APPENDIX A I. ASSISTANCE PROGRAMS TO WHICH THESE REGULATIONS APPLY 1. Assistance in connection with the construction of Federal-aid highway systems under Title 23, United States Code (23 U.S.C. 101 et seq.). 2. Assistance under the Highway Beautification Act of 1965 (Public Law 89-285, 79 Stat. 1028). 3. Assistance for construction of highways, supplementary assistance in connection with applicable Federal grant-in-aid programs, and the providing of grants and other funds, under the Appalachian Regional Development Act of 1965 (Public Law 89-4, 79 Stat. 5). 4. Loans, grants, technical and other assistance for public works and facilities, supplementing grant-in-aid programs, private businesses, and other purposes, including assistance in connection with designated economic development regions, under the Public Works and Economic Development Act of 1965 (Public Law 89-136, 79 Stat. 532), and assistance under its predecessor Area Redevelopment Act (42 U.S.C. 1171 et seq.). 5. Operating differential subsidy assistance to operators of U.S.-flag vessels engaged in U.S. foreign commerce (46 U.S.C. 1171 et seq.). 6. Assistance to operate State Maritime Academies and colleges to train merchant marine officers (46 U.S.C. 1381-1388). 7. Grants and other assistance under the State Technical Services Act of 1965 (Public Law 89-132, 79 Stat. 679). 8. Assistance to mobile trade fair operators (46 U.S.C. 1122b). 9. Trade adjustment assistance to eligible U.S. businesses under the Trade Expansion Act of 1962 (19 U.S.C. 1911-1920). 10. Trade adjustment assistance to eligible U.S. businesses under the Automotive Products Trade Act of 1965 (Public Law 89-283, 70 Stat. 1016). 11. Grants to nonprofit institutions or organizations to further or obtain scientific research to be made available to the public or interested businesses or organizations (e.g., 42 U.S.C. 1891-1893). II. A PRIMARY OBJECTIVE OF THE FINANCIAL ASSISTANCE TO THE PROGRAMS LISTED IN APPENDIX AI, WHICH IS AUTHORIZED BY EACH OF THE FOLLOWING STATUTES IS TO PROVIDE EMPLOYMENT 1. Public Works and Economic Development Act of 1965, and predecessor Area Redevelopment Act. 2. Appalachian Regional Development Act of 1965. 3. Trade Expansion Act of 1962. 4. Automotive Products Trade Act of 1965. [From the Washington Post, Mar. 11, 1972] A QUESTION OF ZEAL Testifying the other day before the House Civil Rights Oversight Subcommittee, Chairman John N. Nassikas of the Federal Power Commission expressed reluctance to withhold the privilege of a license from a regulated utility company engaged in discriminatory employment practices. "In my judgment," he said, "the regulation of employment practices should not, as a matter of policy, be delegated to an economic regulatory agency . . . The commission does not have authority to enforce the provisions of the Civil Rights Act of 1964." Without presuming to challenge Mr. Nassikas' legal judgment, which has the support of the FPC's general counsel, we invite attention to two contrary judgments. David Norman, the assistant attorney general in charge of the Justice Department's Civil Rights Division, informed the FPC that "In our opinion, under relevant statutes, the commission has ample authority to issue regulations barring discrimination by natural gas companies regulated by the commission and by electric companies holding hydroelectric licenses." And three years ago the FPC's own deputy general counsel recommended that the commission "issue a policy statement that it will be commission policy not to issue (a) hydroelectric licenses. particularly in relicensing cases, or (b) certificates of public convenience and necessity to firms having discriminatory employment practices or to facilities to be built or operated by contractors or subcontractors who discriminate." It seems to us that what is involved here is one of those forced options in which the weight and authority of the federal government is necessarily thrown on one side or the other, on the side of discriminatory employment practices or against them. When the government licenses a utility engaging in discriminatory employment practices, it supports, or at the very least condones, those practices. It seems to us that that puts the United States in an intolerable position. The weight of every government agency ought to be to the fullest extent possible on the side of civil rights and in favor of enforcement of acts of Congress as a matter of simple morality. The FPC cannot be indifferent to employment practices which violate laws of the United States. Racial discrimination in employment is a rank form of injustice. The United States ought not to countenance, or be a party to, any manifestation of it. Here at least, where choice is inescapable, a touch of zeal would be more becoming than a yawn of apathy. Hon. DON EDWARDS, EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Chairman, Civil Rights Oversight Subcommittee, Committee on the Judiciary, U.S. House of Representatives, Washington, D.C. DEAR CONGRESSMAN EDWARDS: I greatly appreciate this opportunity to comment on testimony presented by John N. Nassikas, Chairman, Federal Power Commission (FPC), before the Civil Rights Oversight Subcommittee of the House Judiciary Committee. As you are aware, the Equal Employment Opportunity Commission was established to eliminate employment discrimination on the basis of race, color, sex, national origin, and religion. In its seven years of existence, the Commission has received over 86,000 charges alleging employment discrimination and has gained extensive experience and insight in the pernicious problem of employment discrimination which plagues the nation. During this period, the Commission has found that the investor-owned utilities industry, which is regulated by the FPC, lags behind most major employers in the utilization of minorities and women at every job level. The problem in the industry is extreme. Chairman Nassikas, in the face of this need, finds that the FPC has no legal authority to require the industry to provide equal employment opportunity. I respectfully submit that the law which the FPC administers, as well as the constitution, requires the FPC to exercise its regulatory authority so as to meet these needs. My comments will consist of three parts. The first part highlights the very poor performance of the utilities industry in providing equal employment opportunity. The second analyzes the obligation which the law imposes on federal agencies, including the FPC, to require employment opportunity by their regulatees. The last summarizes the steps other regulatory agencies have taken to meet their legal obligations. On November 15, 16, 17 of last year, this Commission held public hearings to ascertain what the utilities industry was doing to improve its equal employment profile. While minority participation in employment on a nationwide scale is almost 14%, minority employment in the gas and electric utilities is less than 8%. The industry employs fewer blacks than 22 other major industries with employment of 500,000 or more; fewer Spanish Surnamed Americans than 20 of those major industries; and fewer women (15%) than the average employed by all employers of the nation (34%). This low rate of participation of females can be traced directly to the industry's sex-specified job assignments. Since utilities are usually located in labor markets with significant minority populations, there is no reason for their poor performance. The people are there, the jobs are there; yet, the industry has remained reluctant to obey the law and employ minorities and women. Those who are employed are shunted into low paying jobs such as laborers and service workers for minorities, and clerical positions for women. Opportunities for minorities and women to enter better-paying, more skilled categories have been severely limited by the industry's seniority systems, which block advancement and perpetuate past discriminatory effects. For example, only 3% of the skilled craftsmen in the industry are black. The FPC has both a statutory and constitutional obligation to prohibit employment discrimination by its regulatees. The fact that the EEOC has responsibility for eliminating employment discrimination does not exempt the FPC from its equal employment responsibility. The legislative history of Title VII made this clear.1 The exclusive remedy provision was again rejected when this question was raised during the debate on the 1972 amendments of Title VII.' The courts have held that Title VII does not preempt the jurisdiction of other statutes such as the Civil Rights Act of 1866 and the National Labor Relations Act in prohibiting employment discrimination.3 Chairman Nassikas suggests that, in his opinion, the FPC should be limited to its regulatory functions without regard to considerations as to equal employment opportunity. This view fails to recognize that the responsibility of the FPC is to regulate "in the public interest." Regulation "in the public interest" today requires consideration of equal employment opportunity. The courts have consistently recognized the obligation of regulatory agencies to weigh and advance important national policies in every action they take.* There is no dispute that equal employment opportunity is such a national policy. For example, a federal court recently held that the Public Service Commission of Washington, D.C., has jurisdiction to examine the employment practices of its regulatees. Similarly, the FPC has authority to examine and require equal employment by its regulatees and licensees. In addition, the Fifth Amendment of the Constitution prohibits the Federal government and any of its agencies from acting in a manner which gives its imprimatur to discrimination. In licensing companies which discriminate the FPC violates this amendment." This constitutional obligation has already been recognized by other agencies. In 1969, the Federal Communication Commission (F.C.C.) determined that it may be constitutionally required to prohibit discrimination by its regulatees." The Regulation of the employment practices of regulatees is not a new concept. The F.C.C. has issued such regulations. The Interstate Commerce Commission (I.C.C.) has on its own motion instituted a proceeding to determine whether it will issue similar regulations. It might reasonably be expected that the FPC would take similar action. Equal employment opportunity is too important a goal to be cast aside in the course of the daily regulation of American industry. It should instead be integrated into every significant governmental activity. I hope that these comments will prove useful to this Committee in reaching that goal. Sincerely, WILLIAM H. BROWN III, Chairman. 1 The Senate rejected Senator Tower's proposed amendment to make Title VII the only vehicle for combatting employment discrimination. 118 Cong. Rec. 13650, 13652 (June 12, 1964.) See also 110 Cong. Rec. 2574-2575 (Feb. 8, 1964) (Clark-Case memorandum). 2118 Cong. Rec. 1526 (Feb. 9, 1972); 118 Cong. Rec. 1797 (Feb. 15, 1972) (rejected on reconsideration). 3 See, e.g.. Brown v. Gaston County Dyeing Machine Co.. F. 2d 4 EPD para. 7737 (4th Cir. 1972): Boudreaux v. Baton Rouge Marine Contracting Co., 437 F. 2d 1011 (5th Cir. 1971). United Packinghouse Workers Union v. NLRB, 416 F. 2d 1126 (D.C. 1969), cert. denied, 396 U.S. 903 (1969); Local 12, United Rubber Workers v. NLRB, 368 F. 2d 12 (5th Cir. 1966). See e.g., Northern Natural Gas Co. v. Federal Power Commission, 339 F. 2d 953 (D.C. Cir. 1968). F. Supp. 3 EPD para. 5 Potomac Electric Power v. Public Service Comm., 8141 (D.D.C. 1971). • Public Utilities Commission v. Pollack, 343 U.S. 451, 72 S. Ct. 813 (1953). See, e.g.. Irvis v. Scott, 318 F. Supp. 1246 (M.D. Pa., 1970) (Three-Judge court), appeal pending 401 U.S. 992, 91 S. Ct. 1236 (1971); Pitts v. Wisconsin Dep't of Revenue, 333 F. Supp. 662 (E.D. Wis. 1971). In the Matter of Petition for Rule Making to Require Broadcast Licensees to Show Non-discrimination in their Employment Practices, 18 F.C.C. 2d 240, 241 (1969). 8 23 F.C.C. 2d 430 (1970) (broadcasters); 24 F.C.C. 2d 725 (1970) (common carriers). The F.C.C. recently amended its equal employment regulations to include women in the program its regulatees are required to implement. Equal Employment Program, 32 F.C.C. 2d 708 (1971). Ex Parte No. 278, 36 F.R. 10741 (June 2, 1971). Hon. DON EDWARDS, U.S. COMMISSION ON CIVIL RIGHTS, Chairman, Subcommittee No. 4, Committee on the Judiciary, U.S. House of Representatives, Washington, D.C. DEAR MR. EDWARDS: I am writing in response to your March 23, 1972 letter in which you requested our view on the authority of the Federal Power Commission to issue regulations prohibiting employment discrimination in the industries regulated by that Commission. We are pleased to comment on this subject. The Federal Power Commission was established in 1920 to license non-Federal hydroelectric projects. Now, under the Federal Power Act, 16. U.S.C. §§ 791828c, and the Natural Gas Act, 15 U.S.C. §§ 717-717w, the agency also regulates the interstate transmission of electricity and the interstate transportation and sale of naural gas. In regulating these aspects of the power industry the Federal Power Commission has a substantial impact on a large and powerful segment of the American economy. Unfortunately, to date the FPC has not used its regulatory authority to insure the full and equal employment of minority workers in that industry. Numerous investigations have shown that the power industry employs a lower percentage of minority workers than most American industries. For example, the Equal Opportunity Commission's report Employment Patterns in the Utilities Industry, 1966-67 states that only 3.7 percent of all jobs in the industry were held by blacks, and that only one percent were held by Spanish surnamed Americans. The report also indicates that these minority workers were overwhelmingly concentrated in lower level jobs. In 1969, William H. Brown, III, Chairman of the Equal Opportunity Commission, stated that the electrical power industry had the lowest level of minority employment of any major United States' industry. The Commission on Civil Rights' own investigations have also shown a substantial underutilization of minority workers in the power industry. Our 1968 hearings in Montgomery, Alabama, and San Antonio, Texas, found that minority workers were seriously underrepresented in the work forces of the Alabama Power Company and the El Paso Natural Gas Company. In the latter case, Mexican Americans held only 10 percent of the company's jobs although they represented more than 45 percent of the area's population. Such substantial underutilization of minority workers indicates that employment discrimination has been present and continues to exist in the power industry. The presence of such discrimination is particularly shocking since many of the companies depend upon a Federally protected monopoly status for their very existence. Such employment discrimination is, of course, illegal under Title VII of the 1964 Civil Rights Act and is also prohibited for those companies who are federal contractors by Presidential Executive Order. In spite of these prohibitions, however, the discrimination persists. The Federal Power Commission has ample authority to use its powers to remove employment discrimination in the companies it regulates. In 1970 this Commission's report. Federal Civil Rights Enforcement Effort, specifically stated our conclusion that the FPC had "clear legal authority to use [its] broad rulemaking power in support of the established national policy of equal employment opportunity." In fact the Commission stated in that report its belief that the FPC has both a statutory and a constitutional obligation to insure that the power industry it regulates is free from employment discrimination. The FPC's authority and statutory obligation to prohibit employment discrimination derive from Section 717 of the Natural Gas Act and Section 824 of the Federal Power Act which provide that the transportation and sale of natural gas and of electric energy are affected with a public interest and that their regulation is required in the public interest. In recent years the Federal courts have repeatedly indicated that Federal regulatory agencies must broadly construe their duty to protect the public interest. In Scenic Hudson Preservation Society v. Federal Power Commission, 354 F. 2d 608 (2d Cir. 1965), and Udall v. Federal Power Commission, 387 U.S. 428 (1967), the courts indicated that in exercising its mandate to regulate in the public interest the FPC must give primary consideration to the protection of the environment. Certainly the national policy of equal employment opportunity is co-equal to the national policy of environmental protection and must also be given effect in the FPC's regulatory actions. The authority of the Federal Power Commission to use its administrative decisions, rules and regulations to prohibit employment discrimination is further demonstrated by the actions of the Federal Communications Commission which on July 5, 1968, adopted a broad policy statement prohibiting such discrimination by licensed broadcasters. Following the submission of comments by interested parties, the FCC issued a Report and Order on June 6, 1969, adopting that policy as a rule. The FCC was convinced that the national policy against discrimination in employment and its duty to regulate in the public interest required such action. We believe that the same national policy and the same duty to serve the public interest require the Federal Power Commission to issue regulations prohibiting employment discrimination in the power industry. Further, the Commission on Civil Rights believes that the Federal Power Commission has more than a statutory duty to prohibit employment discrimination. The FPC has a substantial and close involvement in the affairs of the enterprises it regulates through its licensing, controls, and grants of monopoly rights. For the FPC to permit these companies to discriminate in their employment, in light of this close involvement, places the Commission in violation of the due process clause of the Fifth Amendment to the Constitution. The Constitutional basis for this position is fully discussed in the Legal Appendix to the Federal Civil Rights Enforcement Effort. A copy of this report is enclosed for your convenience. In conclusion, the United States Commission on Civil Rights believes that the Federal Power Commission has ample authority to issue regulations prohibiting employment discrimination in the industries it regulates. Furthermore, we believe that both its statutory mandate to regulate in the public interest and its obligation to uphold the Constitution require the Federal Power Commission to issue such regulations and to insure that they are obeyed. Sincerely, THEODORE M. HESBURGH, Chairman. FEDERAL MARITIME COMMISSION, Hon. DON EDWARDS, Chairman, Civil Rights Oversight Subcommittee, U.S. House of Representatives, Washington, D.C. DEAR MR. CHAIRMAN: In reply to your letter of March 28, 1972, we are forwarding the attached memorandum of law relative to your second point of inquiry therein. We are currently undertaking a study of the feasibility of employing sanctions under Title VII of the 1964 Civil Rights Act with respect to the employment practices of independent ocean freight forwarders, the only group over which the Commission exercises licensing authority. As the attached memorandum points out, we do not have far-reaching licensing authority as do other regulatory agencies. Because of these limitations, we do not possess the requisite controls necessary to employ the effective use of sanctions over the other phases of the shipping industry that we regulate, namely, water carriers and terminals, to insure compliance with the provisions of Title VII. We do, of course, recognize and support the implementation of the Title VII provisions in all matters of discriminatory employment practices by those involved in foreign and domestic offshore water carriage. Likewise, we recognize the powers vested in the Equal Employment Opportunity Commission and the Department of Justice under the 1964 Act, as well as the newly enacted Equal Employment Opportunity Act of 1972, to act in those areas where the FMC lacks adequate authority to insure compliance with the provisions of Title VII. We, in turn, will endeavor to fulfill our obligation to insure compliance by independent ocean freight forwarders with those provisions. As you probably are aware, I have taken a strong personal position on the problems facing women and minorities. You can be certain that the Commission will do all in its power to assure compliance with the equal employment opportunity provisions of Title VII by those participants in our waterborne commerce over which we are authorized to issue licenses. Sincerely, HELEN DELICH BENTLEY, Chairman. |