AFL-CIO in my July 24, 1974, memorandum to you. Since you have expressed your desire to proceed with concluding this agreement, I am submitting this office's comments on the July 24, 1974, version of the memorandum of understanding, pursuant to your instructions.

While we were pleased to learn of the Compliance Staff's suggested language changes, particularly in paragraph 9, we are still concerned that the details of this proposed charge referral procedure do not entirely comport with the spirit of Title VII. We therefore recommend a number of changes that, in our opinion, would be more consistent with the objectives of the Act but would not materially affect the thrust of the proposed agreement.

As you will note in our comments that follow, our most immediate concern relates to the administrative integrity of a procedure which requires the Commission to "evaluate" a respondent's findings of fact and proposed relief and take action thereon-to the extent feasible within thirty (30) days of the respondent's submission-without affording the charging party an opportunity to rebut what are likely to be the exculpatory statements of the respondent or challenge the proposed remedy. Thus we propose the addition of a new paragraph, inserted between proposed paragraphs 8 and 9, which would require the Commission to contact the charging party and consider the charging party's comments prior to commencing its evaluation. (See comment 4 below). Our specific comments follows:

1. For obvious reasons, any charge that a Respondent has retaliated against the Charging Party in violation of Section 704 should not be subject to the procedures set forth in the proposed memorandum of understanding. Furthermore, since there are special procedures for expediting Commissioners' charges in conjunction with our new 707 procedures, we suggest that Commissioners' charges should not be processed according to these procedures as a matter of course, except when a District Director determines this may be appropriate. We would urge therefore that subsections (c) and (d) be added to paragraph 1, to read as follows:

(c) charges of retaliatory action which could be a basis for relief under Section 704, and

(d) Commissioners' charges except when a District Director so determines (however appropriate notice of such charges will in all cases be provided to the organizations indicated in paragraphs 2 and 4 below).

2. In view of the fact that Respondent (s) may contact the Charging Party for "fact-finding" purposes (¶6), the Charging Party should be appraised of all written communications between the Commission and Respondent(s) transmitted pursuant to this memorandum of understanding. Additionally, because we clearly do not want to convey the impression that the Charging Party is compelled to submit to what is tantamount, at least initially, to an internal grievance procedure the Charging Party should be informed immediately that he or she can refuse to participate in this procedure, and that regardless of whether he or she decides to participate, he or she may nevertheless send any information deemed appropriate directly to the Commission.

To accomplish these limited objectives, we suggest that paragraph 5 be amended as follows:

At the same time that a charge is referred to the Respondent(s) pursuant to paragraphs 2, 3, and 4 of this memorandum, the District Director will send a letter to the Charging Party informing the Charging Party of this memorandum and of the procedures to be followed thereunder. In addition, copies of all EEOC correspondence transmitted pursuant to the above paragraphs will be furnished to the Charging Party at this time. The Charging Party will also be informed that he or she is not obligated to participate in the procedure detailed in this memorandum of understanding. Further, the Charging Party will be informed that whether or not he or she participates in this procedure, he or she may at any time submit information directly to the Commission.

3. We believe that it would be highly desirable to provide for Commission participation in any discussion between the Respondent(s) and Charging Party permitted under this agreement. To minimize the abuses that may occur in a procedure that has the approval but not the oversight of the Commission, it seems best to afford the Charging Party the additional protection of direct Commission involvement in any contacts made by the Respondent(s) for purposes of "fact-finding". Thus we propose the following addition at the end of paragraph 6:

No meeting between the Respondent (s) and Charging Party concerning the allegations of the charge will occur without a Commission representative pres

ent. If the Respondent (s) wish to contact the Charging Party for fact-finding purposes, the District Director shall be notified thereof reasonably well in advance of such a meeting. A member of the District Director's Compliance staff will be assigned to attend any such fact-finding discussions.

4. In order to ensure that no Commission "evaluation" will be made in a vacuum, the Charging Party should be afforded an opportunity to consider the Respondent(s)' findings of fact and proposed relief, and present, if he or she desires, rebuttal evidence or a counter remedy. This should be done before the Commission "evaluates" the Respondent(s) "package". Moreover, because the Charging Party's investigative and analytical resources may be limited, there should not be a requirement that the Charging Party submit his or her counterstatement in writing. Thus, we urge the inclusion of a new paragraph between proposed paragraphs 8 and 9, to read as follows:

Copies of all materials submitted by Respondent (s) will be provided immediately to the Charging Party. The Charging Party will then be afforded sixty (60) days to offer any comments or materials regarding Respondent(s)' findings of fact and/or proposed relief. Comments may be oral or in writing. Upon the request of the Charging Party the District Director may, in his or her discretion, allow the Charging Party an additional ten (10) days to comment.

5. If the preceding language is added, proposed paragraph 9 should be amended to read as follows [proposed changes in brackets]:

To the extent feasible, within 30 days after receipt of the [Charging Party's comments and/or materials], the District Director will evaluate any proposed settlement and all facts, explanation, reasoning, [and comments] submitted in support for opposition] of it [and in light of any additional available information which he deems relevant]. The District Director [will] request any additional facts, data

6. Since the Commission must be concerned with preventing abuses of the proposed procedure, we would urge that paragraph 15 be strengthened as follows [proposed change in brackets]:

The AFL-CIO and its affiliates will utilize their maximum resources [and exercise every sanction available to it] to prevent any adverse action against a Charging Party during this procedure.

Finally, we note an inconsistency in the ability of the various parties to terminate this agreement. In paragraph 23, for example, the Commission must give thirty (30) days notice prior to termination. No such requirement is imposed on the AFL-CIO or any of its affiliates; therefore, we suggest that the phrase "with thirty (30) days notice to the parties" be deleted from paragraph 23.

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,
September 11, 1974.

MEMORANDUM

To: John H. Powell, Jr., Chairman.
From: William A. Carey, General Counsel.
Subject: AFL-CIO agreement.

On September 4, 1974, the Commission voted 3-1 that the Chairman not send the letter inaugurating the AFL-CIO self-enforcement program. This memorandum discusses whether the Chairman, pursuant to his responsibility for the administrative operation of the Commission, is authorized to send the letter notwithstanding the contrary vote by a majority of the Commission.

Section 705 (a) of Title VII states in pertinent part that: "There is hereby created a Commission . . . which shall be composed of five members. . . Members. of the Commission shall be appointed by the President . . . The President shall designate one member to serve as Chairman of the Commission... The Chairman shall be responsible on behalf of the Commission for the administrative operations of the Commission..."

The General Counsel's Office has already presented its view that the sending of the letter was an administrative or programmatic matter, rather than a policy matter, which the Chairman could undertake without consultation with the Commission. The matter was, however, put before the Commission, a majority of which voted against the sending of the letter. We are of the opinion that this action alters the situation, and that the Chairman is without authority to act. contrary to the majority vote of the Commission on the matter.

The Commission is much like a corporation with the Commissioners in a capacity similar to members of the board of directors. A corporation is governed by its board of directors which may control the minutest details of its operations, although generally the day to day operations will be delegated to a chief executive officer (who may be the chairman of the board, the president, or the general manager). Russell v. Washington Savings Bank, 23 App. D.C. 398, 407 (1904). While certain powers may be delegated to an executive officer either expressly or impliedly as a function of the office, an officer may not act on any matter in contravention of a resolution of the board of directors on the matter. Humphrey v. Onaway Alpena Tel. Co., 204 Mich 97, 90 NW 1 (1918); 2 Fletcher, Cyc. Corp., Sec. 555, pp. 606-607 (perm. ed.).

The question here is whether the statute's explicit placing of administrative responsibility in the Chairman alters these general principles. Although we have found no case law on the matter, we are of the opinion that, in the instant circumstances, the Commission could properly prohibit the Chairman from acting. This conclusion is supported by the legislative history surrounding various reorganization plans in 1950 which had stemmed from the 1949 Hoover Commission report.

The following colloquy is from the testimony of Mr. Harold Leventhal of the Citizens' Committee for the Hoover Report before the Senate Committee on Expenditures in the Executive Departments, regarding Reorganization Plans Nos. 7 (ICC, 8 (FTC), 9 (FPC), and 11 (FCC) and the effect therein of the transfer of administrative responsibility to the Chairman of the respective regulatory agencies (Hearings on Sen. Res. Nos. 253, 254, 255, 256, 81st Cong., 2d Sess., p. 126 (1950)):

Mr. LEVENTHAL: It gives administrative authority to the chairman.

CHAIRMAN: Who is going to decide what are administrative responsibilities? Will he decide it?

Mr. LEVENTHAL: No. Since it also gives a charter to the Commission to decide questions of basic policy, I think it involves a call-back or it makes possible a call-back by the Commission on the ground that a policy matter is involved. I see no way in which that could be challenged by the chairman if it was adopted by a majority vote of the Commission.

I think in the last analysis the conclusive interpretation of what is a question of policy does remain with the majority vote of the Commission.1

Later, in discussion of the same reorganization plans, on the Senate floor, the following remarks reflected the Congressional intent in this matter (96 Cong. Rec. 7163-7164 (1950)):

Mr. Douglas: Let me ask . . . if it is true that the reorganization plans affecting the regulatory commissions generally . . . give to the Chairman... administrative powers and control over procedural issues, but still leave to the body of the various commissions the determination of so-called substantive issues

Mr. Humphrey: The Senator's interpretation of the reorganization plan is accurate. . . . It is important, according to the Hoover Commission task force reports on reorganization and the report of the Hoover Commission itself, that there be a concentration of administrative, functional powers-what we call the housekeeping powers-in the chairmen of the respective agencies. This would not, however, include powers affecting substantive policies of a commission . . . Mr. Douglas: Suppose the chairman of a commission states that a given matter is procedural and that, therefore, he has jurisdiction over it; but suppose other members of the commission believe that the matter is substantive and policymaking in nature or character. Would the commission then have any authority to overrule the chairman and make the determinations themselves?

Mr. Humphrey: It is my understanding that matters which deal with the substance of regulations, the substance of policy, and the substance of the law

1 The Hoover Commission report from which these plans stemmed stated: On routine supervision and appointments, the chairman should merely report periodically to the Commission. But the chairman's primary responsibility for administration should not supplant the ultimate authority of the entire commission on matters which are of major significance to the agency..

Actually this proposal does not derogate from the importance or equality of the other commissioners. Each member will have undiminished authority on all substantive policies and decisions and on basic administrative matters. In fact their participation in substantive action will be facilitated by freedom from partial and shared responsibility for administrative details. (Emphasis added.) (Executive Branch of the Government, Committee on Independent Regulatory Commissions: A Report With Recommendations, Jan. 13, 1949, Washington, D.C., U.S. Government Printing Office (1949)).

are left to the Commission as a whole; and where there is a conflict as between what is procedural and what is substantive, it is my interpretation that the role of the commission as a whole will overrule the administrative decision of the chairman.... (Emphasis added.)

Other unchallenged statements on the Senate floor reflect a similar attitude. For example, in debate concerning Reorganization Plan No. 8, Senator O'Conor, after noting certain administrative functions specifically reserved to the Commission, stated (96 Cong. Rec. 7361 (1959)):

These three administrative responsibilities specifically reserved to the Commission are concrete examples of the over-all administrative control which remains in the hands of the Commission, namely, that whenever a matter of administration and administrative action is of such importance that the Commission regards it as a policy matter then the Commission may handle it as being a question of policy. (Emphasis added.)

In the absence of any subsequent contrary case law or indication of different Congressional intent, we must assume Title VII was enacted with the same views regarding the relationship of the Chairman's administrative responsibility and the overall responsibility of the Commission. Thus, whether the Commission's action in this case be regarded as the ultimate determination of what is a policy matter or as the elevation of certain basic administrative matters to the level of policy, it is clear that a majority of the Commission may determine that a certain matter is of such significance that it must be acted upon by the Commission as a body. In this case the vote against sending the letter must be regarded as such a determination.

We find support for this view in the language of the statute itself. The administrative authority which the Chairman does have is the authority to act “on behalf of the Commission." This is language of agency, and it is axiomatic that authority delegated to an agent must be exercised in conformity with the direction of its principal. The language takes on special significance when the clause vesting administrative responsibility in the Chairman is contrasted with the subsequent clause vesting appointment authority in the Chairman but without indicating that that authority is to be exercised on behalf of the Commission.* This would indicate that administrative decisions must be in conformity with the ultimate direction of the Commission, except as to the appointment of personnel. For these reasons, it is our view that the Chairman is without authority to send the letter in question in the face of the majority vote of the Commission to the contrary.

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,
Washington, D.C., July 30, 1974.

Hon. AUGUSTUS F. HAWKINS,
Chairman, Subcommittee on Equal Opportunities, Committee on Education and
Labor, U.S. House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: Attached please find our responses to the questions raised in your letter of July 18, 1974. I hope you will find the material useful in preparation for the upcoming hearings of the Subcommittee on Equal Opportunities.

Please note that the data requested is available only through April, 1974. Endof-year data will be forthcoming within thirty to sixty days and will be forwarded to you at that time. In addition, the response to Question No. 4 requires a special computer run. These data should be available in 15 days and will be provided at that time.

Please let me know if we can be of further assistance to you or your staff as you prepare for these hearings. I look forward to seeing you soon.

Sincerely,

The pertinent part of Section 705 (a) reads:

JOHN H. POWELL, Jr., Chairman.

The Chairman shall be responsible on behalf of the Commission for the adminis trative operations of the Commission, and, except as provided in subsection (b) of this section, shall appoint, in accordance with the provisions of Title 5, governing appoint ments in the competitive service, such officers, agents, attorneys, hearing examiners, and employees as he deems necessary to assist it in the performance of its functions and to fix their compensation in accordance with the provisions of chapter 51 and subchapter III of chapter 53 of Title 5, relating to classification and General Schedule pay rates...

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

1. What is the size, regional location and processing stage of the Commission's backlog of complaints as of June 30, 1973; as of June 30, 1974?

The attached table shows the total number of uncompleted charges on hand by processing stage for each Region. This number includes those charges which have been assigned for processing but are not yet completed as well as those awaiting assignment. This information is provided as of June 30, 1973 and April 30, 1974. End-of-year data for FY 1974 is not yet available, but will be provided upon receipt.

The processing stages shown on the attached table are defined as follows: Pre-Investigation Analysis (PIA).— In the PIA stage charges are received, analyzed, and deferred if appropriate. The number of charges on hand in this stage are all those which have been received but are not yet ready to be investigated. Charges which are awaiting the deferral time requirement are included in this stage, as are charges in which more detailed information is necessary to determine if we have jurisdiction.

Investigations.-The number of charges on hand in this stage are all those awaiting assignment to an investigator as well as those which have been assigned but have not yet been completed.

Pre-Determination Settlement (PDS).-PDS is an early attempt at settlement when the facts are straight-forward and the Respondent has indicated a willingness to settle. The number of charges in this stage include all the charges assigned for a PDS attempt but not yet completed.

Determinations.-In the Determinations stage the facts obtained during the investigations are reviewed and determinations made as to reasonable cause to believe the charge is true. A determination letter is then issued by the Ditrict Director to the Respondent and Charging Party giving the determination found. The number of charges on hand in this stage represents all the charges on which investigation is completed but on which a final determination has not yet been issued to the Respondent and Charging Party.

Conciliation.-In the Conciliation stage an attempt is made to obtain a suitable remedy where a finding of reasonable cause has been made. The number of charges on hand in this stage are all those charges on which a reasonable cause finding has been made and on which the conciliation effort is still incomplete.

2. What is the size and processing stage of the Commission's backlog of complaints, by District Office within each regional office as of June 30, 1973; as of June 30, 1974?

Table 2 shows the total number of uncompleted charges on hand by processing stage by District Office within each regional office as of June 30, 1973; and as of April 30, 1974. End of year data for FY 1974 is not yet available, but will be provided upon receipt. Definitions of processing stages are the same as those in question one.