Lawsuits filed last week by the Equal Employment Opportunity Commission against two Maryland companies are the latest in a seven-year series of exchanges over allegations of racial and sexual discrimination.
The EEOC, which began investigating the allegations in 1978, brought class-action lawsuits against two prominent and fast-growing local companies -- Citizens Bank and Trust Co. of Maryland, based in Riverdale, and PHH Group Inc. and a subsidiary, Peterson, Howell and Heather Inc., based in Hunt Valley, Md.
The suits allege race, sex and national-origin discrimination that could net millions of dollars of back pay for minorities and women.
While not answering specific charges, the companies have denied the allegations.
"We strongly disagree with the claims being made by the commission and will vigorously defend ourselves," said PHH Chairman Jerome W. Geckle. "We consider the actions taken by the EEOC to be unsubstantiated."
Said Richard A. Jennison, a spokesman for the bank: "Citizens firmly believes that the allegations of the complaint are incorrect and untrue, and Citizens intends to vigorously defend against all of the EEOC's claims."
Citizens Bank and Trust Co., the principal subsidiary of Citizens Bancorp, is one of the fastest-growing banks in the state. It has 93 branches and employs more than 1,400 persons.
PHH Group, which provides home-relocation services, vehicle leasing, chartering of corporate aircraft and other services to corporations, employs about 150 people at its holding company and about 800 at its corporate vehicle-leasing subsidiary, Peterson, Howell and Heather Inc. The $500 million company has several subsidiaries and is growing rapidly.
The EEOC began investigating Citizens Bank and Trust Co. in 1978 and PHH and its subsidiary in 1980. The suits took years because the commission has to "generally fight the respondent every step of the way to get information," said Renee Devine, an agency spokeswoman.
The companies respond that the judgments of the EEOC were based on faulty presumptions about minority hiring and that the demands of the EEOC have been excessive at times.
Basically, the EEOC alleges the discriminatory practices began in 1972 at both companies and have continued to the present.
The suit against Citizens Bank alleges the bank "discriminated against blacks and other minorities (Asian, American Indian, Hispanic) as a class" in recruitment, hiring and job assignments. The suit also alleges the bank "discriminated against females, as a class, on the basis of sex in recruitment and hiring."
The suit against PHH and its subsidiary alleges discrimination "against blacks as a class" and "against females as a class" in recruitment and hiring. Discrimination against females is alleged "in promotion, wages, assignment. . . . "
Specifically, the companies engaged in "systemic" patterns of discrimination, said Cissie Mead, director of the agency's district office in Baltimore. In the case of the bank, "discrimination began at the top and trickled down," Mead said.
The bank also "primarily assigned" blacks to black areas, Mead said. In one instance, a black was assigned to a branch office in a black neighborhood that was further from the employe's home than a branch in a white neighborhood, she said.
The EEOC alleges there were "instances in these cases where women and minorities went through the door with adequate qualifications for the job, applied for the job and weren't hired, although non-minorities with less qualifications were," Devine said.
The EEOC, which judges discrimination after examining pools of available applicants, the area in which a company is located and what other businesses in the area do, found the bank's percentage of minority hires has decreased over the years.
"When the EEOC started this investigation in 1978, we found that 9.5 percent of the new hires into entry-level positions were minorities -- and that percentage decreased over the years," she said.
At PHH Group and its subsidiary, the company has a "virtually all white" employe body, said Devine. The company has "no recruitment policy for any minorities," she said. "They do their hiring by word of mouth . . . . Word-of-mouth hiring does not violate any laws, but if it is discriminatory, that is in violation of the laws and that was what we allege here," she said.
At a press conference last week, EEOC Chairman Clarence Thomas said the commission is "being much more aggressive than setting goals and timetables. We are seeking the root of the problem, addressing it rather than the symptoms."
Before the suits were filed, the companies were notified about the findings, but efforts to avoid the suits failed, the EEOC said.
"We did attempt to conciliate, and conciliation failed," said EEOC spokeswoman Devine.
However, PHH Group said conciliation with the EEOC failed because it was asking too much.
"In the conciliation process they told us our statistics were too low for minorities and women," said John T. Connor Jr., general counsel for PHH Group. "But there are no specifics." The conciliation process didn't get to the point where "the commission focused on what it was they particularly objected to -- was there an individual we didn't hire that they said we should have hired or promoted?"
In the negotiations, the EEOC was "talking about dollar numbers we thought were totally unreasonable," said Connor. "They wanted us to advertise on the radio and say, 'If you ever thought of applying to this company, but didn't because they were bigots, come and collect some money.' We think that was totally unreasonable," he said.
Essentially, the company does not believe in using pure statistics to determine employment practices, Connor said.
"The decisional law of the land . . . does not allow you to use statistics; they look at the actual practices of the employer," he said. Using only statistical metropolitan area data that should be mirrored at a company is no indicator of a company's practices and will not hold up in court, he added.
"We are out here in a suburban industrial park, and when we first moved here in 1977 we had three buses that would bring out some of our inner-city employes." Connor said. "It's a long distance and people without automobiles stopped coming. We discontinued service when there was only one rider in the bus."
What is important, he said, is whether the company employs a person who actually applies to work there. "If you get 10 black people in applying for a job and none are hired, you say, 'Gee what's going on here?' The law is you have to recruit on a non-discriminatory basis." In that respect, PHH has a good track record, he said.
The EEOC vigorously denied it uses only statistical evidence, but said the evidence can "point to a problem" in employment practices that is then investigated further.
Both PHH and Citizens Bank say they have affirmative action programs. PHH said it could not produce statistics for its employment of minorities or women at this time. Citizens Bank said its 1984 affirmative action program was evaluated by the U.S. Department of Labor and found "acceptable."
Said Dick Sampson, a lawyer for Citizens Bank: "Goals and timetables have been established where appropriate, and efforts have been made to hire and promote women and minorities throughout the entire work force."
The EEOC's Mead said affirmative action plans had nothing to do with the current cases. "Goals and timetables end up with half percent" improvements, she said. "Statistics aren't discriminated against; people are."