In a post-audit letter, OFCCP notified Greenwood that it had found that, during the 1985-1987 period, the Company had discriminated against women in its hiring into the Job Group 8A laborer position. [R.] D. & O. at 3-4. At the Adams plant, Greenwood had three entry-level Job Groups: 8A, 7B and 7A. R. D. & O. Award. Dam. at 2. Job Group 8A is comprised of laborer positions while the Group 7B and 7A jobs are operative positions. Id. During the 1985 through 1987 period, positions in Job Groups 7B and 7A required slightly more training than did those in Job Group 8A, and generally were paid higher than the 8A jobs as well. Id. During this same time period, Greenwood hired 30 men but only one woman into Job Group 8A. Id.

    After the Secretary's 1995 determination of liability and remand for calculation of damages, the ALJ ordered the parties to work out a discovery process which would provide the information needed to determine the names of the victims of discrimination as well as the appropriate remedies. Id. at n.4. After substantive discussions with the parties, however, the ALJ determined that a hearing was unnecessary and that the remedy could be decided based on the parties' stipulations, calculations of back pay, and briefs. Id.

    On November 5, 1999, the parties jointly filed 12 stipulations including nine tables of data (Tables A through I) (Stipulations and Stip. Exhs.). Id. at 3. The substance of the stipulations is as follows:

    1. For the purposes of calculating back pay, the appropriate starting date for accrual of back pay is January 1, 1986.

    2. The latest date on which back pay should continue to accrue is December 31, 1998. This stipulation does not affect accrual of interest, if any.

    6. Exhibit C lists persons to whom employment offers were made for 8A jobs at the Adams plant during the period July 1, 1985, through April 17, 1987. This exhibit also contains the date of each employment offer as well as the Greenwood employment history and tenure of each person through the end of 1998.

    7. Exhibit D lists, for 1986 through 1998, the gross earnings from Greenwood of those persons listed on Exhibit C.

    8. Exhibit E lists, for 1986 through 1998, the gross earnings from Greenwood of those persons listed on Exhibit B.

    9. Exhibit F lists, for 1986 through 1998, the earnings from all sources for 51 of the women shown on Exhibit A who agreed to provide earnings histories.

    10. Exhibit G lists, for 1986 through 1998, the jobs in Job Group 8A including the wage rates for each job.

   11. Exhibit H lists 31 of the persons from Exhibit A who had one or more periods of time out of the labor market during 1986 through 1998.

   12. Exhibit I lists the rate to be used for calculating interest owed on back pay. The rates are to be used to calculate the total interest due from the midpoint of a given year through November 2, 1999, on the back pay that accrued during that year.

   The ALJ adopted the stipulations and made them part of the case record. R. D. & O. Award Dam. at 3-4. On November 12, 1999, each party submitted its calculation of damages including an explanation of the methodology used in arriving at the back pay amount. The ALJ accepted aspects of each parties' calculation, and utilizing the stipulated data, performed his own calculation of the back pay owed to the class. Id. at 11-14. The parties have each taken exception to the ALJ's calculation methods and to the resulting damage award.

   Whether the ARB should adopt the ALJ's method for calculating damages and the amount of damages awarded to the class.

Statutory and Regulatory Framework

   Executive Order 11246 prohibits Federal contractors from discriminating against employees or applicants for employment on the basis of race, color, sex, religion or national origin, and requires such contractors to take affirmative action to provide equal employment opportunities. Executive Order 11246 at Section 202; 41 C.F.R. §§ 60-1.1 and 60-1.40. OFCCP monitors compliance with the Executive Order by conducting reviews of the contractor's facilities, and contractors agree to furnish OFCCP with all information required to enable the agency to determine whether the contractors have complied with the Order's mandates. 41 C.F.R. §§ 60-1.4(a)(5), 60-1.7, 60-1.12, 60-1.20, and 60-1.43. If OFCCP determines that a contractor has failed to meet its obligations under the Order, the agency will attempt to resolve the matter through conciliation and persuasion. 41 C.F.R. § 60-1.33. If conciliation efforts fail, OFCCP may initiate an administrative enforcement proceeding against the contractor. 41 C.F.R. § 60-1.26.

Legal Standard for the Award of Remedies

   The legal standards developed under Title VII of the Civil Rights Act of 1964 apply to cases brought under the Executive Order. See U. S. Department of Labor v. Honeywell, 77 OFCCP-03 (Sec'y June 2, 1993); OFCCP v. Cleveland Clinic Found., 91-OFCCP-20 (Sec'y July 17, 1996). After a finding of discrimination, a remedy is appropriate to restore the injured discriminatee, that is, "to make persons whole for injuries suffered on account of unlawful employment discrimination." Albemarle Paper Co. v. Moody, 422 U.S. 405, 418 (1975). Back pay is one element of the "make whole" relief which may be provided to a victim. 41 C.F.R. § 60-1.26 (a)(2).

   Rather than individual assessments of the loss of each victim, classwide procedures may be used in calculating back pay. See Segar v. Smith, 738 F. 2d 1249 (D.C. Cir. 1984); OFCCP v. Lawrence Aviation Industries, 87-OFC-11 (Sec'y June 15, 1994)(decision and remand order), aff'd, Order 87-OFC-11 (Sec'y Jan. 20, 1995), aff'd, Fin. Dec. (Sec'y Nov. 9, 1995), aff'd in part and remanded on other grounds sub nom Lawrence Aviation Industries v. Reich, 28 F. Supp. 2d 728 (E.D.N.Y. 1998), aff'd in part, vacated in part, and remanded to agency, 182 F.3d 900 (2d Cir. 1999) (unpublished table decision). In the present case, the parties stipulated to and the ALJ accepted the use of a formula to calculate the back pay owed to the class of victims. See n.3, supra; R. D. & O. Award. Dam. at 8-10.

   In fashioning a remedy for employment discrimination, "the court must, as nearly as possible, 'recreate the conditions and relationships that would have been had there been no' unlawful discrimination." International Bhd. of Teamsters v. United States, 431 U.S. 324, 372 (1977) (quoting Franks v. Bowman Transp. Co., 424 U.S. 747, 769 (1976)). Back pay remedies should serve the "make whole" purposes of Title VII without constituting a "windfall" for the victim of discrimination at the expense of the employer. Ingram v. Madison Square Garden Center, Inc., 709 F.2d 807, 812 (2d Cir. 1983).

   "The theory behind an award of back pay is simple; its application is not." R. D. & O. Award. Dam. at 8. The "process of recreating the past will necessarily involve a degree of approximation and imprecision." Teamsters, 431 U.S. at 372. The courts have provided three general rules to guide us in the determination of the appropriate back pay figure:

(1) [U]nrealistic exactitude is not required;

(2) [A]mbiguities in what an employee or group of employees would have earned but for discrimination should be resolved against the discriminating employer; and

(3) [T]he [trier of fact] . . . must be granted wide discretion in resolving ambiguities.

Stewart v. General Motors Corp., 542 F.2d 445, 452 (7th Cir. 1976) (citations omitted).

   While formula or classwide relief may generate a windfall for some employees who would have never been hired even if the jobs had been filled on a nondiscriminatory basis and may undercompensate the genuine victims of discrimination by forcing them to share the award with some undeserving recipients, it is the best that can be done under the circumstances. Id. "Any method [of calculating damages] is simply a process of conjectures." Pettway, 494 F.2d at 260-261. Given a choice between no compensation for those who have been illegally denied jobs and an approximate measure of damages, courts have chosen the latter. See Stewart, 542 F.2d at 452.

   In the present case, the ALJ reviewed the methods used by each party to determine the amount of back pay owed to the class of women discriminatees. R. D. & O. Award. Dam. at 5-7, 9-13. After determining that each of these methods was faulty in some respect, the ALJ performed his own calculation. Id. at 13-14.

   OFCCP has taken exception to the ALJ's calculation citing two cases as authority for its proposition that "[t]he creation of such an original statistical analysis is not within the court's power." OFCCP Except. at 13, citing Calloway v. Westinghouse Electric Corp., 642 F. Supp. 663 (M.D. Ga. 1986) (race discrimination found in initial job assignments and promotion), and Johnson v. United States, 780 F.2d 902 (11th Cir. 1986) (various challenges to evidentiary rulings made by trial court in medical malpractice case). OFCCP is in error.

   First, OFCCP's exception misstates what the ALJ did. He created no "original statistical analysis," rather he used various elements of the stipulated data to perform arithmetic calculations. In addition, the cases cited by OFCCP are inapposite as they fail to support the proposition that a judge is precluded from making arithmetic calculations using stipulated data in the record.

   In Calloway, the first of the cases cited by OFCCP, the trial court discoursed on its role with regard to expert witness testimony. Specifically the court noted that it decides cases based on the material in the record, evaluates the conflicting statistical evidence presented by the parties, and is prohibited from doing independent statistical analyses itself. Calloway, 642 F. Supp. at 690; OFCCP Except. at 13. To emphasize this last point, the court speculated that, if it were sitting on a medical malpractice case, it would not be permitted personally "to examine the plaintiff and then diagnose his medical condition" because the court is neither qualified nor empowered to do so. Calloway, 642 F. Supp. at 690.

   In Johnson, also cited by OFCCP, the appeals court indicated that the trial judge, in order to familiarize himself with the subject matter and to put technical testimony into context, consulted medical journals not in evidence prior to hearing the expert witnesses. Johnson, 780 F.2d at 910. The 11th Circuit held that the "outside research" was not sufficient to require a new trial because, inter alia, the trial judge stated that he did not rely on those outside sources in reaching his conclusion. Id.

   In the instant case, the ALJ did not engage in "outside research" nor was there anything "original" or "statistical" about his arithmetic calculations. The ALJ's method for determining back pay was appropriate and reasonable, and OFCCP's objection to his making the calculation is denied.

Shortfall

The parties stipulated that the shortfall of women was 10.4. Stip. 3. The shortfall represents the number of women one would have expected Greenwood, absent discrimination, to have hired into the Group 8A job during the 1985-87 time period. See Lawrence Aviation, 28 F. Supp. 2d at 740. The parties arrived at the figure by subtracting the actual number of women hired by Greenwood as Group 8A workers during the relevant time period from the number of women who should have been hired in that period if women had been hired in proportion to their representation in the applicant pool. See Hameed v. International Assoc. of Bridge, Structural and Ornamental Iron Workers, 637 F.2d 506, 519 (8th Cir. 1980). A shortfall of 10.4 means that during the 1985-87 time period, absent discrimination, Greenwood would have hired 11 women rather than only one. The ALJ accepted the 10.4 shortfall as stipulated and also used it as the basis for his back pay calculation.

Attrition

Id. at 8; R. D. & O. Award. Dam. at 10.

   The ALJ rejected the use of the Lawrence Aviation presumption based on the case's subsequent history. R. D. & O. Award. Dam. at 11-12. The Second Circuit ruled that the agency's back pay figure was "flawed" because it was based on the presumption that all female class members would work until involuntarily terminated. Lawrence Aviation, 182 F.3d 900. Specifically, the appeals court objected to the agency's failure to account for the record evidence that certain female class members were unavailable for work during the relevant time period. Lawrence Aviation, 182 F.3d 900.

The 8A Proxies

   Calculating back pay required the ALJ to determine what the earnings of the class of women would have been if they had been hired by Greenwood. Each of the parties assumed that the earnings of the 31 8A hires during the 1985-87 period would be a good approximation of what the women would have earned if hired into the same jobs during the same time period. R. D. & O. Award. Dam. at 9. The ALJ also used the earnings of the 8A hires as a proxy for what the women would have earned. Id. at 13. We agree that using the 8A hires as proxies for the women is a reasonable method for calculating back pay.

   To arrive at the average annual earnings for the 8A hires, the ALJ began by tallying the wages of those 8A hires who worked for Greenwood for a full year. Id. The wages of those who worked a full year were averaged by totaling the earnings of those workers in that year and then dividing the total by the number of workers whose earnings were included. This produced the average annual 8A earnings for that year. Id.

   To account for attrition, the ALJ calculated the earnings of the 8A hires only for the first 3.74 years of the liability period, namely, 1986 through 1989. (See discussion of attrition, supra). Id. Thus, the ALJ determined that in 1987, the average earnings, based on the seven workers who worked all of 1987, were $11,273.20; in 1988, the average earnings, based on the eight full-year workers, was $12,857.71; and in 1989, the average earnings figure, based on seven workers, was $13,458.37. Id. at 12-14. Since the ALJ had already determined that any class member would have only worked at Greenwood for an average of 3.74 years, the 1989 average annual earnings figure was multiplied by .74 to yield an adjusted 1989 average earnings of $9,959.19. Id.

   The ALJ also adjusted the 1986 earnings figure. Id. at 13. There was only one full-year 8A worker in 1986 and his earnings for that year amounted to $4,279.13. The ALJ noted that this figure was lower than the earnings of other 8A workers who had worked less than a full year in 1986. Id. Because the ALJ did not consider the earnings of the one full-year worker to be an accurate representation of the 8A wages for 1986, he varied his calculation process and developed a new average earnings figure for 1986. Id. The ALJ added the $4,279.13 figure to the earnings of each worker who made $4,379.13 or more in 1986, regardless of whether he worked a full year or not, and then calculated the average. The average earnings figure for 1986 using this method was $5,603.82. Id.

Id. at 13; OFCCP's Nov. 12, 1999, Explanation of Back Pay at Exhs. 1 and 2.

Interim Earnings

   Interim earnings are the amounts earned from employment that is a substitution for the employment the victim would have had with Greenwood. OFCCP Federal Contract Compliance Manual, § 7F07(c)(1) (1998). To accurately determine how much money the class members lost because of discrimination, a determination of their interim earnings was necessary. Of the 208 members of the class, the parties received interim earnings information on only 51 women. Stip. Exhs. A and F.

   To complete his calculation, the ALJ determined the average interim earnings of the class members for the years 1986 through 1989 by totaling the earnings reported by the 51 women and then dividing that total by 51. R. D. & O. Award. Dam. at 13-14. To arrive at a back pay figure for each year, the ALJ subtracted the average interim earnings of the class members from the average annual earnings of the 8A proxies as follows:

   The ALJ then properly accounted for the shortfall by multiplying each year's back pay figure by 10.4, the stipulated number of women who, but for discrimination, would have been hired by Greenwood in the 1985-1987 period. Id. at 14. Thus, the complete back pay figures when shortfall is accounted for are:

Interest

   Interest is paid on back pay awards to compensate the discriminatee for the loss of the use of her money. OFCCP Compliance Manual, §7F07(e) (1998). The parties stipulated to the interest rates to be applied to the back pay figures with the rate for each year reflecting the total interest due from the midpoint of that year through November 2, 1999. Stip. Exh. I.

   The ALJ awarded interest on the back pay from 1986 through 1998. R. D. & O. Award. Dam. at 14. Using the parties' stipulated interest rates, the ALJ computed the interest owed for each of the 3.74 years in which back pay accrued by multiplying the back pay figure for each year by the interest rate stipulated by the parties. Id.; Stip. Exh. I. After determining the interest due, the ALJ added the interest to the back pay for each year. R. D. & O. Award. Dam. at 14. The ALJ's yearly totals for back pay plus interest are:

   For the foregoing reasons, we affirm the ALJ's determination of back pay plus interest to be awarded to the members of the affected class. In addition, we find that prejudgment interest should be paid on the back pay figure through the date of this final order.

   Greenwood is ORDERED to pay back pay plus interest in the amount of $376,603.46 in equal amounts to the class of women listed in Stipulated Exhibit A. It is also ORDERED that Greenwood pay an amount of additional interest on the back pay for the period from 1998 to the date of this final order. This additional interest payment should be made in accordance with the Executive Order implementing regulations regarding such payments set out in 41 C.F.R. § 60-1.26(a)(2).

   It is further ORDERED that Greenwood has 120 days in which to comply with this Order. Should Greenwood fail to comply within 120 days of this order, it is ORDERED that the present government contracts and subcontracts of Greenwood and its subsidiaries, successors and assigns be canceled, terminated, or suspended, and that Greenwood and its subsidiaries, successors and assigns be declared ineligible for further contracts and subcontracts, and for extension or modification of any existing contracts and subcontracts, until such time that it can satisfy the Secretary of Labor or her designee the Deputy Assistant Secretary for the Office of Federal Contract Compliance Programs that it is in compliance with the provisions of Executive Order 11246 and the regulations issued pursuant thereto.

SO ORDERED.

      WAYNE C. BEYER
      Administrative Appeals Judge

      M. CYNTHIA DOUGLASS
      Chief Administrative Appeals Judge

      OLIVER M. TRANSUE
      Administrative Appeals Judge