FORD MOTOR CO. v. EEOC
Legal provision: Civil Rights Act of 1964, Title VII
ORAL ARGUMENT OF JOHN R. WESTER, ESQ., ON BEHALF OF THE PETITIONER
Chief Justice Burger: We will hear arguments next in Ford Motor Company against EEOC.
Mr. Webster, I think you may proceed when you are ready.
Mr. Wester: Mr. Chief Justice, and may it please the Court, this case is here on certiorari to the Fourth Circuit and presents two issues of employment discrimination law.
The first issue is whether an employer's potential back pay liability to a discrimination claimant continues to accrue after the claimant has rejected the employer's unconditional job offer of employment.
The second issue is whether Ford was improperly required to prove its explanation for its employment decisions in this case.
The resolution of the back pay issue may well affect the handling of almost any employment discrimination case in which an employer finds itself able to offer employment to a discrimination claimant before the determination of the merits of the claim.
The facts essential to the resolution of this issue may be stated briefly.
On July 21, 1971, Judy Judy Gaddis and Rebecca Starr applied to work at the Ford Motor Company's parts warehouse in Charlotte, North Carolina.
Both had recently been laid off from General Motors warehouse, where each had worked for some ten months.
Neither was hired.
Ms. Gaddis then wrote the Equal Employment Opportunity Commission and charged that Ford had not hired Ms. Starr or her because they were women.
Neither Ms. Gaddis nor Ms. Starr resumed regular employment again until January of 1973, although Ford did employ both women in its parts warehouse for some six weeks in late 1972.
In July of 1973, seven months after the women had returned to work at General Motors, Ford had a vacancy for a permanent warehouse job, the same job for which Ms. Gaddis and Ms. Starr had initially applied.
That vacancy was the first Ford had had for a permanent position since Ms. Gaddis had charged Ford with employment discrimination.
Ford offered the position first to Ms. Gaddis, and she declined it.
Ford then offered the position to Ms. Starr.
She declined it.
Unidentified Justice: Did that coincide with the filing of charges?
Mr. Wester: No, sir, it occurred some two years after, nearly so, following the filing of--
Unidentified Justice: How long after?
Mr. Wester: --The offers to these claimants occurred some two years following the charges that were filed, nearly two years.
Neither of Ford's offers included seniority or back pay, nor did either offer require Ms. Gaddis or Ms. Starr to abandon any aspect of their discrimination claims against Ford.
Two years later, in July of 1975, the Commission brought this suit.
The district court concluded that Ford had discriminated against Gaddis and Starr when it did not hire them in 1971, and also concluded that Ford's offers in 1973 had no effect on the amount of back pay.
Unidentified Justice: Well, are you saying--
Mr. Wester: Ford's back pay.
Unidentified Justice: --Are you saying that when the offer of reinstatement was made, it was rejected out of hand?
Mr. Wester: I am saying that it was rejected in both cases.
Unidentified Justice: With no conditions--
Mr. Wester: That's correct.
Unidentified Justice: --except that the employees said they wouldn't come back unless.
Is that it?
Mr. Wester: No.
No, Your Honor.
Let me say that there were no conditions attached to the offer by Ford.
With respect to the claimants' response, the evidence is that both testified to Ford's administrative clerk who delivered the offers by wire and by telephone, that neither wanted to be the only woman in the warehouse.
There was just one position, and neither wanted to be the only woman.
That is what she said.
And neither woman mentioned, I might add, any claim for retroactive seniority or back pay at the time the offers were made.
There was no evidence that that was mentioned.
Unidentified Justice: Well, I got the implication that you were... at least an intimation that the employees were attaching conditions.
Mr. Wester: No, sir, they did not.
Unidentified Justice: Mr. Wester, is it clear what the salary, the wage rate that was offered was?
Was it what would have been paid when they were originally denied employment, or was it the current wage rate?
Mr. Wester: They were offered 1973 jobs, Your Honor, the same jobs they... 1973 jobs in the warehouse.
There has been no question about that in the evidence.
Unidentified Justice: And was the wage rate the same as it had been in 1971?
Mr. Wester: I am unaware of that.
There has been no issue of that, as far as I know.
Unidentified Justice: And the government gives us a hypothetical in their brief... pardon me--
Mr. Wester: Yes.
Unidentified Justice: --but we don't know whether it fits this case or not.
Mr. Wester: I think not.
The current rate is what all the evidence indicates.
They received 1973 offers at the 1973 wage.
They had worked there, as you well recall from the statement of facts, just previous to that, and from all the record shows, they were offered 1973 rates when they were offered these jobs.
Unidentified Justice: They weren't offered the seniority they would have had if they had been hired in the first place?
Mr. Wester: That's correct.
They were not.
And there was no discussion of it at the time.
Unidentified Justice: And if they had been there that long, would they have not only seniority, but would they have had higher wages?
Mr. Wester: They would have had the wages determined by the bargaining agreement with the United Auto Workers.
It would not--
Unidentified Justice: But if they had been hired, if they had been hired when they were turned down, when they weren't hired, when they were allegedly turned down, would they have been making higher rates in 1973 than new employees would make?
Mr. Wester: --I am unaware of that, and it would require me to speculate outside the record to answer, sir.
Unidentified Justice: Mr. Wester, is it your position that the claims for both women should be tolled, even though only one job was available?
Mr. Wester: Yes, Your Honor, because both women were offered jobs.
The offers occurred first to Ms. Gaddis, who declined it.
Then it was offered to Ms. Starr, and she declined it.
That is our position.
The district court held Ford's liability to Gaddis and Starr with allowances for interim earnings extended to the end of 1977, the date the Court entered its findings in the case.
Over a dissent, the Fourth Circuit affirmed its conclusion rejecting Ford's contention that its unconditional offers of employment cut off the accrual of back pay.
Ford submits that the Fourth Circuit's holding should be reversed, first because it is unfair to employers, to incumbent employees, and to claimants, second, because it is unworkable for the Title VII process, and third, because there is a rule available that is better in all respects, and that is the rule followed by the National Labor Relations Board and the circuit courts reviewing the Board's decisions.
The Fourth Circuit's holding means that an employer charged with employment discrimination can be assured that a job offer will stop the accrual of back pay liability only by offering not only the job initially sought, but also retroactive seniority, and as the court of appeals' reasoning indicates, back pay as well.
Thus, to shut off the back pay meter, the employer must offer the claimant essentially all relief that the claimant could be awarded should he or she ultimately prevail at a trial.
The practical effect of this holding is to require that employers give up any meaningful right to contest and defend against the claimant's allegations.
The Fourth Circuit's rule is also unfair to incumbent employees, because job offers that comply with the Fourth Circuit's rule will undermine their seniority rights, although these employees are third parties totally removed from the discrimination controversy.
Unidentified Justice: Well, it might not have been undermined had there been no discrimination.
Mr. Wester: Well, yes, Your Honor, but when the offer was made, there is no finding of any discrimination.
The offer is made--
Unidentified Justice: The offer is made later.
Mr. Wester: --The offer is made following the alleged discriminatory act.
At the moment the offer is made, the matter of discrimination is a matter of allegation alone.
Unidentified Justice: But isn't that the way we have to accept this case, as though there was discrimination?
Mr. Wester: To the contrary.
It is fundamental to our position that the Court understand the posture in which these offers were made, that is, before any finding of discrimination.
There is no question that this Court has stated that both back pay and retroactive seniority would have to be provided, if there was to be a valid offer or a reinstatement offer following, or instatement offer for this case, following a finding of discrimination.
To the contrary, in this case, this offer occurred before a suit was even brought, and some four years before a finding of discrimination.
Unidentified Justice: Would you take the same legal position if there had been a finding but you were appealing it?
Mr. Wester: I would, Your Honor.
Unidentified Justice: You would still say that notwithstanding the finding, as long as you make an offer, that would cut off back pay from the date of the offer?
Mr. Wester: Yes, because there still is no adjudication of discrimination.
Unidentified Justice: Yes.
Mr. Wester: Yes, Your Honor.
Yes, Justice Stevens.
The Fourth Circuit's rule is unfair to incumbent employees because it requires an employer to award seniority to a claimant who has never worked for that employer, although such an award will necessarily dislodge from their positions on the seniority ladder all employees who have been hired subsequent to the date the applicants applied for work... the claimants applied for work.
If the employer is a party to a collective bargaining agreement, the award of seniority will breach any standard seniority provision of that agreement.
Apart from the obligations under any such agreement, however, an employer in Ford's view should not be encouraged to protect itself from continuing back pay liability by sacrificing the interest of present employees who have earned and who rely upon their seniority standing.
This Court's decisions have carefully delineated the basis upon which seniority rights of incumbent employees may be altered.
In each such decision, this Court... the predicate set by this Court for permitting those seniority rights to be affected was either a finding of discrimination or the adoption through collective bargaining of a comprehensive, narrowly drawn, and temporary affirmative action plan designed so as not to affect unnecessarily the seniority interest of employees in the plant.
The Fourth Circuit's rule, we submit, has no such foundation.
Instead, it encourages an employer to make self-interested ad hoc decisions whether in any given case the employer wishes to cut off its back pay liability instead of... cut off its back pay liability at the expense of the seniority interest of incumbent employees.
Unidentified Justice: Well, just how would that affect the seniority of incumbent employees, Mr. Wester, if you simply hired people?
Don't you have to hire them with kind of advanced seniority?
Mr. Wester: To the contrary.
What was necessary here for Ford to do, and the rule that it advocates this Court should adopt in this case, is precisely what it did, make an offer, make an unconditional offer that there are no strings attached to the prosecution of the claim, but without any rights of seniority that may be indeed the due of the claimants once they have established a claim.
Unidentified Justice: Mr. Wester--
Mr. Wester: Yes.
Unidentified Justice: --I am still confused.
Are you saying that this record does not show a finding of discrimination on account of sex here?
Mr. Wester: It certainly does show such a finding, Your Honor, and the key to that... and the key to that is that it occurred, the finding, at a trial some four years following the date these unconditional offers were made, and the key to our position--
Unidentified Justice: How do you avoid that?
I mean, you are hung with that finding, aren't you?
Mr. Wester: --Well, Your Honor, the second issue in the case is whether or not the finding was proper, whether the correct burden of proof was applied, but putting that aside, we are by no means hung with the finding for the purposes of analyzing the first issue, the back pay issue, and the reason for that is that the employer ought be entitled to a cutoff of further back pay liability.
Let me emphasize that if Ford is indeed and should be held liable for sex discrimination, Ford is liable, but through the point of the offer for back pay and seniority, and there can be no question of that.
Our point is that past that point, past that point, there is no subsequently accruing back pay liability because it is shut off by the unconditional offer that Ford makes.
Unidentified Justice: But you didn't offer seniority.
Mr. Wester: Quite right.
We did not, nor should we have, for if we had, it would have required the surrender difficulty that I have just described, and would have also impacted certainly on the seniority interest of other incumbents.
Unidentified Justice: Which means that the complainants are not made whole.
Mr. Wester: Precisely.
They are not made whole at the time the offer is made, but they give up no item whatever, in no respect whatever, their ultimate right to be made whole.
Unidentified Justice: You mean, they could continue litigating it.
Mr. Wester: Absolutely, and that is the crux of our position, and because they can continue litigating, Ford's back pay liability should have ended.
Unidentified Justice: What you are saying is, in effect, that eventually these claims will be resolved by a court, and the court will decide what things in addition to employment, back pay, and that sort of thing, if anything, the successful plaintiff should get, but that the employer before that sort of a determination is made or before a finding of discrimination is made, the employer should have some way of limiting the back pay liability when he does not know what the outcome of the lawsuit will be.
Mr. Wester: That is our entire argument.
In fact, it would seem to us, in light of this Court's holding in Franks, that an award of retroactive seniority is not always appropriate even after a finding of liability, that it would be anomalous to require an employer just to cut off subsequently accruing back liability to throw in an award of retroactive seniority that may turn out never to have been appropriate at all.
The rule followed that we advocate and that I have... the rule we advocate in this case is a rule that has been developed by the National Labor Relations Board, and followed by all of the circuits who have reviewed the Board's findings on this issue.
The National Labor Relations Board has consistently held that an unconditional offer of reinstatement or of employment tolls any subsequent accrual of back pay liability.
The remedial provision of Title VII, as this Court has noted on several occasions, is derived from the National Labor Relations Act so that the Board's decisions provide again in this case, as they did--
Unidentified Justice: Counsel, I have trouble with your unconditional offer which denies seniority status.
Unconditional, and denied.
Is there any tension there?
Mr. Wester: --I think not, Your Honor.
The key is that Ford was obliged to make an offer of the job initially sought, about which there has been no dispute, and--
Unidentified Justice: Well, suppose you had offered her a job at half the salary.
Would that be good?
Mr. Wester: --No, sir, that would not be good, because Ford was obliged--
Unidentified Justice: Suppose you offered them a job with half of their seniority.
Would that be good?
Mr. Wester: --That would be... No, sir, that would not be good.
The key is--
Unidentified Justice: Well, you offered it with no seniority.
Mr. Wester: --That is exactly right, Your Honor.
Unidentified Justice: Which is worse.
Mr. Wester: No, sir, half seniority would have been bad just like full seniority is bad.
What we had to offer was none.
Unidentified Justice: You mean to give somebody full seniority hurts them?
Mr. Wester: It would have hurt... it would have required Ford... by no means would it have hurt them, but it would have required Ford to surrender its right to defend against seniority benefits that the claimant would enjoy.
Unidentified Justice: And it would also require them to pay some money, too.
Mr. Wester: And would also... absolutely.
And would also require the impact on the third parties in the plant, the other employees.
Unidentified Justice: That to my mind is not an unconditional offer.
Mr. Wester: Well, Your Honor, I was--
Unidentified Justice: To the contrary, it is a conditioned offer.
Mr. Wester: --All right, sir.
Unidentified Justice: We will give you a job provided you waive your seniority.
Mr. Wester: --No, sir.
That is exactly... it is important that I note that is not what Ford offered.
Ford did not make any such offer in this case.
To the contrary, its offer did not require in any respect, and the record is undisputed, the waiver of any seniority, the waiver of any back pay.
It required nothing of the sort.
Unidentified Justice: Are you saying they could still litigate that either in the courts or by arbitration proceedings if there were arbitration proceedings available?
Mr. Wester: Precisely.
That is exactly what we are saying.
The offer was unconditional.
It has never been challenged in either court as other than unconditional.
The district court's findings and the Fourth Circuit's findings do not fault Ford's offer in that respect.
Unidentified Justice: Could they also litigate the health benefits and all those other things?
Mr. Wester: Yes, sir, most certainly, because again Ford's offer required--
Unidentified Justice: So what you say is, we will give you a piece of it and you can litigate for the rest of it.
Mr. Wester: --Well, sir, it depends on how you--
Unidentified Justice: Is that what it is?
Mr. Wester: --It depends on how you define a piece of it.
The piece of it Ford would give them was the job they initially sought and unconditionally so, with no strings whatever attached to their continuing right to litigate fully their claims and to receive full make whole relief.
Unidentified Justice: Well, how in the world could you stop them from litigating?
Do you control the courts?
Mr. Wester: No, sir.
There has been no intimation that we... that we tried to stop them from litigation.
To the contrary--
Unidentified Justice: I mean, I love this very generous offer that Ford says, you are free to go to court.
They were already in court.
Mr. Wester: --They were already in court.
That's quite right.
Unidentified Justice: Yes, so you haven't given up anything.
Mr. Wester: Well, precisely, nor should we be required to.
That is our point, Your Honor.
Unidentified Justice: Nor did they give up anything.
Mr. Wester: Nor did they give up anything, and that is the rest of our point.
Unidentified Justice: Did they give up their claim for back pay?
Mr. Wester: No, sir, not in any way.
Unidentified Justice: Wasn't it involved?
Mr. Wester: It was not involved at that stage, Your Honor, because there is a pending claim for back pay by reason of their charge, as well as for seniority and all other benefits--
Unidentified Justice: Well, what were you settling?
Mr. Wester: --and all other benefits that attend--
Unidentified Justice: What did you settle?
Mr. Wester: --Sir?
Unidentified Justice: What did you offer for settlement?
Mr. Wester: We offered not for settlement--
Unidentified Justice: The bare bones job.
Mr. Wester: --No, sir, it wasn't a settlement offer.
It was offer... you are quite right, the bare bones job, but unconditionally so, with no attendant conditions of any sort.
That is what we offered.
Unidentified Justice: Well, Mr. Wester, is it fair to state that... you describe the offer as being one that said, you can have the job plus whatever back pay and seniority is determined to be available in litigation.
Mr. Wester: That's correct.
Unidentified Justice: And you didn't have to offer... the government says the correct offer would have been the job plus seniority plus whatever back pay may be found to be due in litigation.
You both contemplated further litigation of one or the other issue.
You just say there are two issues.
They say there is one that had to be litigated.
Mr. Wester: That's correct, Your Honor.
Unidentified Justice: That's the only difference.
Nobody thinks it settled the lawsuit.
Mr. Wester: No, sir.
Unidentified Justice: Yes.
Mr. Wester: No, sir.
No one does.
Unidentified Justice: How is it an unconditional settlement?
Mr. Wester: Because it is not--
Unidentified Justice: It didn't--
Mr. Wester: --It is not a settlement, Your Honor.
It is an unconditional offer.
Unidentified Justice: --That's right.
It is not even a settlement.
Mr. Wester: And it was not purported to be, nor do we argue that it is.
Unidentified Justice: All right.
Mr. Wester: It is simply an unconditional offer.
Unidentified Justice: Was any request made by either one of these ladies for seniority rights or back pay?
Mr. Wester: None, Your Honor.
Unidentified Justice: None whatever.
Mr. Wester: None whatever.
Unidentified Justice: While I am asking you a question, was there a collective bargaining agreement in effect at the time?
Mr. Wester: Yes, Your Honor, there was.
Unidentified Justice: And what about seniority rights being given in light of the provisions of it?
Mr. Wester: Yes, Your Honor.
The seniority provisions were explained by Ford's warehouse manager at the trial, who testified that seniority was earned by working there.
You earned it after 90 days, and if you did work 90 days or more, then your seniority started from the first day you started work.
We would contend that this sort of offer would have, of course, since these claimants had never worked there, given them in these circumstances two-year seniority, and they would have move down all those on the seniority ladder hired subsequent to their applications.
Unidentified Justice: It would displace people who had been working there.
Mr. Wester: Yes, sir.
Unidentified Justice: Their seniority.
Mr. Wester: Without any question.
Displace all of those who were hired subsequent to these applications.
We submit that the decisions from the Board and the circuit courts reflect a striking of a careful balance between the rights of alleged victims of discrimination, the interests of employers in retaining their right to defend against such charges, and the rights of incumbent employees to maintain their seniority standing.
Ford submits that that rule provides the employer an incentive to offer the claimant the job, provides the claimant an incentive to accept it, requires neither employer nor claimant to waive any defense or claims, and avoids any unnecessary interference with the rights of incumbent employees.
We would command that rule to this Court.
There is another issue presented in this case.
This concerns the standard the Fourth Circuit applied in assessing Ford's explanation of its failure to hire Gaddis, Starr, Judy Gaddis, Rebecca Starr, the claimants whom I have been discussing, and a third claimant, Zettie Smith.
Ford contends that the Fourth Circuit imposed a burden of proof on Ford that this Court expressly rejected in Texas Department of Community Affairs versus Burdine.
Unidentified Justice: How do you square your statement just made with Footnote 5 in the Fourth Circuit's opinion?
Mr. Wester: I square it, Your Honor, because that footnote, if anything, confirms what the Fourth Circuit said in its introductory remarks concerning the burden of proof Ford bore.
What the district court... what the court of appeals... I beg your pardon... stated in Footnote 5 was that Ford had failed to convince the Fourth Circuit of the truth of its explanation.
The district court found the facts to be otherwise, I believe was the language employed.
Unidentified Justice: Well, it speaks of articulation.
I guess I don't read it the way you do.
Mr. Wester: Well, I think it does speak of articulation and establish, and speaks of some of the words that have been approved by this Court.
My point is the analysis employed makes it clear to us when the entire portion of the Fourth Circuit's opinion is read in that regard to indicate Ford had to prove its rebuttal case.
Unidentified Justice: Well, the use of the one phrase in the Fourth Circuit opinion lends some force to your argument.
On the other hand, this Court hasn't been consistent either in pre-Burdine cases, and Burdine came down just a very short time before the Fourth Circuit's case here.
Mr. Wester: I understand that, but I think this Court in Burdine actually just more fully stated, perhaps, the standards of proof and what was required to meet those standards, and it seems to me that as I read Footnote 5, what actually it does show is that Ford did not satisfy at the rebuttal stage the district court of the truth of its explanation, and that was a matter left for the pretext stage.
Ford was therefore convicted, so to speak, on the force of the prima facie case, and was denied the effect of a rebuttal it should have had.
Unidentified Justice: But, Mr. Wester, on this same point, didn't the court in the footnote say that Ford neither articulated nor established?
I mean, how can you read it any other way?
Mr. Wester: There is no question the Fourth Circuit said that.
Because Ford did articulate, Your Honor, through the evidence it introduced into trial, because Ford did articulate, the use of those words confirmed that the burden imposed on Ford was one of proof, and no less than that.
To explain why it did not hire these claimants, Gaddis and Starr, Ford introduced evidence that for legitimate and non-discriminatory reasons Ford had not actually reached their applications in the course of the review conducted by the warehouse manager.
He did not after he identified two male applicants proceed to later filed applications, and thus had no occasion to make any comparison of the males' applications with these later filed claimants' applications.
Even assuming Gaddis and Starr's applications had been on file at the time the decisions were made, Ford's evidence that the applications were not reached in the ordinary course is an adequate articulation, in our view, of the legitimate reason for not hiring.
Unidentified Justice: Mr. Wester, wasn't that claim really an afterthought, and what is there in the record to show that Ford raised this hire in order of application defense in a timely fashion?
Mr. Wester: It--
Unidentified Justice: It looks very much, frankly, like an afterthought.
Mr. Wester: --Yes, ma'am.
Unidentified Justice: And there apparently was no request that the findings of fact be amended to clarify it.
I mean, all of a sudden it is here.
Mr. Wester: I think it is not all of a sudden at all, Your Honor, and for this reason.
This evidence came out at the very beginning of the testimony by the warehouse manager who made the decision.
It came at the very start of that.
It came as soon as he explained that he was the person who made the decisions, and explained the hiring procedure, and explained the qualifications of the males that were selected, and explained that he never made any comparison.
In fact, he repeated it three times in the course of, I think, two pages, which are set out in the opening brief.
In Ford's earliest brief on appeal, in Ford's earliest brief on appeal, we noted specifically that even though there was some ambiguity about whether the offers were actually communicated before these claimants were hired... before these claimants applied, there was no question, the record was unambiguous that Ford actually made the decisions without the benefit of or comparison with the females' applications.
Now, Ford has raised, I submit to you, contrary to the Commission's suggestion about that, this issue in a timely manner, that it certainly did clearly articulate its reason.
It came from exactly whom the court, the district court would expect it to come, the person who made the decisions, and it did it in a direct manner.
Unidentified Justice: Was this presented in the court of appeals?
Mr. Wester: It was, Your Honor, in the passage that I just referred to--
Unidentified Justice: What did the court of appeals say about it?
Mr. Wester: --The court of appeals did not address that issue, Your Honor.
Unidentified Justice: And yet you would... your submission was that it was dispositive.
I mean, you are suggesting it is.
Mr. Wester: It is... it certainly would be.
Unidentified Justice: Well, isn't that strange, for the court of appeals not to address it at all, if it even recognized the--
Mr. Wester: Well, I can't explain that, and wouldn't know how to characterize it.
Unidentified Justice: --Well, I suppose we can look in your briefs to see what you said about it.
Mr. Wester: --You can.
We have set that out at Page 16 of the opening brief and reproduced it at Page 18 of our reply brief.
Unidentified Justice: All right.
Mr. Wester: I should like to reserve the rest of my time for rebuttal.
Chief Justice Burger: Mr. Strauss.
ORAL ARGUMENT OF DAVID A. STRAUSS, ESQ., ON BEHALF OF THE RESPONDENT
Mr. Strauss: Mr. Chief Justice, and may it please the Court, I will first address the back pay issue.
We are willing to assume arguendo that the NLRA principle governs this case, although we don't think that conclusion is obvious, but there is no support, either in the law developed under the Labor Act or in the logic of the Labor Act principle for holding that the July, 1973, offer to Gaddis and Starr cut off their back pay awards at that date.
The best way to understand what that principle is and why those offers did not cut off the back pay awards is to understand the rationale of the Labor Act principle, and that straightforward rationale is that if an employer can ensure that after a certain date an employee will suffer no further effects from an alleged discriminatory act, then the employer should not continue to accrue liability after that date.
In other words, if the July, 1973, offer had placed Gaddis and Starr in such a position that after that date they would not continue to suffer the effects of the Petitioner's discriminatory refusal to hire them, then under the Labor Act principle Petitioner would not continue to accrue back pay liability, but the July, 1973, offer to Gaddis and Starr was not sufficient to prevent further injury to them because that offer left them at a continuing seniority disadvantage.
They were at a two-year seniority disadvantage that was entirely the result of Petitioner's refusal to hire them in 1971.
Unidentified Justice: How did this injure them, pending resolution finally of the issue?
Mr. Strauss: Well, it would have injured them in a number of ways.
It would have reduced the health and life insurance benefits.
It would have exposed them to a greater risk of layoff, and less job security.
Unidentified Justice: But until there was a layoff, that wouldn't arise.
That would be purely speculative, wouldn't it?
Mr. Strauss: Well, they would have been at that disadvantage.
They would have had that much less security, as well as a variety of other disadvantages in the warehouse.
I don't know the details, but customarily bidding on overtime and bidding on more attractive jobs are all functions of seniority.
Unidentified Justice: Mr. Strauss, under a collective bargaining agreement such as here, can an employer without the benefit of a court order offer somebody retroactive seniority to the detriment of other employees there?
Is that even possible to do?
Mr. Strauss: Well, the details of this collective bargaining agreement just haven't been litigated on that point.
Unidentified Justice: Yes.
Well, isn't that very hazardous for the employer?
Mr. Strauss: Well, it may well be.
Unidentified Justice: I mean, it really puts him on a spot.
Mr. Strauss: It may well be that the employer has given up his right to make the sort of offer that would be necessary to cut off the back pay award in the course of collective bargaining, but that is no different from many litigants who find that their chances to improve their litigating position by making a settlement offer or in some other way to improve their position are blocked by a contract they have entered for mutual advantage.
Unidentified Justice: And even if they haven't given it up in an agreement, which might be the typical case, but even if they haven't, then what does that do to the innocent other employees who are affected by inserting someone laterally?
Mr. Strauss: Well, there are really two points to be made about that.
The first, Justice O'Connor, is that those employees are only being placed in the position they would have been in had the employer never discriminated, but the second, and perhaps more fundamental, is that the court of appeals holding doesn't do anything to the rights of those employees.
Whatever rights they have for breach of the collective bargaining agreement or whatever remain intact, and unaffected by this decision.
Unidentified Justice: Well, but rights similar to that will be affected in the future if the Fourth Circuit's opinion stands, because then the employers will be given an incentive to place someone in a higher seniority position than opening, so to speak.
Mr. Strauss: Well, if their collective bargaining agreement permits it, they will presumably do that, but if the collective bargaining agreement permits it, then there is no sense in which the incumbent employees have rights, because they have only the rights given to them by the collective agreement.
Unidentified Justice: Will you spell out for me exactly what offer Ford should have made to these people, in your estimation?
Mr. Strauss: It should have said, to summarize, that they will be put in the position in 1973 they would have been in had they been hired in 1971.
If those jobs were now... if they would have received a routine pay increase or routine promotion, they would be hired at that position, and since they would have received two years' seniority, they would be entitled to those two years' seniority with the company, health and life insurance benefits, and layoff protection.
Unidentified Justice: If that had been what happened, what would happen to the lawsuit?
Mr. Strauss: Then there would be no... the back pay award would be cut off at that date, so that when Gaddis... when the Commission proved the discrimination--
Unidentified Justice: The lawsuit would have gone on.
Mr. Strauss: --The lawsuit would have gone on.
Unidentified Justice: And then suppose the lawsuit was lost.
Then what happens?
Do these ladies stay in with the seniority and all the other... all the rest of it?
Mr. Strauss: They would be subject to the same terms as the other employees.
If they were incompetent, they could be fired, and so on.
Unidentified Justice: No, but if not, they would retain the seniority you say should have been offered.
Mr. Strauss: That's right.
Unidentified Justice: Even though ultimately they lost the lawsuit?
Mr. Strauss: That's right.
Unidentified Justice: And if the collective bargaining agreement in effect prohibited that, then if the employer made that kind of an offer, they committed an unfair labor practice?
Is that it?
Mr. Strauss: Well, I don't know that they would have committed an unfair labor practice.
They might have violated the collective bargaining.
Unidentified Justice: And open the company up to a strike, and so forth.
Mr. Strauss: Well, that's right, but the issue is whether Gaddis and Starr's back pay award is going to be cut off.
Now, it would be anomalous to say that the amount of their back pay award depends on the terms of the collective bargaining agreement that Ford entered for its advantage with the collective bargaining representative of the employees.
There may well be collective bargaining agreements that would permit this sort of remedial slotting in, and if there were, there could be no claim.
That argument that Gaddis and Starr's back pay award should be cut off simply could not be made.
Unidentified Justice: Why shouldn't the appropriate remedy, the cutoff of back pay award, depend to a certain extent on the nature of the collective bargaining agreement?
I mean, you speak as if there were only one conclusion that could be drawn in this case as to the appropriate type of offer that would cut off a back pay award, but actually this is the first time I think the Court has considered it, and I suppose there are two sides to every lawsuit.
Mr. Strauss: Oh, I suppose there are two sides also.
It may be that there are certain circumstances in which the offer would not have to include the two years' seniority.
There is just no suggestion that those circumstances existed here.
For example, if... we suggested in our brief that if in 1973 the jobs Gaddis and Starr were denied in 1971 included... would have included after two years additional responsibilities for which they had not been trained, then some arrangement could have been worked out so they would receive the training before taking on those responsibilities, but there is no suggestion of that here.
There is no--
Unidentified Justice: What if the offer had been to give them provisional security... seniority, dependent upon adjustment after the matter was litigated?
Mr. Strauss: --Well, I think they have to be given... they have to be put in the position they would have been had they been hired in 1971.
Unidentified Justice: Well, that is exactly my hypothesis, that they would be put provisionally in that position dependent on whether they could establish their right to it.
Mr. Strauss: My understanding of the Labor Board principle is that that would be a conditional offer.
Unidentified Justice: Well, do you suggest that they could not continue to litigate these issues?
Mr. Strauss: --Oh, of course they could continue--
Unidentified Justice: That is what I am suggesting.
Mr. Strauss: --They can continue... well, they can continue to litigate the issues, no matter what.
The question is whether they can cut off the back pay award, and in order to cut off the back pay award, they have to ensure that that employee will not be injured after the date at which they proposed to cut it off.
Unidentified Justice: Well, is there a back pay award unless they win the lawsuit?
Mr. Strauss: There isn't.
There is no back pay award, of course.
Unidentified Justice: You still tell me that if they lose the lawsuit, they still are slotted in with the increased seniority, and with all the other benefits that go with it, the training that you just now suggested, even though they lost the lawsuit?
Mr. Strauss: They aren't required to be slotted in.
The employer chose to give them that job offer.
Unidentified Justice: You have said that they can't... could not have made a proper offer at this stage of the litigation without also offering them the seniority that would be theirs had they been employed back in 1971.
Would you say that?
Mr. Strauss: That's right, proper meaning cutting off back pay.
Unidentified Justice: Now they are given that.
You say that is what they must be given, and they are given that, the two ladies are.
Mr. Strauss: Um-hm.
Unidentified Justice: They go out in the lawsuit and they lose the lawsuit.
Mr. Strauss: Um-hm.
Unidentified Justice: But they still retain the seniority.
Mr. Strauss: They are in the same position as any other employees.
Now, if they lose the lawsuit, for example, because the court found that they were not qualified for those jobs, and they remain unqualified for the jobs, they can be fired, if--
Unidentified Justice: But if they are qualified, they can't be fired just because they lost the lawsuit.
Mr. Strauss: --That's right.
Not... if the... well.
Unidentified Justice: If the employer did not want them, he should have taken his chances and not offered them a job at all.
Mr. Strauss: Well, that's right.
I suppose if it is an at will contract, they could be fired at will, but if the--
Unidentified Justice: Your position puts the... puts Ford in the same place they would be if they had never made them any offer, if Ford had never made any offer.
Mr. Strauss: --As far as cutting off the back pay award is concerned.
Unidentified Justice: Cutting... everything.
Mr. Strauss: Well, that's right, because the offer was neither sufficient to cut off the back pay award nor did it give them an opportunity to mitigate damages which they did not take.
Unidentified Justice: Incidentally, Mr. Strauss, is there any significance in the fact that at the time the offer was made they were both employed at GM?
Mr. Strauss: Well, that is significant to the mitigation of damages question.
There is an argument that had they not been employed at GM, and had they refused to take Ford's offer, that would have been an unreasonable failure to mitigation damages, and--
Unidentified Justice: That would be so if they were unemployed at the time?
Mr. Strauss: --That's right.
But there is... Petitioner doesn't even seriously contend that it was unreasonable for them to keep their GM jobs instead of coming with two years' seniority that they had gone out and earned at GM after having been discriminated against by Ford.
It was unreasonable for them not to give that up.
Unidentified Justice: Why shouldn't their taking of the job at GM have cut off the running of back pay?
Mr. Strauss: Well, the taking of the job at GM reduced the running of the back pay award.
Unidentified Justice: Well, why didn't it cut it off totally, as taking other employment?
Mr. Strauss: Well, the short answer is that they would not be made whole if it cut them off entirely.
The GM job, I don't know if it paid more or paid less, but it turned out to be a less good job, and they were forced to--
Unidentified Justice: Well, when you say it turned out to be, what you mean is, they left it after a year or so, don't you?
Or they were laid off?
Mr. Strauss: --No, the plant closed.
Unidentified Justice: Well, but supposing they had stayed with GM for five years and the plant closed.
Would the employer's liability for back pay be cut off or not?
Mr. Strauss: Well, it wouldn't be cut off, but it would probably be zero, or it would be very low, because all the wages they earned at GM would be deducted from the back pay award.
Unidentified Justice: Well, supposing the employer's plant closes after... GM's plant closes after five years, and they are unemployed for three years, so the sixth, seventh, and eighth year after the offer was made, is Ford liable for that?
Mr. Strauss: Well, if the matter hasn't been settled by then, hasn't been litigated out by then, yes, it would, because they are in the GM job, don't forget, because Ford discriminated against them.
Unidentified Justice: Well, but there comes a point at which you can't do it on a house that Jack built basis, you know, where you don't have reverberations after ten or fifteen years.
I think the Commission's approach here seems to be quite different from the common law approach that people are to be encouraged to settle, encouraged to mitigate damages, and that sort of thing, pending the... encouraged to settle, pending litigation.
You seem to take the position that you want a pound of flesh.
Mr. Strauss: No, I think this... in the first place, this case has really nothing to do with settlements.
There is no settlement offer in this case.
The Petitioner tries to present this as a settlement offer.
It was, as he emphasizes, an unconditional offer.
Settlements remain where they were before, and the incentives to settle remain where they were before.
Unidentified Justice: But this was an effort to mitigate damages on the part of Ford, or to cause the employees to mitigate damages.
Mr. Strauss: Well, it was an effort to reduce--
Unidentified Justice: To reduce the amount of liability on the part of Ford--
Mr. Strauss: --That's right.
Unidentified Justice: --and to encourage the employees to mitigate damages.
Mr. Strauss: That's right.
It was an effort to reduce the amount they would be liable for, but it comes to us in the posture that Ford has been found to have discriminated, and the question now is, is the back pay award going to be reduced below the amount that would be needed to make them whole.
Unidentified Justice: Was Ford required to offer, in your view, the seniority that these people had at GM, which was 17 months--
Mr. Strauss: No.
Unidentified Justice: --or the seniority they would have had at Ford?
Mr. Strauss: The seniority they would have had at Ford.
That's the Labor Board principle.
The seniority and the wages and so on that they would have had at Ford.
Unidentified Justice: Mr. Strauss, I would like to get back to the question the Chief Justice asked you.
I am not sure I got your answer.
The one where he asked, what if this offer had been made provisionally, seniority provisionally, if they won their lawsuit.
This is not sufficient, in your estimation.
Mr. Strauss: That, if it were made in those terms, it would not be sufficient.
They... If they were hired, they would be under the same rules as every other employee, and if they were unqualified for the jobs and could be fired for that reason, there would be nothing to prevent Ford from hiring, but Ford does not eradicate their injury, does not prevent a further accumulation of their injury.
Unidentified Justice: Why didn't it eradicate the injury if the seniority is offered provisionally, that is, provisionally on their winning the lawsuit?
Mr. Strauss: Well, at that point, they are still placed in a position that is less secure than they would have been had they not been discriminated against.
Unidentified Justice: Oh, of course it is less secure, but maybe they didn't deserve any more security.
Mr. Strauss: Well, that's right, and that, I think, is what the mitigation--
Unidentified Justice: They keep their job.
They just don't keep the seniority.
Mr. Strauss: --Well, I think that is what the mitigation principle is designed to deal with.
I think then the question becomes, was it reasonable for them to keep the jobs they had gone out and found after they were discriminated against, as opposed to taking Ford's job, and the two courts below found that it was reasonable and--
Unidentified Justice: Legally, your position can't depend on the fact they were working at General Motors, can it?
Mr. Strauss: --Well, not on the--
Unidentified Justice: I mean, legally, you wouldn't take... it seems to me you would make the same argument if they are just unemployed and they said, well, we don't think we'd better take this job unless we get seniority.
Mr. Strauss: --There are two different principles at stake.
One is the Labor Act principle, and the other is the mitigation of damages principle.
The Labor Act principle does not depend on their working at GM.
The mitigation principle does.
Either can justify reducing a back pay award.
Unidentified Justice: Well, but they are not arguing for mitigation.
They are just arguing under the Labor Act principle that the unconditional offer terminated the right to back pay.
Mr. Strauss: Well, to the extent--
Unidentified Justice: And would it not have done so had they not been employed at GM?
Mr. Strauss: --Well, that's right.
That's right, and to the extent their argument is limited to the Labor Act principle, it is irrelevant, but in answer to the suggestions that Justice Blackmun was making that it is somehow unfair to the employer to say, you can't give them a provisional offer of seniority, I think that would not be unfair because the employee remains under a duty to act reasonably, and if that was a reasonable opportunity to mitigate damages, then the employee should have taken it, eyed though it was provisional seniority.
Unidentified Justice: That just guarantees them the right to partially win his lawsuit.
Mr. Strauss: Guarantees whom, Justice White?
Unidentified Justice: The employee.
Mr. Strauss: It doesn't... the employer can stand pat.
The employer doesn't have to give up anything.
Unidentified Justice: Well, he does.
He may offer him a job, but why does he have to guarantee him the seniority?
Mr. Strauss: Well--
Unidentified Justice: Why do you put the risk of losing on the employer?
Mr. Strauss: --The employer doesn't have to... well, the risk of losing is on the employer the way the risk of losing every lawsuit is on a party to the lawsuit.
Unidentified Justice: Well, the risk of losing... If the employee lost his lawsuit, he wouldn't get any back pay.
Mr. Strauss: That's right.
Unidentified Justice: Or any seniority.
Mr. Strauss: That's right, and if the employer lost his lawsuit, he would be liable for everything.
Unidentified Justice: Then I don't understand why you think it is some injury to him, the employee, the woman, if they accepted provisional status of their seniority.
That is, they would get just what they were asking for subject to the proposition that if they lost their lawsuit they would give it up.
They are going to give it up anyway.
Mr. Strauss: Well, at the time that offer was made to them, they had jobs that didn't have this condition on it that they had to win their lawsuit in order to retain their seniority.
Unidentified Justice: Well, but the seniority is one of the issues in the lawsuit, isn't it?
Mr. Strauss: Well, that's right, but--
Unidentified Justice: Certainly, and if they lose on that issue, are you going to say that they have some kind of constitutional right to it?
Mr. Strauss: --Oh, no, of course not.
Unidentified Justice: You seem to be arguing that repeatedly.
Mr. Strauss: Of course not.
Well, as I said, the employer could simply stand pat and offer them nothing, and take his chances on the lawsuit.
He chose not to do so.
He made them an offer.
Now, at the time he made--
Unidentified Justice: Suppose they were unemployed and he made them this conditional offer.
I offer you a job, and I offer you conditionally on your winning the lawsuit seniority equal to what you would have had, and the employee takes the job, takes the job, and continues to litigate.
He wants back pay.
Mr. Strauss: --Um-hm.
Unidentified Justice: He loses the lawsuit, and so he gets no back pay, and the employer suggests that he should then not have his seniority.
Mr. Strauss: That would be fine.
The employee accepted the offer and could be fired.
There is certainly... I mean, perhaps I misstated myself.
There is certainly no suggestion that the employer is prohibited from making such an offer.
Unidentified Justice: All right.
Now, the employee says, no, sorry, I will not take the job because you didn't make me an unconditional offer of seniority.
Mr. Strauss: Um-hm.
And the employee is--
Unidentified Justice: And then the employee goes on and loses the lawsuit.
What does he get?
Mr. Strauss: --Was the employee unemployed at the time this offer was made?
Unidentified Justice: Completely unemployed.
Mr. Strauss: Then it would quite possibly be a failure to mitigate damages.
That would depend on--
Unidentified Justice: In what respect?
Just the job?
Mr. Strauss: --According to the common law principle that if you have an opportunity to mitigate damages, you should take it, and--
Unidentified Justice: Well, if he loses the lawsuit, he isn't going to get anything, is he?
Mr. Strauss: --Well, if he loses the lawsuit, he is not going to get anything.
If he wins the lawsuit, his award might be reduced for the failure to mitigate damages if he were unemployed at the time he rejected the offer.
Unidentified Justice: It would seem to me that the logic of your position would require an offer of back pay because the employee could often come in and say, I have had to borrow money, and so forth, to pay hospital bills and the like.
Unless I get back pay, I am not in the position I would have been had there been no discrimination.
Mr. Strauss: Well, I think that would be the only possible argument that could be made for back pay.
The court of appeals did not require back pay.
There is a--
Unidentified Justice: No, I am talking about... The statement of the Labor Board principle as you phrase it, it seems to me, would really always justify the employee in saying, I am not made whole unless you give me back pay.
Mr. Strauss: --I think the reason it does not, Justice Stevens, is that there has been an historic difference recognized by this Court in a case called Gullet Gin, between the collateral and the direct effects.
Unidentified Justice: Seniority is not collateral?
Mr. Strauss: No, seniority, I think, is a direct effect.
Unidentified Justice: What about... what is back pay?
Mr. Strauss: Well, back pay is awarded for the direct effects, and not for the--
Unidentified Justice: Well, they are both correct then.
Seniority and back pay then should be treated alike.
Is that what that seems to suggest?
Mr. Strauss: --No, the back... the offer does not have to include back pay accrued up to that point, because that doesn't have anything to do with injuries occurring after that point.
The question is, what kind of offer cuts off the further accrual of the back pay award.
Unidentified Justice: It does if he can't pay off the loan that he had to... you know, he can't make the payments for the washing machine and the car and--
Mr. Strauss: That's right.
Those are collateral... those, I think, are historically regarded as collateral consequences.
If the lawsuit were litigated straight through to completion without any offers and the employee's back pay was then being computed, it would be computed on the basis of lost wages and so on, and there wouldn't be extra damages for his inability to pay off his loan.
Unidentified Justice: --If there is a dispute as to the date of the application for the job, which there often is, say they tried one or... I take it the employer to be safe would have to give the maximum amount of seniority, wouldn't he?
Mr. Strauss: Well, that would be litigated out at the end, to be absolutely certain.
Unidentified Justice: In order to cut off the running of back pay.
Mr. Strauss: That's right.
In order to be absolutely safe, although he would be... it could be litigated out at the end when the application was made.
Unidentified Justice: If the collective bargaining agreement prevented Ford from offering seniority rights retroactively, what incentive would there have been for Ford to make any re-employment offer?
Mr. Strauss: Well, there is always an incentive to settle.
Unidentified Justice: What would it be?
Because back pay would continue to run?
This case has been in litigation for nine years.
Mr. Strauss: Well, they could always settle.
There is always an incentive to settle.
Unidentified Justice: Well, if you have to offer something that you have no contractual right to offer, you are not in a very strong position to settle, are you?
Mr. Strauss: Well, if the collective bargaining agreement would have precluded a settlement offer including seniority, they could... would have had to have offered the employee something else to get it settled.
Unidentified Justice: Like what?
Mr. Strauss: Well, whatever the employees--
Unidentified Justice: Like more money.
Mr. Strauss: --would take, like more money.
They could still settle.
It's important to see that the employer can still settle the case on whatever terms--
Unidentified Justice: So the government is really taking a position that discourages settlement, it seems to me.
Is that the position of the government?
Mr. Strauss: --Not at all, Justice Powell.
I think this case has nothing to do with settlements.
The employer here claims--
Unidentified Justice: Well, let's say offering re-employment.
If you are advising the employer, the employer had a contractual right that prohibited it offering retroactive seniority, I would say, just sit tight and litigate.
Why offer, because back pay continues to run, under your theory?
Mr. Strauss: --Well, he can... back pay would continue to run.
He may have precluded himself from making an offer--
Unidentified Justice: But it is running in any event under your theory.
Why offer anything?
Mr. Strauss: --Well, he can settle.
He can still settle.
He can still offer whatever will get the employees to give up their suit, and that is unaffected by this--
Unidentified Justice: Which is everything they ask for.
Mr. Strauss: --Which is whatever... they will assess their chances of winning the case.
Unidentified Justice: What you are suggesting is that they have got to give everything that is being demanded or else they can't mitigate the damages.
Mr. Strauss: Absolutely not.
That is absolutely not--
Unidentified Justice: Well, if you add up two, three, four, and five, it adds up to exactly that.
Mr. Strauss: --If they want to cut--
Unidentified Justice: You are saying that this was a complete futility to make this offer of reinstatement on the job subject to having the unresolved matters decided in a routine way.
Mr. Strauss: --Well, it turned out not to do the employer any good because it was not reasonable for the employees to take it, and in Justice White's hypothetical, they have been unemployed, and might have been--
Unidentified Justice: It has not yet been decided whether it was reasonable for the--
Mr. Strauss: --Both courts below believed it was reasonable for them not to give up their GM jobs to take the Ford job back.
Had they not reached that decision, it might have been far from complete futility.
The question is whether that offer cut off the back pay award.
That is, whether Gaddis and Starr are no not to be made whole by not receiving any back pay after 1973 because they turned down those offers.
Unidentified Justice: --It has been suggested three or four times in questions from the bench that what the position of EEOC is, or amounts to, is that employers are wasting their time to make offers of reinstatement in the position while the other issues are being resolved.
Mr. Strauss: Not at all.
There are at least two reasons... three reasons why they are not.
They can try to settle the case, and that is completely unaffected by the decision below.
They can make an offer that will get the employee assessing his chances of winning and losing to give up, and Justice Brennan, that may be something very much less than what the employee is asking for if he thinks his chances of winning are not great.
He may settle for something very little.
Second, he can put them in the position they would have been in had he not discriminated, and if he says at this point, if he says to the employee, at this point we are drawing the curtain, and we will continue to litigate about any injuries you have suffered up until now, but from now on I am putting you in the position you say you would have been in if I had not discriminated against you.
If the employer says that, then he has cut off the back pay award under the Labor Act principle.
Or, third, he can give the employee an opportunity to mitigate damages, and then the question becomes, does the employee act reasonably in not accepting that offer.
Unidentified Justice: Suppose there had been no seniority system.
All the facts are the same, except no seniority system at all, and he made the offer, and then the person was employed at General Motors at what he thought was a better job, so he just stayed with General Motors, and then his job at General Motors ran out and he sued for back pay at Ford.
He wouldn't get back pay for any time after the offer, would he?
Mr. Strauss: That would depend on whether his decision to stay at GM was reasonable.
That is the old common law principle of having a reasonable--
Unidentified Justice: Well, say it was reasonable to stay at General Motors.
His back pay at Ford certainly wouldn't run beyond the offer.
Mr. Strauss: --Oh, if the offer gave him... put him in the position of--
Unidentified Justice: Well, there was no seniority system.
They just offered him a job.
Mr. Strauss: --Then it would cut off the offer.
Of course, the job would have to be at 1973 wages, not 1971 wages.
Unidentified Justice: Oh, yes.
Mr. Strauss: I think it is important to keep in mind that we are talking about cutting off a back pay award, reducing back pay below the amount that would be needed to make victims of employment discrimination whole, and there has to be some reason for chopping off the award, not just reducing it by the amount of subsequent earnings or subsequent amounts that could have been earned, but chopping off the award at the date of the offer.
Now, there is some logic to doing that.
If the offer takes the form of saying, from now on, you will suffer no further the effects of the discrimination, then it makes sense to say, you will not--
Unidentified Justice: Well, you have to allege discrimination, don't you, because at this time it has not been determined whether there was or was not discrimination.
Mr. Strauss: --That's right, but of course the employer is not liable at all for any back pay if he is not found to have discriminated.
Unidentified Justice: But before the determination both parties are kind of looking at their whole card, really.
Mr. Strauss: Well, that's right.
That's right, but in that they are in the same position.
Unidentified Justice: Why shouldn't the Commission take the position as far as possible consistent with the statute, encourage mitigation of damages, encourage employees to cut liability, and encourage settlement?
Mr. Strauss: We absolutely do all three of those things, and if this had been an unreasonable decision by the employees, if they had been unemployed and had turned down a good job offer, that would be an unreasonable failure to mitigate damages.
Unidentified Justice: What is your final answer on the Chief Justice's question about a provisional offer?
Mr. Strauss: I think the offer has to be to place... and I think this is the Board rule.
The offer has to be to place them in the same position as other employees.
They can't be under a cloud--
Unidentified Justice: So the answer is that that kind of offer would not suffice.
Mr. Strauss: --That sort of offer would not suffice, although, although they would be in no better position than other employees, and if they proved to be incompetent or unqualified, and that were a ground for dismissal, they could be dismissed subsequently.
Unidentified Justice: Mr. Strauss... oh, excuse me.
Did you finish your answer?
I don't think you can phrase your test in terms of whether it is reasonable from the point of view of the employee, because in the example Justice White gave you, if there were no seniority system at Ford, and they were employed at General Motors, and very reasonably decided, well, I don't think I will take the Ford offer, you agree that would nevertheless cut off their back pay?
Mr. Strauss: Yes, if Ford--
Unidentified Justice: So it does not turn just on the reasonableness of the employee's decision.
Mr. Strauss: --That is back to the two principles.
The Labor Act principle is distinct from the mitigation principle.
The Labor Act principle says, if you are put in a position such that you will not continue to suffer the effects of the alleged discrimination, that cuts it off no matter how reasonable it was to take that job.
Then there is a separate way the employer can reduce his back pay, and that is by showing that the employee had a reasonable chance to take a job, whether or not that job was identical to the one he would have had had he not been discriminated against and he failed to do that.
Either of those avenues can be used by the employer to reduce back pay.
Unidentified Justice: Well, we don't need to be bound by the Labor Board principle, I don't think.
Mr. Strauss: No, that's right.
In fact, the--
Unidentified Justice: And anyway, isn't that just some discrete application of a mitigation rule?
Mr. Strauss: --Well, it certainly serves the same policies as the mitigation rule, Justice White.
The reason I am distinguishing it so sharply is that I think analytically they rest on different foundations, and it is important to see the rationale of the Board rule.
Unidentified Justice: Why should the Labor Board rule be important in this context at all?
Mr. Strauss: Well, I think it is not obvious that it should.
We are, as I said, accepting arguendo that it should because the remedial provision of Title VII--
Unidentified Justice: Well, what if it weren't?
Then how would we come out in this case?
Mr. Strauss: --Well, I certainly don't think--
Unidentified Justice: Just on a straight mitigation.
Mr. Strauss: --I certainly don't think there is any logical sense in cutting off the back pay award at a date if the employee continues to suffer injury after that date on account of the employer's discrimination.
Unidentified Justice: You certainly would come out differently on your provisional offer.
Mr. Strauss: Well, he continues to suffer the injury of being under the provisional cloud which he would not have been under.
Unidentified Justice: Well, I know, but he wouldn't continue to suffer if he won the lawsuit, but if he lost it, why should he continue to have his seniority that he didn't deserve in the first place?
Mr. Strauss: Well, we are cutting off back pay, and we are saying, no back pay--
Unidentified Justice: Well, I know, but that is just the Labor Board rule.
Your only answer to the Chief Justice's question was the Labor Board rule.
Mr. Strauss: --Well, I agree, the provisional--
Unidentified Justice: On a mitigation theory, I can't imagine--
Mr. Strauss: --A provisional offer would... may well suffice to mitigate damages in certain circumstances.
Unidentified Justice: --All right.
Mr. Strauss: That is right.
Unidentified Justice: If you admit that, why, this is a provisional offer case, isn't it, because in effect they said, you get the job, and provided you win, you get everything else, too.
Mr. Strauss: I do think there is a possible mitigation argument in this case.
The problem is that both lower courts found it was reasonable for them to decline the Ford offer, and it is a reasonableness test.
Chief Justice Burger: Mr. Wester, do you have anything further?
ORAL ARGUMENT OF JOHN R. WESTER, ESQ., ON BEHALF OF THE PETITIONER -- REBUTTAL
Mr. Wester: I would suggest that the reasonableness analysis employed in the mitigation cases to which Mr. Strauss has referred does not apply to this case, and the reason it does not apply is because the reasonableness analysis in those cases has always come from the context where the courts or the Board were evaluating whether a job other than the one that was the subject of the claim was being offered, and in this case, of course, it was the job that was the subject of the claim that was being offered.
All of the mitigation damages concerned interim or alternative employment other than, distinct from the job initially sought.
Except for that clarification, I shall be pleased to address any questions anyone might have of me.
Otherwise, I shall waive the remainder of our allotted time.
Chief Justice Burger: Thank you, gentlemen.
The case is submitted.