Accordingly, the question whether or not these sections empower the Board to issue and enforce orders against employment discrimination has not been judicially settled at this time, and the Board intends to re-examine the question in the light of comments received in the proceeding.

There are other sections in the Act from which Board jurisdiction over employment discrimination might flow. Many of the regulatory activities of the Board depend upon the Board's view of what is required in the "public interest" or by the "public convenience and necessity," e.g. granting and conditioning certificates of authority to engage in air transportation, sections 401 (a) and (e); altering, amending, or transferring certificates, sections 401 (g) and (h); approving mergers and acquisitions, section 408; granting exemptions from the Act, sections 416 and 101 (3).

While it would appear that the Board has wide discretion in construing the "public interest," that discretion is not unfettered. Under prevailing court interpretations, the Board believes that in general its determinations of what the public interest requires must reasonably grow out of, or be reasonably related to, one or more of the various elements of the public interest laid down for the Board's guidance by the Congress in section 102 of the Federal Aviation Act.* Thus, the Board's consideration of anti-trust principles, although arguably part of the general public interest, see infra, stems from the public interest standard in section 102 (d), "competition to the extent necessary to assure the sound development of an air-transportation system. . . ." 5 The Board's consideration of environmental matters is grounded in the standard in section 102(f), "promotion, encouragement, and development of civil aeronautics." The various conditions which the Board attaches to air transportation certificates as being in the "public interest" ultimately are derived from the standard in section 102(a), "encouragement and development of an air-transportation system. . ." (emphasis added). The standard in section 102(c)—“promotion of . . . efficient service . . . without unjust discrimination"-has been adverted to above.

6

It may be that section 102(f)-"promotion, encouragement, and development of civil aeronautics"-provides an alternate support for Board action to promote equal opportunity in the air carrier's employment practices. It is beyond dispute that equal employment opportunity is a national policy of the highest priority and importance. Moreover, it appears that Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e-2, which makes discrimination in employment unlawful, is remedial legislation which the Congress enacted to deal with a pervasive national problem needing correction at all levels of national life. It may well follow that the correction of this problem in the civil air transportation industry, among others, is an essential part of the promotion, encouragement, and

3 Transcontinental Bus System, Inc. v. Civil Aeronautics Board, 383 F.2d 466 (C.A. 5, 1967), cert. denied, 390 U.S. 920 (1968). (Board has no delegated authority from Congress to consider social policy factors not incorporated in the Federal Aviation Act or deemed relevant in the history of rate regulation in the transportation industry.)

4 "In the exercise and performance of its powers and duties under this Act, the Board shall consider the following, among other things, as being in the public interest, and in accordance with the public convenience and necessity :

"(a) The encouragement and development of an air-transportation system properly adapted to the present and future needs of the foreign and domestic commerce of the United States, of the Postal Service, and of the national defense;

"(b) The regulation of air transportation in such manner as to recognize and preserve the inherent advantage of, assure the highest degree of safety in, and foster sound economie conditions in, such transportation, and to improve the relations between, and coordinate transportation by air carriers

"(c) The promotion of adequate, economical, and efficient service by air carriers at reasonable charges, without unjust discriminations, undue preferences or advantages, or unfair or destructive competitive practices:

"(d) Competition to the extent necessary to assure the sound development of an airtransportation system properly adapted to the needs of the foreign and domestic commerce of the United States, of the Postal Service, and of the national defense;

"(e) The promotion of safety in air commerce; and

"(f) The promotion, encouragement, and development of civil aeronautics."

5 National Aviation Trades Association v. Civil Aeronautics Board, 420 F.2d 209 (C.A.D.C., 1969).

6 The Palisades Citizens Association, Inc., et al. v. Civil Aeronautics Board, 420 F.2d 188 (C.A.D.C., 1969). The National Environmental Policy Ace of 1969 also adds significant duties on the Board with respect to the environmental aspects of its decisions.

7 These conditions are almost entirely restrictions of a purely transportation nature, such as requirements to serve certain points in conjunction with other points.

8 In this respect, Title VII may be distinguishable from many other statutes which play more tangential role in civil aeronautics and which the Board is not empowered to enforce.

a

development of civil aeronautics and thus part of the public interest factors which the Board is empowered under the Act to consider and act upon."

Another potential source of jurisdiction over employment discrimination might stem from the sections of the Act which empower the Board to grant authorizations to air carriers to engage in interstate and foreign air transportation. The most important of these, section 401 of the Act, 49 U.S.C. 1371, provides that before issuing a certificate to engage in air transportation to a carrier the Board must find, among other things, that the applicant is "fit, willing, and able to perform such transportation properly" and to comply with the law and the rules of the Board.

It is possible that employment considerations are relevant to determinations as to the "fitness" of an air carrier under section 401. Whether the Board could consider discrimination in employment in relation to the fitness of a carrier well might turn on whether a violation of law is involved which could be said to adversely affect the rendition of air carrier services. Regulatory agencies including the Board have been upheld by the courts in denying applications for benefits filed by law violators on the grounds of fitness. However, while discrimination in employment is a violation of Title VII of the 1964 Civil Rights Act, allegations of such discrimination have yet to be pursued by any party in a Board certification proceeding.

10

Standing against these various interpretations are the facts, also beyond dispute, that the Congress has not explicitly empowered the Board to deal with air carrier employment practices, and that the Congress has not laid down for the Board any public interest standard parallel to the provision in the National Trasportation Policy in the Interstate Commerce Act, 49 U.S.C. preceding 1. 301, 901 and 1001, which declares the policy of Congress, among other things, "to encourage. equitable working conditions" in all modes of transportation subject to that Act and directs that the Act is to be administered and enforced to carry out that policy. The omission of this or any comparable provision in the Federal Aviation Act may be a positive limitation on the power of the Board to regulate employment practices.

In addition, the regulation and enforcement of equal employment opportunity within the civil air transportation industry is already entrusted specifically to a number of other agencies, so there is a question as to the propriety of an additional and possibly duplicative role for the Board in this area which would depend largely on inference. Thus, the Equal Employment Opportunity Commission has specific, although not exclusive," authority to enforce Title VII of the Civil Rights Act, which sets out the national policy against discrimination. The anti-discrimination commissions of the several states are empowered to bar discriminatory practices against air carrier employees within the respective states. The courts of course provide a forum for direct enforcement by aggrieved individuals."

12

Lastly, all of the trunklines, the local service carriers," and the major supplemental carriers have contracts with the Federal Government which impose on them as contractors equal employment opportunity responsibilities under Executive Order 11246 and regulations of the Department of Labor issued thereunder. These responsibilities include the establishing and carrying out affirmative action programs to assure equal employment opportunity in all aspects of employment. Carrier performance under these plans and the fulfillment of each carrier's con

Courts have held that the term "public interest" by itself encompasses consideration of matters of fundamental national policy such as the antitrust laws. City of Pittsburgh v. Federal Power Commission, 237 F.2d 741 (C.A.D.C., 1956); Denver v. Rio Grande Western Railroad Co. v. United States, 387 U.S. 485 (1967). Consideration of such matters, however, may be more properly an issue in disposing of applications for operating authori zations than a positive source of authority for promulgating regulations. It may be noted that section 102, footnote 5 supra, permits the Board to consider "other things" than the six enumerated elements as being in the public interest. But see Transcontinental Bus System, Inc. v. Civil Aeronautics Board, footnote 3 supra, which appears to limit Board discretion in considering matters not explicitly set forth or necessarily implied in the Federal Aviation Act.

10 Great Lakes Airlines v. C.A.B., 294 F.2d 217, cert. denied, 366 U.S. 965 (C.A.D.C. 1961); ABC Freight Forwarding Corp. v. United States, 125 F. Supp. 926 (D.C.S.D. N.Y. 1954). 11 110 Cong. Rec. 13650-52 (June 12, 1964).

12 Colorado Anti-Discrimination Commission, et al. v. Continental Airlines, Inc., 372 U.S. 714 (1963).

13 Diaz v. Pan American World Airways, Inc., 442 F.2d 385 (C.A. 5, 1971).

14 Two Hawaiian carriers and two Alaskan carriers are exceptions.

tractual responsibilities are actively monitored and inspected on site by the Federal Aviation Administration through its Office of Civil Rights under an assignment from the Office of Federal Contracts Compliance in the Department of Labor. The Federal Aviation Administration must certify that the carrier is in adequate compliance with the requirements of E.O. 11246 in order for the carrier to qualify for additional contracts.

In sum, aside from considering the denial of pending applications for new operating authority the Civil Aeronautics Board has at present no sanctions which it may impose on carriers found by appropriate authority to be engaging in discriminatory employment practices.15 However, if regulations are promulgated pursuant to the rulemaking proceedings, or conditions on carrier certificates adopted which provide against employment discrimination, the Board could then impose the normal sanctions for violations set forth in the Act.

Under section 901 of the Act, 49 U.S.C. 1471, any person who violates a rule or condition of certification established pursuant to the Act, is subject to a civil penalty not in excess of $1,000 for each such violation. In addition, if the violation is "knowing and willful," the person, under section 902, 49 U.S.C. 1472, is deemed guilty of a misdeameanor and subject for the first offense to a fine not exceeding $500. Finally, under section 1002 (c), 49 U.S.C. 1482 (c), the Board is empowered to issue cease and desist orders against any person who fails to comply with any provision of the Act or any requirement established pursuant thereto.

Hon. DON EDWARDS,

THE ADMINISTRATOR OF NATIONAL BANKS,
Washington, D.C., April 18, 1972.

Chairman, Civil Rights Oversight Subcommittee, House of Representatives,
Washington, D.C.

DEAR MR. EDWARDS: I am writing in response to your recent inquiry concerning the action taken by regulatory agencies to prevent violations of the equal employment opportunity policies of Title VII of the 1964 Civil Rights Act by the banks which are regulated by the Office of the Comptroller of the Currency.

The Treasury Department has been assigned the responsibility for monitoring Executive Order 11246, which relates to equal employment opportunity, for the financial industry-commercial banks who are depositaries of federal funds, savings banks and savings and loan associations as issuers and redeemers of savings bonds and savings notes. Under this assignment by the Office of Federal Contract Compliance of the U.S. Department of Labor, the Secretary of the Treasury has established and staffed an Office of Equal Opportunity Program to carry out this responsibility. This office has been conducting compliance reviews-an examination as to how these relate to minorities. The Department has required written affirmative action programs, ultilization studies of all job categories, and offers technical assistance with regard to new recruitment sources and programs for minorities and in areas of establishing numerical goals and timetables for minority hiring and utilization. These guidelines are an adaptation of Order No. 4 of the Office of Federal Contract Compliance, Department of Labor-especially adapted to meet the requirements of the financial industry (copy attached).

15 The statutes and Executive Orders relating to the elimination of discrimination in connection with Government procurement or contracting do not afford a basis for the Board to control airline employment practices. Board procurement is miniscule and is executed from GSA schedules. Air mail services are procured by the Post Office and, with minor exceptions, are authorized by statute rather than by contract.

Section 406(b) of the Act governs the award of subsidies to local service carriers. Because this is an activity receiving Federal financial assistance, the provisions of Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d, apply and, as implemented by the Board in Part 379 of its Organizational Regulations, 14 C.F.R. 379, prohibit subsidized carriers from discriminating against users of their services on grounds of race, color, or national origin. Procedures are provided for complaints against such carriers and proceedings which could result in termination of subsidy to a non-complying carrier. No such proceedings have been conducted. Title VI, 42 U.S.C. 2000d-3, expressly does not authorize action with respect to the employment practices of the carriers. However, an amendment to Part 379 is pending Presidential approval, which would prohibit discrimination in the employment practices of subsidized air carriers to the extent necessary to assure non-discriminatory treatment of passengers and shippers.

In addition to compliance reviews. the Department has carried on an extensive program of education and technical assistance. Conferences on equal employment for banks have been conducted in fifteen states, and in addition workshops have been held in conjunction with management conferences conducted by state bankers associations. In all, the Department has explained the requirements and expectations at these conferences and workshops to approximately 20,000 bank officials.

Bank examiners from my office, the Federal Reserve Bank and the Federal Deposit Insurance Corporation, upon the request of the Under Secretary of the Treasury, check technical compliance as regards minority statistical reporting requirements and having on file a written affirmative action program at every site a bank examination is made by these offices. Deficiencies of these technical requirements are reported to the Director of the Office of Equal Opportunity Program for follow-up and compliance.

Treasury regulations concerning equal employment and the requirements are enclosed. You will note that a system for sanctions is set forth therein.

For your further information, I am happy to report to you that several months ago a study was made by the Treasury Department in approximately 2,400 banks (those with over 100 employees) who are required to report minority employment statistics to the Joint Reporting Committee. The total employment of these banks is 630,000. (A memorandum on this subject from the Director of Treasury's Equal Opportunity Program is attached for your information.) The study, as you will note, disclosed that minority participation in the banks studied increased from 8% in 1966 to 14% by mid-1970.

In numbers, the increase is from 40,493 to 88,166 and are more than doubled. A review of the enclosed memorandum from Mr. Sawyer will further disclose increases by specific minority groups not only in totality, but in areas of white collar and officials and managers.

We trust that the above information is responsive to your inquiry. If we may be of further assistance, please do not hesitate to call upon us. Sincerely,

THOMAS G. DESHAZO.

Enclosures.

Acting Comptroller of the Currency.

[From the Federal Register, vol. 34, No. 1, Jan. 1, 1969]

TITLE 41-PUBLIC CONTRACTS AND PROPERTY MANAGEMENT

CHAPTER 10-DEPARTMENT OF THE TREASURY

PART 10-12-LABOR

Subpart 10-12.8-Equal Opportunity in Employment

The Secretary of Labor has issued regulations under Executive Order 11246 to promote and insure equal opportunity in employment with Government contractors, without regard to race, creed, color, or national origin, which have been promulgated as Chapter 60 of Title 41 of the Code of Federal Regulations, 33 F.R. 7804, May 28, 1968. Section 60-1.6 (c) provides that the head of each agency shall prescribe regulations for the administration of the order and of the regulations of the Secretary of Labor. In conformity with thtat requirement, the following regulations are being issued by the Department of the Treasury to the regulations of the Secretary of Labor. In conformity with that requirement, with respect to contracts for Treasury procurement and to implement and supplement the regulations of the Labor Department as applied to contracts with depositary banks and with those financial institutions which are issuing and paying agents for U.S. savings bonds and savings notes. These regulations were approved by the Acting Director of the Office of Federal Contract Compliance on Decem ber 20, 1968.

Since these regulations involve matters relating to agency management and to public contracts, within the meaning of 5 U.S.C. 553, they are issued without notice of proposed rule making and shall take effect as of the date of publication. Accordingly, the Department of the Treasury hereby add to Chapter 10 of Title 41 of the Code of Federal Regulations a Part 10-12-Labor, and hereby

promulgates as a subpart thereof Subpart 10-12.8-Equal Opportunity in Employment, to read as follows:

AUTHORITY: The provisions of this Subpart 10-12.8 issued under E.O. 11246, as amended by E.O. 11375, 42 U.S.C. Supp. III, 2000e note; and 41 CFR ch. 60.

§ 10-12.801 Scope of subpart.

(a) This subpart implements and supplements rules and regulations issued by the Secretary of Labor as Chapter 60 of this title to carry out the provisions contained in Parts II, III, and IV of Executive Order 11246, as amended by Executive Order 11375, for the promotion of equal opportunity in employment with Government contractors on the basis of merit and without discrimination because of race, color, religion, sex, or national origin. The provisions of Chapter 60 of this title apply to the contracts of the Treasury Department except as may be specifically provided herein. The regulations in this subpart prescribe administrative requirements and procedures to assure compliance with the program for equal employment opportunity under Treasury contracts.

(b) Sections 10-12.803 to 10-12.815 apply exclusively to contracts with financial agents, as defined in § 10-12.803 (c). Sections 10-12.816 to 10-12.830 are reserved for subsequent provisions governing financial agents. Sections 10-12.831 to 10-12.899 are reserved for regulations applying to other Treasury contracts covered by Executive Order 11246, as amended.

§ 10-12.802 Administrative responsibility.

The Secretary has designated an Assistant Secretary as the Treasury Department Contract Compliance Officer, who is responsible to the Secretary for carrying out the duties and responsibilities of the Department under Chapter 60 of this title and the provisions of this subpart. In his office the Contract Compliance Officer has established an Office of Employment Policy, the Associate Director of which is designated as the Principal Deputy Contract Compliance Officer. He is assisted by Contract Compliance Specialists. Additionally, the bureaus and offices of the Department have designated Deputy Contract Compliance Officers to assist the Department Contract Compliance Officer in the administration of the Executive order, as amended, with respect to contractors for whom the respective bureaus and offices have been designated as compliance agency units. § 10-12.803 Definitions.

(a) The term “Compliance Agency" means the Treasury Department. (b) The term "contract" includes any agreement to serve as a financial agent, whether written or implied by the performance of services as a financial agent. (c) The term "financial agent" in this subpart means a bank which, under Treasury Department regulations, accepts deposits of public money in any amount, or any financial institution which, under Treasury Department regulations, acts as either an issuing or paying agent for U.S. savings bonds and savings notes. The term "financial agent" does not include any organization, other than a financial institution, which is an issuing agent only, or a Federal Reserve Bank.

§ 10-12.804 Equal opportunity clause.

(a) By operation of the order, as amended, and of the regulations of the Treasury Department in 31 CFR Parts 202, 203, 214, 317, and 321, the equal opportunity clause in section 202 of Executive Order 11246, as amended, applies to every contract with a financial agent whether the contract is made by written agreement with the Department, or with a Federal Reserve Bank acting as its