author: Mr. Justice Brennan

text:
    SEATRAIN SHIPBUILDING CORP. et al. v. SHELL OIL CO. et al.
    No. 78-1651.
    Argued November 28, 1979
    Decided February 20, 1980

      BrenNan, J., delivered the opinion for a unanimous Court.

      William E. McDaniels argued the cause for petitioners. With him on the briefs were John W. Vdrdaman, Jr., Neal M. Mayer, and Jonathan Blank.

      Andrew J. Levander argued the cause pro hoc vice for the federal parties as respondents under this Court's Rule 21 (4) in support of petitioners. With him on the briefs were Solicitor General McCree, Acting Assistant Attorney General Daniel, Ronald R. Glancz, Michael Kimmel, and Michael J. McMorrow.

      Amy Loeserman Klein and Stephen N. Shulman argued the cause for respondents. With Ms. Klein on the brief for respondents Alaska Bulk Carriers, Inc., et al. were William Karas, Francis Ballard, and Alan G. Choate. With Mr. Shul-man on the brief for respondent Shell Oil Co. were Joseph A. Artabane and Mark C. Ellenberg.

   Mr. Justice Brennan

delivered the opinion of the Court.

In 1972, petitioner Seatrain Shipbuilding Corp. (Seatrain) received a construction-differential subsidy (CDS) of $27.2 million pursuant to Title V of the Merchant Marine Act, 1936, 49 Stat. 1995, as amended, 46 U. S. C. § 1151 et seq., to construct the 225,000-deadweight-ton supertanker Stuyvesant. As required by § 506 of the Act, 46 U. S. C. § 1156, Seatrain and its affiliate, petitioner Polk Tanker Corp., the initial owner of the Stuyvesant, agreed to operate the supertanker exclusively in the foreign trade except as otherwise authorized in that section. By the time the vessel was completed in 1977, however, petitioners wanted to operate it in the domestic trade. Accordingly, they asked the Secretary of Commerce permanently to lift all restrictions on the Stuyvesant’s operation in domestic commerce in exchange for their fully secured, 20-year interest-bearing note repaying in full the vessel’s CDS. The Secretary granted the application, accepted the promissory note, and deleted the applicable restrictions from the CDS contract. The primary question for decision is whether the Secretary of Commerce may terminate the restrictions imposed pursuant to § 506 when the owners of a vessel constructed with a CDS repay that subsidy in full. The District Court for the District of Columbia concluded that the Secretary had such authority, Shell Oil Co. v. Kreps, 445 F. Supp. 1128 (1977). The Court of Appeals for the District of Columbia Circuit disagreed and reversed. Alaska Bulk Carriers, Inc. v. Kreps, 194 U. S. App. D. C. 7, 595 F. 2d 814 (1979). We granted certiorari. 442 U. S. 940 (1979). We reverse.

I

The costs of constructing ships in American shipyards and manning them with American crews are higher than comparable costs in foreign ports. Accordingly, Congress has taken a number of steps to protect and support the United States’ shipping and shipbuilding industries. The Jones Act, 46 U. S. C. § 883, has, since 1920, reserved the United States domestic trade exclusively for vessels built in this country and owned by its citizens. The Merchant Marine Act, 1936, 46 U. S. C. § 1101 et seq., established a number of programs to help American vessels compete effectively in foreign trade with vessels constructed and staffed abroad. Specifically, Title V of that Act, 46 U. S. C. § 1151 et seq., authorizes the Secretary of Commerce to grant a CDS for up to 50% of the cost of constructing a ship in this country. The owners of vessels built with these subsidies are required by § 506, 46 U. S. C. § 1156, to agree that they will operate only in foreign trade unless they come within one of two explicit statutory exceptions. Neither exception may be invoked unless the owner remits to the Government an appropriate pro rata portion of the outstanding subsidy.

In 1969, petitioner Seatrain began constructing a series of supertankers at the former Brooklyn Navy Yard. The venture received substantial amounts of federal aid. By its completion, the Economic Development Administration (EDA) of the Department of Commerce had advanced $5 million as a direct loan and had guaranteed 90% of $82 million in loans from other sources to help finance modernization and operation of the Navy Yard facilities and a major on-the-job training program. Moreover, the Department granted a CDS for each of the four supertankers built by Seatrain, in addition to guaranteeing various construction loans.

The Stuyvesant was the third of the Seatrain tankers. In the mid-1970's, while it was under construction, demand for such vessels began to decline in the wake of the Arab oil embargo, increasing crude oil prices and the economic problems that ensued. By 1977, when the vessel was completed, there was a significant oversupply of tankers on the world market and no opportunity in foreign trade for the fledgling Stuyvesant. Foreseeing this problem, the owners had begun to explore prospects for employing the vessel in the transportation of Alaskan crude from Valdez around Cape Horn to the Eastern United States and the Caribbean. This relatively new trade required sizeable tankers, and since the Jones Act restricted it to American-flag vessels the demand remained high despite the abundance of otherwise suitable foreign vessels.

In mid-1977, petitioner Polk Tanker Corp. executed an agreement with Standard Oil of Ohio (SOHIO) for a 3-year charter of the Stuyvesant for use in the Alaskan trade. The agreement was conditioned upon Polk’s obtaining from the Secretary of Commerce a release from the foreign-trade-only restriction imposed pursuant to § 506. This was obtained at the end of August in the form of letters to Polk and Queensway Tankers, Inc., the proposed operator of the vessel. Those letters recited the findings upon which the agency based its decision. These were: (1) that there were no other opportunities for employment of the Stuyvesant, (2) that the SOHIO charter would strengthen the collateral securing obligations the Government had guaranteed, (3) that the charter might prevent default on those obligations, and (4) that failure to approve the proposal would jeopardize the continued operation of Seatrain.

The complex closing of several transactions necessary to finance repayment of the CDS, refinance various other obligations, and transfer the Stuyvesant to new owners and operators was scheduled for September 23, 1977. On September 22, respondents, three competitors in the Alaskan trade, brought suit in the District Court for the District of Columbia against various Department of Commerce officials. The complaints sought declaratory and injunctive relief prohibiting the Secretary from granting a permanent release from the § 506 foreign-trade-only requirement. They argued (1) that the Secretary lacked authority to grant such a release and (2) that, even if the Secretary had authority to do so in certain cases, that authority should not have been exercised with regard to the Stuyvesant. In addition, they alleged violations of various procedural requirements of the Administrative Procedure Act and asserted that the Secretary was without power to accept a promissory note as repayment for the CDS. Petitioners Seatrain and Polk were permitted to intervene as defendants.

On November 22, 1977, ruling on the parties’ cross-motions for summary judgment, the District Court held (1) that the Secretary had the authority to release vessels from trade restrictions imposed pursuant to § 506 in exchange for full CDS repayment and could accept a promissory note, (2) that releasing the Stuyvesant from such restrictions without analyzing the economic effect of that vessel’s entry into the Alaskan trade was an abuse of discretion, and (3) that there existed material issues of fact which made summary judgment on portions of the Administrative Procedure Act claim improper. The court remanded the case to the Secretary for consideration of the competitive consequences of the Stuyvesant decision. Eight days later, on the motion of the respondents, the court amended its decision by dismissing the Administrative Procedure Act claim and — relying on Rule 54 (b) of the Federal Rules of Civil Procedure — certifying its decision as a “final judgment.”

Respondents appealed from this certified final judgment, and a divided panel of the Court of Appeals reversed, concluding that by specifying two exceptions to the foreign-trade-only requirement § 506 occupied the field and impliedly prohibited the Secretary from making any other exceptions under the Act’s more general provisions. 194 U. S. App. D. C., at 15-22, 595 F. 2d, at 822-829. Judge Bazelon dissented, id., at 33, 595 F. 2d, at 840, stating that he would hold that § 506 did not limit the Secretary’s power in this regard. He observed that after full repayment of the CDS and appropriate interest the Stuyvesant would be on precisely the same footing as other vessels in the unsubsidized domestic fleet.

II

We are met at the outset with the contention that we lack jurisdiction to hear this case. Raised for the first time in a footnote to the federal parties’ petition for rehearing in the Court of Appeals, the argument is that the District Court’s November 30 judgment and order was not a “final decision” for purposes of 28 U. S. C. § 1291 because it remanded the case to the Secretary for consideration of the economic consequences of permitting the Stuyvesant to enter the Alaskan oil trade. Respondents, the federal parties assert, sought but one form of relief — an order barring the Stuyvesant from competing with their own vessels. They advanced two legal theories to support that prayer, one general — that the Secretary has no power to grant a permanent release from restrictions imposed pursuant to § 506 — and the other particular — that even if the Secretary has the power to do so in some circumstances, the exercise of that power with regard to the Stuyvesant was an abuse of discretion. On remand, the federal parties continue, the Secretary might have concluded that the termination of § 506 restrictions was unwise. Alternatively, the Secretary might have decided to adhere to the original administrative decision and then been reversed by the courts. In either case, the federal parties argue, respondents would have obtained all the relief they sought. Accordingly, the District Court’s November 30 order did not “ 'en[d] the litigation on the merits and leav[e] nothing for the court to do but execute the judgment,’ ” Coopers & Lybrand v. Livesay, 437 U. S. 463, 467 (1978), quoting from Catlin v. United States, 324 U. S. 229, 233 (1945), and thus was not a “final decision.” As a result, the argument concludes, the November 30, 1977, order was not appealable to the Court of Appeals and this Court is therefore without jurisdiction to hear the case.

The difficulty with the federal parties’ argument is that it misapprehends the nature of at least one of the complaints which commenced this litigation — that of Alaska Bulk Carriers, Inc., and Trinidad Corp. Fairly read, that complaint seeks not only relief from competition from the Stuyvesant, but also a general declaration that the Secretary of Commerce is without power to permit any vessel constructed with the assistance of a CDS to enter the domestic trade under any circumstances save those narrow exceptions specifically mentioned in the statute itself. In this regard, the complaint alleged that the Secretary would in the future grant a Stuyvesant-like waiver to that vessel’s sister ship, the Bay Ridge, It stated that the owners of unsubsidized vessels would be harmed by competition from the Stuyvesant “and from other CDS-built vessels with respect to which . . . the agency may likewise lift operating restrictions if this action is permitted to stand.” And its prayer for relief sought (1) declaratory and injunctive relief relating to the Stuyvesant itself, (2) a declaration that the Secretary lacks authority permanently to waive § 506 restrictions under any circumstances, (3) an injunction barring the Secretary from amending CDS contracts or taking any other action to lift § 506 restrictions, and (4) such other relief as the court deemed necessary. There were, in short, two claims made and two quite different sorts of relief sought.

In their reply brief, the federal parties attempt to answer the contention that respondents made two separate claims for relief by asserting that as to one of them — the request for a determination that the Secretary lacked power to grant a permanent release — the case-or-controversy requirement of Art. Ill of the Constitution has not been satisfied. Terming the question “abstract” and “hypothetical,” the federal parties maintain that this claim was in effect a request for an advisory opinion, that it could not stand alone. We disagree. In our judgment, respondents’ claim that the Merchant Marine Act does not permit the Secretary to grant a permanent release from § 506 restrictions satisfies the case-or-controversy requirement quite apart from the fate of the particular decision with respect to the Stuyvesant. First, there is at least one other vessel on the horizon as to which a similar waiver may well be sought and granted — the Bay Ridge. Built in the same yard for the same purpose, faced with a similar plight, and likely to have a similar effect on the Alaskan market if the same solution to that plight is sought, the Bay Ridge is a prime candidate for release from § 506 restrictions, and the prospect of its release is sufficient to create a live controversy. In this respect, the present case is very different from Golden v. Zwickler, 394 U. S. 103, 106-107, 109-110 (1969), on which the federal parties rely. Second, the Secretary’s decision to grant a full release for the Stuyvesant is clear evidence of administrative willingness to grant such releases in appropriate cases if they are in fact lawful. Accordingly, there is nothing speculative about the assertion that, unless restrained or at least given the benefit of an authoritative ruling of law by this Court, the agency will grant such waivers in the future. Compare Steffel v. Thompson, 415 U. S. 452, 459 (1974), and id., at 476 (concurring opinion), with O’Shea v. Littleton, 414 U. S. 488, 493-498 (1974). And third, the Stuyvesant itself contributes to the concrete controversy between respondents and the agency. As a practical matter, whether that vessel operates in the Alaskan trade is likely to depend almost entirely on the outcome of this litigation. And even were it determined on review of the remand decision that under the circumstances existing at the time a waiver was improper, both the Stuyvesant and the Bay Ridge would remain in the wings as likely prospects for future waivers if circumstances were to change. Accordingly, we conclude that the respondents’ claim for relief respecting the general powers of the Secretary meets the case-or-controversy requirement of Art. III.

Having determined that there were two separate claims, each within the jurisdiction of the courts below, we need only note that the appeal from the District Court decision comported fully with Rule 54 (b) of the Federal Rules of Civil Procedure. That Rule states in relevant part that “[w]hen more than one claim for relief is presented in an action . . . the court may direct the entry of a final judgment as to one or more but fewer than all of the claims . . . only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.” In the present case, more than one claim for relief was presented and the District Court found there was no reason for delay prior to directing the entry of final judgment as to one of the claims. As a result, the determination that the Secretary was empowered to waive permanently the restrictions required by § 506 was a final decision certifiable under Rule 54 (b) and appealable under 28 U. S. C. § 1291.

Ill

Prior to 1936, Congress assisted the American maritime industry in two ways: (1) it provided substantial low-interest loans to aid the construction of vessels destined for foreign trade, and (2) it appropriated large amounts of money for oceangoing mail contracts — amounts considerably in excess of actual cost and clearly intended as a subsidy for American shipping. Neither effort was very successful. Loan repayment was difficult to secure, few ships were constructed, and the hidden mail subsidy proved unwieldy in addition to being somewhat disingenuous.

In 1935, President Roosevelt proposed that Congress end the subterfuge and adopt a forthright and sensibly tailored program, to subsidize and stimulate American shipping and shipbuilding. The result was the Merchant Marine Act, 1936. Its basic goals were set forth in § 101, 46 U. S. C. § 1101. There Congress declared it to be the policy of the United States “to foster the development and encourage the maintenance” of a large and effective merchant marine capable of meeting the Nation’s future commercial and military needs. The fleet was to be modern and efficient. And Congress intended that it be supported by substantial shipbuilding and repair facilities.

The Secretary of Commerce was given broad authority to oversee administration of the Act. Thus, he was called upon to undertake a survey of the merchant marine, to note its needs, and to adopt a long-range program for meeting those needs. § 210, 46 U. S. C. § 1120. He was directed to investigate and keep current records of essential routes and lines to foreign ports, bulk-cargo carrying service requirements, needs for various types of vessels in various routes, construction and operating costs here and abroad, shipyard conditions, and new designs and technologies. § 211, 46 U. S. C. § 1121. He was authorized to devise means of encouraging use of American-flag vessels and improving those vessels in collaboration with vessel owners and shipbuilders. § 212, 46 U. S. C. § 1122. And he was empowered to “enter into such contracts, upon behalf of the United States,... as may, in . . . his discretion, be necessary to carry on the activities authorized by this chapter, or to protect, preserve, or improve the collateral held by the [Federal Maritime] Commission or Secretary to secure indebtedness, in the same manner that a private corporation may contract within the scope of the authority conferred by its charter.” § 207, as set forth in 46 U. S. C. § 1117.

Central to the legislative scheme was the creation of an arsenal of grant and loan programs for use in the Secretary’s efforts to stimulate domestic construction and make operation by domestic crews competitive. Included were an operating subsidy program, Title VI, 46 U. S. C. § 1171 et seq.; a program pursuant to which the Secretary could directly acquire new or reconditioned vessels and charter or sell them, Title VII, 46 U. S. C. § 1191 et seq.; a loan guarantee program, Title XI, 46 U. S. C. § 1271 et seq.; and the CDS program that lies at the core of the present litigation, Title V, 46 U. S. C. § 1151 et seq. Again, the Secretary’s discretion in administering these programs was substantial.

It was recognized from the outset that substantial limits would have to be placed upon the entry of subsidized vessels into the domestic trade. Any other result would have been disastrous for the unsubsidized Jones Act fleet for which that trade was (and is) reserved. Burdened by higher construction costs, greater outstanding debt, and higher operating expenses, that fleet would simply have been unable to compete with new vessels enjoying the benefits of the 1936 Act.

The congressional response to this problem as it relates to the CDS program was § 506. Basically, that section confines subsidized vessels to the foreign trade. Congress recognized, however, that an entirely rigid prohibition on entry into domestic commerce might be impractical — incidental domestic operation on one segment of a voyage in foreign trade might well be efficient, and other circumstances might also arise in which some flexibility would be desirable. Accordingly, Congress permitted subsidized vessels to carry domestic cargoes on one leg of certain foreign voyages and provided in addition that the Secretary could authorize such vessels actually to enter the domestic trade for six months or less in any year upon finding that such entry would be “necessary or appropriate to carry out the purposes of this chapter.” In an effort to ensure that subsidized vessels operating in domestic trade pursuant to these exceptions would compete on an equal footing with unsubsidized vessels similarly employed, Congress required the repayment of that portion of the outstanding subsidy allocable to the vessel's domestic activities.

The Court of Appeals was of the view that the specific exceptions in § 506 marked the limit of the Secretary’s authority to approve entry of subsidized vessels into the domestic trade. By its logic, detail, and legislative history, the panel majority reasoned, that section prohibits transactions like the one before us. In consequence, that court found the broad sweep of the Secretary’s power under the balance of the Act irrelevant, the express language giving the Secretary authority to make and amend contracts unimportant, and the policy arguments advanced by the Secretary unpersuasive.

We disagree. On the face of the statute, the Secretary’s broad contracting powers and discretion to administer the Act seem to comprehend the authority urged by petitioners here. Indeed, as the Secretary found in the present case, a permanent release from the foreign-trade-only requirement may quite directly further the general goals of the Act by protecting the Government’s position as guarantor of substantial financial obligations and improving the chances that a domestic shipyard will survive. Further, we are hard pressed to find anything in § 506 that suggests that the Secretary is forbidden to approve transactions of this sort under these circumstances. Certainly nothing in the language of that section so manacles the Secretary as to require the result reached below. Rather, § 506 simply mandates that vessels enjoying the benefits of a subsidy may move in and out of domestic commerce only under narrowly circumscribed conditions. It speaks to temporary releases from the foreign-trade-only requirement, and only to such releases. Moreover, for Congress to draft a section directed to the particular problems posed by temporary entry into the domestic trade was entirely logical since such releases pose problems not present in permanent releases of the sort at issue here. Specifically, a vessel with an outstanding CDS that was completely free to enter and depart the domestic trade would be in an extraordinarily favorable competitive situation even if it was required to repay a proportionate amount of its subsidy whenever it did so. Absent some restriction on its ability to move from one market to the other, it would be a formidable force in both, capable of taking advantage of every shift in trade and profitability, skimming the cream and leaving what remains to those less mobile. It could, in a very real sense, have the best of both worlds.

Section 506 responds to this problem by permitting a vessel that enjoys the benefits of a CDS to operate outside the foreign market only in narrow circumstances, generally upon a highly discretionary administrative decision, and for no more than six months a year. And we have no doubt that it would be flatly inconsistent with the congressional intent were the Secretary or this Court to conclude that a temporary release not meeting these conditions was proper. But a permanent release upon full repayment is quite different. It irrevocably locates the vessel in the unsubsidized fleet and thus poses no danger of a supercompetitor skimming the cream from each market. It creates no long-term instability. And it confers no windfall. On the contrary, at least where repayment of the CDS includes some amount reflecting capital costs which would have been incurred had no subsidy been available, such a transaction merely permits a once subsidized vessel to enter the domestic trade on a footing equal to that of vessels already in that trade. It was not the purpose of the Act to prohibit such entry, and we accordingly agree with the District Court that “nothing in section 506, [or] in any other provision of Title V, . . . either expressly or implicitly addresses the issue of permanent revocation of a CDS contract.” 445 F. Supp., at 1135 (emphasis in original).

We turn now to the Court of Appeals’ arguments concerning the legislative history of § 506. The panel majority was of the view that that history demonstrates that Congress addressed the problem before us and affirmatively decided not to permit the Secretary to approve transactions like the one at issue. We disagree. At most, we find the legislative history ambiguous, even puzzling. We do not find that it demonstrates that Congress has decided the present question.

We begin with the version of § 506 originally enacted as part of the 1936 Act. The first sentence of that version stated that it would be unlawful to operate any subsidized vessel other than exclusively in foreign trade or on incidental domestic portions of voyages in foreign trade, but provided that the Maritime Commission had authority to consent to operation that would otherwise be unlawful so long as the owner agreed to repay “an amount which bears the same proportion to the construction subsidy theretofore paid ... as the remaining economic life of the vessel bears to its entire economic life.” The second sentence provided that in cases of “emergency” the Commission could permit transfer of a subsidized vessel to “service other than exclusive operation in foreign trade” provided that no operating subsidy were paid during the emergency period and that period was limited to three months. And the third sentence specified that owners of a vessel operated on incidental domestic portions of voyages in foreign trade would have to make a proportionate subsidy repayment. It seems abundantly clear that this section provided for three different exceptions to the foreign-trade-only requirement: (1) subsidized vessels could also carry out incidental tasks in domestic trade (sentence one) — in which case consent of the Commission would not be required, but pro rata subsidy repayment would have to be made (sentence three), (2) such vessels could operate permanently in domestic trade upon the consent of the Commission and repayment of the unamortized portion of the subsidy (sentence one), and (3) such vessels could, upon a Commission finding of emergency, enter domestic trade for up to three months without subsidy repayment (sentence two).

In 1938, § 506 was rewritten into substantially its present form. The objective consequences of that rewriting were, first, that all the language suggesting that a permanent release from trade restrictions upon full subsidy repayment would be appropriate was deleted and, second, that the provision authorizing a 3-month “emergency” release with no subsidy repayment was altered by eliminating the emergency requirement, changing the 3-month limit to 6 months and requiring proportionate subsidy repayment. In substance, the balance of the provision was left unchanged.

Respondents and the Court of Appeals contend that this rewriting embodied a considered congressional judgment that permanent release upon full repayment should not be permitted. They rely to a considerable extent upon the comments of Joseph P. Kennedy, Chairman of the Maritime Commission. During hearings on the measure he stated as follows:

“Section 506 has been entirely rewritten to remove ambiguities and confusion. The section now provides that the owner can only engage in foreign trade exclusively with certain enumerated excepted services, for which services the owner is required to repay part of the construction-differential subsidy. There are also provisions which appear to give owners the right to engage in services other than the excepted ones, if the Commission consents to such use and the owner repays part of the construction-differential subsidy. Whether this right is restricted to the cases of emergency and to periods of 3 months as mentioned in the section, it is difficult to determine.”

The ambiguity referred to by Mr. Kennedy, the Court of Appeals concluded, was that hinted at in the final sentence of the quoted remarks — whether the “right to engage in services other than excepted ones” upon subsidy repayment was restricted to 3-month emergencies. And that ambiguity was resolved, the argument goes, by the decision to delete all language authorizing a permanent release and to rewrite the temporary release provision so that the “right” referred to by Mr. Kennedy could only be exercised for six months in any year. Accordingly, we are told, the intention of Congress to bar the transaction at issue here was “unmistakably manifested.” 194 U. S. App. D. C., at 22, 595 F. 2d, at 829.

We find the contention that anything was unmistakable in these snippets of legislative history exceedingly curious. In the first place, it seems scarcely possible that Congress actually thought the original version ambiguous in the regard apparently referred to by Mr. Kennedy. As we have already noted, no reading of that provision other than one permitting permanent waiver is possible given the mechanism set forth for calculation of the amount of subsidy repayment due. Moreover, there is in fact no indication that Congress intended to make the major alterations claimed. Indeed, the House Report states that “[n]o fundamental change in the original purpose of the section has been effected,” and the Senate Report, while to some extent tracking Mr. Kennedy’s comments, seems to identify the major change effected by the amendments as the addition of language making it “perfectly clear that unless the owner operates exclusively in foreign trade, he must repay a portion of the construction-differential subsidy for any service in which the vessel is engaged which includes domestic ports. . . .” There is no language suggesting that Congress intended to rule out permanent releases of the type at issue here.

We do not go so far as to assert with confidence that the deletion of the authorization contained in the second half of the first sentence of the 1936 version was inadvertent. Rather we are simply unsure of the precise significance of that deletion. What does seem clear is that it did not represent a considered congressional judgment that the permanent-release/ full-repayment transaction before us should be prohibited.

IV

Our conclusion that Congress did not forbid the transactions here at issue is buttressed by two additional factors. First, the agency has consistently interpreted the Act to permit full-repayment/permanent-release arrangements. Thus, in 1964 two vessels owned by Grace Line were permitted to repay the unamortized portion of subsidies in exchange for the removal of restrictions on their entry into domestic trade. And in late 1976 and early 1977 two conditional requests for permanent release were granted to the owners of vessels employed in the Virgin Islands trade. The owners were concerned with the prospect that that trade might in the future be classified as domestic and were informed that they could obtain waivers if that eventuality were to occur. While the agency’s rationale has not always been entirely persuasive, it has not wavered from its general understanding of its powers and the extent to which their exercise is consistent with the goals of the Act.

More importantly, in 1971 and 1972 Congress seems clearly to have contemplated transactions of the sort challenged here. In 1972, a new § 1104 (a) (3), 86 Stat. 911, 46 U. S. C. § 1274 (a)(3), was added to the Act. As originally proposed, the section provided that the agency could aid in financing repayment of “any amount of construction-differential subsidy paid with respect to a vessel pursuant to Title V of this Act ... in order to release such vessel from all restrictions imposed as a result of the payment of [that] subsidy. . .

As enacted, the section did not include the language relating to release from all restrictions. The House Committee explained the deletion as follows:

“In the entire history of the administration of the 1936 Act there has been only one instance where a construction-differential subsidy repayment, authorized by the Secretary under very special circumstances, could have called into play the provisions of this paragraph. Your Committee questions the desirability of general legislation to deal with such an unusual situation, and feels that Title XI assistance should be extended to all instances of subsidy repayments under Title V, so as to include the relatively frequent situation of repayments under the first sentence of section 506 of the Act. Your Committee has therefore amended the legislation by deleting the language [relating to release from all restrictions]. This paragraph in Title XI does not in any way extend or affect the application of Title Y of the Act.”

The understanding of the 92d Congress seems clear. And while the views of subsequent Congresses cannot override the unmistakable intent of the enacting one, Teamsters v. United States, 431 U. S. 324, 354, n. 39 (1977), such views are entitled to significant weight, NLRB v. Bell Aerospace Co., 416 U. S. 267, 275 (1974), and particularly so when the precise intent of the enacting Congress is obscure.

V

In conclusion, we hold that the Act empowers the Secretary to approve full-repayment/permanent-release transactions of the type at issue here. We express no view upon respondents’ claim that if such authority exists under the Act full repayment may not be made by promissory note. This issue was not addressed by the Court of Appeals and is open for its consideration on remand. Further, we express no view upon the merits of the Secretary’s particular exercise of discretion with regard to the Stuyvesant since that issue is not before us.

Reversed and remanded.

       Some form of prohibition on use of foreign vessels in domestic trade predates the Jones Act by more than a century. See, e. g., Act of Mar. 1, 1817, 3 Stat. 351. See generally G. Gilmore & C. Black, The Law of Admiralty 963, and nn. 34 and 35 (2d ed. 1975).

       Section 506 of the Act, 49 Stat. 1999, as amended, 46 U. S. C. § 1156, provides as follows:
      "Every owner of a vessel for which a construction-differential subsidy has been paid shall agree that the vessel shall be operated exclusively in foreign trade, or on a round-the-world voyage, or on a round voyage from the west coast of the United States to a European port or ports which includes intercoastal ports of the United States, or a round voyage from the Atlantic coast of the United States to the Orient which includes inter-coastal ports of the United States, or on a voyage in foreign trade on which the vessel may stop at the State of Hawaii, or an island possession or island territory of the United States, and that if the vessel is operated in the domestic trade on any of the above-enumerated services, he will pay annually to the Secretary of Commerce that proportion of one-twenty-fifth of the construction-differential subsidy paid for such vessel as the gross revenue derived from the domestic trade bears to the gross revenue derived from the entire voyages completed during the preceding year. The Secretary may consent in writing to the temporary transfer of such vessel to service other than the service covered by such agreement for periods not exceeding six months in any year, whenever the Secretary may determine that such transfer is necessary or appropriate to carry out the purposes of this chapter. Such consent shall be conditioned upon the agreement by the owner to pay to the Secretary, upon such terms and conditions as he may prescribe, an amount which bears the same proportion to the construction-differential subsidy paid by the Secretary as such temporary period bears to the entire economic life of the vessel. No operating-differential subsidy shall be paid for the operation of such vessel for such temporary period.”

       Seatrain also invested some $38 million of its own funds in the project.

       The first two tankers, the Brooklyn and the Williamsburg, initially-found employment in the foreign trade and subsequently were placed in layup. App. 112. The decision in this case may have some bearing on the fate of the fourth, the Bay Ridge. See infra, at 580-582.

         In addition to'the $27.2 million CDS, loans of $30.2 million were guaranteed under Title XI of the Act, 46 U. S. C. § 1271 et seq., for construction of the Stuyvesant. Similar financial support was made available for the Bay Ridge, which received a CDS of $28.8 million and Title XI loan guarantees of $34.5 million.

       This drop in tanker demand had caused Seatrain to halt construction of both the Stuyvesant and the Bay Ridge in early 1975 — a halt that necessitated the layoff of most of the shipyard’s 2,500 employees and virtually shut the facility down. The yard reopened and construction resumed only after the EDA provided 90% guarantees for additional bank loans of $40 million. From that time on Seatrain apparently was on the lookout for prospects for employing the two supertankers in the domestic trade.

       See 46 U. S. C. § 883; n. 1, supra.

       The preceding month, Polk had sought permission to operate the Stuyvesant in coastal trade for three years in exchange for pro rata repayment of the CDS. This application was withdrawn in the face of strong protests from prospective competitors.

       Letter of James S. Dawson, Jr., Secretary of Maritime Administration, to Polk Tanker Corp., Aug. 31, 1977, App. 530.

       Two separate complaints were filed, one by Alaska Bulk Carriers, Inc., and Trinidad Corp., and the other by Shell Oil Co. They were consolidated before the District Court.

       The remand proceedings were completed on January 6, 1978, prior to oral argument in the Court of Appeals. The Secretary concluded that there would continue to be a shortage of tankers in the Alaskan trade for the foreseeable future and that the entry of the Stuyvesant into that trade would accordingly have little or no adverse effect on the respondents. Id., at 568-569. Thereafter, Shell filed suit in the District Court challenging these findings. Its complaint was dismissed without prejudice following the decision of the Court of Appeals in the present case.

        Id., at 558-559.

       Title 28 U. S. C. § 1291 states that “[t]he courts of appeals shall have jurisdiction of appeals from all final decisions of the district courts of the United States. . . .”

       The Alaska Bulk Carriers complaint is reproduced at App. 45-63.

       Complaint ¶¶ 33 and 42, App. 57, 61-62.

        Id., ¶ 41, App. 61.

         Id., at 62-63. The Shell complaint is reproduced id., at 6-17. It focuses far more specifically on the Stuyvesant, and were it the only complaint before us there might be more force to the federal parties’ characterization of this litigation as presenting a single claim supported by two theories. In that event, we would have had to explore some of the alternative bases of jurisdiction advanced by the respondents. The clear presence of two claims in the Alaska Bulk Carriers complaint makes such an inquiry unnecessary.

       The two are not, of course, unrelated. In particular, a favorable disposition of respondents’ statutory claim would leave respondents with no reason to press the administrative one. The contrary proposition, however, is not true. The complaint strongly suggests that respondents would have pressed for resolution of their statutory claim even if the Secretary or the courts had concluded that under the circumstances existing at the time the administrative determination was made the Stuyvesant could not lawfully have been permitted to enter the Alaskan trade.

       Prior administrative practice supports this conclusion as well. See infra, at 595.

       See also Abbott Laboratories v. Gardner, 387 U. S. 136, 152-154 (1967).

       We recognize that the District Court could not by purporting to comply with Rule 54 (b) render final for purposes of 28 U. S. C. § 1291 a decision that was in fact not final. Liberty Mutual Ins. Co. v. Wetzel, 424 U. S. 737, 742-743 (1976); Sectas, Roebuck & Co. v. Mackey, 351 U. S. 427, 435 (1956). These cases make clear that Rule 54 (b) may properly be applied only to actions in which there has been a final decision on one or more but fewer than all the multiple claims raised. This condition is fully satisfied here, and the federal parties’ reliance on Liberty Mutual is thus misplaced. There the District Court had made a determination of liability but had finally disposed of none of the original plaintiff’s prayers for relief. Accordingly, Rule 54 (b) was not applicable. Here, one of the respondents’ claims for relief was actually decided against them.

       App. 558-559. All parties proceeded as though the November 30 order were final. Indeed, even the federal parties initially appealed from that judgment, although that appeal was later dismissed on the federal parties’ motion. Brief for Respondents Alaska Bulk Carriers, Inc., et al. 36, n. 26.

       See H. R. Doc. No. 118, 74th Cong., 1st Sess., 1-3 (1935) (message from the President). In addition to these measures aimed at mating it possible for American vessels to compete in foreign trade, of course, the Jones Act, 46 U. S. C. § 883, reserved the domestic trade for American vessels. See supra, at 574-575, and n. 1.

       H. R. Doc. No. 118, supra, at 3-19 (Report of the Postmaster General).

       Section 101, 49 Stat. 1985, as amended, provides in full as follows:
      “It is necessary for the national defense and development of its foreign and domestic commerce that the United States shall have a merchant marine (a) sufficient to carry its domestic water-borne commerce and a substantial portion of the water-borne export and import foreign commerce of the United States and to provide shipping service essential for maintaining the flow of such domestic and foreign water-borne commerce at all times, (b) capable of serving as a naval and military auxiliary in time of war or national emergency, (c) owned and operated under the United States flag by citizens of the United States, insofar as may be practicable, (d) composed of the best-equipped, safest, and most suitable types of vessels, constructed in the United States and manned with a trained and efficient citizen personnel, and (e) supplemented by efficient facilities for shipbuilding and ship repair. It is declared to be the policy of the United States to foster the development and encourage the maintenance of such a merchant marine.” 46 U. S. C. § 1101.

       The first section dealing with the CDS program, § 501, 46 U. S. C. § 1151, gives the Secretary considerable discretion to process, accept, and reject subsidy applications. Sections 502 and 504, 46 U. S. C. §§ 1152, 1154, authorize him to subsidize construction either by contracting directly with a shipyard for a vessel and then selling the completed ship to private parties at a cost corresponding to the cost of constructing a similar vessel abroad, or by contracting to pay only the appropriate CDS to the shipyard and letting the owner-operator remit the balance of the cost to the yard and take title directly. Those sections also set forth means of calculating foreign costs and subsidies, various limitations on such subsidies, terms of sale, and other requirements. Section 503, 46 U. S. C. § 1153, requires that subsidized vessels be documented under the laws of the United States and spells out various financial requirements. Section 505, 46 U. S. C. § 1155, requires that domestic shipyards and materials be used to construct subsidized vessels. And § 506, 46 U. S. C. § 1156, see n. 2, supra, contains the requirement that owners of subsidized vessels agree not to operate in domestic commerce except as specifically provided.

       H. R. Doc. No. 118, 74th Cong., 1st Sess., 22 (1935) (Report of the Interdepartmental Committee on Shipping Policy). See also H. R. Rep. No. 1277, 74th Cong., 1st Sess., 22 (1935) (describing 1935 version of the Act and noting that the Government may in certain circumstances consent to the operation of a subsidized vessel in the domestic trade “in which case the amount of the subsidy shall be repaid to the United States proportionately. . .”).

       See n. 2, supra.

       See § 504 of the Act, 46 U. S. C. § 1154, and § 207, 46 U. S. C. § 1117. The former provision expressly authorizes the Secretary to make and amend CDS contracts.

       The discussion in the text demonstrates that regardless of subsidy repayment there is considerable reason to restrict the extent to which subsidized vessels may enter and exit the domestic market. The need for limits is heightened by the fact that proportionate subsidy repayment will generally fail to equalize the actual costs borne by owners of subsidized and unsubsidized vessels in domestic commerce. The problem is that the repayment formula in § 506 does not require the subsidized vessel to make any repayment to compensate for the interest it has not had to pay. To give a somewhat oversimplified example, compare two hypothetical vessels that operate for six months in domestic commerce, one unsubsidized and constructed with a $100 million, 10% loan, and the other subsidized and built with a $50 million CDS and a $50 million, 10% loan. During a given 6-month period the former vessel’s interest will be $5 million (% x 10% x $100 million). The latter will pay interest of $2.5 million (% x 10% x $50 million) and a CDS repayment of $1.25 million (6/240 (months’ useful life) x $50 million). In short, the subsidized vessel’s expenses will be $1.25 million less, and its competitive posture all the more formidable. On the importance of interest in the permanent-release/full-repayment situation, see infra, this page, and n. 31.

       The need for some payment reflecting avoided capital costs was highlighted by Judge Bazelon’s dissent to the opinion below. Alaska Bulk Carriers, Inc. v. Kreps, 194 U. S. App. D. C. 7, 36, n. 15, 595 F. 2d 814, 843, n. 15 (1979). In their brief, the federal parties represent that, while the Secretary originally concluded that no payment for interest would be required, the agency now intends to seek a reasonable amount of interest. Brief for Federal Parties 54, n. 59. Failure to do so might raise serious questions of inconsistency with the entire thrust of the Act.

       As originally enacted, Section 506, 49 Stat. 1999, provided in its entirety as follows:
      “It shall be unlawful to operate any vessel, for the construction of which any subsidy has been paid pursuant to this title, other than exclusively in foreign trade, or on a round-the-world voyage or a round voyage from the west coast of the United States to a European port or ports or a round voyage from the Atlantic coast to the Orient which includes intercoastal ports of the United States, or on a voyage in foreign trade on which the vessel may stop at an island possession or island territory of the United States, unless the owner of such vessel shall receive the written consent of the Commission so to operate and prior to such operation shall agree to pay to the Commission, upon such terms and conditions as the Commission may prescribe, an amount which bears the same proportion to the construction subsidy theretofore paid or agreed to be paid (excluding cost of national-defense features as hereinbefore provided), as the remaining economic life of the vessel bears to its entire economic life. If an emergency arises which, in the opinion of the Commission, warrants the temporary transfer of a vessel, for the construction of which any subsidy has been paid pursuant to this title, to service other than exclusive operation in foreign trade, the Commission may permit such transfer: Provided, That no operating differential subsidy shall be paid during the duration of such temporary or emergency period, and such period shall not exceed three months. Every contractor receiving a contract for a construction-differential subsidy under the provisions of this title shall agree that if the subsidized vessel engages in domestic trade on a round-the-world voyage or a round voyage from the west coast of the United States to a European port or ports or loads or discharges cargo or passengers at an island possession or island territory as permitted by this section, that the contractor will repay annually to the Commission that proportion of one-twentieth of such construction subsidy as the gross revenue of such protected trade bears to the gross revenue derived from the entire voyages completed during the preceding year.”

       The Court of Appeals conceded that permanent domestic operation was permitted under this second exception, and respondents appear reluctantly to have followed suit. Further, as the Court of Appeals recognized, this reading is buttressed by the legislative history of the 1936 Act. See 194 U. S. App. D. C., at 19, n. 43, 595 F. 2d, at 826, n. 43 (citing legislative history). Moreover, the statute itself admits of no other interpretation. It provides for repayment of “an amount which bears the same proportion to the construction subsidy ... as the remaining economic life of the vessel bears to its entire economic life.” That amount necessarily would represent the entire portion of the subsidy allocable to the vessel’s remaining life — for a new vessel it would constitute the entire subsidy, for a vessel halfway through its life, half the subsidy, etc. It is hardly conceivable that Congress would have intended repayment of the entire unamortized subsidy in exchange for only a temporary release from the foreign-trade-only requirement. Thus, only permanent release could have been contemplated.

       Amending Merchant Marine Act, 1936: Hearings on H. R. 8532 before the House Committee on Merchant Marine and Fisheries, 75th Cong., 2d and 3d Sess., 8 (1937-1938).

       See n. S3, supra.

       H. R. Rep. No. 2168, 75th Cong., 3d Sess., 21 (1938).

       S. Rep. No. 1618, 75th Cong., 3d Sess., 13 (1938). Similarly, the House Report stated that under the new version “the obligations of the owner to repay part of the subsidy are clearly defined.” H. R. Rep. No. 2168, supra, at 21. Petitioners argue that such language supports the contention that the ambiguity actually troubling to Congress was whether proportional subsidy repayment would be required for temporary or incidental use in domestic trade and had nothing to do with the permanent-release issue.

       Interestingly, one of the spokesmen for unsubsidized carriers who testified during the Senate hearings suggested that Congress should substitute for the amendments to § 506 then under discussion a new section “prohibiting subsidized vessels and vessels which have at any time been subsidized, from the intercoastal service.” Amending The Merchant Marine Act of 1936: Hearings on S. 3078 before the Senate Committee on Commerce and the Committee on Education and Labor, 75th Cong., 2d Sess., pt. 2, p. 44 (1937).

       The relevant precedents are listed in Affidavit of James S. Dawson, Jr., Secretary of Maritime Administration, App. 164-166.

       Comptroller General Decision B-155039, 44 Comp. Gen. 180 (1964). The Court of Appeals sought to distinguish the Grace Line precedent on grounds the subsidies there were not used in initial construction of the vessels, but rather to convert them from cargo to container. We fail to see the relevance of this distinction.

       App. 165.

       See 194 U. S. App. D. C., at 35, 595 F. 2d, at 842 (dissenting opinion of Judge Bazelon criticizing administrative rationale in the Grace Line case).

       H. R. 9756, 92d Cong., 1st Sess., § 3 (1971).

       H. R. Rep. No. 92-688, p. 10 (1971).


source: Caselaw Access Project

author: Mr. Justice Stewart Mr. Justice Marshall,

license: Public Domain

text:
    CALIFORNIA BREWERS ASSN. et al. v. BRYANT et al.
    No. 78-1548.
    Argued November 27, 1979
    Decided February 20, 1980

      Stewart, J., delivered the opinion of the Court, in which Burger, C. J., and White and RehNquist, JJ., joined. Marshall, J., filed a dissenting opinion, in which BheNNAN and BlacemuN, JJ., joined, post, p. 611. Powell and SteveNS, JJ., took no part in the consideration or decision of the case.

      Willard Z. Carr, Jr., argued the cause for petitioners. With him on the briefs were Michael D. Ryan, Aaron M. Peck, George Christensen, James R. Madison, and William F. Alderman.

      Roland P. Wilder, Jr., argued the cause for respondent unions as respondents under this Court’s Rule 21 (4), urging reversal. With him on the briefs were David Previant, George A. Pappy, and Robert D. Vogel.

      James Wolpman argued the cause for respondent Bryant. With him on the brief was Michael P. Goldstein.

      Deputy Solicitor General Wallace argued the cause for the United States as amicus curiae urging affirmance. On the brief were Solicitor General McCree, Assistant Attorney General Days, Richard A. Allen, Leroy D. Clark, Joseph T. Eddins, and Beatrice Rosenberg.

        J. Albert Woll and Laurence Gold filed a brief for the American Federation of Labor and Congress of Industrial Organizations as amicus curiae urging reversal.
      Briefs of amici curiae urging affirmance were filed by Gerald A. Rosenberg, John B. Jones, Jr., Norman Redlich, William L. Robinson, and
        Richard T. Seymour for the Lawyers’ Committee for Civil Rights Under Law; and by Jack Greenberg, James M. Nabrit III, Barry L. Goldstein, O. Peter Sherwood, Daniel B. Edelman, Vilma S. Martinez, and Morris J. Bailer for the NAACP Legal Defense and Educational Fund, Inc., et al.

        Bruce A. Nelson, Raymond L. Wheeler, Robert E. Williams, and Douglas S. McDowell filed a brief for the Equal Employment Advisory Council as amicus curiae.

   Mr. Justice Stewart

delivered the opinion of the Court.

Title VII of the Civil Rights Act of 1964 makes unlawful, practices, procedures, or tests that “operate to 'freeze’ the status quo of prior discriminatory employment practices.” Griggs v. Duke Power Co., 401 U. S. 424, 430. To this rule, § 703 (h) of the Act, 42 U. S. C. § 2000e-2 (h), provides an exception:

“[I]t shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment pursuant to a bona fide seniority . . . system, . . . provided that such differences are not the result of an intention to discriminate because of race....”

In Teamsters v. United States, 431 U. S. 324, 352, the Court held that “the unmistakable purpose of § 703 (h) was to make clear that the routine application of a bona fide seniority system would not be unlawful under Title VII . . . even where the employer’s pre-Act discrimination resulted in whites having greater existing seniority rights than Negroes.”

The present case concerns the application of § 703 (h) to a particular clause in a California brewery industry collective-bargaining agreement. That agreement accords greater benefits to “permanent” than to “temporary” employees, and the clause in question provides that a temporary employee must work at least 45 weeks in a single calendar year before he can become a permanent employee. The Court of Appeals for the Ninth Circuit held that the 45-week requirement was not a “seniority system” or part of a “seniority system” within the meaning of § 703 (h). 585 F. 2d 421. We granted cer-tiorari to consider the important question presented under Title YII of the Civil Rights Act of 1964. 442 U. S. 916.

I

In 1973, respondent Bryant (hereafter respondent), a Negro, filed a complaint in the United States District Court for the Northern District of California, on behalf of himself and other similarly situated Negroes, against the California Brewers Association and seven brewing companies (petitioners here), as well as against several unions. The complaint alleged that the defendants had discriminated against the respondent and other Negroes in violation of Title VII of the Civil Rights Act of 1964, 42 U. S. C. § 2000e et seq., and in violation of 42 U. S. C. § 1981.

The complaint, as amended, alleged that the respondent had been intermittently employed since May 1968 as a temporary employee of one of the defendants, the Falstaff Brewing Corp. It charged that all the defendant employers had discriminated in the past against Negroes, that the unions had acted in concert with the employers in such discrimination, and that the unions had discriminated in referring applicants from hiring halls to the employers. The complaint further asserted that this historical discrimination was being perpetuated by the seniority and referral provisions of the collective-bargaining agreement (Agreement) that governed industrial relations at the plants of the seven defendant employers. In particular, the complaint alleged, the Agreement’s requirement that a temporary employee work 45 weeks in the industry in a single calendar year to reach permanent status had, as a practical matter, operated to preclude the respondent and the members of his putative class from achieving, or from a reasonable opportunity of achieving, permanent employee status. Finally, the complaint alleged that on at least one occasion one of the defendant unions had passed over the respondent in favor of more junior white workers in making referrals to job vacancies at a plant of one of the defendant employers.

The Agreement is a multiemployer collective-bargaining agreement negotiated more than 20 years ago, and thereafter updated, by the California Brewers Association (on behalf of the petitioner brewing companies) and the Teamsters Brewery and Soft Drink Workers Joint Board of California (on behalf of the defendant unions). The Agreement establishes several classes of employees and the respective rights of each with respect to hiring and layoffs. Three of these classes are pertinent here: “permanent,” “temporary,” and “new” employees.

A permanent employee is “any employee . . . who . . . has completed forty-five weeks of employment under this Agreement in one classification [] in one calendar year as an employee of the brewing industry in [the State of California].” An employee who acquires permanent status retains that status unless he “is not employed under this Agreement for any consecutive period of two (2) years. ...” A temporary employee under the Agreement is “any person other than a permanent employee . . . who worked under this agreement ... in the preceding calendar year for at least sixty (60) working days. ...” A new employee is any employee who is not a permanent or temporary employee.

The rights of employees with respect to hiring and layoffs depend in substantial part on their status as permanent, temporary, or new employees. The Agreement requires that employees at a particular plant be laid off in the following order: new employees in reverse order of their seniority at the plant, temporary employees in reverse order of their plant seniority, and then permanent employees in reverse order of their plant seniority. Once laid off, employees are to be rehired in the reverse order from which they were laid off.

The Agreement also gives permanent employees special “bumping” rights. If a permanent employee is laid off at any plant subject to the Agreement, he may be dispatched by the union hiring hall to any other plant in the same local area with the right to replace the temporary or new employee with the lowest plant seniority at that plant.

Finally, the Agreement provides that each employer shall obtain employees through the local union hiring hall to fill needed vacancies. The hiring hall must dispatch laid-off workers to such an employer in the following order: first, employees of that employer in the order of their seniority with that employer; second, permanent employees registered in the area in order of their industry seniority; third, temporary employees in the order of their seniority in the industry; and fourth, new employees in the order of their industry seniority. The employer then “shall have full right of selection among” such employees.

The District Court granted the defendants’ motions to dismiss the complaint for failure to state a claim on which relief could be granted. No opinion accompanied this order. A divided panel of the Court of Appeals reversed, 585 F. 2d 421, concluding that the 45-week rule is not a “seniority system” or part of a “seniority system” within the meaning of § 703 (h) of Title VII. In the appellate court’s view the provision “lacks the fundamental component of such a system” which is “the concept that employment rights should increase as the length of an employee’s service increases.” 585 F. 2d, at 426. The court pointed out that under the Agreement some employees in the industry could acquire permanent status after a total of only 45 weeks of work if those weeks were served in one calendar year, while others “could work for many years and never attain permanent status because they were always terminated a few days before completing 45 weeks of work in any one year.” Id., at 426-427.

The Court of Appeals concluded that “while the collective bargaining agreement does contain a seniority system, the 45-week provision is not a part of it.” Id., at 427: Accordingly, the Court of Appeals remanded the case to the District Court to enable the respondent to prove that the 45-week provision has had a discriminatory impact on Negroes under the standards enunciated in Griggs v. Duke Power Co., 401 U. S. 424. 585 F. 2d, at 427-428.

“The 45-week rule is simply a classification device to determine who enters the permanent employee seniority line and this function does not make the rule part of a seniority system. Otherwise any hiring policy (e. g., an academic degree requirement) or classification device (e. g., merit promotion) would become part of a seniority system merely because it affects who enters the seniority line.” Id., at 427, n. 11.

II

Title VII does not define the term “seniority system,” and no comprehensive definition of the phrase emerges from the legislative history of § 703 (h) . Moreover, our cases have not purported to delineate the contours of its meaning. It is appropriate, therefore, to begin with commonly accepted notions about “seniority” in industrial relations, and to consider those concepts in the context of Title YII and this country’s labor policy.

In the area of labor relations, “seniority” is a term that connotes length of employment. A “seniority system” is a scheme that, alone or in tandem with non-“seniority” criteria, allots to employees ever improving employment rights and benefits as their relative lengths of pertinent employment increase. Unlike other methods of allocating employment benefits and opportunities, such as subjective evaluations or educational requirements, the principal feature of any and every “seniority system” is that preferential treatment is dispensed on the basis of some measure of time served in employment.

Viewed as a whole, most of the relevant provisions of the Agreement before us in this case conform to these core concepts of “seniority.” Rights of temporary employees and rights of permanent employees are determined according to length of plant employment in some respects, and according to length of industry employment in other respects. Notwithstanding this fact, the Court of Appeals concluded that the 45-week rule should not be viewed, for purposes of § 703 (h), as part of what might otherwise be considered a “seniority system.” For the reasons that follow, we hold that this conclusion was incorrect.

First, by legislating with respect to “systems” of seniority in § 703 (h), Congress in 1964 quite evidently intended to exempt from the normal operation of Title VII more than simply those components of any particular seniority scheme that, viewed in isolation, embody or effectuate the principle that length of employment will be rewarded. In order for any seniority system to operate at all, it has to contain ancillary rules that accomplish certain necessary functions, but which may not themselves be directly related to length of employment. For instance, every seniority system must include rules that delineate how and when the seniority time-clock begins ticking, as well as rules that specify how and when a particular person’s seniority may be forfeited. Every seniority system must also have rules that define which passages of time will “count” towards the accrual of seniority and which will not. Every seniority system must, moreover, contain rules that particularize the types of employment conditions that will be governed or influenced by seniority, and those that will not. Rules that serve these necessary purposes do not fall outside § 703 (h) simply because they do not, in and of themselves, operate on the basis of some factor involving the passage of time.

Second, Congress passed the Civil Rights Act of 1964 against the backdrop of this Nation’s longstanding labor policy of leaving to the chosen representatives of employers and employees the freedom through collective bargaining to establish conditions of employment applicable to a particular business or industrial environment. See generally Steelworkers v. Weber, 443 U. S. 193. It does not behoove a court to second-guess either that process or its products. Porter Co. v. NLRB, 397 U. S. 99. Seniority systems, reflecting as they do, not only the give and take of free collective bargaining, but also the specific characteristics of a particular business or industry, inevitably come in all sizes and shapes. See Ford Motor Co. v. Huffman, 345 U. S. 330; Aeronautical Lodge v. Campbell, 337 U. S. 521. As we made clear in the Teamsters case, seniority may be “measured in a number of ways” and the legislative history of § 703 (h) does not suggest that it was enacted to prefer any particular variety of seniority system over any other. 431 U. S., at 355, n. 41.

What has been said does not mean that § 703 (h) is to be given a scope that risks swallowing up Title YII’s otherwise broad prohibition of “practices, procedures, or tests” that disproportionately affect members of those groups that the Act protects. Significant freedom must be afforded employers and unions to create differing seniority systems. But that freedom must not be allowed to sweep within the ambit of § 703 (h) employment rules that depart fundamentally from commonly accepted notions concerning the acceptable contours of a seniority system, simply because those rules are dubbed “seniority” provisions or have some nexus to an arrangement that concededly operates on the basis of seniority. There can be no doubt, for instance, that a threshold requirement for entering a seniority track that took the form of an educational prerequisite would not be part of a “seniority system” within the intendment of § 703 (h).

The application of these principles to the case at hand is straightforward. The Agreement sets out, in relevant part, two parallel seniority ladders. One allocates the benefits due temporary employees; the other identifies the benefits owed permanent employees. The propriety under § 703 (h) of such parallel seniority tracks cannot be doubted after the Court’s decision in the Teamsters case. The collective-bargaining agreement at issue there allotted one set of benefits according to each employee’s total service with the company, and another set according to each employee’s service in a particular job category. Just as in that case the separation of seniority tracks did not derogate from the identification of the provisions as a “seniority system” under § 703 (h), so in the present case the fact that the system created by the Agreement establishes two or more seniority ladders does not prevent it from being a “seniority system” within the meaning of that section.

The 45-week rule, correspondingly, serves the needed function of establishing the threshold requirement for entry into the permanent-employee seniority track. As such, it performs the same function as did the employment rule in Teamsters that provided that a line driver began to accrue seniority for certain purposes only when he started to work as a line driver, even though he had previously spent years as a city driver for the same employer. In Teamsters, the Court expressed no reservation about the propriety of such a threshold rule for § 703 (h) purposes. There is no reason why the 45-week threshold requirement at issue here should be considered any differently.

The 45-week rule does not depart significantly from commonly accepted concepts of “seniority.” The rule is not an educational standard, an aptitude or physical test, or a standard that gives effect to subjectivity. Unlike such criteria, but like any “seniority” rule, the 45-week requirement focuses on length of employment.

Moreover, the rule does not distort the operation of the basic system established by the Agreement, which rewards employment longevity with heightened benefits. A temporary employee’s chances of achieving permanent status increase inevitably as his industry employment and seniority accumulate. The temporary employees with the most industry seniority have the first choice of new jobs within the industry available for temporary employees. Similarly, the temporary employees with the most plant seniority have the first choice of temporary employee jobs within their plant and enjoy the greatest security against “bumping” by permanent employees from nearby plants. As a general rule, therefore, the more seniority a temporary employee accumulates, the more likely it is that he will be able to satisfy the 45-week requirement. That the correlation between accumulated industry employment and acquisition of permanent employee status is imperfect does not mean that the 45-week requirement is not a component of the Agreement’s seniority system. Under any seniority system, contingencies such as illnesses and layoffs may interrupt the accrual of seniority and delay realization of the advantages dependent upon it.

For these reasons, we conclude that the Court of Appeals was in error in holding that the 45-week rule is not a component of a “seniority system” within the meaning of § 703 (h) of Title VII of the Civil Rights Act of 1964. In the District Court the respondent will remain free to show that, in respect to the 45-week rule or in other respects, the seniority system established by the Agreement is not “bona fide,” or that the differences in employment conditions that it has produced are “the result of an intention to discriminate because of race.”

For the reasons stated, the judgment before us is vacated, and the case is remanded to the Court of Appeals for the Ninth Circuit for further proceedings consistent with this opinion.

It is so ordered.

Mr. Justice Powell and Mr. Justice Stevens took no part in the consideration or decision of this case.

Mr. Justice Marshall,

with whom Mr. Justice Brennan and Mr. Justice Blackmun join, dissenting.

In the California brewing industry, an employee’s rights and benefits are largely dependent on whether he is a “permanent” employee within the meaning of the collective-bargaining agreement. Permanent employees are laid off after all other employees. If laid off at one facility, a permanent employee is permitted to replace the least senior nonperma-nent employee at any other covered facility within the local area. Permanent employees are selected before temporary employees to fill vacancies. They have exclusive rights to supplemental unemployment benefits upon layoff and receive higher wages and vacation pay for the same work performed by other employees. Permanent employees have first choice of vacation times, less rigorous requirements for qualifying for holiday pay, exclusive access to veterans’ reinstatement and seniority rights, and priority in assignment of overtime work among bottlers.

According to respondent Bryant’s complaint, no Negro has ever attained permanent employee status in the California brewing industry.

The provision of the collective-bargaining agreement at issue here defines a permanent employee as one “who . . . has completed forty-five weeks of employment ... in one classification in one calendar year as an employee of the brewing industry in this State.” An employee who works 44 weeks per year for his entire working life remains a temporary employee. By contrast, an employee who works 45 weeks in his first year in the industry attains permanent employee status. This simple fact belies the Court’s conclusion that the 45-week requirement “does not depart significantly from commonly accepted concepts of ‘seniority.’ ” Ante, at 609. Since I am unable to agree that the provision at issue is part of a “seniority system” under § 703 (h) of Title VII, I dissent.

I

Neither Title VII nor its legislative history provides a comprehensive definition of the term “seniority system.” The Court is therefore correct in concluding that the term must be defined by reference to “commonly accepted notions about ‘seniority’ in industrial relations” and “in the context of Title VII and this country’s labor policy.” Ante, at 605. Those “commonly accepted notions,” however, do not lead to the Court’s holding today. And I believe that the relevant policies do not support that holding, but instead require that it be rejected.

The concept of “seniority” is not a complicated one. The fundamental principle, as the Court recognizes, ante, at 606, is that employee rights and benefits increase with length of service. This principle is reflected in the very definition of the term, as found in dictionaries' and treatises and articles in the field of industrial relations. To quote from a few of the sources on which the Court purports to rely today: “Seniority is a system of employment preference based on length of service; employees with the longest service are given the greatest job security and the best opportunities for advancement.” Aaron, Reflections on the Legal Nature and Enforceability of Seniority Rights, 75 Harv. L. Rev. 1532, 1534 (1962). "The variations and combinations of seniority principles are very great, but in all cases the basic measure is length of service, with preference accorded to the senior worker.” Cooper & Sobol, Seniority and Testing under Fair Employment Laws: A General Approach to Objective Criteria of Hiring and Promotion, 82 Harv. L. Rev. 1598, 1602 (1969). “Seniority grants certain preferential treatment to long-service employees almost at the expense of short-service employees. . . . [Sjeniority is defined as length of service.” E. Beal, E. Wickersham, & P. Kienast, The Practice of Collective Bargaining 430 (1972).

It is hardly surprising that seniority has uniformly been defined in terms of cumulative length of service. No other definition could accord with the policies underlying the recognition of seniority rights. A seniority system provides an objective standard by which to ascertain employee rights and protections, thus reducing the likelihood of arbitrariness or caprice in employer decisions. At the same time, it promotes stability and certainty among employees, furnishing a predictable method' by which to measure future employment position. See, e. g., Sayles, Seniority: An Internal Union Problem, 30 Harv. Bus. Rev. 55 (1952); C. Golden & H. Ruttenberg, The Dynamics of Industrial Democracy 128-131 (1973); Cooper & Sobol, supra, at 1604^1605.

The Court concedes this general point, recognizing that a “ 'seniority system’ is a scheme that, alone or in tandem with non-'seniority’ criteria, allots to employees ever improving employment rights and benefits as their relative lengths of pertinent employment increase.” Ante, at 605-606 (footnote omitted). In my view, that concession is dispositive of this case. The principal effect of the 45-week requirement is to ensure that employee rights and benefits in the California brewing industry are not “ever improving” as length of service increases. Indeed, cumulative length of service is only incidentally relevant to the 45-week rule. The likelihood that a temporary employee will attain permanent employee status is largely unpredictable. The 45-week period, which is exclusive of vacation, leaves of absence, and time lost because of injury or sickness, represents almost 90% of the calendar year. Even if an employee is relatively senior among temporaries, his ability to work 45 weeks in a year will rest in large part on fortuities over which he has no control. The most obvious reason that employees have been prevented from attaining permanent employee status — a reason barely referred to by the Court — is that the brewing industry is a seasonal one. An employee may also be prevented from becoming permanent because of replacement by permanent employees or an employer’s unexpected decision to lay off a particular number of employees during the course of a year. It is no wonder that the accrual of seniority by temporary employees has not led with any regularity to the acquisition of permanent employee status. In sum, the 45-week rule does not have the feature of providing employees with a reasonably certain route by which to measure future employment position. So understood, the 45-week rule has very little to do with seniority, for it makes permanent status turn on fortuities over which the employee has no control, not on length of service with the employer or in the relevant unit.

The Court avoids this conclusion by little more than assertion. It observes that the 45-week rule acts as a threshold requirement for entry onto the seniority track composed of permanent employees, but eliminates the force of that observation with the inevitable concession that such threshold requirements are not necessarily entitled to § 703 (h) exemption. It notes that the 45-week requirement “focuses on length of employment,” and proceeds to the unexplained conclusion that it therefore “does not depart significantly from commonly accepted concepts of 'seniority.’ ” And it adds that more senior temporary employees tend to have a greater opportunity to obtain work and thus to attain permanent status through 45 weeks of employment in a calendar year.

The Court’s analysis, of course, is largely dependent on its conclusion that since the 45-week requirement is one measured by time of service, it does not depart from common concepts of seniority. That conclusion, however, is foreclosed by the Court’s own definition of a seniority system as one in which employee rights increase with cumulative length of service — not length of service within a calendar year. The mere fact that the 45-week rule is in some sense a measure of “time” does not demonstrate a valid relation to concepts of seniority. Such a conclusion would make the § 703 (h) exemption applicable to a rule under which permanent employee status is dependent on number of days served within a week, or hours served within a day.

Nor is there much force to the suggestion that the 45-week requirement somehow becomes part of a seniority system because permanent employee status is more easily achieved by the more senior temporary employees. I could agree with the Court's decision if petitioners demonstrated that the collective-bargaining agreement actually operates to reward employees in order of cumulative length of service. But at this stage of the litigation there is no evidence that temporary employees attain permanent status in a way correlating even roughly with total length of employment. The mere possibility that senior temporary employees are more likely to work for 45 weeks is, in my view, insufficient. It might as well be said that a law conditioning permanent employee status on the attainment of a certain level of skill is a “seniority” provision since skills tend to increase with length of service. A temporary employee is always subject to a risk that for some reason beyond his control, he will be unable to work the full 45 weeks and be forced to start over again.

II

Since the 45-week rule operates as a threshold requirement with no relation to principles of seniority, I believe that the rule is for analytical purposes no different from an educational standard or physical test which, as the Court indicates, is plainly not entitled to § 703 (h) exemption. Accordingly, I think it clear that the 45-week requirement is not part of a “seniority system” within the meaning of § 703 (h). But if the question were perceived to be close, I would be guided by the familiar principle that exemptions to remedial statutes should be construed narrowly. “To extend an exemption to other than those plainly and unmistakably within its terms and spirit is to abuse the interpretative process and to frustrate the announced will of the people.” Phillips Co. v. Walling, 324 U. S. 490, 493 (1945). See, e. g., Group Life & Health Ins. Co. v. Royal Drug Co., 440 U. S. 205, 231 (1979); Abbott Laboratories v. Portland Retail Druggists Assn., 425 U. S. 1, 12 (1976); Peyton v. Rowe, 391 U. S. 54, 65 (1968). The effect of § 703 (h) is to exempt seniority systems from the general prohibition on practices which perpetuate the effects of racial discrimination. This exception is a limited one in derogation of the overarching purpose of Title VII, “the integration of blacks into the mainstream of American society,” Steelworkers v. Weber, 443 U. S. 193, 202 (1979). A statute designed to remedy the national disgrace of discrimination in employment should be interpreted generously to comport with its primary purpose; exemptions should be construed narrowly so as not to undermine the effect of the general prohibition. Today the Court not only refuses to apply this familiar principle of statutory construction, it does not even acknowledge it.

In my view, the Court’s holding is fundamentally at odds with the purposes of Title VII and the basic function of the § 703 (h) exemption. I dissent.

       78 Stat. 253, as amended, 42 U. S. C. § 2000e et seq.

        United Air Lines, Inc. v. Evans, 431 U. S. 553, extended this holding to preclude Title VII challenges to seniority systems that perpetuated the effects of discriminatory post-Act practices that had not been the subject of a timely complaint. See also Teamsters v. United States, 431 U. S., at 348, n. 30.

       The complaint also alleged, under 29 U. S. C. §§ 159 and 185, that the union defendants had breached their duty of fair representation by, among other things, negotiating “unreasonable privileges for some employees over others. . .

       In this Court, the respondent emphasizes that he has not contended that there is anything illegal in classifying employees as permanent and temporary or in according greater rights to permanent than to temporary employees. His sole Title VII challenge in this respect has been to the 45-week rule on its face and as it has been applied by the defendant unions and employers.

       The Agreement classifies employees into brewers, bottlers, drivers, shipping and receiving clerks, and checkers. Under the Agreement, separate seniority lists have to be maintained for each of these classifications of employees. The respondent is a brewer.

       An employee may also lose permanent status if he “quits the industry” or is discharged for certain specified reasons.

       In addition, permanent employees are given preference over temporary employees with respect to various other employment matters, such as the right to collect supplemental unemployment benefits upon layoff, wages and vacation pay, and choice of vacation times.

       The Court of Appeals also observed that “the 45-week requirement makes the system particularly susceptible to discriminatory application since employers and unions can manipulate their manpower requirements and employment patterns to prevent individuals who are disfavored from ever achieving permanent status.” 585 F. 2d, at 427. This danger, according to the court, is almost never present in any “true” seniority system, in which rights “usually accumulate automatically over time. . . .” Ibid.

       The Court of Appeals directed the trial court on remand to consider as well the respondent’s claims -under 42 U. S. C. § 1981 and 29 U. S. C. §§ 159 and 185.

       See 110 Cong. Rec. 1518, 5423, 7207, 7213, 7217, 12723, 15893 (1964). The example of a “seniority system” most frequently cited in the congressional debates was one that provided that the “last hired” employee would be the “first fired.” Nowhere in the debates, however, is there any suggestion that this model was intended to be anything other than an illustration.

       See Tram World Airlines, Inc. v. Hardison, 432 U. S. 63; United Air Lines, Inc. v. Evans, 431 U. S. 553; Teamsters v. United States, 431 U. S. 324; Franks v. Bowman Transportation Co., 424 U. S. 747.

       Webster’s Third New International Dictionary 2066 (unabridged ed. 1961) defines “seniority,” in pertinent part, as the “status attained by length of continuous service ... to which are attached by custom or prior collective agreement various rights or privileges ... on the basis of ranking relative to others. ...”

       A collective-bargaining agreement could, for instance, provide that transfers and promotions are to be determined by a mix of seniority and other factors, such as aptitude tests and height requirements. That the “seniority” aspects of such a scheme of transfer and promotion might be covered by § 703 (h) does not mean that the aptitude tests or the height requirements would also be so covered.

       See E. Beal, E. Wickersham, & P. Kienast, The Practice of Collective Bargaining 430-431 (1972); Cooper & Sobol, Seniority and Testing Under Fair Employment Laws: A General Approach to Objective Criteria of Hiring and Promotion, 82 Harv. L. Rev. 1598, 1602 (1969); Aaron, Reflections on the Legal Nature and Enforceability of Seniority Rights, 75 Harv. L. Rev. 1532, 1534 (1962).

       Webster’s Third New International Dictionary 2322 (unabridged ed. 1961) defines “system,” in pertinent part, as a “complex unity formed of many often diverse parts subject to a common plan or serving a common purpose.”

       See generally S. Slichter, J. Healy, & E. Livemash, The Impact of Collective Bargaining on Management 115-135 (1960).

       By way of example, a collective-bargaining agreement could specify that an employee begins to accumulate seniority rights at the time he commences employment with the company, at the time he commences employment within the industry, at the time he begins performing a particular job function, or only after a probationary period of employment.

       For example, a collective-bargaining agreement could provide that accumulated seniority rights are permanently forfeited by voluntary resignation, by severance for cause, or by nonemployment at a particular plant or in the industry for a certain period.

       For instance, the time an employee works in the industry or with his current employer might not be counted for the purpose of accumulating seniority rights, whereas the time the employee works in a particular job classification might determine his seniority.

       By way of example, a, collective-bargaining agreement could provide that an employee's seniority will govern his entitlement to vacation time and his job security in the event of layoffs, but will have no influence on promotions or job assignments.

       The examples in the text of the types of rules necessary to the operation of a seniority system are not intended to and do not comprise an exhaustive list.

       There are indications in the record of this case that a long-term decline in the California brewing industry’s demand for labor is a reason why the accrual of seniority as a temporary employee has not led more automatically to the acquisition of permanent status. But surely, what would be part of a “seniority system” in an expanding labor market does not become something else in a declining labor market.

       In the present procedural posture of the case, of course, the allegations of the complaint must be accepted as true.

       The legislative history does, however, provide a bit more guidance than the Court admits. The fact that the sole example of a seniority system given in the congressional debates is one in which rights increase with cumulative length of service is at least suggestive. See ante, at 605, n. 10.

       See, e. g., Webster’s Third New International Dictionary 2066 (unabridged ed. 1961) (“a status attained by length of continuous service ías in a company . . .) to which are attached by custom or prior collective agreement various rights or privileges”); Random House Dictionary of the English Language 1299 (1966) (“priority, precedence, or status obtained as the result of a person’s length of service”); Black’s Law Dictionary 1222 (5th ed. 1979) (“As used with reference to job seniority, worker with most years of service is first promoted within range of jobs subject to seniority, and is the last laid off, proceeding so on down the line to the youngest in point of service”); Ballentine’s Law Dictionary 1160 (1969) (“the principle in labor relations that length of employment determines the order of layoffs, rehirings, and advancements”).

       See, e. g., Roberts’ Dictionary of Industrial Relations 390 (1966) (“The length of service an individual employee has in the plant. . . . The seniority principle rests on the assumption that the individuals with the greatest length of service within the company should be given preference in employment”); United States Department of Labor, Bureau of Labor Statistics, Bulletin No. 908-11, p. 1 (1949) (“A seniority program aims to provide maximum security in employment to those with the longest service”); E. Dangel & I. Shriber, The Law of Labor Unions § 15 (1941) (“Seniority ... is an employment advantage in the matter of the choice of and the right to work in one’s occupation on the basis of an employee’s length of service”); BNA, Collective Bargaining Contracts, Techniques of Negotiation and Administration with Topical Classification of Clauses 488 (1941) (“The term [seniority] refers to length of service with the employer or in some division of an enterprise”); Meyers, The Analytic Meaning of Seniority, Industrial Relations Research Association, Proceedings of Eighteenth Annual Meeting 194 (1966) (“Seniority is the application of the criterion of length of service for the calculation of relative equities among employees”); McCaffrey, Development and Administration of Seniority Provisions, Proceedings of New York University Second Annual Conference on Labor 132 (1949) (“seniority may be defined as the length of company-recognized service as applied to certain employer-employee relationships”) ; Christenson, Seniority Rights Under Labor Union Working Agreements, 11 Temp. L. Q. 355 (1937) (“seniority is a rule providing that employers promote, lay-off and re-employ labor, according to length of previous service”). Cf. P. Selznick, Law, Society, and Industrial Justice 203 (1969) (referring to the “ 'rather general feeling that a worker who has spent many years on his job has some stake in that job and in the business of which it is a part’ ”).

       Indeed, the agreement expressly provides that a permanent employee laid off at one facility will replace (or “bump”) the temporary employee with the lowest plant seniority, even if that employee has more industry seniority than others. As a result, temporaries who are relatively senior in terms of industry seniority may have less opportunity to work 45 weeks in a calendar year than temporaries with less industry seniority but more plant seniority. Thus, it is simply not true that temporary employees obtain permanent employee status in order of cumulative length of employment, for the requisite 45 weeks is computed on the basis of service in the industry rather than in particular plants.

       The Court acknowledges this point, ante, at 610, n. 22, but responds that a system which would fall within § 703 (h) in an expanding labor market does not lose that status by virtue of the fact that the labor market is contracting. In the Court’s words, however, the question is whether the 45-week rule is a part of a seniority system because it “allots to employees ever improving employment rights and benefits as their relative lengths of pertinent employment increase.” In that context it is surely relevant whether the 45-week provision does in fact operate to reward cumulative length of service, or serves instead as a virtually impassable barrier to advancement.

       As the Court’s own analysis suggests, the 45-week provision is entirely different from the seniority provisions involved in Teamsters v. United States, 431 U. S. 324 (1977). At issue in that case was a seniority system granting some benefits on the basis of an employee’s cumulative length of service with the company, and others on the basis of cumulative length of service in a particular job category. In both cases employee rights and benefits depended on total length of service in the relevant unit, not on the length of service within a calendar year.

       For example, there can be no serious question that a provision making permanent status dependent on 7 days of work per week, or 12 hours per day, would not be part of a “seniority system” within the meaning of §703 (h).

       I could understand, although I do not favor, a decision remanding this case for factual findings on the question whether temporary employees in fact acquire permanent status and, if so, whether they do so in order of cumulative length of service. In my view, it is extraordinary for the Court to conclude, in a factual vacuum and on the authority of nothing other than petitioners' word, that “the rule does not distort the operation of the basic system established by the Agreement, which rewards employment longevity with heightened benefits.” See also n. 5, supra.

       To decide this case we are not required to offer a complete definition of the term “seniority system” within the meaning of § 703 (h). Nor are we called upon to canvass and evaluate rules “ancillary” to seniority systems. The question whether all of the rules listed by the Court, ante, at 607, nn. 17-20, are part of a seniority system is not at all easy, and the Court’s own reasoning demonstrates that its discussion of those rules is gratuitous and does little to advance analysis of the 45-week requirement. That requirement serves none of the functions of an “ancillary” rule.