California Brewers Assn. v. Bryant

444 U.S. 598, 100 S. Ct. 814, 63 L. Ed. 2d 55, 1980 U.S. LEXIS 77

Opinions

Mr. Justice Stewart

delivered the opinion of the Court.

Title VII of the Civil Rights Act of 1964¹ makes unlawful, practices, procedures, or tests that “operate to 'freeze’ the status quo of prior discriminatory employment practices.” Griggs v. Duke Power Co., 401 U. S. 424, 430. To this rule, § 703 (h) of the Act, 42 U. S. C. § 2000e-2 (h), provides an exception:

“[I]t shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment pursuant to a bona fide seniority . . . system, . . . provided that such differences are not the result of an intention to discriminate because of race....”

In Teamsters v. United States, 431 U. S. 324, 352, the Court held that “the unmistakable purpose of § 703 (h) was to make clear that the routine application of a bona fide seniority system would not be unlawful under Title VII . . . even where the employer’s pre-Act discrimination resulted in whites having greater existing seniority rights than Negroes.” ²

The present case concerns the application of § 703 (h) to a particular clause in a California brewery industry collective-bargaining agreement. That agreement accords greater benefits to “permanent” than to “temporary” employees, and the clause in question provides that a temporary employee must work at least 45 weeks in a single calendar year before he can become a permanent employee. The Court of Appeals for the Ninth Circuit held that the 45-week requirement was not a “seniority system” or part of a “seniority system” within the meaning of § 703 (h). 585 F. 2d 421. We granted cer-tiorari to consider the important question presented under Title YII of the Civil Rights Act of 1964. 442 U. S. 916.

I

In 1973, respondent Bryant (hereafter respondent), a Negro, filed a complaint in the United States District Court for the Northern District of California, on behalf of himself and other similarly situated Negroes, against the California Brewers Association and seven brewing companies (petitioners here), as well as against several unions. The complaint alleged that the defendants had discriminated against the respondent and other Negroes in violation of Title VII of the Civil Rights Act of 1964, 42 U. S. C. § 2000e et seq., and in violation of 42 U. S. C. § 1981.³

The complaint, as amended, alleged that the respondent had been intermittently employed since May 1968 as a temporary employee of one of the defendants, the Falstaff Brewing Corp. It charged that all the defendant employers had discriminated in the past against Negroes, that the unions had acted in concert with the employers in such discrimination, and that the unions had discriminated in referring applicants from hiring halls to the employers. The complaint further asserted that this historical discrimination was being perpetuated by the seniority and referral provisions of the collective-bargaining agreement (Agreement) that governed industrial relations at the plants of the seven defendant employers. In particular, the complaint alleged, the Agreement’s requirement that a temporary employee work 45 weeks in the industry in a single calendar year to reach permanent status had, as a practical matter, operated to preclude the respondent and the members of his putative class from achieving, or from a reasonable opportunity of achieving, permanent employee status.⁴ Finally, the complaint alleged that on at least one occasion one of the defendant unions had passed over the respondent in favor of more junior white workers in making referrals to job vacancies at a plant of one of the defendant employers.

The Agreement is a multiemployer collective-bargaining agreement negotiated more than 20 years ago, and thereafter updated, by the California Brewers Association (on behalf of the petitioner brewing companies) and the Teamsters Brewery and Soft Drink Workers Joint Board of California (on behalf of the defendant unions). The Agreement establishes several classes of employees and the respective rights of each with respect to hiring and layoffs. Three of these classes are pertinent here: “permanent,” “temporary,” and “new” employees.

A permanent employee is “any employee . . . who . . . has completed forty-five weeks of employment under this Agreement in one classification [⁵] in one calendar year as an employee of the brewing industry in [the State of California].” An employee who acquires permanent status re tains that status unless he “is not employed under this Agreement for any consecutive period of two (2) years. ...” ⁶ A temporary employee under the Agreement is “any person other than a permanent employee . . . who worked under this agreement ... in the preceding calendar year for at least sixty (60) working days. ...” A new employee is any employee who is not a permanent or temporary employee.

The rights of employees with respect to hiring and layoffs depend in substantial part on their status as permanent, temporary, or new employees.⁷ The Agreement requires that employees at a particular plant be laid off in the following order: new employees in reverse order of their seniority at the plant, temporary employees in reverse order of their plant seniority, and then permanent employees in reverse order of their plant seniority. Once laid off, employees are to be rehired in the reverse order from which they were laid off.

The Agreement also gives permanent employees special “bumping” rights. If a permanent employee is laid off at any plant subject to the Agreement, he may be dispatched by the union hiring hall to any other plant in the same local area with the right to replace the temporary or new employee with the lowest plant seniority at that plant.

Finally, the Agreement provides that each employer shall obtain employees through the local union hiring hall to fill needed vacancies. The hiring hall must dispatch laid-off workers to such an employer in the following order: first, employees of that employer in the order of their seniority with that employer; second, permanent employees registered in the area in order of their industry seniority; third, temporary employees in the order of their seniority in the industry; and fourth, new employees in the order of their industry seniority. The employer then “shall have full right of selection among” such employees.

The District Court granted the defendants’ motions to dismiss the complaint for failure to state a claim on which relief could be granted. No opinion accompanied this order. A divided panel of the Court of Appeals reversed, 585 F. 2d 421, concluding that the 45-week rule is not a “seniority system” or part of a “seniority system” within the meaning of § 703 (h) of Title VII. In the appellate court’s view the provision “lacks the fundamental component of such a system” which is “the concept that employment rights should increase as the length of an employee’s service increases.” 585 F. 2d, at 426. The court pointed out that under the Agreement some employees in the industry could acquire permanent status after a total of only 45 weeks of work if those weeks were served in one calendar year, while others “could work for many years and never attain permanent status because they were always terminated a few days before completing 45 weeks of work in any one year.” Id., at 426-427.

The Court of Appeals concluded that “while the collective bargaining agreement does contain a seniority system, the 45-week provision is not a part of it.” Id., at 427: Accordingly, the Court of Appeals remanded the case to the District Court to enable the respondent to prove that the 45-week provision has had a discriminatory impact on Negroes under the standards enunciated in Griggs v. Duke Power Co., 401 U. S. 424. 585 F. 2d, at 427-428.⁹

“The 45-week rule is simply a classification device to determine who enters the permanent employee seniority line and this function does not make the rule part of a seniority system. Otherwise any hiring policy (e. g., an academic degree requirement) or classification device (e. g., merit promotion) would become part of a seniority system merely because it affects who enters the seniority line.” Id., at 427, n. 11.⁸

II

Title VII does not define the term “seniority system,” and no comprehensive definition of the phrase emerges from the legislative history of § 703 (h) .¹⁰ Moreover, our cases have not purported to delineate the contours of its meaning.¹¹ It is appropriate, therefore, to begin with commonly accepted notions about “seniority” in industrial relations, and to consider those concepts in the context of Title YII and this country’s labor policy.

In the area of labor relations, “seniority” is a term that connotes length of employment.¹² A “seniority system” is a scheme that, alone or in tandem with non-“seniority” criteria,¹³ allots to employees ever improving employment rights and benefits as their relative lengths of pertinent employment increase.¹⁴ Unlike other methods of allocating employment benefits and opportunities, such as subjective evaluations or educational requirements, the principal feature of any and every “seniority system” is that preferential treatment is dispensed on the basis of some measure of time served in employment.

Viewed as a whole, most of the relevant provisions of the Agreement before us in this case conform to these core concepts of “seniority.” Rights of temporary employees and rights of permanent employees are determined according to length of plant employment in some respects, and according to length of industry employment in other respects. Notwithstanding this fact, the Court of Appeals concluded that the 45-week rule should not be viewed, for purposes of § 703 (h), as part of what might otherwise be considered a “seniority system.” For the reasons that follow, we hold that this conclusion was incorrect.

First, by legislating with respect to “systems” ¹⁵ of seniority in § 703 (h), Congress in 1964 quite evidently intended to exempt from the normal operation of Title VII more than simply those components of any particular seniority scheme that, viewed in isolation, embody or effectuate the principle that length of employment will be rewarded. In order for any seniority system to operate at all, it has to contain ancillary rules that accomplish certain necessary functions, but which may not themselves be directly related to length of employment.¹⁶ For instance, every seniority system must include rules that delineate how and when the seniority time-clock begins ticking,¹⁷ as well as rules that specify how and when a particular person’s seniority may be forfeited.¹⁸ Every seniority system must also have rules that define which passages of time will “count” towards the accrual of seniority and which will not.¹⁹ Every seniority system must, moreover, contain rules that particularize the types of employment conditions that will be governed or influenced by seniority, and those that will not.²⁰ Rules that serve these necessary pur poses do not fall outside § 703 (h) simply because they do not, in and of themselves, operate on the basis of some factor involving the passage of time.²¹

Second, Congress passed the Civil Rights Act of 1964 against the backdrop of this Nation’s longstanding labor policy of leaving to the chosen representatives of employers and employees the freedom through collective bargaining to establish conditions of employment applicable to a particular business or industrial environment. See generally Steelworkers v. Weber, 443 U. S. 193. It does not behoove a court to second-guess either that process or its products. Porter Co. v. NLRB, 397 U. S. 99. Seniority systems, reflecting as they do, not only the give and take of free collective bargaining, but also the specific characteristics of a particular business or industry, inevitably come in all sizes and shapes. See Ford Motor Co. v. Huffman, 345 U. S. 330; Aeronautical Lodge v. Campbell, 337 U. S. 521. As we made clear in the Teamsters case, seniority may be “measured in a number of ways” and the legislative history of § 703 (h) does not suggest that it was enacted to prefer any particular variety of seniority system over any other. 431 U. S., at 355, n. 41.

What has been said does not mean that § 703 (h) is to be given a scope that risks swallowing up Title YII’s otherwise broad prohibition of “practices, procedures, or tests” that disproportionately affect members of those groups that the Act protects. Significant freedom must be afforded employers and unions to create differing seniority systems. But that freedom must not be allowed to sweep within the ambit of § 703 (h) employment rules that depart fundamentally from commonly accepted notions concerning the acceptable contours of a seniority system, simply because those rules are dubbed “seniority” provisions or have some nexus to an arrangement that concededly operates on the basis of seniority. There can be no doubt, for instance, that a threshold requirement for entering a seniority track that took the form of an educational prerequisite would not be part of a “seniority system” within the intendment of § 703 (h).

The application of these principles to the case at hand is straightforward. The Agreement sets out, in relevant part, two parallel seniority ladders. One allocates the benefits due temporary employees; the other identifies the benefits owed permanent employees. The propriety under § 703 (h) of such parallel seniority tracks cannot be doubted after the Court’s decision in the Teamsters case. The collective-bargaining agreement at issue there allotted one set of benefits according to each employee’s total service with the company, and another set according to each employee’s service in a particular job category. Just as in that case the separation of seniority tracks did not derogate from the identification of the provisions as a “seniority system” under § 703 (h), so in the present case the fact that the system created by the Agreement establishes two or more seniority ladders does not prevent it from being a “seniority system” within the meaning of that section.

The 45-week rule, correspondingly, serves the needed function of establishing the threshold requirement for entry into the permanent-employee seniority track. As such, it performs the same function as did the employment rule in Teamsters that provided that a line driver began to accrue seniority for certain purposes only when he started to work as a line driver, even though he had previously spent years as a city driver for the same employer. In Teamsters, the Court expressed no reservation about the propriety of such a threshold rule for § 703 (h) purposes. There is no reason why the 45-week threshold requirement at issue here should be considered any differently.

The 45-week rule does not depart significantly from commonly accepted concepts of “seniority.” The rule is not an educational standard, an aptitude or physical test, or a stand ard that gives effect to subjectivity. Unlike such criteria, but like any “seniority” rule, the 45-week requirement focuses on length of employment.

Moreover, the rule does not distort the operation of the basic system established by the Agreement, which rewards employment longevity with heightened benefits. A temporary employee’s chances of achieving permanent status increase inevitably as his industry employment and seniority accumulate. The temporary employees with the most industry seniority have the first choice of new jobs within the industry available for temporary employees. Similarly, the temporary employees with the most plant seniority have the first choice of temporary employee jobs within their plant and enjoy the greatest security against “bumping” by permanent employees from nearby plants. As a general rule, therefore, the more seniority a temporary employee accumulates, the more likely it is that he will be able to satisfy the 45-week requirement. That the correlation between accumulated industry employment and acquisition of permanent employee status is imperfect does not mean that the 45-week requirement is not a component of the Agreement’s seniority system. Under any seniority system, contingencies such as illnesses and layoffs may interrupt the accrual of seniority and delay realization of the advantages dependent upon it.²²

For these reasons, we conclude that the Court of Appeals was in error in holding that the 45-week rule is not a component of a “seniority system” within the meaning of § 703 (h) of Title VII of the Civil Rights Act of 1964. In the District Court the respondent will remain free to show that, in respect to the 45-week rule or in other respects, the se niority system established by the Agreement is not “bona fide,” or that the differences in employment conditions that it has produced are “the result of an intention to discriminate because of race.”

For the reasons stated, the judgment before us is vacated, and the case is remanded to the Court of Appeals for the Ninth Circuit for further proceedings consistent with this opinion.

It is so ordered.

Mr. Justice Powell and Mr. Justice Stevens took no part in the consideration or decision of this case.

Footnotes

1

78 Stat. 253, as amended, 42 U. S. C. § 2000e et seq.

2

United Air Lines, Inc. v. Evans, 431 U. S. 553, extended this holding to preclude Title VII challenges to seniority systems that perpetuated the effects of discriminatory post-Act practices that had not been the subject of a timely complaint. See also Teamsters v. United States, 431 U. S., at 348, n. 30.

3

The complaint also alleged, under 29 U. S. C. §§ 159 and 185, that the union defendants had breached their duty of fair representation by, among other things, negotiating “unreasonable privileges for some employees over others. . .

4

In this Court, the respondent emphasizes that he has not contended that there is anything illegal in classifying employees as permanent and temporary or in according greater rights to permanent than to temporary employees. His sole Title VII challenge in this respect has been to the 45-week rule on its face and as it has been applied by the defendant unions and employers.

5

The Agreement classifies employees into brewers, bottlers, drivers, shipping and receiving clerks, and checkers. Under the Agreement, separate seniority lists have to be maintained for each of these classifications of employees. The respondent is a brewer.

6

An employee may also lose permanent status if he “quits the industry” or is discharged for certain specified reasons.

7

In addition, permanent employees are given preference over temporary employees with respect to various other employment matters, such as the right to collect supplemental unemployment benefits upon layoff, wages and vacation pay, and choice of vacation times.

8

The Court of Appeals also observed that “the 45-week requirement makes the system particularly susceptible to discriminatory application since employers and unions can manipulate their manpower requirements and employment patterns to prevent individuals who are disfavored from ever achieving permanent status.” 585 F. 2d, at 427. This danger, according to the court, is almost never present in any “true” seniority system, in which rights “usually accumulate automatically over time. . . .” Ibid.

9

The Court of Appeals directed the trial court on remand to consider as well the respondent’s claims -under 42 U. S. C. § 1981 and 29 U. S. C. §§ 159 and 185.

10

See 110 Cong. Rec. 1518, 5423, 7207, 7213, 7217, 12723, 15893 (1964). The example of a “seniority system” most frequently cited in the congressional debates was one that provided that the “last hired” employee would be the “first fired.” Nowhere in the debates, however, is there any suggestion that this model was intended to be anything other than an illustration.

11

See Tram World Airlines, Inc. v. Hardison, 432 U. S. 63; United Air Lines, Inc. v. Evans, 431 U. S. 553; Teamsters v. United States, 431 U. S. 324; Franks v. Bowman Transportation Co., 424 U. S. 747.

12

Webster’s Third New International Dictionary 2066 (unabridged ed. 1961) defines “seniority,” in pertinent part, as the “status attained by length of continuous service ... to which are attached by custom or prior collective agreement various rights or privileges ... on the basis of ranking relative to others. ...”

13

A collective-bargaining agreement could, for instance, provide that transfers and promotions are to be determined by a mix of seniority and other factors, such as aptitude tests and height requirements. That the “seniority” aspects of such a scheme of transfer and promotion might be covered by § 703 (h) does not mean that the aptitude tests or the height requirements would also be so covered.

14

See E. Beal, E. Wickersham, & P. Kienast, The Practice of Collective Bargaining 430-431 (1972); Cooper & Sobol, Seniority and Testing Under Fair Employment Laws: A General Approach to Objective Criteria of Hiring and Promotion, 82 Harv. L. Rev. 1598, 1602 (1969); Aaron, Reflections on the Legal Nature and Enforceability of Seniority Rights, 75 Harv. L. Rev. 1532, 1534 (1962).

15

Webster’s Third New International Dictionary 2322 (unabridged ed. 1961) defines “system,” in pertinent part, as a “complex unity formed of many often diverse parts subject to a common plan or serving a common purpose.”

16

See generally S. Slichter, J. Healy, & E. Livemash, The Impact of Collective Bargaining on Management 115-135 (1960).

17

By way of example, a collective-bargaining agreement could specify that an employee begins to accumulate seniority rights at the time he commences employment with the company, at the time he commences employment within the industry, at the time he begins performing a particular job function, or only after a probationary period of employment.

18

For example, a collective-bargaining agreement could provide that accumulated seniority rights are permanently forfeited by voluntary resignation, by severance for cause, or by nonemployment at a particular plant or in the industry for a certain period.

19

For instance, the time an employee works in the industry or with his current employer might not be counted for the purpose of accumulating seniority rights, whereas the time the employee works in a particular job classification might determine his seniority.

20

By way of example, a, collective-bargaining agreement could provide that an employee's seniority will govern his entitlement to vacation time and his job security in the event of layoffs, but will have no influence on promotions or job assignments.

21

The examples in the text of the types of rules necessary to the operation of a seniority system are not intended to and do not comprise an exhaustive list.

22

There are indications in the record of this case that a long-term decline in the California brewing industry’s demand for labor is a reason why the accrual of seniority as a temporary employee has not led more automatically to the acquisition of permanent status. But surely, what would be part of a “seniority system” in an expanding labor market does not become something else in a declining labor market.