An administrative law judge at the Labor Department ruled yesterday that Harris Trust and Savings Bank of Chicago excluded women and minorities from management jobs and recommended that the bank be ordered to give $12.2 million in back pay to 1,837 workers.
The seven-year-old case has been widely regarded as a federal contracts compliance test of employment practices in the banking industry. The Labor Department, in settling a similar case at Chase Manhattan in 1978, negotiated a $2 million training and incentive program for women and minorities. Employment discrimination charges have been filed subsequently at several other banks across the country.
Labor Department Judge Rhea M. Burrow also recommended to the Labor secretary that the bank, 28th in the country in deposits and assets and ninth in the size of its trust department, be barred from operating as a federal depository until it turns over detailed records of its pay and seniority records to the Labor Department's office of federal contracts compliance programs. The bank, third-largest in Chicago with assets of about $6 billion, also is considered a federal contractor because it acts as a depository for federal taxes, issues U.S. savings bonds and is a member of the Federal Reserve system and the Federal Deposit Insurance Corp.
The final decision in the seven-year-old Harris case also rests with the incoming Labor secretary; the president's nominee, Raymond J. Donovan, has not been confirmed yet. But the Reagan administration has indicated that it is unhappy with affirmative-action requirements imposed on business, and the president earlier this week characterized such programs as "quota systems."
Harris Bank said yesterday that it will file a challenge of Burrow's recommendations.
"We have vigorously denied" discrimination charges in the past, Harris said in a statement, "and we deny it now." The bank said Burrow's recommendation "comes as no surprise . . . since both the judge and the opposing counsel are employes of the Department of Labor."
In addition to back pay for women and minorities who worked at Harris between 1974 and 1977, Burrow recommended that Harris use special training programs and "seniority benefit action" to promote the affected workers.
Only "a comparatively few exceptionally or extraordinarily qualified" women and minority men "have been able to progress with Harris," Burrows said. Among all employes with the same level of education, "white males invariably held higher-paying positions than females and minorities," the judge noted.
The "vast majority of lowest-paying clerical positions are held by women and/or minorities," Burrow noted. Bank statistics showed that more than half of the female college graduates hired from 1969 to 1974 were still in lower-ranking jobs by 1974, compared with 12 percent of the male college graduates hired in that period.
Records also indicated a wide disparity in salaries paid men and women doing essentially the same work, the judge said. Until recent years, some departments of the bank refused to use minority-group employes, the ruling indicated. Of about 3,000 persons employed by Harris' home office as of two years ago, 1,500 were women and 500 were members of racial or ethnic minorities.
The Harris case has its roots in a campaign launched by Women Employed, a Chicago organization that has organized office workers in the downtown Loop area. A spokeswoman for the group, which has since gone national, noted yesterday where sanctions have been issued against federal contractors "the government has brought compliance in every single case."
"In terms of overall patterns of discrimination, the banking industry is a very guilty party," she said. "It has engaged in the practice of promoting women more slowly, placing women into staff and personnel positions as opposed to profit centers in banks, the routes to upper management, and is continuing to place the majority [of women] into clerical jobs with no routes to management."