GEN. ELEC. CORP. v. COM. PA. HUM. R. COM., 469 Pa. 292 (1976)

365 A.2d 649

Supreme Court of Pennsylvania.Argued March 9, 1976.
Decided October 20, 1976.

Appeal from the Commonwealth Court, No. 539 C.D. 1974, 18 Pa. Commw. 316, 334 A.2d 817, Harry A. Kramer, J.

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Katherine H. Fein, Asst. Gen. Counsel, Pittsburgh, Sanford Kahn, Gen. Counsel, Pa. Human Relations Comm., Harrisburg, for appellant.

Frederick N. Egler, Egler Reinstadtler, Pittsburgh, for appellee.

Before JONES, C. J., and EAGEN, O’BRIEN, ROBERTS, POMEROY, NIX and MANDERINO, JJ.

OPINION OF THE COURT
POMEROY, Justice.

On September 19, 1971, Agnes Stokles, Anna Katynski and Mary Kush filed a complaint with the Pennsylvania Human Relations Commission [hereinafter “the Commission”] on behalf of themselves and all other similarly situated female employees of appellee, General Electric Corporation, alleging that General Electric had engaged in sexually discriminatory practices in violation of Section 5(a) of the Pennsylvania Human Relations Act, Act of October 27, 1955, P.L. 744, Section 5(a), as amended, 43 P. S. § 955(a) (Supp. 1974-1975).[1] Specifically, the complaint alleged that General Electric “failed to offer the complainants and other female employees similarly situated the same terms and conditions to secure full time employment after phasing out the coil department because of their sex, female, while offering less senior

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males of the same work unit full time employment in all areas not effected [sic] by the elimination of the coil department”. After a hearing the Commission found that General Electric had violated Section 5(a) and entered a final order prescribing remedies not here at issue.[2] General Electric appealed and the Commonwealth Court reversed the Commission. General Electric v. Pennsylvania Human Relations Commission, 18 Pa. Commw. 316, 334 A.2d 817 (1975). We granted allocatur and now reverse.[3]

It is well established that the findings of the Commission may not be disturbed on appeal if they are in accordance with the law and are supported by substantial evidence. Act of June 4, 1945, P.L. 1388, § 44, 71 P. S. § 1710.44; Pennsylvania Human Relations Commission v. Chester Housing Authority, 458 Pa. 67, 327 A.2d 335, cert. denied 420 U.S. 974, 95 S.Ct. 1396, 43 L.Ed.2d 654 (1974); Slippery Rock State College v. Pennsylvania Human Relations Commission, 11 Pa. Commw. 501, 314 A.2d 344
(1974); Straw v. Pennsylvania Human Relations Commission, 10 Pa. Commw. 99,

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308 A.2d 619 (1973). The Commonwealth Court reversed the Commission not because its factual findings were unsupported by the record but because its conclusions of law were found to be erroneous. The issues raised in this appeal relate to the correctness of these legal conclusions. In order for these conclusions to be understood, however, it will first be necessary to recite the uncontested factual findings of the Commission. This is done in Part I of the Opinion. In Part II we explore the legal issues and state the reasons why the decision of the Commonwealth Court must be reversed.

I
Prior to the “phase-out” of the coil department in General Electric’s Pittsburgh Apparatus Shop, Agnes Stokles, Mary Kush and Anna Katynski had been employed in that department as coil tapers[4] for continuous periods ranging from thirty-six to twenty-two years. The position of coil taper, like all positions in the Pittsburgh shop, was classified by two methods. The first was through a job hiring classification system which consisted of a number preceded by an “R” prefix [hereinafter “R rating”]. The lowest hiring classification was an R-4, the highest R-25. The R classification both denoted one’s base pay and also determined one’s ability to transfer to equivalent R rated positions or to bump into equivalent or lower rated jobs.

Each job within the shop had a range of maximum and minimum R classifications which could be assigned to it. Within the coil department there were four such subdivisions of R classifications. These were designated from highest to lowest by the letters “A”, “B”, “C” and “D” respectively. Within the coil department of the Pittsburgh shop all female employees had been hired as coil workers C or D and none had an R rating in excess

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of R-9. All but three male employees, on the other hand, were employed as coil workers A or B and had R ratings in excess of R-11. As a consequence they enjoyed more advantageous transfer and bumping rights. The three named complainants were all coil workers C with an R-9 classification.

In addition to the bumping and transfer privileges mentioned above, there were two methods through which an employee in the Pittsburgh shop could broaden his or her base of work experience. The first method allowed employees in lower rated positions to bid on unfilled vacancies in higher rated positions. Only one woman had attempted to exercise this bidding right prior to 1969[5] , and no woman has made such an attempt since General Electric initiated during that year a policy of actively encouraging female employment. The complainants contended that females did not bid for such jobs because it was commonly understood that all jobs other than that of coil taper were “male” jobs to which no female would be assigned. The Commission found, however, that while such an attitude may have existed, it was not the result of any overt or passive policy on the part of General Electric.

The second method of obtaining broader work experience was through “road work” which was assigned by departmental supervisors from time to time to various employees within the coil department. “Road work” consisted of trips to outlying General Electric facilities to repair electrical equipment which was too large to bring back to the Pittsburgh shop. In making these repairs employees received training in skills which they would not have otherwise obtained within the coil department. Significantly, with one exception, women

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were never invited to engage in such road work.[6] General Electric attempted to justify this exclusion on the ground that the female employees seemed engrossed in their work and that they would not have been capable of undertaking the assignments.[7] The Commission found that this procedure had a “disparate impact” on females.

At the end of 1970 General Electric decided to phase out the coil department. At that time the department employed twenty-one female and twenty male employees. The company offered to transfer the employees to a new operation in Ohio or to attempt to find positions for them elsewhere in the Pittsburgh shop. Lay off and transfer decisions were to be made in accordance with the local labor-management contract. This provided: “Lay-offs and transfers due to lack of work will be made in accordance with the length of continuous service within the affected occupational group. However, ability will be given consideration.”

During the early part of 1971 General Electric completed the phase-out of the department. Of the twenty-one female employees, sixteen were laid off, four were offered part-time positions and one retired.[8] Of the

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twenty male employees, sixteen were transferred into full time positions, three bumped into full time positions and one was laid off. Most of the males who bumped or were transferred into other positions by General Electric had less seniority than the women who were laid off. Few of the men had ever held, even temporarily, the job positions to which they were transferred. Transfer decisions were, in many instances, based upon a supervisor’s personal familiarity with experiences which the male employees had had outside of their employment at General Electric. These experiences were not reflected in the employees’ official record but were nevertheless relied upon to determine whether a male employee had the aptitude or experience to fill a given opening. No effort was made to ascertain whether any of the female employees had similar job-related experiences which did not appear on their records. In other instances, General Electric retained male employees because of the training they had received during various road work assignments.

It was on the basis of this evidence that the Commission concluded that General Electric had engaged in unlawful employment practices in violation of Section 5(a) of the Act. In particular, the Commission concluded that General Electric violated the Act by failing to take affirmative action to dispel an erroneous feeling among its employees that certain jobs were for males and certain jobs were for females; by retaining the female employees in the lowest job classifications and thus limiting their rights to bump; by failing to ascertain the females’ general work experience and qualifications for available positions on an equal basis with male employees; by training males to fill positions for which they had no previous experience while failing to offer females the same opportunities to be trained for new positions; and by following general procedures during the phase-out which had a disparate impact upon the female employees’ job opportunities. The Commission also concluded that

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the statutory requirement of proving that the complainants were the “best able and most competent to perform services required” was not applicable under the circumstances of this case.

II A.
Section 5(a) of the Pennsylvania Human Relations Act reads in relevant part:

“It shall be an unlawful discriminatory practice, unless based upon a bona fide occupational qualification . . .:
(a) For any employer, because of the . . . sex . . . of any individual to refuse to hire or employ, or to bar or to discharge from employment such individual, or to otherwise discriminate against such individual with respect to compensation, hire, tenure, terms, conditions or privileges of employment, if the individual is the best able and most competent to perform the services required.” (emphasis added)

The first issue raised on this appeal is whether the underscored language imposes upon a complainant the burden of proving as part of a prima facie case that he or she is “the best able and most competent to perform the services required”. In the instant case the complaints undertook no such showing. The Commission ruled that where the discriminatory practice consists of a failure to evaluate a female worker’s qualifications and where there is evidence that experience was not the employment criterion the “efficacy” of the “best able” requirement of Section 5(a) is “vitiated”. Relying on two previously decided cases which had cast the burden on the complainant, the Commonwealth Court disagreed. G. C. Murphy Company v. Commonwealth of Pennsylvania, Human Relations Commission, 12 Pa. Commw. 20, 314 A.2d 356 (1974); Romain v. Middletown Area School District, 1 Pa. Commw. 419, 275 A.2d 400
(1971). As a consequence,

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the court concluded that the complainants had failed to meet their burden of proof.

This Court has not heretofore had occasion to consider the “best able and most competent” clause of Section 5(a). In doing so we are, of course, required to ascertain as best we can what the legislature intended to express in the italicized language quoted above. In this process we are to be guided by the directive of the legislature in the Act itself that “[t]he provisions of [PHRA] shall be construed liberally for the accomplishment of the purposes thereof.” Act of October 27, 1955, P.L. 744, as amended 43 P. S. § 962. These purposes are legislatively declared in the Act as follows:

“It is hereby declared to be the public policy of this Commonwealth to foster the employment of all individuals in accordance with their fullest capacities regardless of their . . . sex . . . and to safeguard their right to obtain and hold employment without such discrimination [and] to assure equal opportunities to all individuals . . .” Act of October 27, 1955, P.L. 744, § 2 as amended 43 P. S. § 952(b).

Thus approached, the choice of placing on a complainant the burden of proving the superiority of his or her abilities as part of establishing a prima facie case, on the one hand, or of requiring an employer to assert the “best able” proviso in defending a challenge to an employment decision becomes relatively easy, for we must adopt a construction which, without doing violence to the language of the statute, best promotes the goal of equal employment opportunities. We believe that the legislature intended that it is the employer who should shoulder the burden of demonstrating that the complainant was not “best able and most competent to perform the services required.” This conclusion is supported by two principal considerations, one conceptual and the other pragmatic.

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Our decision is primarily rooted in certain principles of fair employment law which have emerged relative to the federal analogue to Section 5(a) of the PHRA-Title VII of the Civil Rights Act 1964. 42 U.S.C.A. 2000e-2(a) [hereinafter “Title VII”]. Fair employment laws embody an attempt to reconcile two distinct and, at times, competing social interests — the interest in ending all vestiges of discrimination, and the interest in promoting an efficient and productive economy. Employment decisions must not, of course, be allowed to be made on the basis of a person’s sex, and decisions so based must not be permitted to be justified by perfunctory resort to claims of economic efficiency. But just as surely fair employment laws were never intended to interfere with employment policies which maximize efficiency and productivity simply because those policies have an unintended discriminatory impact.[9]

As a consequence, the federal courts have recognized that the unintended discriminatory impact of an employment policy may be justified under Title VII if that policy is necessary for the safe and efficient operation of the

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enterprise. The doctrine, known as the “business necessity doctrine,” is not to be found in the language of Title VII; it was engrafted onto the statute by the United States Supreme Court in its decision in Griggs v. Duke Power Company, 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971):

“Congress did not intend by Title VII, however, to guarantee a job to every person regardless of his qualifications . . . the touchstone is business necessity. If an employment practice which operates to exclude negroes cannot be shown to be related to the job performance the practice is prohibited.” 401 U.S. at 430-31, 91 S.Ct. at 853, 28 L.Ed.2d at 164.

The burden of demonstrating the justification for an employment policy which produces a discriminatory impact has uniformly been placed upon the employer.[10]

In McDonnell-Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), the United States Supreme Court held that a prima facie case of discrimination under Title VII is made out if the complainant establishes that he is a member of a protected minority, that he applied for a job for which he was qualified, that his application was rejected and that the employer continued to seek other applicants of equal qualification. 411 U.S. at 800, 93 S.Ct. at 1823, 36 L.Ed.2d at 677.[11]

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Once a complainant establishes these elements the burden then shifts to the employer to justify his employee selections on the basis of job-related criteria which are necessary for the safety and efficiency of the enterprise. 411 U.S. at 802, 93 S.Ct. at 1824, 36 L.Ed. at 678.[12] As one court has put it:

“[W]hen dealing with a humanitarian remedial statute which serves an important public purpose, it has

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been the practice to cast the burden of proving an exception to the general policy of the statute upon the person claiming it.” Weeks v. Southern Bell Tel. Tel. Co., 408 F.2d 228, 232 (5th Cir. 1969).

We agree with this rationale.

With these teachings in mind we conclude that the “best able and most competent” clause of Section 5(a) of the PHRA is best read as an expression of the business necessity doctrine.[13] The purpose of the clause is to protect employers from having to select employees who do not meet their qualification standards. In essence, it serves as a limitation upon the right to equal employment broadly bestowed upon the citizens of this Commonwealth by the PHRA. We believe that notions of fairness and common sense dictate that the burden of establishing such a limitation should fall upon the party in whose favor the limitation is designed to operate. Such a conclusion is in accord with the developments in fair employment law in the federal courts and we have been presented with no reasons which persuade us that the language of Section 5 (a) should be read otherwise.

Moreover, our decision is supported by certain pragmatic considerations. The employer has far easier access

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to the facts which must be established in order to prove the relative qualifications of those employees who were retained and those employees who were laid off in any given work curtailment situation. Where objective criteria have been employed, the employer is in the better position to demonstrate which standards were used and whether they were applied in a nondiscriminatory manner. Where employment decisions have been based upon the employer’s subjective assessments, it is the employer alone who can articulate the rationale behind his decisions.[14]

To cast the burden of establishing one’s relative qualifications on the complainant would, in both objective and subjective situations, impose significant obstacles of time and expense which could serve to deter vigorous enforcement of the rights conferred by the statute. In the case where subjective standards have been employed the burden of proving relative qualifications might well be an impossible one. In either event, however, effective enforcement of the PHRA seems best promoted by casting the burden on the employer to demonstrate that the female worker was not best qualified. Such a solution best advances the salutory purposes of the PHRA and is in accord with accepted notions of allocation of burden of proof:

“If the existence or non-existence of a fact can be demonstrated by one party to a controversy much more easily than by the other party, the burden of proof

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may be placed on that party who can discharge it most easily.” Barrett v. Otis Elevator Company, 431 Pa. 446, 452-453, 246 A.2d 668, 672 (1968).

B.
During the course of the hearing, General Electric objected to the introduction of all evidence pertaining to alleged discriminatory practices which occurred prior to April 14, 1971, the date specified in the complaint as the time when the alleged discriminatory practices began. General Electric alleged that such evidence was irrelevant to prove the violations which were charged. The Commission ruled that evidence of practices which took place subsequent to the effective date of the sex amendment to Section 5(a) (July 1, 1969) was admissible to establish the substance of the charge, notwithstanding that such evidence might pertain to events which occurred prior to the discriminatory acts here complained of; evidence of practices which pre-dated the effective date of the amendment was admitted for the limited purpose of establishing the state of mind of the complainants as to whether certain jobs were commonly considered to be “male” jobs. The Commonwealth Court concluded that to the extent that the Commission relied upon evidence of practices which pre-dated the Act it acted improperly. In its view, evidence of such practices is relevant only to establish those types of violations which are akin to a conspiracy to thwart the purposes of the Act in contemplation of its passage by the legislature. Accordingly, the court held that the introduction of such evidence in this case was impermissible even for the limited purpose of establishing state of mind. We cannot agree with the Commonwealth Court.[15]

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Section 5(a) was enacted in part to put an end to those invidious, discriminatory policies and practices which have in the past served to deprive women of equal employment opportunities. To this end the section outlaws such policies and stands as a guarantee that a woman’s qualifications for the position she seeks will be evaluated with neutral objectivity. This statutory imposition of neutral employment requirements does not in itself, however, assure equal opportunities to the victims of past discriminatory practices; such persons still remain shackled by the already suffered deprivations of seniority rights, access to training programs, promotions and the like. Occasionally, a facially neutral employment policy incorporates as a criterion for employment a qualification which a female has been precluded from attaining by virtue of an abandoned discriminatory policy. In such an instance the impact of the past discriminatory practice is perpetuated and the former victim is deprived of equal employment opportunity just as surely as if she were the current object of an overt discriminatory practice. These considerations have led the United States Supreme Court to say: “Practices, procedures or tests, neutral on their face and even neutral in terms of intent, cannot be maintained if they operate to ‘freeze’ the status quo of prior discriminatory employment practices.”Griggs v. Duke Power Company, 401 U.S. at 430, 91 S. Ct. at 853, 28 L.Ed.2d at 163 (1971).

Circuit courts which have addressed the issue have uniformly held that facially neutral employment policies which have the practical effect of perpetuating the injustices of past discriminatory practices violate the provisions of Title VII.[16] These courts have reasoned that by

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carrying forward the impact of abandoned discriminatory practices,[17] facially neutral policies violate the past victims’ present right to be free of discriminatory standards. Because it is the impact of the present policy which violates Title VII, the federal courts have deemed it of no consequence that the impact is derived from an employment practice which was abandoned prior to the effective date of that Act.[18]

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In a like manner, we believe that present neutral standards which perpetuate the impact of abandoned discriminatory policies may be held to violate Section 5(a). Because it is the legality of the present policy, not the past practice, which is at issue we find no reason to limit the admissibility of such evidence to incidents which occurred after the effective date of Section 5(a).

For this reason we also reject General Electric’s contention that the rule we announce deprives a respondent of its due process right to notice of the charges against which it must defend. General Electric argues that the introduction of such evidence charges it with a number of violations which were not specified in the complaint as a basis for relief. The introduction of such evidence does not, however, charge General Electric with additional violations. Abandoned practices which pre-dated the effective date of Section 5(a) are not and cannot be found to be illegal under the PHRA. The evidence is introduced solely to establish the discriminatory impact of a present employment policy. As such the evidence is relevant to establish the charge specified in the complaint and does not present the due process problem complained of by General Electric.[19]

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In sum, we hold that if an employer has in fact engaged in past discriminatory actions, and if the impact of these actions is perpetuated by the employer’s otherwise neutral present employment policy, then that employer’s present policy may be found to be in violation of Section 5(a) of PHRA.[20] Because evidence of these past actions is relevant to prove the substance of a complaint, the Commission did not err in admitting such evidence for the more limited purpose of establishing “state of mind.”

C.
The sole question which remains to be decided is whether, in light of the standards we have announced today, the Commission acted properly in finding General Electric to be in violation of Section 5(a) of the PHRA. While at least one of the bases for such a finding could not be sustained[21] there are two grounds upon which we affirm the Commission’s conclusions.

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First, the Commission concluded that “respondent violated Section 5(a) of the PHRA by discriminating against the instant complainants during the phase out of its coil department . . . by failing to ascertain the general work experience of the complainants on an equal basis as was done with the male employees of the department.”

As noted in Part I of this opinion, many of the employees were retained by General Electric not because of work experience which was reflected on their official work record, but rather on the basis of the supervisor’s familiarity with their personal backgrounds. Exemplary of the types of background which were relied upon to justify the transfer decisions are: time spent in the Signal Corps of the Navy, sporadic employment in an uncle’s repair shop, and a “well-known” mechanical aptitude. In at least one instance, a male employee was retained because of his supervisor’s subjective belief that he could do the job. No inquiry, however, was made into the personal backgrounds of the female employees to determine whether they might possess undisclosed job-related qualifications of a similar nature.

As discussed earlier, Section 5(a) entitles every female job applicant to have her qualifications for employment considered on an equal footing with those of a man.[22] When the qualifications of a female applicant are not considered at all, she is manifestly deprived of this entitlement. In the instant case, General Electric made a large number of its lay-off decisions on the basis

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of personal background information relative to male employees, without making any effort to ascertain and evaluate the personal background of its female employees. Thus the appellee’s employment decision was made, in effect, without consideration of the female workers’ qualifications and in consequence violates Section 5(a).[23]

Second, the Commission found that female employees were not given the same opportunities as male employees to obtain various work experiences and that to the extent that such experiences were utilized as criteria for the transfer decisions, General Electric acted in violation of Section 5(a). We agree.

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General Electric retained at least some of its employees because of the experience which these workers had acquired in various road work assignments. As has been mentioned earlier, road work assignments were not generally made available to women.[24] The basic reason advanced as a justification for this policy was that the women were so engrossed in their coil taping jobs that they would not have been interested in such assignments. This conclusion, however, was not arrived at after individual consultations with the female workers, including complainants. It was, rather, an assumption based upon an undifferentiated, stereotypic appraisal of the women as a class; as such, it was plainly discriminatory.[25] The impact of this discriminatory practice was to deprive the women of an opportunity to acquire valuable skills. When General Electric relied upon these skills as a neutral criterion for job retention, it impermissibly perpetuated this discriminatory impact. See discussion II A of this opinion.

General Electric argues, however, that the training the men had received had actually made them better qualified than the women who were laid off and therefore that the retention of these male employees was justified. This is a bootstrap approach to Section 5(a) which we cannot accept. While an employer may generally justify his employment decision simply by demonstrating that the male employee is better qualified, such is not the case where women have been deprived of the

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opportunity to obtain these qualifications through discriminatory employment policies.[26] In such instances the employer has a heavy burden of demonstrating not only that the qualifications are necessary for the performance of the job, but also that it is economically impractical for him now to train those women who have been previously deprived of the opportunity to learn the required skills.

In the instant case it is apparent that General Electric’s decision was not based upon a justifiable concern that it would be too impractical and expensive to train female employees in those skills they would have otherwise acquired on road work assignments. General Electric made their lay-off decisions without inquiry into the relevant background experience of its female workers. It seems apparent that without such an inquiry General Electric could not have engaged in any meaningful, objective appraisal of the costs which would have been involved in a training program for women. Because no meaningful appraisal of costs could have been made, it is fair to assume that the ultimate employment decision was reached not because it would have been too expensive to train the women, but rather because the male employees had already received such training. Such a justification, however, is not a defense to the violation here charged.[27]

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Having found, contrary to the Commonwealth Court, that the complainants did not fail in meeting their burden of proof and that the proof was sufficient to sustain the decision of the Commission that General Electric had “committed an unlawful discriminatory practice under Section 5(a) of the Act,” we must reverse the order of the Commonwealth Court which reversed the final order of the Commission and remand the case to the Commonwealth Court for such further proceedings as may be necessary.

It is so ordered.

MANDERINO, J., filed a concurring opinion in which ROBERTS and NIX, JJ., join.

JONES, C. J., dissents.

MANDERINO, Justice (concurring).

Although I concur in the result reached by the majority there is one important aspect of this case that I feel should be considered by the Commonwealth Court when the case is remanded for further proceedings.

The Commission concluded that General Electric “violated the Pennsylvania Human Relations Act by failing to tak affirmative action to dispel an acknowledged, albeit erroneous, feeling amongst its employees that certain jobs at respondent’s facility were for males and certain jobs at respondent’s facility were for females.” (Emphasis added.)

In passing on this point the Commonwealth Court i General Electric v. Commonwealth of Pa., Pa. Human

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Relations Commission, 18 Pa. Commw. 316, 325, 334 A.2d 817
(1975), concluded:

“The point here is that there is no statutory requirement that any employer take affirmative action to dispel feelings among its employees, and the failure to do so cannot, therefore, be found to be an unlawful discriminatory practice.” (Emphasis added.)

I disagree with this conclusion of the Commonwealth Court, especially in view of the express language of the Human Relations Act. The Act itself provides that it is to be construed liberally “. . . for the accomplishment of the purposes thereof . . .” 43 P. S. § 962(a).

It should also be noted that this Court and the Commonwealth Court imposed an affirmative duty to desegregate upon a Housing Authority that contended it did nothing wrong and that segregation occurred simply because “. . . blacks do not want to live with whites and whites not with blacks.” Pa. Human Relation’s Comm. v. Chester Housing Auth., 458 Pa. 67, 327 A.2d 335 (1974). In that case we concluded:

“An unlawful discriminatory practice having been found to exist, the Commission is statutorily empowered ‘to take such affirmative action . . . as, in the judgment of the Commission, will effectuate the purposes of the Act . . .’ ” (Emphasis added.) 43 P. S. § 959 (Supp. 1974), 327 A.2d at 346.

I would hold, therefore, that if the facts indicate that the total work climate “chilled” the rights of the female employees to apply for jobs in certain categories for which they were otherwise qualified; that if as a result of this chilling effect discrimination in fact occurred; and that if the employer knew or should have known of the discrimination and did nothing to prevent it, a violation

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of the Human Relations Act should be deemed to have occurred.

ROBERTS and NIX, JJ., join in this concurring opinion.