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manifest the need for this legislation. The conclusion inescapably to be drawn from 28 witnesses in 10 days of hearings, and from statements filed without oral testimony, is that discrimination in employment because of race, religion, color, national origin, or ancestry, is a pervasive practice. The evidence before the committee makes it abundantly, clear that job opportunity discrimination permeates the national social fabric-North, South, East, and West. The act is directed at correcting such abuses wherever found and is not focused upon any single section of the country. An unequivocal declaration and implementation of a national policy on equal employment opportunity, predicated upon individual merit, competence, and capability, is of paramount importance at this stage of U.S. history. The following points, established during committee hearings, will pertinently emphasize the pervasiveness of the problem and the impact which employment discrimination has upon the Nation.
(a) Job discrimination is extant in almost every area of employment and in every area of the country. It ranges in degrees from patent absolute rejection to more subtle forms of invidious distinctions. Most frequently, it manifests itself through relegation to "traditional” positions and through discriminatory promotional practices. The maxim, "last hired, first fired," is applicable to many minority groups, but most particularly Negroes, as is evidenced by the greater unemployment rate for these groups. The Secretary of Labor, W. Willard Wirtz, testified with respect to unemployment:
The hard central fact is that among male family breadwinners, the unemployment rate today among nonwhites is three times what it is among whites. The percentage figures are 9 percent for nonwhites, 3 percent for whites.
Among younger workers, age 14 to 19, the unemployment rate today for whites is 12 percent, for nonwhites, it is 24 percent.
The total number of nonwhites in the civilian work force is 8 million, which represents 11 percent of the total work force. There are in this work force today 600,000 men and women who have been out of work for more than 26 weeks. More than one out of every four in this group of long-term unemployed is non white.
Nonwhite workers are also increasingly bearing the brunt of involuntary part-time work. The proportion of employed nonwhites working part time in nonfarm industries for economic reasons is 10 percent-more than triple the 3percent rate for whites. Significantly, this rate has been moving up for nonwhites for the past 6 years, but has remained virtually unchanged for whites.
The Negro has steadily and consistently fallen behind in terms of unemployment. In 1947, the nonwhite unemployment rate was 64 percent higher than the white's; in 1952, it was 92 percent higher; in 1957, it was 105 percent higher;
in 1962, it was 124 percent higher. (6) Discrimination by labor organizations, particularly certain construction unions, with respect to membership and apprenticeship training is widespread. Segregated locals still exist despite continuous statements of opposition by national labor leaders.
(c) Employment agencies and services continue to refer applicants for job opportunities in a discriminatory manner. Such discrimination also manifests itself in various forms, from outright refusal to deal with minority group applicants to refusal to refer such applicants for specific jobs due to expressed agreements, tacit understandings, and assumptions based upon traditional practices.
(d) Unfair discrimination in employment opportunities is costly to the Nation.
(1) Underutilization of the Nation's manpower resources prevents the attainment of full national productivity and economic growth. The continuing progress of our democratic society depends on the effective use of the resources of all its people. The full employment of all talents and abilities, the unrestricted use of every individual at the level of his highest skill benefits the employee, the employer, and the Nation. Ineffective utilization of manpower poses a distinct threat to the Nation's ability to maintain its competitive economic position in the world.
(2) Current discrimination in employment opportunities has longrange adverse effects upon the economy through disillusionment of youths. Perceiving discrimination against adults, youths are discouraged from attempting to prepare for useful careers believing that they will meet with the same rejection. Such destruction of motivation frequently leads to poor performance in school, increased school dropouts, perpetuation of skill and knowledge deficiencies, unemployment, juvenile delinquency, adult crime, and increased welfare costs. Not only does this decrease the potential output of the country, it also acts as a drain upon existing growth by the unnecessary addition of crime and welfare costs.
(3) Discrimination in apprenticeship training programs, in management trainee programs, in employer-sponsored educational programs, and in other programs aimed at improving the skills, knowledge, and capability of individuals, will tend to perpetuate the existing system of widespread discrimination and uneconomic use of manpower if not immediately remedied.
(4) Arbitrary denial of equal employment opportunities is heavily concentrated in certain rapidly growing industries—traditionally prime employers of young people-such as banks and financial institutions, advertising agencies, insurance companies, trade associations, management consulting firms, and bogk and publication companies. Such concentration holds portent of increasing problems for the Nation if remedies are not provided.
(e) Discrimination in employinent, as one phase of the total civil rights problem, has its international implications. Each incident pointing up our deficiencies in extending to all of our citizens full and equal rights and opportunities casts doubt upon our sincerity and motives in the international sphere. With the inajority of the world's people being nonwhite and with their growing influence in international relations, these incidents cannot have but highly adverse effects upon our foreign relations, both politically and economically.
(1) Testimony before the committee has indicated that Federal legislation is necessary despite the existence of fair employment practice laws in almost half the States. First, many millions of individuals are not protected by State laws. Second, State laws very in coverage and effectiveness. Third, State cominissions have en
countered difficulty in dealing with large, multiphased operations of business in interstate commerce. Fourth, Federal responsibility, as well as authority, extends to activities and industries affecting commerce, particularly as a consequence of the expanded economic role of the Federal Government which financially supports many economic activities and, therefore, related practices.
(g) In brief, the committee found that employment practices commonly failed to conform to the written tradition and professed position of our Nation as regards the venerable principles of liberty, equality of opportunity, and the immutable dignity of man. To restore these principles to practice, to transform theory into reality, to assure that great words become implemented acts, is substantially the purpose of this act with respect to employment opportunities.
The General Subcommittee on Labor began public hearings on H.R. 405 on Monday, April 22, 1963. There were 10 days of public hearings, hearing in all 28 witnesses representing the administration, the U.S. Employment Service, unions, business groups, private organizations, and others, and additionally receiving several statements for insertion in the record by interested parties.
The subcommittee concluded its consideration in executive session on June 20, 1963, voting to report the bill to the full committee with amendments.
MAJOR PROVISIONS OF THE ACT
(a) In section 4 of the act, a limited exemption is provided for employers with respect to employment of aliens outside of any State, and also, to religious corporations, associations, or societies. The intent of the first exemption is to remove conflicts of law which might otherwise exist between the United States and a foreign nation in the employment of aliens outside the United States by an American enterprise. The second exemption is intended to be applied only insofar as such activities are of a religious nature or are related to religious endeavors.
(6) Sections 5 and 6 describe acts which are unlawful employment practices under this act. Subsection (e) of section 5 provides that, notwithstanding any other provision of the act, the employment of persons of a particular religion or national origin in limited situations, where religion or national origin is a bona fide occupational qualification in that specific enterprise, shall not be an unlawful employment practice. This language is meant to apply in those rare circumstances where a reasonable, good faith, cause exists to justify occupational distinctions based only upon religion or national origin.
(c) Sections 7 through 11 create the Equal Employment Opportunity Commission, the Office of the Administrator, the Board, and establish the procedures for remedying unlawful employment practices. The Commission is merely a vessel containing the two primary functioning bodies under the act. Within the Commission is the Board and the Office of the Administrator. The Board is primarily a quasi-judicial body with power to hear and determine complaints and issue lawful and appropriate orders. The Office of the Administrator, headed by the Administrator, is the body responsible for the continuing implementation of the act in its entirety. The Administrator's responsibilities are described in sections 9 through 11 and include all responsibility delegated under the act not delegated to the Board. The major purpose of this functional division within the Commission is to separate to the greatest degree feasible the functions of "prosecutor" and "judge." It is also the purpose of these provisions to provide for an independent, bipartisan Commission.
(d) Sections 10 and 11 establish the procedures for prevention of unlawful employment practices. It is the intent of the committee that maximum efforts be concentrated on informal and voluntary methods of eliminating unlawful employment practices before commencing formal procedures. Emphasis should be placed upon conference, conciliation, and persuasion throughout the proceedings with a view toward reaching a mutually satisfactory agreement for eliminating unlawful employment practices. Formal proceedings leading toward an order of the Board shall be pursued only when informal methods fail or appear futile.
Where the Administrator fails or refuses to issue a complaint within a reasonable time, the person filing a charge may petition a Federal court to require the Administrator to issue such complaint. This is intended to inhibit unjustifiable delay or rejection of remedial action.
The bill provides for administrative hearings of complaints brought under the act with review under the substantial evidence rule in Federal courts. This is the procedural pattern followed by the vast majority of State fair employment practice laws, as well as a traditional practice among many independent Federal agencies. Numerous merits can be attributed to this procedure, perhaps the most important of which is speed. "Justice delayed, is justice denied," applies especially with great force in this area. Undue delay in achieving a final decision could make the ultimate result a pyrrhic victory. In addition to speed, this procedure would reduce costs for parties, allow for greater informality and flexibility, provide greater uniformity of result within a shorter period, tend toward the development and contribution of expertise in the area, be conducive to continuing supervision of compliance, create greater motivation to reach informal agreements, and establish unified implementation of a truly national policy.
It is to be noted that the unlawful employment practices of sections 5 and 6, with the exception of section 6(a) relating to publication of advertisements of a discriminatory nature, refer to discrimination against individuals rather than groups. This act is intended to apply equally to all individuals regardless of their race, religion, color, national origin, or ancestry, and is not intended to discriminate in favor of or against individual members of any group. The act is intended to prevent those unlawful employment practices specified in sections 5 and 6 and to encourage the consideration of individuals for employment opportunities based upon merit, capability, competence, effort, and other factors not related to an individual's race, religion, color, national origin, or ancestry. Nothing in the act is intended to allow charges to be brought based upon disproportionate representation of members of any race, religion, color, national origin, or ancestry within any business enterprise or labor organization. General rules as to percentages, quotas, or other proportional representation shall not be the basis of charges brought under this act. However, disproportionate representation may be considered as background evidence in an unlawful employment practice proceeding under this act.
(e) The committee's intention with respect to the effect of this act upon State laws is both clear and firm. This act does not preempt the area of unlawful employment practices. State laws which do not require or permit the commission of an unlawful employment practice under this act are not in any manner affected by this act. Further, the Administrator is directed to seek agreements with States or local agencies to cede Federal jurisdiction where there is an effective power in the State or local agency to eliminate discrimination in employment in any cases covered by this act and where such power is being effectively exercised. Though these determinations are the responsibility of the Administrator, he is expected to affirmatively and diligently seek such agreements wherever practicable. Such agreements shall not be prevented by anything but substantial deficiencies in the State power or exercise of such power. Where Federal jurisdiction has been ceded, an aggrieved party may petition a Federal court to require the Administrator to file a complaint if, after a reasonable time, the State or local agency fails to process a complaint.
(F) Sections 13 and 14 provide for investigations, inspections, and the requirement that records be kept in specific situations. Investigations and inspections shall be in connection with verified charges filed under section 10. They shall not be harassing, unduly disruptive, nor unrelated to a matter under investigation or question with respect to a charge. They should seek always to be of minimal inconvenience to affected persons. With respect to records, they should always be relevant, reasonable, and necessary for the enforcement of this act. Regulations or orders requiring the maintenance of records shall be issued only after affording interested parties an opportunity to be heard publicly. Application to the Administrator, or courts after exhausting the administrative remedy, for an exemption from such regulations or orders because they may be unduly burdensome may be made by an affected party. Appropriate relief may be granted.
(9) Close cooperation between the Commission and other Federal, State, and local agencies has been one of the prime goals of the committee in the drafting of this act. Duplication of effort and expense are to be avoided whenever possible.
(h) The committee has established a ceiling of $2,500,000 for the administration of the act by the Comission for the first year after its enactment and not to exceed $10 million for this purpose during the second year after such date.
SECTION-BY-SECTION ANALYSIS OF THE BILL
Section 1. Short title
This section provides that the act may be cited as the "Federal Equal Employment Opportunity Act." Section 2. Findings and declaration of policy
Subsection (a) of this section states a congressional finding that discrimination in employment against qualified persons because of race, religion, color, national origin, or ancestry is contrary to American principles of liberty and equality of opportunity, is incompatible