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EQUAL EMPLOYMENT OPPORTUNITY, 1965

MONDAY, JULY 19, 1965

HOUSE OF REPRESENTATIVES,

GENERAL SUBCOMMITTEE ON LABOR

OF THE COMMITTEE ON EDUCATION AND LABOR,

Washington, D.C.

The subcommittee met at 9:45 a.m., pursuant to notice, in room 2261, Rayburn House Office Building, Hon. John H. Dent presiding. Present: Representatives Dent, Hawkins, Martin, and Bell. Also present: Jay Foreman, subcommittee counsel.

Mr. DENT. The General Subcommittee on Labor will come to order. I would like to read a statement prepared by Mr. Roosevelt, the chairman of this subcommittee, for the record at this point.

On July 2, 1965, title VII of the Civil Rights Act of 1964 became legally effective.

Title VII contains those provisions of the 1964 Civil Rights Act which prohibit discrimination in employment because of race, color, religion, sex, or national origin.

Hearings into employment discrimination commenced in this committee. In the 87th and 88th Congresses this committee reported bills to ban job opportunity discrimination. Appreciating the difficulty of enacting two major civil rights acts in one Congress, the chairman of this subcommittee presented a statement and a proposed amendment to the Judiciary Committee which would have integrated H.R. 405, 88th Congress, into the 1964 Civil Rights Act.

With minor changes the Judiciary Committee accepted this proposal. With further modification, including the addition of discrimination in employment based on sex, the House passed the Civil Rights Act incorporating equal employment opportunity.

Subsequently title VII was altered drastically and the entire bill was passed. The authority of the Equal Employment Opportunity Commission to prevent employment discrimination has been substantially curtailed.

These hearings are intended, therefore, to examine closely the administrative and enforcement provisions of title VII. We also wish to draw attention to the problem of discrimination because of sex. This amendment to title VII originated on the floor of the House. There was a paucity of meaningful debate and the legislative intent is unclear. This one problem has caused enormous difficulties which it is our hope to alleviate.

Seventeen members of this committee have introduced bills to prohibit arbitrary job opportunity discrimination. This evidences the great concern that is felt in this area better than any speech.

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These 17 bills reflect our desire to eradicate discrimination in employment in the most effective and reasonable manner possible. We welcome constructive criticism which will help us to achieve our goals.

That is the end of the statement by the chairman. At this time acting in his behalf, we will call the first witness, Mr. James B. O'Shaughnessy, speaking for the Illinois Chamber of Commerce. Mr. O'Shaughnessy, will you come forward, please?

I understand that you passed out statements on your position in the matter so you may follow whatever procedure you believe will give us the benefit of your testimony this morning.

STATEMENT OF JAMES B. O'SHAUGHNESSY, ON BEHALF OF THE ILLINOIS STATE CHAMBER OF COMMERCE; ACCOMPANIED BY ROBERT M. PERRY, MANAGER, LABOR RELATIONS DEPARTMENT, ILLINOIS STATE CHAMBER OF COMMERCE

Mr. O'SHAUGHNESSY. Thank you, Mr. Chairman.

Mr. DENT. With unanimous consent I am sure that your full statement will appear in the record as it is written. So you may read or summarize from it as you please.

(The document referred to follows:)

STATEMENT OF JAMES B. O'SHAUGHNESSY FOR THE ILLINOIS STATE CHAMBER OF COMMERCE ON H.R. 9222 (EQUAL EMPLOYMENT OPPORTUNITY ACT OF 1965)

My name is James B. O'Shaughnessy. I am a partner in the Chicago law firm if Schiff, Hardin, Waite, Dorschel & Britton. I am a member of the Labor Relations Committee of the Illinois State Chamber of Commerce, and am authorized to speak here today on behalf of this 110-member committee as well as the chamber's 70-member board of directors. I am accompanied today by Robert M. Perry, manager, labor relations department of the State chamber. Mr. Perry also has served since its inception as a member of the advisory committee to the State FEPC.

The Illinois State Chamber of Commerce is a Statewide civic association with membership of almost 20,000 business and professional people representing some 8,000 companies located in every section of the State of Illinois. The State chamber appreciates the opportunity to offer its views on the highly controversial section of the Civil Rights Act dealing with equal employment opportunities. While it may not serve the purpose of this subcommittee, or the State chamber, to refer to the "controversial" nature of this section, the fact remains that this section is controversial. It is our basic contention that proposals made in H.R. 9222 will not contribute to the lessening of controversy, a goal of all who are sincerely concerned with equal employment opportunities, but will have the reverse effect.

Therefore, it will be our main contention that now is not the time for any consideration of changes in title VII. Just as was the case in 1961 when the Illinois FEP statute was enacted, "initial business receptivity" to title VII, even during its short life of 19 days, has been good. We are confident that good receptivity to the Federal statute will continue.

We, therefore, seriously question proposals in H.R. 9222 for (1) extending the coverage; (2) giving to the Equal Employment Opportunity Commission more authority than exists at present; and (3) eliminating State commissions from the fair employment practices scene for all practical purposes.

Before the assumption is made that the Illinois State chamber is opposed to equal employment, let me quote to you from some editorial comment which appeared in a well-known magazine of national circulation. "Something new and revolutionary is happening-many ranking industrialists have taken the lead in campaigning against job bias. Even more extraordinary a leading U.S. business organization has made a film that tells businessmen that it is time to replace the traditional system of hiring by race with a new pattern of hiring by merit." The quotation, gentlemen, is from the August 1951 edition of Ebony magazine, then

and now one of the leading publications aimed at Negro readers. The business organization mentioned was the Illinois State Chamber of Commerce. The film referred to was our initial effort to educate the business community to the importance and the good business sense of equal employment and of hiring based on merit. Since that initial film we have conducted long-range educational programs throughout the State. A year ago we invested some $32,000 in the production of a second movie entitled "Challenge" dealing with the implementation of merit programs within companies. The film has had wide acceptance, including not only the Illinois business community, but industry in other States, the President's Committee on Equal Employment Opportunity and the Employment Security Commission of the Federal Government-which purchased four prints of the film for use in training its employment personnel in dealing with business and industry. A brochure explaining the film is attached.

These facts are presented to indicate our sincerity in this field. We do not hold ourselves forth as historical exponents of compulsory legislation designed to end discrimination in employment. We do hold ourselves forth as historical exponents of equal employment for all-regardless of race, color, religion, or creed-or the hiring of the best qualified person for the job. It is from this background that we can truly say that the cause of equal opportunity for all is moving forward on an increasingly promising note. We would be naive to contend that passage of the Civil Rights Act has not had a certain role in accomplishing further equal opportunity. It has been said that because this law deals with employment problems, it is to employers that we must look for its success, however.

CHANGES IN TITLE VII UNTIMELY, INAPPROPRIATE

If this statement has any validity, and we feel it has, then we must question the attempt to repeal a vital section of the Civil Rights Act which went into effect only 19 days ago and with which those coming under the law and those in charge of its enforcement are not yet familar. We respectfully urge, therefore, that any consideration of changes in this statute be delayed for at least 2 years. It is incumbent on this subcommittee to consider all the facts and especially incumbent on it to consider the opinion of the one group that can insure equal employment opportunity-the industry, business, retail, and professional community. These various sections of American life just happen to think that changes in title VII at this time are untimely and inappropriate.

It was just a year ago that Congress locked in the great debate on the civil rights bill. As the commentator in our merit film "Challenge" states in the opening scene "debate was long and hot. Tempers flared, and not only on the House and Senate floor. Civil rights groups demonstrated, dramatizing racial discontent, pressing for passage. After the longest filibuster in history, the act was passed and became the law of the land. The Civil Rights Act is a challenge to all of us, but one part, the controversial title VI, is a special challenge to all employers to eliminate discrimination in every aspect of employment."

We like to feel that we had a small role to play in the drafting of the final version of title VII, for after 4 delegation trips to Washington and numerous conferences of our labor relations committee, we developed 16 pages of suggested amendments to the section, and many of them found their way into the statute. Although business does not like regulations, and seem to be able to create more jobs for people if left free from excessive controls, it was felt that the final version of title VII was fair and equitable to all concerned.

Yet, even with title VII, even with State fair employment practices laws and numerous regulations facing business today, the fact remains that this highvoltage human relations problem is not going to be solved by Government edict. Persons with an extremist outlook, on either side, are not going to solve this problem. The problem calls for objectivity, diplomacy, planning ahead, and, to a large measure, calls for positive action by American business and industry. Such positive action is being taken. Let the business community show what it can do in conjunction with the present title VII.

An examination of H.R. 9222 indicates that there are three major areas of change; namely, lowering of coverage to employers with eight or more employees; extensive revision of the section dealing with prevention of unlawful employment practices (sec. 6), and an evident attempt to eliminate State commissions from the fair employment practices scene.

First, we are unalterably opposed to lowering of coverage under the statute. Since the inception of the Illinois law attempts have been made, in spite of legislative history which indicated that none would be made, to lower coverage.

In both of the last two sessions of the general assembly such proposals have been defeated, mainly because we were able to point out that the heavy influx of complaints would result in an administrative load that the Commission would not be able to administer. It was the considered judgment of the general assembly, after 4 years' experience with the law, that coverage should not be lowered. Yet, H.R. 9222 is asking for lowering of coverage after 19 days of experience. The sponsor of the Illinois bill to lower coverage from 50 to 10 stated that it would mean an additional 29,347 employers would be covered. It is impossible to predict the number of complaints that would result, but it is basically factual to assume they would be in the hundreds-mostly unfounded. The reason is that lowering of coverage would affect mainly the small firms in areas of the State outside of the city complexes of Chicago, Peoria, Rockford, and East St. Louis. It is in these areas where qualified minority group employees are probably less available than in city areas. Proof of this fact is contained in the report of the Governor's Committee on Unemployment in Illinois, released in 1963, which stated in part that "it is necessary, however, that they understand that discrimination is, in fact, lessening and that many of the problems that Negroes face in the job market are due to inadequate skills and education rather than to color." Multiply this Illinois situation by the other 49 States of the Union and you can obtain some idea of the enormity of the problems which would result to Federal administration.

A recent survey among members of the BNA personnel policies forum on the employment of Negroes, gives further indication of the problems which may result. The survey indicated that

(1) Although Negroes are employed in blue-collar jobs by 94 percent of the companies surveyed, they are employed in white-collar jobs by only 70 percent.

(2) Nearly 75 percent of the companies are taking positive steps to recruit Negroes, but the percentage of Negroes in the work force is 3.9 percent, or lower, in 58 percent of the firms.

(3) More than 60 percent of the companies reported that there has been no increase in their employment of Negroes since the passage of the Civil Rights Act last year. Some stated that they expect their emloyment of Negroes to decline, rather than increase, because of adherence to a policy of merit employment and a lack of qualified minority group applicants. The Governor's Committee on Unemployment report also indicated that (1) while Negroes constitute approximately 10 percent of the Illinois population, they constituted about 30 percent of those seeking jobs; (2) one-half of the jobseekers were factory workers with little or no occupational skill, but jobs for such workers constituted only a fourth of the Illinois total; thus, two-thirds of the jobseekers were possessed of skills which required little or no training; and (3) 68 percent of the jobseekers have not completed high school; 17 percent had not completed the eighth grade; 22 percent had completed only the eighth grade, and another 29 percent were high school dropouts.

These characteristics are reflected by the Illinois State Employment Service's figures on surplus occupations (those where the job applicants exceed the job openings) for February 1965. Virtually all of the surplus occupations were ones demanding little or no skills, such as laborers, clerks, chambermaids, and porters.

The Bureau of Labor Statistics has completed the first phase of a survey, and noted that from a third to a half of the job vacancies were difficult to fill, in that filling the job required a month or more of employer recruitment effort. Among the vacancies most frequently mentioned as difficult to fill were those for engineers, registered nurses, draftsmen, laboratory technicians, physical therapists, stenographers, typists, machinists, tool and die makers, and various types of mechanics and repairmen.

An analysis of the unemployment problem, thus, shows that the difficulty in our fast changing and upgraded society does not lie with a deficiency of demand for labor, but with the lack of skills among the labor force to fill existing demand. In talking with civil rights leaders in Chicago one learns that these leaders are the first to admit, but only privately, that minority group members today do not possess the skills to handle the majority of jobs open today in American business. Therefore, lowering of coverage can only result in impossible administrative burdens for the Federal Commission through an influx of unfounded complaints-unfounded because of lack of skills for the job in question. The result will be unfilled promises to those who will expect employment because they now come under the provisions of the act.

The Federal Commission also may experience manpower problems. A recent training seminar in Washington indicated that 65 investigators, on loan to the Equal Employment Opportunity Commission from various Government agencies, were urged to conduct broad investigations into employment practices rather than to overemphasize adjustment of the individual complaints. If 65 investigators are required now when the law applies to employers of 100 or more, what number will be needed if the coverage drops to 8?

What will happen on the State level should coverage be lowered? At present some 30 States have FEP statutes. In Illinois lowering of coverage under the Federal act would bring immediate demands for further lowering of the State coverage, although this could not be done until the next session of the general assembly. Yet, lowering of coverage on the State level also would result in an influx of complaints and would place an even heavier administrative burden on the staff. Under both title VII, and under proposals contained in H.R. 9222, the Federal Commission may enter into agreements with State agencies which would, in essence, grant to States the right to handle their own fair employment problems. However, it is also provided that the "Commission shall rescind any such agreement whenever it determines that the agreement no longer serves the interest of effective enforcement under this Act." The State chamber fought, successfully, for passage of a bill in the just concluded session of the Illinois General Assembly which would grant the right to the Illinois FEPC to enter into such a relationship with the Federal authorities. We have long preached the theory of States rights and felt that this was one area where we could practice what we preach.

Any attempt to lower coverage on the Federal level, that would result in State action to lower coverage, would certainly render the Illinois operation ineffective and could result in the cancellation of any State-Federal agreement. In fact, to my knowledge no such agreement has yet been signed. It is our considered opinion that the reason for no agreement being reached is the indecision concerning the Federal program-an indecision contributed to by the proposals made in H.R. 9222.

Let us assume that the coverage under Federal law is lowered to 8, but Illinois remains at its present 50. Cases involving employees in the 8-49 range would be handled by the Federal Government. Cases involving 50 or more would be handled by the State agency, so long as the State FEPC operated "effectively." Cases involving charges of discrimination based on sex would be handled by the Federal authorities, as it is presently under title VII. The end result would be chaotic, to say the least.

What would happen in the smaller firms to be covered? Every personnel man acquainted with this subject knows that, even under the very best conditions and with the best intentions, an integration program can only be installed gradually. Such a program is difficult enough with larger, well-staffed firms who have had some experience with fair employment problems. To lower coverage to these smaller firms will be confusing and would not serve the best interests of the fair employment program itself.

For these reasons lowering of coverage as proposed in H.R. 9222 is just not feasible.

The second major change in H.R. 9222 comes in Section 6-Prevention of Unlawful Employment Practices. The original intent of title VII was to provide machinery for conciliation and persuasion. This is the basis of any FEP statute, and the Illinois FEP Commission has continually played up the role of conciliation since the act became effective in 1961. If the conciliation approach was good enough last year when the civil rights bill was passed, what is wrong with it today? Is new language proposed in section 6 a shift away from the conciliation approach? One of the leading exponents of conciliation, and one of the most respected groups, is the National Urban League. They believe in racial diplomacy, rather than the direct action approach. This country has been able to compare the two systems in recent months and, we believe, the great majority of Americans favor the diplomatic-the conciliatory-approach.

Provisions of section 6 seem to switch from the conciliatory approach to a new concept including service of complaint upon the respondent, hearings by the Commission or designated agent, issuance of cease-and-desist orders, court enforcement, etc. We have had experience with these procedures in Illinois. While the performance of the FEPC in our State has been generally good, there is one case which did involve public hearings, examiner's reports, a Commission review, and other procedures similar to proposals under section 6. This

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