Who Gets the Pink Slip?

Charles Watkins and three other young blacks are among nearly 200 workers who were laid off at a Continental Can Co. plant in Harvey, La. The layoffs were determined by the traditional seniority rule--last on the job, first to go--that is part of Continental's contract with the United Steelworkers. Normally no one would have a legal beef. But Watkins and his three buddies thought they had, and they went to court to prove it.

Prodded by the 1964 Civil Rights Act, Continental Can by 1971 had increased the number of blacks in the Harvey plant from two to more than 50 among its 400 regular employees. Now, because of the cutbacks, all but the original two black workers have been let go. Watkins and his friends contended that earlier discrimination against blacks meant that an ostensibly color-blind seniority rule was, in fact, a continuing color bar. Despite precedent to the contrary, a federal district court agreed. It ordered a remedy that would have the effect of moving junior blacks ahead of many senior whites. The company and the union objected, and last week the argument moved to the Fifth Circuit Court of Appeals.

New Life. What the court faces is one of the most complex and emotional issues to grow out of the current recession. Payrolls are being slashed everywhere, from factories to college campuses, and the newest arrivals are usually the first to be sent packing. In many cases, that means blacks and women. "If something is not done soon," says Yale Law Professor Clyde Summers, "we will be back to Square 1." But what can be done?

The difficulties begin with conflicts in the law. Title VII of the Civil Rights Act contains a general ban on hiring discrimination because of race or sex in all firms having more than 15 employees. But during the legislative debate, Title VII's floor managers made clear that the provision was meant to "have no effect on established seniority rights." Language to that effect was included in the law. Then a series of cases brought new life to the once moribund Civil Rights Act of 1866. That statute sweepingly outlaws all manner of racial discrimination--and makes no special exception for job seniority. And, in a major decision, the Supreme Court indicated that on-the-job practices that tend to foster discriminatory patterns can survive only if justified by "business necessity"--a rationale that may well not cover the "last-hired, first-fired" rule.

Making matters worse is the Government's "affirmative action" policy. Federal regulations state that most organizations with $50,000 or more in Government contracts must not only refrain from discriminating; if necessary, they must also establish "goals" for increased percentages of female and minority workers. Universities found themselves in particular trouble. On the one hand, they have had trouble finding enough qualified people to meet affirmative-action goals. On the other hand, affirmative action came under attack for its seeming bias against white males. Complaints were so strong that the Department of Health, Education and Welfare was forced to announce in December that its regulations did not mean that a black or a woman teacher had to be hired over a more qualified white man. Nonetheless, schools are still under pressure to diversify their staffs. And all kinds of enterprises are in a quandary over how to formulate a policy for layoffs.

The Jersey Central Power & Light Co. last September asked a federal court how it could legally go about cutting 400 employees from its payroll. The utility had a seniority layoff agreement with the International Brotherhood of Electrical Workers and an affirmative-action agreement with the Equal Employment Opportunity Commission. The court ruled that the EEOC should prevail and that Jersey Central should seek to keep its work force as integrated as it was before the layoffs, perhaps by establishing three separate seniority lists--for minority workers, for women and for all others. The union lost no time filing an appeal. Indeed organized labor has taken the lead in defending contractual seniority. Says Lawyer Michael Gottesman, who argued for the union in the Watkins case last week: "Because older workers fare so badly in seeking other employment, it is not surprising that they cling desperately to the employment they have." Columbia Law Professor Harriet Rabb focuses on an opposing concern. "The victims of recession are those excluded in the first place," she says. "Affirmativeaction programs have upset the traditional rules of hiring. They can upset the rules for layoffs as well."

"All of this poses a problem I wouldn't know how to solve," admits Berkeley's labor law expert David Feller. Various suggestions include work sharing, in which no one gets the pink slip but everyone has fewer hours on the job. Another is "inverse seniority," which would allow older employees, who have high, contractual unemployment benefits, to take the brunt of layoffs. The agricultural manufacturer, Deere & Co., has worked out such an arrangement on a voluntary basis. But volunteers can hardly provide a general answer. That will have to come from new legislation or the U.S. Supreme Court.

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