The Labor Department soon will issue a proposal to prevent corporations with federal contracts from paying the dues of employes at private clubs that discriminate on the basis of race, color, sex or nation origin.
Donald E. Elisburg, assistant secretary for employment standards, told a Senate Banking committee hearing that the proposed regulation, which has been in the works for three years, will be published by the end of August.
The dues ban is intended to eliminate the professional disadvantages that minorities and women suffer through exclusion from private clubs where business deals and contacts are made. The Office of Federal Contract Compliance Programs will enforce the regulation.
The American Bankers Association and Federal Home Loan Bank Board General Counsel Milan C. Miskovsky immediately warned of possible legal difficulties under libel laws when a corporation decides that a certain club discriminates.
The extent of dues paying was illustrated by a survey of 1,700 banks and savings associations undertaken last fall by federal banking regulators at the request of the committee. Approximately half of the financial institutions said they regularly pay membership dues in private clubs on behalf of their executives. Sixty percent of those that pay dues do so regardless of whether the club discriminates in admitting members. Only a handful have a written policy of not supporting discriminatory clubs.
Emphasizing the importance of social clubs to business opportunities, Ira Gissen of Anit-Defamation League of B'nai B'rith said, "It is a fair assumpton that a person who is 'not fit' to socialize with is certainly not fit to share desk space in the executive suite." He singled out investment banking, commerical airlines, automobile manufacturing, the shipping industry, utilities, steel and aluminum manufacturing as "conspicuous by the absence of Jews from among (their) corporate leaders."
Former Massachusetts banking commissioner Carol Greenwald testified that corporate payment of dues tends to legitimize and subsidize discrimiation. The dues can be deducted from income taxes as legitimate business expenses. Greenwald, speaking on behalf of the Women's Equity Action League, also deplored discrimination against women in the office through what she termed title inflation.
She cited Equal Employment Opportunity Commission figures which show that the number of women and minorities with official and managerial positions in banks quadrupled in the last decade. "Branch manager is the latest female job ghetto in banking," Greewald declared.