Policy Statement: Whether an employer with which an employment agency or union deals must have fifteen or more employees in order for the agency or union to be covered by Title VII

1. SUBJECT: Policy Statement: Whether an employer with which an employment agency or union deals must have fifteen or more employees in order for the agency or union to be covered by Title VII.
2. PURPOSE: This policy statement reflects the Commission’s view of the effect on unions and employment agencies of Title VII coverage of the employers with whom they deal.
3. EFFECTIVE DATE: July 11, 1988
4. EXPIRATION DATE: As an exception to EEOC Order 205.001, Appendix B, Attachment 4, § a(5), this Notice will remain in effect until rescinded or superseded.
5. ORIGINATOR: Office of Legal Counsel.
6. INSTRUCTIONS: File behind page 36 of § 605 of Volume II of the Compliance Manual.
7. SUBJECT MATTER:

Both employment agencies and unions may be subject to Title VII’S prohibitions even when they deal with uncovered employers. An employment agency is covered by Title VII if it regularly supplies employees to employers with 15 or more employees even if, in a particular case, the employer has fewer than 15 employees. Title VII contains prohibitions against discrimination specifically aimed at employment agencies. Section 703 provides:

(b) It shall be an unlawful employment practice for an employment agency to fail or refuse to refer for employment, or otherwise to discriminate against, any individual because of his race, color, religion, sex, or national origin, or to classify or refer for employment any individual on the basis of his race, color, religion, sex, or national origin. (Emphasis added).

In addition, Section 704 provides:

(b) It shall be an unlawful employment practice for an employer, labor organization, employment agency.... to print or publish or cause to be printed or published any notice or advertisement relating to employment by such an employer.... or referral for employment by such an employment agency... indicating any preference, limitation, specification, or discrimination, based on race, color, religion, sex, or national origin.... (Emphasis added).

Title VII at Section 701(c) defines “employment agency” to mean:

any person regularly undertaking with or without compensation to procure employees for an employer or to procure for employees opportunities to work for an employer and includes an agent of such a person. (Emphasis added).

The Commission has consistently interpreted the term “employer” as used in Title VII to mean a Title VII employer (i.e., a person engaged in an industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year, and any agent of such person).⁽¹⁾ Thus, in order to be considered an employment agency within the meaning of Title VII, an entity or person must regularly deal with at least one person or entity employing fifteen or more employees. In the particular case, the Commission’s inquiry will be a factual one designed to ascertain the frequency with which an employment agency deals with a Title VII employer or employers. If an agency regularly procures employees for at least one Title VII employer, it qualifies as an employment agency under § 701(c) with respect to all of its activities whether or not such activities are for employers  covered by the Act. It would not matter that the employing entity in the charge at issue has fewer than fifteen employees.⁽²⁾ A corollary of this situation is one where, in a particular instance, an employing entity has more than fourteen employees, but the agency is found not to regularly deal with that employer, or others that large. In such a case, the employment agency would not be covered by Title VII. See EEOC Compliance Manual Section 605.14(a) for guidance on eliciting information relevant to determining “regular undertaking.”

Title VII’s provisions concerning labor unions are somewhat more complex. However, we conclude that, if they meet certain criteria, they too are covered by Title VII even when dealing with uncovered employers.

It is unlawful under Title VII for a labor organization to:

(1) ... exclude or expel from its membership, or otherwise to discriminate against, any individual...
(2) ... limit, segregate, or classify its membership, or applicants for membership or to classify or fail or refuse to refer for employment any individual, in any way which would deprive or tend to deprive any individual of employment opportunities, or would limit... or otherwise adversely affect his status as an employee or as an applicant for employment, because of such individual’s race, color, religion, sex, or national origin; or (3)... cause or attempt to cause an employer to discriminate against an individual in violation of this section...

[section 703] or to print or advertise any limitations or preferences based on race, color, religion, sex, or national origin. [Section 704, see page 1 of this policy statement].

Section 701(d) defines “labor organization” as:

a labor organization engaged in an industry affecting commerce, and any agent of such an organization, and includes any organization of any kind… so engaged in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers….

Section  701(e), in turn, deems a labor organization to be engaged in an industry affecting commerce if:

(1) it maintains or operates a hiring hall or hiring office which procures employees for an employer or procures for employees opportunities to work for an employer, or (2) the number of its members is... (B) fifteen or more... and... [it]

(1) is the certified representative of employees under . . . the National Labor Relations Act ...;

(2) although not certified, is a national or international..., or a local labor organization recognized or acting as the representative of employees of an employer or employers engaged in an industry affecting commerce; or

(3) has chartered a local labor organization or subsidiary body which is representing or actively seeking to represent employees of employers within the meaning of paragraph (1) or (2); or

(4) has been chartered by a labor organization… as the local or subordinate body through which... employees may enjoy membership or become affiliated with such labor organization; or

(5) is a conference, general committee... subordinate to a national or international
labor organization, which includes a labor organization engaged in an industry affecting commerce within the meaning of any of the preceding paragraphs of this subsection.

In short, a labor organization is engaged in an industry affecting commerce and is covered by Title VII if it maintains a hiring hall or hiring office and deals with one Title VII employer or if it has fifteen or more members and fulfills any of the criteria set forth in section 701(e)(2)(B)(l) through (5).⁽³⁾  The language of the Act thus makes clear that a labor organization is subject to Title VII’s proscriptions so long as it deals with at least one Title VII employer. Thus, Title VII applies to such a labor organization when it deals with non-Title VII employers.⁽⁴⁾

Indeed, there is an argument that a labor organization is covered whether or not it deals with any Title VII employer. Unlike the definition of “employment agency,” that of labor organization is not limited by reference to an “employer.” Under §701(d), while a Title VII “labor organization” “includes any organization… which exists for the purpose... of dealing with [Title VII] employers” (emphasis added), it broadly covers any labor organization engaged in industry affecting commerce (see 701(d)) and does not exclude from coverage labor groups which deal with employers not covered by Title VII.

There is conflicting case law on this question. In Jennings v. American Postal Workers Union, 672 F.2d 712, 28 EPD ¶ 32,533 (1982), the Eighth Circuit found jurisdiction over a federal em-ployees union despite the fact that the employing entity (the U.S. Postal Service) was not a Title VII employer. The court reasoned that Section 703 of Title VII provides a cause of action against labor organizations for unlawful employment practices and that the fact that the labor organization represented federal employees was not controlling.⁽⁵⁾

In Renfro, supra note 4, the Fifth Circuit found no jurisdiction because the plaintiff was not employed by a Title VII employer. Through an unfortunate ellipsis omitting the words “and includes” (see supra p. 3), the court found that “a labor organization is any organization in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes... or other terms or conditions of employment.” (Emphasis in original).

The statutory language is more consistent with the result in Jennings. So long as a union is engaged in industry affecting commerce, it is covered, whether or not it deals with covered employers.

_____________       Approved: __________________________________
Date                           Clarence Thomas
                               Chairman

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