated to California on April 17, 1972, to begin public hearings. In Los Angeles, a number of Hispanic activist groups testified, surprising the EEOC by supporting the company as the result of a deal that they had arranged with Pacific Bell prior to the hearing. In San Francisco, the testimony focused on the problems faced by Spanish-speakers when playing phone calls. On May 8, 1972, the hearings moved to New York City, where the Center for United Labor Action (CULA) joined the case as a party. The women from CULA, all employees of New York Telephone, testified about their own experiences working for the company. The hearing reconvened in Washington, D.C. on May 31, 1972, where the final public hearings would take place. Inspired by media coverage of A Unique Competence, which included national headlines on the case such as "AT&T Assailed as Racist Monopoly", local chapters of NOW had committed to getting involved in the case, led by their president Wilma Scott Heide. Ann Scott finally testified on behalf of the organization, criticizing the company's affirmative action plan. Following this final public hearing, Denniston adjoined the hearings and AT&T agreed to submit its written defense by August 1, 1972.

AT&T response
In preparing their defense, the AT&T lawyers coordinated with the BOCs, as the EEOC case referred to policies at each of the subsidiaries. The company petitioned Denniston to omit the summaries of fact prepared by the EEOC but he ruled on February 29, 1972, that each one would need to be challenged separately. AT&T and the EEOC went to work agreeing the summaries between themselves, a job that took eight months, finishing on October 30.

Changes were also happening within the organization itself, with a focus on improving diversity beginning to be pushed from the top down. Robert D. Lilley, president of the company, and John D. deButts, the chairman, both spoke of the importance of affirmative action. AT&T ran nationwide advertisements that spring which showed women working as framemen and men working as operators. Dan Davis, a personnel manager at AT&T, established a team within the company that was focused on updating and improving the company's affirmative action plan, which would serve as a model for the BOCs, and submitted it to the GSA in February 1972. The EEOC were increasingly frustrated with this submission to the GSA, worried it would undermine their case if a government agency approved the plan. It looked as if the GSA and the company would reach agreement in early summer, but the government's insistence that goals be set for women in craft jobs and men in operators jobs led to them issuing a letter of non-compliance.

Davis worked with his colleagues to update the plan in accordance with the GSA's concerns, agreeing to set a target for men in operators jobs within one year. The amended affirmative action plan was approved by the GSA on September 20, 1975, with the government agency proclaiming it to be "landmark agreement". Under the agreement, AT&T was required for a year to hire women and minorities at "one-and-a-half times their proportion of the population". The EEOC immediately filed a complaint against the agreement. Copus contacted Bill Kilberg, associate solicitor for labor relations and civil rights at the Department of Labor, and asked him to review the plan. Kilberg referred the issue to the OFCC director, Phil Davis, who ultimately overturned the GSA's approval of the plan on September 28, 1972.

Settlement talks
Kilberg began contacting the EEOC, AT&T and the Equal Pay Act, a task force within the Labor Department, about arranging government-wide negotiations. The negotiations began on October 18, with the various government agencies outlining the concessions that they were hoping to gain from the company. Talks continued over several weeks. While negotiations were ongoing, the hearing re-started on October 30. A number of AT&T executives testified, including executives at the various BOCs. The company called expert witnesses in the areas of economics and psychology to testify that women and minorities were less likely to be interested in high paying craft and management positions and that the issue was society wide. The hearings were adjorned for the holidays on December 15, 1972.

In the negotiations, the EEOC was focused on creating a quota system to get women and minorities into craft jobs and men into operator jobs and receiving a multi-million dollar payment for the company's employees, whereas the Equal Pay Act was concerned with reworking AT&T's salary structure to ensure equal pay. The company were resistant to set quotas and to a large settlement payment. The first conflict was resolved by Davis, who proposed using the preemployment tests to identify women and minority applicants who would be qualified for a position without setting a specific quota, a strategy which would become known as the "affirmative action override". The EEOC convinced AT&T to agree specific goals to hire women and minorities for craft and management positions and to hire men for operator and clerical positions. The second primary issue was back pay and promotional pay, which the negotiators resolved by using a Labor Department formula that would result in a payment of between $100 to $400 to each female and minority employee who had recently been denied the chance to receive a higher paying position.

The negotiators agreed a deal in late December 1972 and then got to work preparing opinion letters from the Department of Labor and the EEOC, which would protect AT&T from further legal liability, and asking each of the BOC presidents to sign off on the consent decree. The agreement was signed on January 17, 1973, and the following day, the parties flew to Philadelphia where the complaint was formally filed at the U.S. District Court for the Eastern District of Pennsylvania and the consent decree was signed by Judge Leon Higginbotham. The EEOC was listed first out of the plaintiffs, a deviation from the usual practice, although the Department of Labor and the DOJ were also listed as parties. Meanwhile in Washington D.C., the successful agreement was announced to the public.

Settlement
A settlement was reached on January 18, 1973, whereby AT&T agreed to pay $15 million (equivalent to $ in ) in back pay, which was divided amongst 15,000 employees, and $23 million (equivalent to $ in ) in raises, which was divided amongst 36,000 employees. The back pay went to 13,000 women and 2,000 male minorities. For each of the six years of the consent decree, AT&T agreed to hire women to fill 40 percent of craft jobs and 19 percent of outside craft jobs and, as Copus insisted, to hire men to fill 10 percent of operator jobs and 25 percent of clerical jobs. Separate arrangements were agreed for hiring minorities.

[Stockford 197-198]

Brown called the settlement, "the most significant legal settlement in civil rights employment history".

Aftermath
Contemporary newspapers predicted that more employers would be held responsible for past employment discrimination. Brown established a sub-group named the National Programs Division in the EEOC which tackled discrimination from a nationwide perspective as opposed to investigating individual complaints. Copus led the division, which investigated General Electric, General Motors, Sears and Ford. In response, a number of these and similar Fortune 500 companies approached the EEOC and AT&T directly to put policies in place that would avoid a government intervention. During the summer of 1973, the EEOC filed 150 cases against other corporations to attempt to receive similar results across the country. Between 1973 and 1977, the government settled suits with Delta Air Lines, Merrill Lynch, Prudential Insurance, NBC and a number of large steel companies and unions which resulted in millions in back pay and thousands of new opportunities for women and minorities.

The Equal Employment Opportunity Act of 1972 amended section 706 of Title VII, which allowed the EEOC to file civil cases where it could not "secure an acceptable conciliation agreement". It also widened the scope of the 1964 Act, making local and state governments subject to the provisions of Title VII. The amended section 707 provided that the EEOC would receive the DOJ's power to bring "pattern or practice" cases beginning in March 1974. However the nature of the organization itself changed as time went on; when Eleanor Holmes Norton became chair in 1977, she shifted the focus to closing individual cases.

[Statistics - Stockford 212-213]

Backlash
The employees of AT&T were represented by a number of different unions, including the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers, and while some of the unions were involved in the negotiations between the company and the EEOC, the CWA declined to get involved until it filed suit to ask the court to consider whether the consent decree could take legal precedence over a union contract that required seniority to be a major consideration in promotions. [EEOC v. AT&T, 419 F. Supp. 1022 (E.D. Pa. 1976)] In EEOC v. American Telephone and Telegraph Co. et al., 556 F2d 167 (1977), the Third Circuit overruled the objections of the union, finding that a consent decree could be agreed which affected the union if its objections had been heard and a proportionate balance was reached between the union's concerns about its collective bargaining agreement and the necessity of the decree.

The U.S. Commission on Civil Rights published a statement immediately following the settlement, where it alleged that there was over $3 billion due in backpay, whereas the EEOC had only sought to recover between $50 to $75 million and the FCC had only estimated that $300 million was owed. In Leisner v. New York Telephone Co. 358 F. Supp. 359 (S.D.N.Y. 1973), which was decided two months after the consent decree, the federal district court held that the settlement was insufficient for the class of plaintiffs, who were all female employees. The court granted the women a preliminary injunction against the discriminatory practices of their employer. A second consent decree was signed between the EEOC and AT&T on May 30, 1974, which addressed salary inequity between male and female managers at AT&T.