United States v. Allegheny-Ludlum Industries, Inc.

In April 1974, the secretary of labor and the Equal Employment Opportunity Commission (EEOC) (plaintiffs) filed a complaint against nine steel companies and a steel union (the steel companies) (defendants) for violation of Title VII of the Civil Rights Act of 1964 and Executive Order 11246, which required government contractors and subcontractors to agree to certain nondiscrimination and affirmative-action requirements. The complaint alleged that the steel companies discriminated against minorities and women in various employment practices, including hiring, placement and advancement, and seniority. The parties submitted a proposed nationwide settlement agreement in the form of two written consent decrees, and the district judge approved them. Among other things, consent decree I provided for the implementation of plantwide seniority and transfer reforms, as well as a back-pay fund of $30,940,000 to be distributed to affected employees. According to paragraph 18(g) of consent decree I, any affected employee wishing to receive payment from the back-pay fund was required to execute a release of any discrimination claims against the steel companies. The consent decrees did not prevent individual employees from pursuing private litigation, and hundreds of employment-discrimination charges were pending at the time the consent decrees were entered. According to paragraph 19 of consent decree I, the EEOC was required to review all pending charges; as to those wholly within the scope of the decree, the EEOC would recommend accepting payment from the back-pay fund, and as to those not wholly within the scope of the decree, the EEOC would swiftly investigate and conciliate as normal. Various intervenors moved to vacate the consent decrees, and the district court upheld the decrees. The intervenors appealed, arguing that the back-pay release was illegal on various grounds and that the EEOC abdicated its statutory duties by entering into the decrees.