tries? What impact has GSA had in dealing with discriminatory employment practices in these industries?

Answer. Executive Order 11246, as amended, provides under Part II, Section 202, that all government contracting agencies shall include in every governmet contract hereafter entered into the requirements of the Government's equal employment opportunity program.

The U.S. Department of Labor Order No. 1 of October 1969 assigned the contract compliance responsibility for the utility industry to the General Services Administration.

In those instances where written, formal bilateral contracts are executed, there has been no difficulty in implementing Executive Order 11246, as amended, and reviewing the employment practices of the utility contractor.

One year after the reorganization of GSA's contract compliance program in 1970, GSA's efforts resulted in the companies in the electric, gas, and sanitary services industries submitting Affirmative Action plans and EEO 1 reports that indicated parity would be reached in penetration ratio (percent of minorities in the work force) seven years sooner than previously predicted (1976 instead of 1983) and that parity would be reached in occupation ratio (equality of wages) seventeen years sooner than previously projected (1981 instead of 1998). Specific examples of progress in this area follow:

a. Washington Gas Light Co. (WGL)

In the two-year period, from 1969 to 1971, the minority employment increased by 14.1%. This increase in the penetration ratio was accompanied by an increase in the occupation ratio. For example, in the "Officials and Managers" category, the total number of minorities increased from 12 to 17 and they now represent 4.1% of that category; in the "Professionals" category, it went from 5 to 11 (or 5.0% of the total); in the "Skilled" category, it went from 157 to 181 (or 25.7%); and, in the "Semi-skilled" it increased from 338 to 384 (or 62.7% of the WGL total).

What makes this progress outstanding is that it occurred even though the company was experiencing severe cut-backs in their overall employment. For example, in October 1971, WGL's total work force was 3,000. A scant seven months later, this figure dropped by 320 employees to 2,680.

b. Potomac Electric Power Company (PEPCO)

In January of 1972 GSA's contract compliance staff analyzed the entire PEPCO organization. This analysis showed that an "affected class situation" exists in several departments. An affected class situation occurs when members of a particular minority group are kept in a particular class of jobs (such as maintenance men, etc.). The result of this analysis will be a formal agreement to eradicate this situation.

c. Baltimore Gas & Electric Company (BG&E)

The impact of the GSA Contract Compliance program is just beginning to be felt at BG&E. A total of 27 of BG&E facilities were reviewed and the results show that BG&E has a long distance to go to reach parity. The minority representation at the company is currently 15.3% while the Baltimore Standard Metropolitan Statistical Area Negro percentage is 21.9% (1960 Cenus). In Baltimore City itself minorities compose 47% of the population.

In order to help eliminate this disparity, a conference was held in Washington with officials of the company. The company has agreed to establish separate goals and timetables for each department with severe under-utilization of minorities and females. There are 31 departments in this category (which consists of any department with less than 11% minorities, or less than 16% women). This unique approach has the effect of pinpointing and helping to eliminate such discriminatory practices as segregated departmental areas and work crews.

d. AT&T (Bell System)

GSA's contract compliance efforts with various companies in the Bell System began in 1969.

The accompanying chart reflects the amount of change in the minority penetration into the work force of the 20 Bell System companies and the AT&T Headquarters office and the Long Lines offices from 1969 to 1970. The 1971 statistics will be available by June 1, 1972, and judging by some of the quarterly EEO progress summaries received, it is anticipated that considerably more improvements will be evident.

In one incident a "show-cause notice" was issued by GSA to the New Jersey Bell Telephone Company because of sex discrimination. The company has agreed to work out this problem and at the same time has made substantial advancements in other EEO areas, especially minority recruiting and training.

The Pacific Northwest Bell System plans a significant increase in the percentage of minority and women employees at all levels of operations over the next five years as a result of GSA's impact on their EEO program. In the Seattle area, for example, minority employment will eventually equal or exceed the minority representation in that area. At the end of 1971 there were 390 minority workers among the 4,658 total employees. This represented an 8.5% penetration. ratio. Seattle's minority population is 12.6% (1970 Census) and by the end of 1972 the goals indicate the minority employment will be 10% at Pacific Northwest Bell.

Question 2. As the agency responsible for protecting the Federal Government's interest in rate increase hearings, does the General Services Administration believe that employment practices of an applicant for a rate increase should be appropriately considered in the granting of a rate increase? If so, please give the legal authority for your position and indicate instances where this argument has been made by the General Services Administration.

Answer. GSA believes the employment practices of a regulated monopoly to be a proper issue in rate increase proceedings. The regulated company's discriminatory employment practices may have substantially and unreasonably increased the cost of providing the service during the test period used in the proceeding for ratemaking purposes, and, if so, this issue should be raised for Commission consideration.

Since the rate increase proceeding is fundamental to and strikes at the heart of the utility industry in a period of rising costs, it is an effective forum to press the issue of fair employment practices. Consequently, GSA considers these proceedings to be, not only an effective, but a proper vehicle by which it can pursue the goal of equal employment opportunity. However, many commissions disclaim any jurisdiction over such matters.

Because GSA appears in rate increase proceedings throughout the country and before most Federal and State commissions, the legal basis on which it would raise an employment practice issue would, of course, vary from state to state. For example, in Re Potomac Electric Power Company (1970), 83 PUR 3d, 209, the District of Columbia Public Service Commission held it was obligated by local law with the responsibility of taking corrective action when it finds a utility is not meeting the requirements of the law as to equal employment opportunity. While the Commission did not disallow the rate increase in question, it directed the utility to submit, periodically, reports as to what corrective acts were being taken.

Even if the local law did not specifically charge a regulatory body with such oversight responsibility as the D.C. Commission found it had, most enabling statutes empower a commission to attach to any grant of authority such terms and conditions as are just and reasonable. On this basis, it seems clear that most commissions could condition a rate increase decision upon the utility's compliance with nondiscriminatory hiring practices.

Disregarding the individual jurisdiction and power of the Commission in question, an employment practice issue could be raised directly in any proceeding by presenting it in the posture of traditional cost of service approach. While it would be difficult to establish an adequate record in this area, certain connections between the utility's employment practices and its cost of service could be shown. For example, to the extent a company engages in unfair hiring and promotion practices, such acts would have a cost of service effect, especially in wage and salary expense. In this respect, certain expenses could be disallowed. Moreover, since such practices most certainly effect the utilities' overall efficiency, the rate of return granted to the utility could be established at the lower end of the zone of reasonableness. Quite frequently, utilities contend excellent efficiency warrants a rate of return fixed at the high end of the zone of reasonableness or a small extra return allowance.

In the numerous rate cases GSA has appeared in, the affirmative action plans of the applicant utility have been acceptable to the extent that using the rate proceeding by GSA as a forum for the nondiscrimination issue has not, in our opinion, been justified. This is not to say that GSA does not maintain an active

posture of surveillance over such matters. In each proceeding, GSA checks into the applicant's employment practices as a matter preparatory to entering the case. Additionally, the GSA Office of Civil Rights has cooperated extensively with the Equal Employment Opportunity Commission (EEOC) which has intervened in the AT&T rate increase hearing now before the Federal Communications Commission (FCC).

Question 3. In view of the responsibility of the General Services Administration under Executive Order 11246, has the Federal Power Commission requested your assistance in dealing with discriminatory employment practices of gas or electric utility companies? Please furnish the Subcommittee with a list of instances where such assistance has been requested.

Answer. On February 24, 1972, GSA received a request from FPC soliciting EEO data as it pertained to 15 gas and electric companies. FPC was primarily interested in: (a) the percentage of minorities employed at each company; (b) the percentage of minorities in the service area; (c) the company goal for minority employment (was it equal to, more than, or less than minority percentage in the service area); and, (d) the EEO classification of workers.

After several telephone discussions with the requestor, the exact nature of their requirements was pin-pointed and the information was supplied to FPC on March 31, 1972.

There is no record of any other formal request on file from FPC for EEO-type information.

Question 4. Recognizing your agency's familiarity with utilities matters and your involvement with contract compliance for the utilities industries, do you feel that the Federal Power Commission has authority to deny a license or renewal of a license to a company which engages in discriminatory employment practices?

Answer. As stated in our answer to question 2, GSA believes that the employment practices of a regulated monopoly are a proper issue in rate increase hearings. As to extending this position to the granting and renewal of licenses, this agency has not in the past appeared before the FPC in this connection, does not foresee any such appearances in the future, and as such has no independent opinion.

We have, however, a copy of the September 17, 1971 letter from Mr. David L. Norman, Assistant Attorney General, Civil Rights Division, setting forth the opinion of the Department of Justice, and we defer to the Department on this issue.

If I can furnish you with any further information, please do not hesitate to contact me.

Sincerely,

Enclosure.

HAROLD S. TRIMMER, Jr.,
Acting Administrator.

EMPLOYMENT DATA-BELL SYSTEM AND A.T. & T. (HEADQUARTERS AND LONG LINES ONLY)

EEOC POSITION PAPER, PRESENTED AT HEARINGS ON THE UTILIZATION OF MINORITIES AND WOMEN IN GAS AND ELECTRIC UTILITY COMPANIES, NOVEMBER 15, 1971 The U.S. Equal Employment Opportunity Commission has selected the gas and electric utilities industry for public hearings in order to examine the employment

problems of minority group persons and women. The hearings will be held in Washington, D.C. in mid-November.

Under Title VII of the 1964 Civil Rights Act, the Commission has the responsibility for eliminating discrimination in employment. The limited judicial authority of the Commission has been offset, in part, by its ability to command the Nation's attention in a public forum. In the past, the Commission has held public hearings on White Collar Employment in New York City, on Utilization of Minority and Women Workers in Major Industries in the Los Angeles area, and on employment practices in the city of Houston, Texas. The employment practices of the gas and electric utilities will now be examined through the medium of a public forum held in our Nation's capital. A combination of factors account for the Commission's selection of the gas and electric industries. We stress that it is the combination of the following factors that led EEOC to select the gas and electric utility industry for the subject of a public hearing.

Public utilities are given a franchise for their operations. The arrangement is open and explicit: the utility receives a charter that protects it from buisness rivals, and in return the utility agrees to operate its facility "in the public interest." As the decade of the 1960s came to a close, our society widened the scope of the meaning of the phrase, "in the public interest." Witness the increasing awareness of all segments of our society in environmental issues. Once public awareness was manifest, many public utilities took measures to assure the citizens in their marketing areas that their operations were being changed in order to protect the quality of our environment. We sense that all segments of our society will agree with us when we assert that "the public interest" would be a hollow phrase if it did not also include the spirit of Title VII of the 1964 Civil Rights Act.

The patterns of employment of minorities and women by these industries in 1970 are the basis for our concern. The most recent figures held by the Commission indicate a general low level of participation by minority groups as well as a low level of occupational positions held by women and minority groups. The record for the industry is poor, a conclusion which holds true whether the comparison is made between their record and the level of minority participation in their local labor markets, or when the record of this industry is compared with that of other major employers. As of 1970, we still find that minorities and women are concentrated in the lower-paying, less-responsible jobs within the industry. However, we also want to make clear that in this context we are speaking of the overall performance of the industry. We are very much aware that averages may conceal individual performances, and in the course of the hearing those companies that have made strides toward compliance with Title VII will be recognized publicly for having done so. In face, much of our effort in the hearing will be devoted to demonstrating the contrasts among the companies. Other kinds of variations will be examined. For instance, a review of the data in our possession reveals an extremely low rate of participation by women and minorities in the professional positions of these companies. Women appear to be excluded from craft jobs almost completely, and the more responsible administrative jobs appear to be a preserve for male Anglos.

The Commission has a continuing interest in the process by which companies upgrade employees from entry level positions. The gas and electric utilities, generally, do not hire skilled craftsmen away from other employers. Rather, the specialized nature of their operations requires that utilities train most, if not all, of their upper level bluecollar employees. This suggests that entry level occupations may be used more effectively as a conduit for the hiring and upgrading of minorities and women.

In the past, many students of minority employment patterns have noted the existence of transportation difficulties that confront central city minority residents when they attempt to obtain employment on the periphery of our urban centers. The research efforts on this question have not been conclusive, but the utilities can offer no such explanation for their records. Our investigation has indicated that most facilities in this industry are located in the central city. either in the minority residential areas or adjacent to them.

The following are some of the specific points considered by the Equal Employment Opportunity Commission in its selection of the electric and gas utilities for a public hearing:

1. The black participation rate in this industry is the lowest (6.1%) among the twenty-three industries reporting employment of 500,000 or more.

2. One-third of all the utility establishments filing EEO-1 reports with the Commission in 1970 had no black employees.

3. In only three of twenty large SMSAS did the black participation rate in utilities approach or exceed the participation rate for all industries in the area. In 8 of the same 20 SMSAS, the all-industry black participation rate was at least double the black participation rate in local utilities.

4. In 1970, Spanish Surnamed Americans held 3.6 percent of all jobs reported in the EEO-1 nationwide survey, but they held only 1.6 percent of all jobs in the utilities industry.

5. Spanish Surnamed Americans held less than 1 percent of the official, managerial, professional and sales jobs and only 1.5 percent of all technicians jobs. 6. In many SMSAS Spanish Surnamed Americans have relatively low participation rates in the utilities industry when compared to their participation rate in all industries in the local labor market. Most striking in this kind of comparison is the city of Chicago where Spanish Surnamed Americans held 0.4 percent of the jobs in the gas and electric utilities at the same time that they held approximately 5 percent of all jobs in the Chicago area.

7. While women held 34% of the positions reported in EEOC's overall survey in 1970, only 15% of this industry's employees were female.

8. Nine of every ten females employed in this industry were clerical workers. 9. Less than 2% of the blue collar jobs were held by women.

Many of the signs of unequal job opportunities for minorities and women that appear in the gas and electric utilities, are also present in other large industries throughout the land. The Commission, therefore, expects that industry leaders throughout the country, as well as the spokesmen for the gas and electric utilities, will benefit from the opportunity that a public hearing presents to gain insight into the problems of minority group persons and women who are seeking equality in employment.

We believe that it is imperative to move beyond acknowledgement of the legitimacy of the aspirations of minorities and women as they seek to achieve equality. Recognition must be followed by action. The Equal Employment Opportunity Commission, under the mandate of Title VII of the Civil Rights Act of 1964, seeks to encourage the kinds of action that would make the aspirations of these groups realities.

CLOSING STATEMENT BY WILLIAM H. BROWN III, CHAIRMAN, EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, HEARINGS ON THE UTILIZATION OF MINORITIES AND WOMEN IN GAS AND ELECTRIC UTILITIES COMPANIES, NOVEMBER 17, 1971 Ladies and gentlemen, as we adjourn this final session of these EEOC hearings on the utilization of minority and women workers in the investor-owned utility industry, there are some critical findings and issues which emerge.

As you might imagine, the Commission had conducted extensive research into the employment practices of this industry even before we invited the representatives from the companies you have heard. We knew the industry had a very poor equal employment record. We knew that minorities and women were few and far between in these companies. We knew that little had been done to correct the effects of past discrimination so that minorities and women were still compressed in the lowest-paying jobs.

Our research was so thorough that we expected to hear little at these hearings that would shock us.

And yet, after three days and 14 companies, we are shocked.

Perhaps. after we have had time to study the transcript more carefully, we will find more reason to be optimistic about this industry. Perhaps we were too stunned by the rampant discrimination we saw to recognize some progress made by the industry.

I hope so. But I doubt it.

Employment discrimination is not new to us. The people who serve this Commission have spent most of their adult lives working on problems of human rights. We deal with discrimination every day.

Yet we are shocked. We are astounded in the face of testimony which indicates actual systems of repression by gas and electric utility companies. Not only are women and minority individuals now working in the lowest job classifications; it appears that they are locked into these undesirable jobs for the rest of their working lives.