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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In re Applications of ) ) Kelly Communications, Inc. ) ) For Renewal of Licenses of ) Stations WOAM(AM), Peoria, IL; ) File Nos. BR-960805YH WXCL(FM), Pekin, IL; and ) BRH-960805YE WKZW(FM), Chillicothe, IL ) BRH-960805YI ) MEMORANDUM OPINION AND ORDER & NOTICE OF APPARENT LIABILITY Adopted: October 20, 1997 Released: October 27, 1997 By the Commission: I. INTRODUCTION 1. The Commission has before it for consideration: (i) license renewal applications for the above-referenced stations; (ii) a Petition to Deny filed by the Rainbow-PUSH Coalition ("Rainbow"); (iii) the licensee's Opposition to the Petition to Deny; (iv) a Joint Request for Approval of Settlement Agreement filed by the licensee and Rainbow; and (v) the licensee's response to a staff letter of inquiry. II. BACKGROUND/PROCEDURAL MATTERS 2. Combined Order. The renewal applications of all three stations are considered together in this order for purposes of analyzing their Equal Employment Opportunity ("EEO") records because the stations are commonly owned, filled out identical information in each of their Broadcast EEO Reports (FCC Form 396) and filed joint Broadcast Annual Employment Reports (FCC Form 395-B) for 1996. 3. Settlement Agreement. The Joint Request for Approval of Settlement Agreement seeks approval of the agreement, dismissal of the Petition to Deny, and grant of the stations' license renewal applications. By delegated authority, the Mass Media Bureau Chief approved the settlement agreement and dismissed the Petition to Deny in a separate action in which it granted the renewal application of another radio station owned by the licensee, WIHN-FM, Normal, Illinois. Nonetheless, as is our practice in all such cases, we reviewed the stations' EEO program and performance. See Section 309 of the Communications Act of 1934, as amended, 47 U.S.C.  309; see also Hilton Head Television, Inc., 10 FCC Rcd 1679 (1995), recon. denied 11 FCC Rcd 5238 (1996). Our findings with respect to the stations are set forth below. III. DISCUSSION 4. The licensee contends that our EEO Rule is inconsistent with the holding in Adarand Constructors, Inc. v. Pe¤a, 515 U.S. 200 (1995) ("Adarand"). We disagree. Adarand addresses the constitutionality of a race-based preference program arising under federal law. The Supreme Court held that where questions arise as to a violation of the personal right to equal protection of the laws as a result of such programs, courts should evaluate such challenges by invoking the "strict scrutiny" standard of judicial review. Under strict scrutiny, racial classifications are constitutional only if they are narrowly tailored measures that further a compelling governmental interest. The requirements imposed by our EEO Rule, 47 C.F.R.  73.2080, are fundamentally different from a race-based preference program such as that at issue in Adarand. The Rule does not require that any person be hired or accorded a hiring preference based on racial or ethnic status. Rather, it requires that licensees make efforts to recruit minority and women applicants so that they will be ensured access to the hiring process. The ultimate decision as to whether to hire a particular applicant may be premised upon any non-discriminatory considerations, without regard to the applicant's race, ethnicity or gender status. Further, our Rule does not require licensees to hire any prescribed "quota" of minorities or women. Thus, our EEO Rule imposes no requirement that would operate to deprive any person of a benefit he or she might receive but for his or her race, ethnicity or gender. 5. We employ a two-step process in evaluating licensees' EEO efforts. In the first step, we seek to identify those licensees whose EEO efforts may be unsatisfactory so as to warrant further inquiry. Whether a licensee's employment profile as reflected in its Annual Employment Reports filed during the license term meets the processing guidelines is one factor considered in making this preliminary assessment, along with information contained in the renewal application, allegations raised by any petitions to deny or informal objections, and any other information available concerning the licensee's EEO record. We emphasize that these guidelines are used as an initial screening tool for determining the stations whose EEO programs might require further investigation. If the first step of review indicates that the station's EEO efforts are satisfactory, the station is found to be in compliance with our EEO Rule. In no situation are a station's efforts found to be unsatisfactory or is it found to have violated the EEO Rule solely because it does not meet the processing guidelines. Where we find that a station's efforts may be unsatisfactory, we will generally request additional information which is analyzed along with relevant pleadings to determine if, among other things, the station notifies sources of minority and female referrals when vacancies occur and engages in continuous self-assessment of its EEO program; if, in light of the evidence, the station violated our EEO Rule; and, if it did, what sanctions or remedies may be appropriate. Compliance with the processing guidelines is not a factor in this second step analysis. Broadcast licensees whose employment profiles are below our processing guidelines have been renewed without sanction. 6. Accordingly, we find no basis for concluding that our process denies any person equal protection of the laws. Indeed, the licensee has not identified any person who arguably suffered such injury as a result of the provisions of our Rule. As the Court emphasized in City of Richmond v. J.A. Croson Co., 488 U.S. 469, 493 (1989) ("Croson"), the right to equal protection is a personal right. In the absence of any provisions in our EEO Rule that abridge the personal rights of any person, we conclude that Adarand does not implicate our EEO program. Our reading of the scope of the Adarand decision is consistent with the interpretation of the case by the Department of Justice ("DOJ"). An analysis of the Adarand decision by DOJ states: Mere outreach and recruitment efforts . . . typically would not be subject to Adarand standards. Indeed, post-Croson cases indicate that such efforts are considered race neutral means of increasing minority opportunity. In some sense, of course, the targeting of minorities through outreach and recruitment campaigns involves race-conscious action. But the objective there is to expand the pool of applicants or bidders to include minorities, not to use race or ethnicity in the actual decision. If the government does not use racial or ethnic classifications in selecting persons from the expanded pool, Adarand ordinarily would be inapplicable. 7. Section 73.2080 of the Commission's Rules requires that a broadcast licensee refrain from employment discrimination and establish and maintain an EEO program reflecting positive and continuing efforts to recruit and promote qualified women and minorities. When evaluating EEO performance, the Commission focuses on the licensee's efforts to recruit and promote qualified women and minorities and the licensee's ongoing assessment of its EEO efforts. Such an assessment enables the licensee to take corrective action if qualified women and minorities are not present in the applicant and interviewee pools. The Commission also focuses on any evidence of discrimination by the licensee. See Section 73.2080(a), (b), and (c) of the Commission's Rules, 47 C.F.R.  73.2080(a)-(c). 8. The stations' license renewal applications and inquiry response reveal that the licensee filled 43 full-time vacancies, including 40 for upper-level positions, from January 1, 1994, to December 31, 1996. The licensee indicates that it used outside recruitment sources for 35 of its 43 full-time positions. With respect to those eight individuals hired without outside recruitment, one came from a competing station, three were former employees, two were walk-in applicants, and two (minorities) came from employee referrals. The licensee states that it hired these individuals because it was already familiar with their work or because of their unique talents. However, our EEO Rule requires that licensees recruit minorities and females for each vacancy. See 47 C.F.R.  73.2080(c); see also Enterprise Media of Toledo, L.P., 12 FCC Rcd 3920, 3924 (1997). For one vacancy, the licensee indicates that it did not look any further since the individual hired was a minority and qualified for the position. However, the occasional hiring of minorities as a result of random encounters cannot replace a licensee's ongoing efforts to attract minority and female applicants for all vacancies as required by our EEO Rule. Further, it would be difficult to self-assess the adequacy of recruitment efforts through random, informal encounters of uncertain frequency. See Prism Radio Partners, L.P., 11 FCC Rcd 11227, 11230 (1996). 9. When outside recruitment occurred, the licensee reports that it notified four recruitment agencies (including one minority organization) for 34 vacancies, notified a minority newspaper for 30 vacancies, advertised in a general newspaper for 26 vacancies, announced the positions on one or more of the stations for 23 vacancies, used employee referrals and internal posters for 27 vacancies, and advertised in the trade press for six vacancies. The licensee states that it did not keep records of the number, race, sex, and referral source of its applicants, with the exception of successful applicants. However, the licensee recalls that it received one minority applicant from an outside recruitment source over the three-year inquiry period. Of its 35 successful applicants, 17 were referred by the general newspaper (including the one minority applicant), 12 were referred by station employees, two were walk-ins, two were referred by trade publications, and two responded to the stations' on-air announcements. 10. The licensee could not provide interview pool information. However, it reports that it hired two Black females and one Hispanic male for upper-level positions during the inquiry period. 11. Although acknowledging that it did not document all of its recruiting practices, the licensee maintains that its EEO program is successful in view of its minority hires. The licensee claims that it satisfied its EEO obligations because it employed minorities to achieve over 50% of parity in 1994 and 1996 and thereby met the Commission's processing guidelines. The licensee insists that this result is more significant than the number of minorities in its applicant/interview pools or any self-assessment. Further, the licensee contends that the Commission's EEO rule does not require licensees to maintain recruitment records. 12. The licensee places undue emphasis on meeting our processing guidelines without consideration of its failure to engage consistently in efforts to attract qualified minorities whenever vacancies occur. Moreover, the licensee incorrectly asserts that minority employment above a certain number is evidence of an adequate EEO program. Our primary focus is on a licensee's EEO efforts and not on its employment of a specific number of minority employees. We do not require stations to hire or employ a specific number of minority employees. See Amendment of Part 73 of the Commission's Rules Concerning Equal Employment Opportunity in the Broadcast Radio and Television Services, 2 FCC Rcd 3967 (1987). See also Implementation of Commission's Equal Employment Opportunity Rules, 9 FCC Rcd 2047 (1994). Conversely, the achievement of minority employment at 50% of parity with the presence of minorities in a labor force is neither a ceiling nor a goal of the Commission's EEO Rule. 13. We also find no merit in the licensee's argument that our EEO Rule does not require licensees to retain recruitment records and that a licensee's self-assessment of its EEO program is unimportant. Section 73.2080(c)(5) of the Commission's Rules unambiguously requires a licensee to self- assess its EEO program by "analyz[ing] its efforts to recruit, hire and promote minorities and women...." 47 C.F.R.  73.2080(c)(5). The Commission has held that adequate self-assessment is not possible absent record retention. See Lewis Broadcasting Corp., 7 FCC Rcd 1420, 1421 (1992); Hilton Head Television, Inc., 11 FCC Rcd 5238, 5238-39 (1996) ("For many years and in many decisions, the Commission has clearly indicated that a licensee is required to keep detailed EEO records because these records are necessary for adequate self-assessment under the broadcast EEO Rule.") Maintaining recruitment, applicant and interview data for each position filled is critical because this information provides the very basis for a licensee's self-assessment of its EEO program. Indeed, we cannot, and the licensee cannot, fully determine whether the licensee engaged in a thorough and meaningful self-assessment of its recruitment efforts without data as to the results of those efforts. As the Commission has stated, "[i]f a licensee cannot determine the race and sex of the persons it has interviewed, a question may be raised whether the licensee had sufficient information as to analyze the effectiveness of its recruitment efforts, critical information for renewal purposes." Amendment of Part 73 of the Commission's Rules Concerning Equal Employment Opportunity in the Broadcast Radio and Television Services, 4 FCC Rcd 1715, 1716 (1989). 14. Having reviewed all matters presented, we conclude that there are no substantial and material questions of fact warranting designation for hearing and that a grant of the applications would be consistent with Section 309(k) of the Communications Act of 1934, as amended, 47 U.S.C.  309(k). See Astroline Communications Co. v. FCC, 857 F.2d 1556, 1561 (D.C. Cir. 1988). Further, we find no indication of employment discrimination. Therefore, because the licensee is otherwise qualified, grant of the applications will serve the public interest. 47 U.S.C.  309(d)(2). 15. Nevertheless, we find the stations' EEO recruitment efforts to be deficient. The licensee recruited using outside sources for only 35 (81.4%) of its 43 vacancies. The licensee could not verify the composition of its applicant and interview pools for any vacancy for which it recruited. The licensee was able to show that minorities were present in three (7.0%) of the 43 applicant and interview pools. However, this information was derived from the stations' hiring of three minorities and not as a result of the maintenance of adequate employment and recruitment records as contemplated by the EEO Rule's self- assessment requirement. See 47 C.F.R.  73.2080(c)(5). The retention of such data may have enabled the licensee to increase the number of minority-inclusive applicant and interview pools, which was clearly necessary in light of the paucity of minority applicants during the three-year inquiry period. Few records were available for meaningful self-assessment, and the evidence does not show that adequate self-assessment occurred. The licensee's recruitment sources, including its two minority-specific sources, were unproductive in producing minority referrals. The licensee might have attracted a greater number of minority applicants by assessing the productivity of its recruitment sources, and modifying its recruitment list accordingly. 16. In determining a forfeiture, we rely on case precedent, taking into consideration the relevant statutory factors in Section 503(b)(2) of the Communications Act, including the nature, circumstances, extent and gravity of the violations, and the licensee's record of compliance with our Rules. We also consider the station's size, local minority labor force, number of hiring opportunities, recruitment patterns, applicant and interview pools, record-keeping and self-assessment. E.g., Stauffer Communications, Inc., 10 FCC Rcd 5060, 5061 (1995). 17. After carefully reviewing the facts of this case, we find that the record here is similar to, but more egregious, than that of WTAX(AM)/WDBR(FM), Springfield, Illinois, and WVAX(AM)/WYXY(FM), Lincoln, Illinois in Central States Network, L.P., 12 FCC Rcd 3959 (1997). In that case, despite the presence of minorities in the stations' available labor force (7.4%) and the significant number of hiring opportunities (44), only six applicants were minorities and minorities were present in only nine applicant pools. The licensee did not recruit for seven vacancies and failed to maintain information on the race or national origin of 56.9% of its applicants. Although the licensee added sources to its recruitment list two years before the end of the license term, the new sources were not consistently contacted for every vacancy. Consequently, the Commission granted the renewals subject to reporting conditions and issued a Notice of Apparent Liability for $8,000. 18. Both Stations WTAX(AM)/WDBR(FM)/WVAX(AM)/WYXY(FM) and WOAM(AM)/WXCL(FM)/WKZW(FM) had a substantial number of vacancies (44 and 43, respectively) and are located in areas with similar minority labor forces (7.4% and 7.3%, respectively). When the stations did recruit, their efforts were unsuccessful in attracting minority applicants. The records do not show that either licensee adequately self-assessed during its inquiry period. However, WOAM(AM)/WXCL(FM)/WKZW(FM)'s record is more egregious than that of WTAX(AM)/WDBR(FM)/WVAX(AM)/WYXY(FM). For example, Stations WTAX(AM)/WDBR(FM)/ WVAX(AM)/WYXY(FM) had six minority applicants and nine minority-inclusive applicant pools while WOAM(AM)/WXCL(FM)/WKZW(FM) had only three minority applicants and three minority-inclusive applicant pools. Also, the Springfield/Lincoln stations attempted to modify their recruitment list to attract more minorities, while in the instant case, the licensee made no such attempt. Finally, WTAX(AM)/WDBR(FM)/WVAX(AM)/WYXY(FM) kept records on over half of its applicants, while WOAM(AM)/WXCL(FM)/WKZW(FM) did not keep any record of applicants, with the exception of successful applicants. Accordingly, we will grant renewal subject to a Notice of Apparent Liability for Forfeiture for $9,000 and impose reporting conditions to monitor the licensee's EEO performance. IV. ORDERING CLAUSES 19. Accordingly, IT IS ORDERED that the Joint Request for Approval of Settlement Agreement IS GRANTED. 20. IT IS FURTHER ORDERED that the license renewal applications filed by the licensee for the stations ARE GRANTED subject to reporting conditions as described herein and, pursuant to Section 503 of the Communications Act of 1934, as amended, 47 U.S.C.  503, a NOTICE OF APPARENT LIABILITY FOR FORFEITURE in the amount of $9,000. 21. IT IS FURTHER ORDERED that the licensee submit to the Commission an original and one copy of the following information on August 1, 1998, August 1, 1999, and August 1, 2000: (a) Two lists divided by full-time and part-time job vacancies during the 12 months preceding July 1, 1998, for the first report, July 1, 1999, for the second report, and July 1, 2000, for the third report, indicating the job title and FCC job category, date of hire, the race or national origin, sex and the referral source of each applicant and interviewee for each job and the race or national origin and sex of the person hired. The lists should also note which recruitment sources were contacted; (b) A list of employees as of the July 1, 1998, payroll period for the first report, a list of employees as of the July 1, 1999, payroll period for the second report, and a list of employees as of the July 1, 2000, payroll period for the third report, by job title and FCC job category indicating full-time or part-time status (ranked from the highest paid classification), date of hire, sex and race or national origin; and (c) Details concerning the stations' efforts to recruit minorities for each position filled during the 12-month periods specified, including identification of sources used and indicating whether any of the applicants declined actual offers of employment. In addition, the licensee may submit any information it believes relevant regarding the stations' EEO performance and its efforts thereunder. 22. IT IS FURTHER ORDERED that a copy of this Memorandum Opinion and Order be sent to the licensee and Rainbow by Certified Mail -- Return Receipt Requested. 23. The reports are to be filed with the Secretary of the Commission for the attention of the Mass Media Bureau's Enforcement Division, EEO Branch. 24. With respect to the forfeiture proceeding, the licensee may take any of the actions set forth in Section 1.80 of the Commission's Rules, 47 C.F.R.  1.80, as summarized in the attachment to this Order. Any comments concerning the ability to pay should include those financial items set forth in the attachment. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary