The opinion of the court was delivered by: WEINSTEIN
This is yet another chapter in the challenge to the September 7, 1977 "Memorandum of Understanding" ("agreement") between the New York City Board of Education ("Board") and the Office for Civil Rights of the United States Department of Health, Education and Welfare ("OCR"). The agreement purports to remedy alleged violations by the Board of Title VI of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000d et seq., and Title IX of the Education Amendments of 1972, 20 U.S.C. §§ 1681 et seq., with respect to hiring and assignment of teachers, and hiring of supervisory personnel. Alleging that OCR had no jurisdiction to investigate what they deem "employment" practices under either Title VI, see 42 U.S.C. § 2000d-3, or Title IX, and that the agreement itself violates Title VI, Title IX, and the fifth and fourteenth amendments, plaintiffs and intervenor-plaintiffs seek injunctive and declaratory relief voiding the agreement. For the reasons indicated below, no relief is warranted.
Following a bench trial, this Court delivered an oral opinion and filed written findings of fact and conclusions of law. This Memorandum elaborating on the Court's oral opinion may be of assistance on the appeals.
Background of this Litigation
A. Events Leading to the Memorandum of Understanding
Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d, provides that "No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance." Title IX of the Education Amendments of 1972, in similar language, prohibits discrimination on the basis of sex in "any education program or activity" receiving federal funds. Each federal department and agency is charged with assuring compliance with these provisions in the programs and activities under its jurisdiction; each must adopt regulations toward this end. See 42 U.S.C. § 2000d-1; 20 U.S.C. § 1682. See, e.g., 45 C.F.R. §§ 80.1-80.13 (Title VI regulations of Department of Health, Education and Welfare); 45 C.F.R. §§ 86.1-86.71 (Title IX regulations of Department of Health, Education and Welfare). In addition to requiring initial assurances of nondiscrimination in every application for federal assistance, see, e.g., 45 C.F.R. § 80.4, federal departments are required to conduct periodic compliance reviews and to investigate and resolve individual or class complaints of discrimination arising under any federally assisted program they supervise. See, e.g., 45 C.F.R. § 80.7; see also Brown v. Weinberger, 417 F. Supp. 1215 (D.D.C.1976) (requiring expeditious compliance investigations and enforcement proceedings by HEW under Title VI). In the event that efforts to achieve voluntary compliance fail, a federal department must terminate or withhold federal funding to programs in violation of the statutes, see 42 U.S.C. § 2000d-1(1), or seek compliance by other means authorized by law, see id. § 2000d-1(2).
The Department of Health, Education and Welfare supervises various programs of federal aid to the New York City school system. On November 9, 1976, OCR Director Martin Gerry sent a letter to the Chancellor of the New York City Schools specifying alleged areas of noncompliance by the school system with Titles VI and IX. The letter focused on the "employment" phase of OCR's review of the system. It charged that the Board had, in violation of Title VI, discriminated on the basis of race and national origin by,
(1) den(ying) minority teachers full access to employment opportunity through the use of racially discriminatory selection and testing procedures and through the use of racially identifiable employment pools in a manner that discriminatorily restricts the placement of minority teachers;
(2) assign(ing) teachers, assistant principals and principals in a manner that has created, confirmed and reinforced the racial and/or ethnic identifiability of the system's schools; and
(3) assign(ing) teachers with less experience, lower average salaries and fewer advanced degrees to schools which have higher percentages of minority students.
It also charged that the Board had, in violation of Title IX, discriminated on the basis of sex by,
(1) deny(ing) females equal access to positions as principals and assistant principals throughout the system;
(2) providing a lower level of financial support for female athletic coaching programs; and
(3) depriving female teachers of seniority rights and other compensation through failure to eliminate the effects of past discriminatory leave policies.
The letter ordered the Board to submit a plan within ninety days to "remedy the discrimination and provide corrective action where individual cases of discrimination are identified." It noted that OCR's goal was "to end discrimination not to cut off federal funds."
After receipt of the November 9, 1976 letter, the Chancellor appointed Deputy Chancellor Bernard Gifford to serve as chairperson of an internal Board committee to review and evaluate OCR's specific discrimination allegations. The result of this review, a report entitled Race, Ethnicity and Equal Employment Opportunity: An Investigation of Access to and Assignment of Professional Personnel in New York City's Public Schools (June 1977) ("Gifford Report") (Def.-Int. Ross' Ex. 106), substantiated and confirmed many of OCR's findings, though it denied any discriminatory intent on the part of the Board. See Caulfield v. Board of Education of the City of New York, 583 F.2d 605, 609 & n. 5 (2d Cir. 1978). On April 22, 1977, the Board submitted its response to the OCR allegations; it suggested affirmative efforts to equalize employment opportunities:
without admitting any violation of law, (the response) expressed (the Board's) determination to rectify "disparate employment opportunities" and proposed an equal employment opportunity plan to "insure equality of opportunity and avoidance of discrimination." (The plan) suggested affirmative efforts to increase the number of minority teachers, to improve integration of the teaching staff, and to correct disparities of experience, salary and educational level in the distribution of personnel. The plan also advocated goals for integration of faculty based upon a numerical index, legislative replacement of rank order lists with qualifying lists for teacher selection, and a new system of teacher certification and selection.
Caulfield v. Board of Education of the City of New York, supra, 583 F.2d at 608.
OCR rejected this compliance plan. Further negotiations during July and August resulted in the promulgation of the September agreement, which is challenged in this lawsuit. The agreement calls for the implementation of a three year plan to eliminate alleged discrimination in the selection and assignment of teachers and supervisors in the City's public schools. The terms, which OCR accepts as compliance with Titles VI and IX as to matters covered, include the following, designed gradually to equalize minority and non-minority teacher distribution throughout the school system and to increase minority hiring and appointment of women supervisors through affirmative action:
1. Not later than September of 1979, the teacher corps of each District in the system will reflect, within a range of five percent, the racial-ethnic composition of the system's teacher corps as a whole for each educational level and category, subject only to educationally-based program exceptions.
2. Not later than September of 1980, each individual school in the system will reflect, within a range of five percent, the racial-ethnic composition of the system's teacher corps as a whole for each educational level and category, subject only to educationally-based program exceptions.
3. The Board of Education will demonstrate to the Office for Civil Rights, subject to prescribed review, that any failure to meet the commitments set forth in paragraphs one and two hereof results from genuine requirements of a valid educational program. In addition, the Board will demonstrate that it has made and is continuing to make special efforts to overcome the effects of educationally-based program exceptions through effective use of such mechanisms as recertification, recruitment and special assignment of teachers.
4. The Board . . . will adopt and implement the following affirmative action procedures, and will sponsor and actively support state legislation at the next session of the Legislature where necessary to accomplish these ends.
(a) Any test used henceforth to determine whether a person is qualified for a teaching position in the system shall be validated prior to its being administered; except that in cases of demonstrable educational necessity ... a test may be used prior to its validation for temporary assignments, provided that validation shall be accomplished as soon as practicable. . . .
(b) All existing eligibility lists by license shall be combined, and the names of all persons contained thereon shall be merged with the names of any persons who have passed any new tests, without regard to the dates of examinations.
(c) Rank ordering of persons who have passed examinations for the system shall be abolished.
(d) In employing and assigning teachers pursuant to these modified standards and procedures, the Board . . . will implement affirmative action mechanisms found to be appropriate, such as, for example, giving hiring preferences to all eligible persons with prior experience in the system.
5. The Board . . . agrees that, in the event that the above-described legislation is not adopted so as to govern employment decisions for the 1978-79 school year, the Board will seek appropriate litigation in support of the agreed objectives.
6. The Board agrees, as soon as practicable to have performed a study of the relevant qualified labor pool by race, ethnicity and sex by an independent expert acceptable to the parties and pursuant to methodology and standards agreed to by the parties. Through the adoption and implementation of the affirmative action procedures and legislation provided in paragraph 4 . . . and other efforts . . . the Board commits that by September of 1980, the levels of minority participation in the teaching and supervisory service will be within a range representative of the racial and ethnic composition of the relevant qualified labor pool.
It is understood that this commitment shall not require the Board to lay off any teacher currently employed by the Board or to hire any teacher who has not met appropriate requirements for employment, not inconsistent with this agreement. It is further understood that the commitment made herein does not establish quotas. Failure to meet this commitment shall not be considered a violation of this agreement if the Board demonstrates that it has implemented the provisions of this agreement in a good faith effort to meet the commitment made herein.
(A footnote to this portion of the agreement stated that "The commitment herein is subject to applicable standards of law. (see Hazelwood School Dist. v. United States (433 U.S. 299), 97 S. Ct. 2736 (53 L. Ed. 2d 768).")
8. The Board . . . commits itself to pursue a program of affirmative action to increase the number of women in the supervisory service, including a plan to reach a systemwide level of participation by women within a range representative of the pool of available qualified women by a date to be agreed upon . . . . The Board further agrees that it will establish a procedure whereby no person shall be appointed to a supervisory position until an affirmative action officer in the central personnel administration has studied the file of applicants for the particular position and determined that the appointment process demonstrates good faith compliance with the affirmative action plan. . . .
B. The Related ESAA Funding Controversy
In January, 1977 two months after receiving OCR's letter alleging violation of Titles IV and IX the Board, along with various local school boards, submitted applications for funding under the Emergency School Aid Act, 20 U.S.C. § 1601 et seq., to the Department of Health, Education and Welfare. The funds sought were to provide services for an estimated 40,000 students. In April, 1977, the Board, as instructed by HEW staff, submitted a revised application; HEW officials then informed the Board that the educational programs described in the April, 1977 applications met all HEW programmatic and fiscal requirements and were approved as to content and amount, subject only to a determination that no other legal impediments to funding existed.
In early June, 1977, the applicant school boards were informed that ESAA funding would be denied for the 1977-78 school term. HEW based this decision upon the conclusions stated in the November 9, 1976 letter from OCR to the Board. Subsequently, HEW modified its position: ESAA funding would be denied solely on the ground of discrimination in assignment of teachers in the City's public schools. But a compromise resulted in ESAA funding being allowed to all the local school district applicants with the exception of District 11; the other local districts had agreed to reassign teachers to eliminate racial disparities in the schools within their control. Pursuant to ESAA regulations, see 45 C.F.R. § 185.46, District 11 and the Board were given an opportunity at an administrative show cause hearing to contest the determination of ESAA funding ineligibility. After the hearing and one week after the agreement was entered into by the Board and OCR HEW informed District 11 and the Board that the evidence presented at the hearings had not caused HEW to reconsider its decision. The boards then submitted evidence to HEW in support of waivers of ineligibility, see 20 U.S.C. § 1605(d)(1), 45 C.F.R. § 185.44, but to no avail.
A similar dispute arose with respect to ESAA funding for 1978-1979. Again HEW denied the Board's application for reasons of segregated teaching staffs.
C. Prior Litigation in this Case
On October 31, 1977, plaintiffs local school board officials, school boards, supervisors, teachers and parents filed this action seeking declaratory and injunctive relief voiding the agreement between the Board and OCR. They alleged that, by requiring teacher assignment on the basis of race, the agreement violated Title VI, Title VII, see 42 U.S.C. § 2000e-2, and the fifth and fourteenth amendments. The Council of Supervisors and Administrators (CSA), the United Federation of Teachers (UFT) and various local school boards were permitted to intervene as plaintiffs. Defendants HEW and the Board asserted that Titles VI and IX empowered them to reach such an agreement which protects, rather than violates, the constitutional and statutory rights of New York City residents. Further, HEW along with intervenor-defendant Ronald Ross (a black New York City School teacher), and amici, the Coalition of Concerned Black Educators, the Public Education Association, and the American Civil Liberties Union contended that the Board had carried out and maintained a discriminatory and illegally segregated system of teacher hiring and assignment which required the remedial action undertaken by the agreement.
Noting that the parties had presented "substantial substantive questions," see Caulfield v. Board of Education of the City of New York, 449 F. Supp. 1203, 1206 (E.D.N.Y.1978), this Court addressed what it identified as a "preliminary matter of transcendent importance." Id. at 1206. It found that because the procedures HEW followed did not provide for some form of public participation by those whose rights were so directly affected, HEW had failed to comply with the procedural requirements of Title VI itself, which the Court read as mandating that "drastic governmental action of this nature . . . cannot result solely from secret, informal negotiations conducted exclusively by a handful of government officials." Id. at 1206-07. As this Court noted:
(The primary issue is) due process and the right to a hearing before important administrative action affecting the rights of individuals and institutions is taken. The huge power concentrations in the bureaucracies of our governments must not be permitted to be exercised secretly and arbitrarily. No matter how benign and well-intentioned, those government officials who can, in practical effect, turn on or off the source of hundreds of millions of dollars, must conduct themselves with scrupulous regard for procedural protections. Not only must the result be just, but, if the people are to retain their faith in their government, the means used to achieve the result must be fair.
Id. at 1206. The court found that although the UFT had been consulted with respect to the specific terms of the agreement prior to its adoption, the other parties in the litigation had not been; rather, along with the public, they had been "presented with an accomplished fact." Id. at 1212. See also id. at 1212-13 (describing interests of intervenors-plaintiffs and intervenors-defendants and lack of consultation with them prior to agreement promulgation). This court summed up the nub of the procedural problem:
It is disingenuous to suggest . . . that the general discussions about discrimination in the City school system . . . obviated the need for a hearing on the particular terms of the Agreement. In point of fact, announcement of the Agreement came as a surprise to all those indirectly involved as well as the public, save for the small coterie who actually participated in negotiating its terms. No one has ever denied that serious racial problems exist in the schools of the City of New York. The issue was and is what specific remedies are to be adopted. On this dispositive point of judgment and power there never was an opportunity for public participation of the kind minimally required. . . . We cannot ignore what every person involved in negotiations labor, commercial or political knows: it is the "details," the precise "drafting," not global principles, that are usually the bones of contention.
Id. at 1213. This court remanded the case to HEW to devise an appropriate procedural mechanism which would guarantee that those parties affected by the agreement would have at least "an opportunity to voice their opinions" before any agreement was ratified. Id. at 1227.
On appeal, the Second Circuit reversed, approving the procedures followed by HEW in promulgating the agreement, and ruling that potentially aggrieved or concerned parties had no right to be heard. See Caulfield v. Board of Education of the City of New York, 583 F.2d 605 (2d Cir. 1978). Rigidly applying the enforcement scheme set forth in 42 U.S.C. § 2000d-1, the court held that neither the statute, nor HEW regulations, "provide for public participation or a hearing when HEW acts informally." 583 F.2d at 614.
Because HEW did not seek compliance by fund termination, but rather by a voluntary agreement, HEW was not required to afford (plaintiffs or others) an opportunity to participate. The action taken here to effect compliance was precisely the type of action contemplated by Congress in using the phrase "voluntary means."
Id. In rejecting this court's "totality of circumstances" approach, which had found the agreement something less than voluntary, the circuit court concluded:
Nevertheless, the district court held that participation was mandatory on the basis that the agreement was not voluntary. The principal reason for the . . . finding of involuntariness was that the City Board, along with the City as a whole, was in the midst of a fiscal crisis and presumably could not afford a fund termination while it litigated the issue of Title VI compliance. But the only fund termination sought by HEW related not to Title VI funds but to (ESAA) funds. To be sure, a threat of potential fund termination lurked in the background since without such leverage voluntary compliance might possibly never be achieved. And after all, if there is lack of compliance, HEW is obligated to enforce the statute ultimately by terminating funds. . . . Undoubtedly then there is a certain amount of coercion inherent in the enforcement scheme. . . .
Undercutting any actual coercion, however, are several points. The City Board's own study, the Gifford Report, confirmed the conditions cited in the November 9 letter from OCR. Moreover, the City Board's press release indicated that the agreement had been reached in a spirit of cooperation. . . . The City Board's commitments under the (agreement), despite its impact on teachers and supervisors, came about by the City Board's decision to comply with OCR's interpretation of Title VI, not by any fund-termination action by OCR. . . . In addition, there was ample opportunity to communicate with the City Board between the time the terms of the agreement became publicly known and the time of its ratification, but no party . . . sought to participate during that hiatus, although most parties were consulted in the interim.
In any event, the statutory scheme requires a hearing with notice only when HEW seeks fund termination. . . .
The Court of Appeals affirmed this court's holding that it was appropriate for HEW and OCR to require the Board and local districts to furnish data on the racial or ethnic background of students, teachers and supervisors by individual schools. It held that in "the context of this OCR investigation . . ., the collection of racial and ethnic data is authorized by Title VI." Id. at 611.
Having characterized the agreement as voluntary both as contemplated by the statute and in fact, the circuit court remanded the challenge to its validity to this court. In so doing, it noted that it had not passed on plaintiffs' contentions that HEW was without jurisdiction to take action upon allegations that employment practices discriminated against minorities, that the practices complained of in the OCR letter did not constitute illegal and unconstitutional discrimination against minorities, and that the agreement and the Board's actions thereunder resulted in illegal "reverse discrimination" and deprived them of liberty and property without due process of law. See Caulfield v. Board of Education of the City of New York, 583 F.2d 605, 607 n. 1 (2d Cir. 1978). As noted below, it is this court's view that by characterizing the agreement as voluntary in fact, the circuit court substantially defined the appropriate standard for review of the constitutional and statutory validity of the agreement upon remand. See Section II, infra.
D. Litigation Regarding ESAA Fund Ineligibility
Following HEW's denial to the Board and District 11 of ESAA funding for the 1977-78 school year, the Board filed suit alleging that the determination of ineligibility was arbitrary, capricious and illegal under the Administrative Procedure Act, 5 U.S.C. § 702 et seq. The facts upon which HEW based its determination are, in certain major respects, identical to those underlying the agreement at issue in this case, for HEW initially based its ruling on the charges of Title VI violations resulting from teacher assignment practices outlined in the OCR letter to the Board. In addition, the resolution by this Court and the Second Circuit of the legal issues surrounding HEW's ESAA determination bear, in some respects, on the legal issues raised in this case. For these reasons although this court does not suggest that any of the factual determinations or results of the ESAA litigation are binding on the parties to this litigation it is relevant to briefly review the ESAA litigation.
In Board of Education v. Califano, No. 77 C 1928 (E.D.N.Y., November 18, 1977), this court concluded that because HEW had failed to properly consider evidence proffered in rebuttal by the Board at the administrative show cause hearings held to review the ESAA ineligibility determination, it was necessary to remand the funding dispute to HEW for further administrative consideration.
First, the court concluded that the statistical data relied upon by HEW data identical to that presented and relied on in part in this case as to the teacher assignment issues did "lend support to HEW's finding that subsequent to 1972 there was a pattern of assigning teachers by the Central Board in a way that would tend to correlate the race of the teacher with the predominant race of the students in the school . . . (and supported) a direct correlation between the numbers of minority teachers and the percentage of minority students in the City's schools when the schools are broken down into groups of low, medium and high minority school population." See id. at pp. 16-20.
Second, the court concluded that the Board had presented substantial evidence at the administrative hearing that there was neither intentional discrimination nor a pattern or practice after 1972 of assigning teachers by race. This evidence also presented in large part in this case included a school-by-school analysis of the history of some forty high schools where the minority staff and student populations correlated, arguments that any disparities from an integrated staffing distribution were beyond Board control because caused by state law as to teacher appointment, demographic changes in the New York City public school student population, provisions in collective bargaining agreements, low availability of minority personnel in the available labor pool, and incidence and distribution of vacancies only in specific teacher license areas. See id. at pp. 25-33. Similar rebuttal evidence and challenge to the HEW statistics was presented as to staffing of District 11 schools. See id. at pp. 33-38.
Third, the court found that HEW had failed to properly consider the rebuttal evidence submitted by the Board. Instead, it had erroneously relied on an interpretation of the ESAA statute which permitted a statistical disparity alone to constitute a violation. See id. at pp. 39-41; see also 45 C.F.R. § 185.43(b)(2) ("no educational agency shall be eligible for assistance . . . if . . . it has had or maintained in effect any practice, policy or procedure which results in discrimination . . . including the assignment of . . . teachers . . . in such a manner as to identify any . . . schools as intended for students of a particular race . . .). The Court held that this interpretation of the statute was improper, for it created, in effect, an irrebuttable presumption that disparate ethnic statistics constituted discrimination in violation of the statute. While "statistical disparities alone (may) provide the basis for a rebuttable . . . presumption of discrimination . . . some aspect of mala fides, no matter how remote or indirect, must be attributable to the (school authorities) before they can be found to have illegally racially discriminated." Id. at 42, 44. Thus, the court ruled that, in order to hold the Board ineligible for ESAA funds, HEW would have to make a finding either that
(1) the school board was maintaining an illegally segregated school system on June 23, 1972 and . . . took no effective steps to desegregate after that date or (2) . . . had a practice after (that date) that was segregative in intent, design, or foreseeable effect. It may rely on statistics alone to make this finding, but it may not ignore evidence tending to rebut the inferences drawn from the statistics.
Board of Education v. Califano, 77 C 1928 (E.D.N.Y., November 18, 1977) at pp. 49-52. Because HEW had not fairly considered the rebuttal evidence, the court remanded the case to it for further consideration. Id. at 52.
After remand, HEW determined that under the standard outlined by this court, the Board and District 11 were ineligible for ESAA funding. Applying the "substantial evidence" standard for review of administrative determinations, see Board of Education v. Califano, 77 C 1928 (E.D.N.Y., November 18, 1977) at pp. 53-54, this court upheld HEW's determination. See Board of Education v. Califano, 584 F.2d 576, 578 (2d Cir. 1978).
On appeal, the Second Circuit affirmed the determination that the Board and District 11 were ineligible for ESAA funding. See Board of Education v. Califano, 584 F.2d 576 (2d Cir. 1978). It disagreed, however, as to the appropriate standard to be applied under the statute for purposes of determining whether unlawful discrimination had been shown. And more importantly for purposes of this case, in so doing the appellate court relied heavily on its interpretation of the appropriate standard under Title VI the statute now at issue.
The circuit court first noted that 45 C.F.R. § 185.43(b)(2) prohibited teacher assignment practices that served to identify schools as designed for students of a particular race. Board of Education v. Califano, 584 F.2d 576, 578-81 (2d Cir. 1978). It then proceeded to review the manner in which teacher appointments and assignments are made in the City's schools under New York law, finding that while decentralization and the examination procedures mandated by New York law in large part controlled the appointment of teachers,
irrespective of how the teachers are appointed, ultimate control still remains with the Chancellor (and the Board). He retains the power to rescind illegal teacher assignments and to compel a local board's compliance with all applicable provisions of law. In addition, he is vested with all powers and duties of the superintendent of schools of the city district, which include "the power to transfer teachers from one school to another."
Id. at 582 (footnotes omitted). The court then reviewed the statistics upon which HEW had based its initial finding of ineligibility:
Racial and ethnic statistics demonstrated that in school year 1975-76 62.6% of high school students were minority students whereas 8.2% of high school teachers were minority teachers. Seventy percent of minority high school teachers were assigned to high schools in which minority student enrollment exceeded 70%, even though these high schools employed only 48% of the system's high school teachers. Conversely, in high schools in which there were proportionately a low number of minority teachers, minority student enrollments were below 40%.
Similar correlations between the racial/ethnic composition of the faculty of community school districts and the racial/ethnic composition of the student bodies within these school districts exist. For the same school year, 14.3% of the teachers and 69.7% of the students in elementary schools were minority, and 16.7% of the teachers and 70.1% of the junior high school students were minority. Quite clearly, the schools with minority student enrollments over 90% identifiably had the highest percentage of minority faculty by a substantial margin. Similarly, community school districts with minority student enrollments under 50% contained a disproportionately low percentage of minority faculty.
Id. at 583-84 (footnotes containing additional statistical analysis omitted). See also id. at 584-85 (additional statistical data).
Declaring that neither the "substantial disproportions" nor the fact of statistical racial identifiability were contested by the Board, the circuit court proceeded to consider the sole issue before it: whether "the statute and regulation must be construed to require HEW to establish that the disparities resulted from purposeful or intentional discrimination in the constitutional sense." Board of Education v. Califano, 584 F.2d 576, 587-88 (2d Cir. 1978). The court held that they did not:
While appellants argue that HEW's decision to deny ESAA funds relies solely on statistical evidence of disparate impact, contrary to the Supreme Court cases construing the Fourteenth Amendment, we need not reach the question whether the evidence supports a finding of purposive segregative intent. Because we are dealing with an act of Congress, as amplified by HEW regulations, and not with a judicial determination whether certain acts have produced a Fourteenth Amendment violation, it is permissible for Congress to establish a higher standard, more protective of minority rights, than constitutional minimums require. For example, Title VII cases have not required proof of discriminatory motive, at least where the employer is unable to demonstrate that requirements causing a disparate impact are sufficiently related to the job. . . .
Here, Congress intended to permit grant disqualification not only for purposeful discrimination but also for discrimination evidenced simply by an unjustified disparity in staff assignments. This conclusion seems clear from the statute which expressly requires that all ESAA "guidelines and criteria . . . be applied uniformly . . . without regard to the origin or cause of such segregation." . . . Moreover, the ESAA proscription against employment discrimination forbids discriminatory acts and practices which violate statutory civil rights provisions such as Title VI of the Civil Rights Act . . . . It is significant that Title VI findings of discrimination may be predicated on disparate impact without proof of unlawful intent.
Id. at 587-89 (citations and footnotes omitted) (emphasis added). Applying this standard, the court held that HEW had properly concluded that
the Central Board failed to present a sufficient justification for the racial disparities in teacher and staff assignments. The proffered justifications for the substantial disparities . . . included (1) restrictions on the transfer of teachers written into the collective bargaining agreement, (2) the desirability of teaching assignments in (nonminority) schools, (3) the unwillingness of many nonminority teachers to teach in predominantly minority schools and (4) the unequal distribution of licenses in specific areas. None of these explanations is adequate to justify the racial disparities in staff assignments. The unequal distribution of licenses resulted from the very examinations which OCR previously determined had produced a racially significant disparate impact (in its November 9, 1976 letter to the Board at issue in this case). . . . Leaving aside whether the remaining justifications are sufficient as a matter of law, they have not been supported by adduced facts appearing on the record.
Id. at 589. The Supreme Court has granted certiorari. See Board of Education v. Califano, 440 U.S. 905, 99 S. Ct. 1211, 59 L. Ed. 2d 453 (1979).
A second wave of ESAA litigation involved New York City's application for 1978-79 ESAA funding. Despite the fact that the City was presumably carrying out the agreement to eliminate any alleged discrimination in hiring and assignment of teachers and supervisors, HEW took the position that the Board was ineligible for aid since it "had in effect . . . (a) practice, policy or procedure" of racial discrimination after June 1972. The Board's request for discretionary waiver of ineligibility was denied on the ground that a waiver was not possible until all the effects of discrimination had been fully eliminated. This court held that HEW had an "unduly limited view of its statutory discretionary powers to grant a waiver." Board of Education of the City of New York v. Califano, 464 F. Supp. 1114 (E.D.N.Y.1979). Accordingly, it granted an injunction to protect the funds and remanded the application for a 1978-79 waiver to HEW for further consideration. Id. at 1127. This case is presently on appeal to the Second Circuit.
Parties, Issues and Standard of Review in this Litigation
It is against this complex administrative, procedural, and litigation background that this court considers plaintiffs' challenges to the September, 1977 agreement. Not surprisingly, the posture of the litigation has caused confusion as to the precise issues before this Court, and a conflict particularly among defendants as to the appropriate stance to take in defense of the agreement. Perhaps in the most uncomfortable position has been the Board itself: striving to uphold the agreement as a voluntary action entered into to redress perceived inequalities and reform what it views, in large part, as outmoded and unjust teacher employment and assignment practices largely beyond its direct control, it has understandably been unwilling to admit that it has engaged in intentional or otherwise unlawful discriminatory practices. Instead, drawing a strong analogy to United Steelworkers of America v. Weber, 443 U.S. 193, 99 S. Ct. 2721, 61 L. Ed. 2d 480 (1979), it has urged this court to validate the agreement as a reasonable, voluntary and permissive exercise of its pedagogic and administrative authority over the New York City public school system. The other defendants HEW, intervenor-defendant black school teacher Ross, and the Coalition of Concerned Black Educators urge the same result; they, however, would be quite satisfied (and have introduced evidence towards this end) to have this court declare the Board in violation of Title VI, Title IX, and the Constitution.
Plaintiffs (a local school board, teachers, parents, and school supervisors) along with intervenors-plaintiffs (the Council of Supervisors and Administrators and the United Federation of Teachers), of course take a diametrically different view. They seek to bring this case squarely within the parameters of Regents of the University of California v. Bakke, 438 U.S. 265, 98 S. Ct. 2733, 57 L. Ed. 2d 750 (1978). Thus, they argue that the agreement sets up what amounts to a quota system mandating the hiring and assignment of teachers and supervisors on the basis of race. And because, they urge, there has been no judicial or formal administrative finding of intentional discrimination by the Board in violation of the fourteenth amendment (a standard they view as applicable also to Titles VI and IX), and the evidence will not support such a finding, Bakke will not permit the remedial measures contemplated by the agreement. In addition, plaintiffs argue that under Titles VI and IX, HEW was without jurisdiction to investigate the employment practices of the Board, and thus to draw the Board into the statutory enforcement scheme which resulted in promulgation of the agreement.
Thus, the issues in this case emerge as follows: First, under Title VI of the Civil Rights Act of 1964 and Title IX of the Education Amendments of 1972, did HEW through OCR have jurisdiction to investigate and seek compliance with regard to the employment practices of the Board outlined in the November 9, 1976 letter from OCR to the Board? Second, if so, does the agreement entered into by the Board and OCR to resolve the allegations of statutory noncompliance result in impermissible "reverse discrimination" violative of plaintiffs' rights under the equal protection clause of the fourteenth amendment, the implied equal protection principle of the fifth amendment, or under Titles VI and IX, or otherwise deprive plaintiffs of liberty or property without due process of law in violation of the fifth or fourteenth amendments?
For the reasons discussed in Section III, infra, HEW and OCR did have jurisdiction, under both Titles VI and IX, to investigate the employment practices challenged in the November 9, 1976 letter to the Board. While it is true that Title VI contains a provision exempting from its coverage employment practices except where employment is a "primary objective" of financial assistance, see 42 U.S.C. § 2000d-3, and that Title IX has been read implicitly to include such a provision, there is no need to reach the issue of whether the financial assistance involved in this case had as a primary objective the provision of employment. Rather, under the particular facts and circumstances of this case, what has been termed the "infection" theory of jurisdiction applies: because those practices HEW and OCR investigated had or could have a discriminatory effect upon students, who are the direct beneficiaries of the financial aid, HEW action was appropriate.
In determining the appropriate standard of review, this court is bound by the Second Circuit's determination in Caulfield v. Board of Education of the City of New York, 583 F.2d 605 (2d Cir. 1978), that the agreement at issue must be deemed "voluntary" both as a matter of law under Titles VI and IX and as a matter of fact. Thus, in many respects, the analogy of this case to United Steelworkers of America v. Weber, 443 U.S. 193, 99 S. Ct. 2721, 61 L. Ed. 2d 480 (1979), is a powerful one. Titles VI and IX encourage voluntary steps by federal and local governmental agencies to eliminate possible discrimination in programs receiving federal financial assistance; the statutes require attempts at conciliation before federal officials may initiate formal enforcement efforts. See 42 U.S.C. § 2000d-1; 20 U.S.C. § 1682. See also Alabama NAACP State Conference of Branches v. Wallace, 269 F. Supp. 346, 351-52 (M.D.Ala.1967) (three-judge court); Citizens Legal Defense Alliance v. Department of Health, Education and Welfare, No. CV 76-1614 (C.D.Cal., June 24, 1977) (upholding compliance agreement with regard to employment practices of Los Angeles school system). Since the Title VI and IX voluntary compliance scheme is initiated by federal government investigation and transmittal of evidence outlining specific allegations of statutory violations, there is added assurance that any voluntary remedial measures adopted will redress possible discriminatory practices on the part of the fund recipient itself (here, the Board). The argument for a plan designed to avoid future racial and sex discrimination is thus much stronger here than it was in either Regents of the University of California v. Bakke, 438 U.S. 265, 98 S. Ct. 2733, 57 L. Ed. 2d 750 (1978) or United Steelworkers of America v. Weber, 443 U.S. 193, 99 S. Ct. 2721, 61 L. Ed. 2d 480 (1979). It is inappropriate, as the Second Circuit has implicitly ruled in Caulfield, to require a formal administrative or judicial finding of discrimination, whether in violation of the Constitution or some lesser statutory standard, before such remedial action may be taken.
The agreement must be judged essentially by the standards applied in judicial review of class action settlements. The issue for determination is simply whether the parties entering into a Title VI or IX remedial plan had a reasonable basis for believing that the practices at issue might result in liability, and whether the remedial measures adopted are reasonable in view of the perceived liability. Cf., e.g., Patterson v. Newspaper & Mail Deliverers' Union of New York and Vicinity, 514 F.2d 767, 771 (2d Cir. 1975) (district judge must "satisfy himself that the settlement agreement was equitable to all persons concerned and in the public interest"); Alaniz v. California Processors, Inc., 73 F.R.D. 269, 278 (N.D.Cal.1976) (court must conclude settlement is fair, reasonable and adequate; "The most important factor to be considered is the strength of the plaintiff's case. . . . (but) the court should not endeavor to make a final determination of liability . . ."); Armstrong v. Board of School Directors of the City of Milwaukee, 471 F. Supp. 800 (E.D.Wis.1979) (approval of proposed plan to remedy pupil segregation) (same). See generally 3B Moore's Federal Practice, P 23.80(4) at pp. 23-515 23-528. Any voluntarily agreed resolution of the dispute may not, of course, violate the rights of third parties.
As noted in Sections IV and V, infra, the extensive evidence presented at trial demonstrates that the Board and OCR had a reasonable basis for entering into the agreement and that it was reasonable for the Board to conclude (though it does not preclude a contrary conclusion) that had it gone to litigation (whether administrative, if OCR had been forced to initiate formal hearings to effect a fund cutoff, see 42 U.S.C. § 2000d-1; 45 C.F.R. §§ 80.8 80.10, or judicial, had OCR elected to seek compliance by "any other means authorized by law," see 42 U.S.C. § 2000d-1(2)) it would have been found in violation of Title VI and Title IX. Moreover, the remedial measures embodied in the agreement represent a reasonable resolution of the charges of statutory violation levelled by OCR. First, they constitute a fair attempt to remedy the scope of the violations alleged. Second, they do not straightjacket the Board into an abdication of its primary pedagogic and administrative authority over the New York City school system, but rather provide for flexibility and consideration of the Board's preeminent responsibility for assuring the best possible education of the city's school population. Third, they represent measures which the Board could have chosen to initiate on its own in the exercise of its authority over the school system. Fourth, when viewed against what the Board could reasonably have believed would have been a judicial remedy had OCR elected to seek such a remedy, or had a class of private plaintiffs sought such a remedy, they emerge as a reasonable accommodation. And finally, because the remedial measures in fact establish goals and not rigid quotas, and because they do not restrict the opportunities of any of the plaintiffs (or any person) to seek or hold employment in the school system, they do not as presently structured impact in an unconstitutional or statutorily violative fashion on plaintiffs' rights.
Preliminary Issues: Standing and Jurisdiction
At this stage of the litigation, defendant HEW and defendant-intervenor Ross question the standing of all plaintiffs to challenge the September, 1977 agreement and the jurisdictional appropriateness of OCR's inquiry into the Board's employment practices. It would be unjust to deny standing to these plaintiffs. They must be given their day in court.
First, in Caulfield v. Board of Education of the City of New York, 449 F. Supp. 1203, 1221-23 (E.D.N.Y.), aff'd in part and rev'd in part on other grounds, 583 F.2d 605 (2d Cir. 1978), this court considered, in some detail, the standing issue. It found that plaintiff teachers, supervisors and administrators might suffer "injury in fact" as a result of implementation of the agreement. See 449 F. Supp. at 1222-23. Even though one of the types of injury identified by the court that resulting from possible forced transfers of teachers and administrators may arguably not be ripe for consideration at this time, since the Board now takes the position that the agreement will not require it to execute such transfers, and the Board and OCR have agreed that the assignment provisions of the agreement will not apply to supervisors at least pending further negotiations, the other injuries identified by the court still remain. Plaintiffs have thus suffered " "some threatened or actual injury resulting from the putatively illegal action.' " Warth v. Seldin, 422 U.S. 490, 499, 95 S. Ct. 2197, 2205, 45 L. Ed. 2d 343 (1975) (citing Linda R.S. v. Richard D., 410 U.S. 614, 617, 93 S. Ct. 1146, 35 L. Ed. 2d 536 (1973)). Apart from this "minimum constitutional mandate," 422 U.S. at 499, 95 S. Ct. 2197, 45 L. Ed. 2d 343, plaintiffs have standing under the additional prudential considerations relevant to invocation of federal court jurisdiction. They do not present the court with a " "generalized grievance' shared in substantially equal measure by all or a large class of citizens," id.; cf. Schlesinger v. Reservists to Stop the War, 418 U.S. 208, 94 S. Ct. 2925, 41 L. Ed. 2d 706 (1974). Rather, they have demonstrated sufficiently that "the challenged practices harm (them), and that (they) personally would benefit in a tangible way from the court's intervention." Warth v. Seldin, 422 U.S. 490, 508, 95 S. Ct. 2197, 2210, 45 L. Ed. 2d 343 (1975). See also Caulfield v. Board of Education of the City of New York, 449 F. Supp. 1203, 1223 (E.D.N.Y.1978).
Second, policy considerations support standing. Because the Second Circuit has determined that plaintiffs had no right to be heard in the process that lead to the promulgation of the agreement, see Caulfield v. Board of Education of the City of New York, 583 F.2d 605 (2d Cir. 1978), if plaintiffs are to be heard at all, they must be heard in this court. To deny such a hearing in the circumstances of this case would work an injustice: it would permit a federal agency and a local governmental agency, under the banner of "voluntarism", to take far-reaching steps affecting vital societal institutions and substantial individual interests without question or challenge from directly effected parties. See Tribe, Seven Pluralist Fallacies: A Reply to Mr. Justice Rehnquist, 38 U.Miami L.Rev. 43, 46-47 (1978).
Finally, it is at least implicit in the Second Circuit opinion in Caulfield v. Board of Education of the City of New York, 583 F.2d 605 (2d Cir. 1978), that that court viewed plaintiffs here as possessing standing. See id. at 607 n. 1 (outlining issues for resolution on remand). Given the short shrift that court accorded concerns for plaintiffs' participation in the process leading up to the promulgation of the agreement, it is hardly conceivable that had the Second Circuit perceived any serious standing issue in this case, it would have not have passed directly on the issue.
Plaintiffs argue that under Title VI and Title IX, HEW and OCR had no jurisdiction to investigate or seek compliance with regard to the Board's teacher and supervisory employment practices. In their Title VI argument, they proceed from the language of the statute. On the Title IX issue, they argue an implied exclusion. As to both, they urge that insofar as HEW regulations authorize investigation and action respecting employment practices, those regulations are invalid as beyond the scope of the authorizing statutes.
1. Title VI of the Civil Rights Act
Title VI, 42 U.S.C. § 2000d, provides that:
No person . . . shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.
42 U.S.C. § 2000d-1 sets forth the duty and requirements of federal agency enforcement of the § 2000d prohibition. 42 U.S.C. § 2000d-3 limits the scope of § 2000d-1:
Nothing contained in this subchapter shall be construed to authorize action under this subchapter by any department or agency with respect to any employment practice of any employer . . . except where a primary objective of the Federal financial assistance is to provide employment.
Plaintiffs argument against HEW and OCR jurisdiction proceeds directly from the language of § 2000d-3: they view OCR's investigation, letter, and the agreement in this case as directed at the Board's teacher and supervisory employment practices; because, they urge, almost none (if any) of the federal grants to the Board has as a "primary objective" the provision of employment, the statute itself barred OCR's efforts.
Under the circumstances of this case, it is not necessary to address the issue whether any of the federal assistance to the Board had as a primary objective provision of employment. Nor is it a dispositive semantic consideration whether, under § 2000d-3, federal grants may have several primary objectives, or merely one; there is no need to consider whether "a primary objective" is to be read as "the primary objective." Cf. Tr. at 744 (testimony of former OCR director Martin Gerry) (program of assistance may have several primary objectives); id. at 741-49, 960-65 (Gerry questioned by plaintiffs' counsel as to primary objective of various federal grants to Board). OCR simply did not act under a theory that it could take action with regard to the Board's employment practices because a primary objective, however defined, of the federal assistance was the provision of employment. See Tr. at 631-37, 741-49, 960-65 (testimony of Gerry).
Rather, OCR proceeded, in large part, under the authority of 45 C.F.R. § 80.3(c)(3), as outlawing discriminatory teacher employment practices which cause discriminatory effects on school children who are clearly intended as ...