Don't you think that would be more meritorious rather than waiting to see how it works in 5 years and then come in and amend the act to include a lower number?

Mr. O'SHAUGHNESSY. Here I will have to distinguish between myself and as a spokesman for the chamber.

Mr. DENT. What do you think?

Mr. O'SHAUGHNESSY. I can say that the suggestion is not without merit.

Mr. HAWKINS. That is a great concession.

Mr. O'SHAUGHNESSY. I don't mean to begrudge a compliment. Mr. HAWKINS. We are suggesting some concessions also in postponing the eventual day.

Mr. O'SHAUGHNESSY. Let me just give you the reason here why I think that and I do have to try to balance two different concepts. One is a large number of small employers who will be covered and who are not again capable of handling the problems themselves because some of these problems get pretty sophisticated, and on the other hand compelling the employer who looks at the realities and say there is going to come a time when I am covered by the Federal statute, may I have to start changing my thinking right now.

These are the two balancing interests that you asked me to consider. I do think that a large number of covered employers who are unsophisticated men who may hold deep prejudices that are unwholesome could result in the kind of confusion that would be undesirable all around-acrimonious, bitterness-this, I think, must be avoided at almost any cost. I do wish you gentlemen, if you have an opportunity, would see this film "Challenge" and I think of Bill Quinn, president of the Milwaukee Railroad, said we think this is good business and you see Mr. Patterson saying he thinks this is the way it should be done, and one executive after another standing up in the film for everybody to hear, they don't weasel words, they say it is good business.

Mr. DENT. If the committee desires or feels it would be helpful, is there a copy of the film that is available in order that we might have a showing for the House Members?

Mr. O'SHAUGHNESSY. There certainly is. Mr. Perry would be most happy to arrange it.

Mr. DENT. Thank you very kindly.

Mr. HAWKINS. I have just one other question, Mr. Chairman. Mr. O'Shaughnessy, I think you mentioned something about the quota system and you feared that this might work disadvantageously. I am sure that you are aware that the act does prohibit actually preferential treatment and that any system based on a quota system or preference treatment is actually prohibited.

In view of that provision in the present law I am wondering whether or not your argument about a quota system of the employer being disadvantaged because of the feeling that he has to employ a number of minorities is unfounded because the law is clear on that particular point and it would seem to me that particular part of the law is something that would not present any difficulties.

It certainly has not in the experience of other States. I wonder why it is you made such a point out of that.

Mr. O'SHAUGHNESSY. I did not mean to make a point. I believe it is mentioned here in the written statement.

Unfortunately, sir, the President's Committee on Employment Practices was doing business with employers who have contracts with the Federal Government. Unfortunately, some of that experience has not been very wholesome because some clients, including some of my clients, have been told that they had better hire Negroes.

Mr. HAWKINS. I don't know the operation of that system but I would assume that in looking at records and seeing, let's say, the absence of Negroes in certain jobs in certain departments or in certain industries, is itself some indication that that enterprise may be discriminating, but whether that is so or not the proposal and the existing law has written a provision that it seems to me covers this point and protects the employer.

Mr. O'SHAUGHNESSY. That is right.

Mr. HAWKINS. This is something you should certainly consider as being a protection and obviously not being something that can be used as an argument against the proposal.

Mr. O'SHAUGHNESSY. No, sir; I did not mean to do that if that impression was created. Anybody who has worked in this field realizes this but unfortunately many businessmen are not aware of this.

I think you will hear-among your own constituents you hear, "Now we have to turn down a white person and hire a Negro."

Mr. DENT. A quota system in itself is a bad concept to even start with and we know that in some communities for instance where they have a very, very low percentage in a communitywide count probably in some of those areas, and it is true in some of our areas up home, the Negro worker has a greater percentage of the jobs available than his quota would be.

Now how do we ever even start to let that creep into the law and we have tried to write in safeguards so that that would not creep in but we believe where they have been told, you ought to hire Negroes, because they have hundreds of employees, and in this whole area of employment they do not have one and they have had applications and applications of employment.

Now that is almost a clear-cut case of discrimination.

Mr. HAWKINS. In that instance it has to be proved that a qualified person has applied and has been turned down so it is not merely the statistics that would have the facts that would be considered but it would be whether a qualified person has fully applied and been discriminated against.

I think that is the point of the law.

May I offer this one comment and then I am through. Under the State law in my own State, the State of California, this point has been discussed and recently, and I commend this case to your attention: the Bank of America was picketed because of allegations that the Bank of America was not employing minorities. In that instance the State fair employment practice commission defended the hiring practices of the Bank of America against the complainants, those public persons who were picketing the Bank of America.

So this is a case in which I think indicates that this can work both ways, that a law that protects the employer against what they may sometimes consider direct action or unfair protest movements certainly I think will work to their advantage in the long run and many

times will work to the disadvantage of minorities who may feel that they are discriminated against but who actually may not be qualified, so I think that the law works both ways and I think that that is something, one of the main reasons why I believe that the responsible grants that wish to uphold merit employment should be in favor of a law and not against it.

Mr. O'SHAUGHNESSY. May I ask a question, sir? Did the State commission in California then get an injunction to restrain the picketing?

Mr. HAWKINS. They did not accept the jurisdiction, so the protest against the Bank of America just melted away.

That is all.

Mr. DENT. Thank you, and if there are no further questions, I want to thank both you gentlemen for appearing here today and giving us the benefit of your thinking, and I am sure that if there are any further questions on the part of the committee, if addressed to you, you will be kind enough to give us the benefit of your thinking on the matters. Mr. O'SHAUGHNESSY. We will be very happy to, Mr. Chairman. Mr. DENT. At this time without objection I would like to present for the record, the testimony of the Chamber of Commerce of the United States and make the announcement that tomorrow at 9:45 the committee will again reconvene and have as its witnesses the Honorable George H. Fowler, chairman of the New York State Commission for Human Rights, and the Honorable James Kemp, commissioner, Illinois State Fair Employment Practice Commission. (The document referred to follows:)

STATEMENT OF THE CHAMBER OF COMMERCE OF THE UNITED STATES

The chamber appreciates this opportunity to present its position on H.R. 9222, introduced by Representative Powell, Democrat, of New York. This bill would amend title VII of the 1964 Civil Rights Act in two important respects. It would, first, extend the coverage of title VII to all employers affecting interstate commerce with eight or more employees. Second, it would give the Equal Employment Opportunity Commission, the agency which enforces title VII, the authority that it does not now possess to issue cease and desist orders in cases involving discrimination in employment.

CHAMBER'S POSITION

The proposals contained in H.R. 9222 are premature. Furthermore, the objective of title VII, equal employment opportunity, will be achieved without these proposed changes.

The proposal to expand the authority of the Commission presupposes that the Commission now lacks the necessary authority to enforce title VII effectively. Similarly, extending the law to smaller operations implies that existing coverage is inadequate to provide equal opportunities for employees. These assumptions, however, are conjectural since title VII became effective only on July 2. It is, therefore, too early to determine whether the Commission's authority should be expanded and whether coverage should be extended. For this reason alone, a proper evaluation of title VII in these respects should be deferred until the Government has gained sufficient experience in the administration of this law.

EXTENDED COVERAGE

Existing law, which now applies to all employers with 100 or more employees, will not become applicable to employers with 25 employees until 1968. The reason for this is that it allows the smaller operations-and its employees-to become adjusted to this law. The proposal to extend the law to even smaller employers should await a determination of its impact on smaller operations.

Second, the smaller the operation, the less impact it is likely to have on interstate commerce. These are the employers that State fair employment practices

laws will cover. In the past year alone, 5 State spurred by enactment of the Civil Rights Act have adopted such legislation, making a total of 30 States with fair employment practice laws.

Another factor which cannot be overlooked is the administrative burden such extended coverage will place on the Commission. The National Labor Relations Board has placed a self-imposed limitation on its jurisdiction because its caseload is rising constantly. For example, the NLRB will not consider cases involving retail operations, even though they affect interstate commerce, unless the business involved does a gross volume of business of $500,000 annually. If the Commission is given additional jurisdiction, it may be faced with the same problem as the NLRB.

Another problem associated with a rising caseload, apart from the expense involved, is the additional time it takes to process a case. Again using the NLRB as an example, it takes 10 months for an average case to be processed from the time of the filing of a charge to the issuance of a decision.

For these reasons, the proposal to extend the coverage of title VII to smaller employers should be deferred until such factors as State fair employment practice laws and the Commission's caseload can be properly considered.

PURPOSE OF TITLE VII

Title VII was enacted because Congress found that persons from certain minority groups were denied equal opportunity for employment on the basis of their race or color rather than on the basis of their ability or qualifications.

The bill originally introduced in Congress would have given the Commission authority comparable to that of the National Labor Relations Board. The NLRB has the power to issue cease and desist orders enforceable in court. However, this NLRB procedure was not adopted. Instead, it was decided by the Congress that the problems of discrimination should be resolved through informal methods of conference, conciliation, and persuasion.

Representative William McCulloch, Republican, of Ohio, explained the congressional intent: "As the title was originally worded, the Commission would have had authority to not only conduct investigations, but also institute hearing procedures and issue orders of a cease and desist nature. A substantial number of committee members, however, preferred that the ultimate determination of discrimination rest with the Federal judiciary. Through this requirement, we believe that settlement of complaints will occur more rapidly and with greater frequency. In addition, we believe that the employer or labor union will have a fairer forum to establish innocence ***." [Emphasis added.] (Rept. 914, pt. 2, 88th Cong., 1st sess., House of Representatives, p. 29.)

There have been no developments in the past year which would alter this judgment. On the contrary, all indications are that employers affected by title VII are willing to comply voluntarily and are making every effort to do so. An important factor in this voluntary effort is that compliance is not based on compulsion. In the area of civil rights, probably more than any other, deeply ingrained attitudes are involved. As a consequence, a philosophy of enforcement stressing cooperation, as the law now provides, will accomplish more permanent results than an order commanding a person to "cease and desist." Mr. Hobart Taylor, Jr., Executive Vice Chairman of the President's Committee on Equal Employment Opportunity, stated in a recent interview that "* * * primary reliance is on the good will and on the American spirit, and on the decency of the people who are involved. We rather think that that will be sufficient. But there are these other things in the event that they are not." [Emphasis added.]

TITLE VII ENFORCEMENT PROCEDURE

Title VII, in effect, provides for enforcement in three distinct stages. The first is voluntary compliance. The second is conciliation and persuasion by the Commission. The third step is through judicial proceedings.

The first stage, voluntary compliance, is meeting with considerable success. A survey reported in the Daily Labor Report, Bureau of National Affairs (No. 127, dated July 2, 1965), reveals that 75 percent of the companies interviewed are taking "positive steps" to employ Negroes. This is actually more than title VII requires. The law is negative. It orders an employer not to discriminate. However, as indicated, many employers are taking positive steps, including recruitment, to insure that Negroes are aware of job opportunities.

The June 1965 report by the "Plans for Progress" organization, involving 100 companies enrolled in the Government's voluntary program to provide equal em

ployment opportunity, revealed that there was an increase in nonwhite employment of 14.5 percent. Total employment by these companies, however, only increased 3 percent during the 1963-64 survey period. In addition, many business organizations have encouraged their members to comply with this law. The national chamber, for example, has distributed over 100,000 copies of its "Guide to Civil Rights Act" not only to its members but also to the public, and it has conducted conferences on title VII in over 50 cities in all sections of the country in the past year. Our impression from these meetings is that, irrespective of the region, there is a clear willingness on the part of employers to comply with this law. Thus, it is our conclusion that the first stage, voluntary compliance, is meeting with success.

The second stage of enforcement under title VII is for the settlement of disputes through conciliation and persuasion by the Commission. It is, of course, too early to determine the results of this procedure. Nevertheless, it is our view that conciliation will provide a workable method of resolving problems involving discrimination in employment. Until the Congress has more information, therefore, the Commission should be given sufficient time to act upon this problem. The Chairman of the Commission, Franklin D. Roosevelt, Jr., has stated that he will report, with recommendations, to the respective committees in both the House and the Senate on any problem of enforcement which the Commission may discover during the course of its activities.

The final stage is through court action to compel compliance when other approaches fail. Title VII gives the courts broad authority to take action in this area of the law. Section 706 (g) of title VII, for example, gives a court the power to enjoin a person from engaging in a discriminatory employment practice, and to order "such affirmative action as may be appropriate, which may include reinstatement or hiring of employees, with or without back pay." [Emphasis added.] There is no need to strengthen the hand of the courts to deal with discrimination in employment.

TITLE VII PROVIDES EFFECTIVE AND PROMPT RELIEF

The arguments advanced for giving the Commission more power is that at the second stage of enforcement too much time will elapse before a person can obtain judicial relief. This will generally be no more than 60 days, as this is the time in which the Commission is permitted to act.

This is not an unreasonable amount of time to permit the voluntary approach of conciliation and persuasion to work. What H.R. 9222 contemplates is to give the Commission power to issue cease and desist orders similar to authority given to the NLRB under the Taft-Hartley Act. But, increased power will create an adversary out of a Commission which not strives for cooperation. This may result in decreasing the Commission's effectiveness.

As this statement pointed out earlier, the average case before the NLRB takes an average of 302 days before the parties can get to court. This does not expedite case handling. Accordingly, H.R. 9222 would be self-defeating.

Even assuming, for argument's sake, that immediate court action may be needed in some instances, there is already a provision in title VII that allows for such action. Section 707 allows the Attorney General of the United States. to institute a court action whenever a pattern or practice of discrimination exists. The Attorney General, in fact, may take such action before or simultaneously with action by the Commission. If the situation warrants, therefore, there is no reason for delay. The Attorney General under existing law certainly has extraordinary power since he is not required to defer to the actions of the Commission. In any event, title VII does allow immediate court action.

SUMMARY

In sum, our views on amendments of title VII of the Civil Rights Act are1. Voluntary compliance is meeting with success. There are no indications that the Equal Employment Opportunity Commission requires additional authority to enforce title VII.

2. Existing law provides for immediate court action if the need arises. 3. Extending the coverage of title VII to more employers will increase the administrative burden of the Commission.

(Whereupon, at 11:45 a.m., the subcommittee recessed, to reconvene at 9:45 a.m., Tuesday, July 20, 1965.)