dissenting:
The court’s decision is based upon a pretrial stipulation of the parties that “the denial of equal opportunity for employment in the instant case was based substantially on the applicant’s previous racial discrimination complaint and that such denial constituted a violation of Executive Order 11478 and Department regulations pursuant thereto.” In most cases we accept the parties’ stipulations but, as the court’s opinion recognizes, we are not required to do so.
In Swift & Co. v. Hocking Valley Ry. Co., 243 U.S. 281 (1917), the Supreme Court had before it a stipulation which the Court found was contrary to the facts shown in the record. In rejecting the stipulation and in deciding the case on the basis of the facts of record, the Supreme Court said:
If the stipulation is to be treated as an agreement concerning the legal effect of admitted facts, it is obviously inoperative; since the court cannot be controlled by agreement of counsel on a subsidiary question of law. If the stipulation is to 'be treated as an attempt to agree “for the purpose only of reviewing the judgment” below that what are the facts shall be assumed not to be facts, a moot or fictitious case is presented. “The duty of this court, as of every judicial tribunal, is limited to determining rights of persons or of property, which are actually controverted in the particular case before it. * * * No stipulation of parties or counsel, whether *209in the case before the court or in any other case, can enlarge the power, or affect the duty, of the court in this regard.” [Id. at 289 (footnote omitted).]
After a study of the administrative record, I am convinced that we are faced with a similar situation in this case. Therefore, I would reject the stipulation. It is an adoption verbatim by the defendant of a determination made by the Director of the Equal Opportunity Staff of the Department of Health, Education and Welfare on review of the facts set forth in an investigative report and in a transcript of the testimony of a formal hearing held at plaintiff’s request. In my view, the administrative decision is not only without substantial evidentiary support in the record, but is also in direct conflict with the material evidence, including plaintiff’s own testimony, that was received in the course of the investigation and the hearing. It is also contrary to the facts found by the investigator, who personally interviewed seven witnesses, and contrary to findings of the hearing officer, who heard the sworn testimony of plaintiff and of Mr. Dwight Billings, District Manager of the Beckley, West Virginia, Office of the Social Security Administration, the official charged with racial discrimination in this case.
The administrative proceedings began with an investigation and report of May 29, 1967, on plaintiff’s complaint, which was made after the District Manager had denied her application for employment in 1967. It is important, I think, to examine carefully the specific charges made by the plaintiff. As found by the investigator, these were:
1. The district manager denied employment to her in March 1967 because of an inaccurate and demeaning reference report which was submitted by the BARH.
2. The district manager erred in assigning weight to the reference report. (Complainant is sure the report came from Charles D. Holland, who, being anti-Negro, discriminated against her during her employment at the BARH.)
3. Immediately prior to receipt of the reference report from the BARH, the district manager gave her direct indications that he would recommend her for employment if the BARH reference report proved good— *210proof positive that, but for the report, she would have been employed by SSA.
The complainant believes that the sum of these elements amounts to racial discrimination against her by the SSA and/or district manager. However, she concedes that SSA and/or the district manager may not have discriminated against her directly, citing her firm belief that SSA and/or the district manager would have hired her in October 1965 had she not taken employment at the BARH.1
It is undisputed that Mr. Billings rejected plaintiff’s application for employment on the basis of two reports which he received from plaintiff’s last employer, the Beckley Appalachian Eegional Hospital. The first was a report from her last immediate supervisor, Hr. Kisfcin, who stated that she was an adequate employee but that he would not reemploy her, because the hospital administrator questioned her ability to get along with her co-workers. The second was a report from the Administrator of the hospital in which it was stated that plaintiff was a perennial troublemaker who was not adverse to frivolously alleging racial discrimination and calling in the NAACP. The investigation report further recites that Mr. Billings stated that in view of the information submitted by the hospital, “he felt it was best, under these circumstances, to seek out and recommend employment of someone who was equally well qualified and about whom there was no question of potential incompatability with his existing work force.” 2 After considering the testimony and other evidence which he received, the investigator made the following findings:
A. But for the reference report submitted by the BABH management employees, complainant would have been recommended for employment by the district manager. However, neither the accuracy of the report not [sic] the validity of its demeaning content has been determined.
B. The district manager assigned substantial — and crucial — weight to the BABH reference report. However, in doing so, he did not err under existing, applicable policies and regulations.
*211C. Immediately prior to receipt of the BARH reference report, the district manager gave the complainant direct or indirect indication that he would recommend her for employment if the BARH reference report proved good. However, his doing so was more an acknowledgment, on his part, of the complainant’s awareness of her status vis-a-vis possible employment than a firm commitment to a definite course of action with respect to her application for employment.
D. Notwithstanding the basic findings outlined in A-C above, the complainant, in seeking employment, was not discriminated against, because of race, by the Social Security Administration and/or the district manager.3
i{5 % íjí Jfc Í-Í
On July 5, 1967, after the receipt of the investigation report, Mr. M. D. Dewberry, Regional Assistant Commissioner, made the following recommendation to Mr. Zawatzky, Deputy Assistant Commissioner:
"We recommend she be advised there was no discrimination based on race, color, religion or national origin. In her letter of June 27, 1967, she points out that we employed her cousin to fill the vacancy for which she was considered. Obviously, the selection was made between two minority applicants — one with no prior service whose references were good, and one with prior service whose last employer in Beckley would not reemploy her. Also, the manager had some other reservations about Miss Bennett’s attitude from several contacts with her that he considered of minor importance until the former employer questioned her ability to get along with coworkers. We did not investigate the situation at the Beckley Appalachian Regional Hospital leading to the poor reference, since this would not appear to be under our jurisdiction at the present time, even though the hospital is certified under Medicare. The manager has. enjoyed a good working relationship with that hospital, and certainly would not have questioned the integrity of their reference regarding Madrith Bennett.
On July 20,1967, Mr. Zawatzky wrote plaintiff that he had concluded that discrimination was not a factor in her failure to obtain employment in the District Office. However, he ad*212vised ber of her right to a hearing in the event she was dissatisfied with the decision.
At plaintiff’s request, a hearing was held on December 4, 1967. The transcript of the hearing contains the following testimony by plaintiff, in response to the questions of the hearing officer, Mr. Philip Janus:
Q Miss Bennett, as I take it, a central part of your charge is that, in acting on references received from the hospital, Mr. Billings and the Social Security office acted in a racially discriminatory way by not looking behind or into the events that led to the reference from the hospital. Is that correct?
A That is correct, sir.
Q I believe it is your position that, if the references had been satisfactory, you would have been hired.
A This is correct.
Q So, that, without leading, aside from this point— the references, you would not make a charge of discrimination on the part of Mr. Billings or the Social Security office; that is, they were prepared to hire you.
A This is my feeling, sir.
(Transcript of hearing at page 5)
A Well, as I earlier stated, this discrimination existed at the Beckley Appalachian Regional Hospital and it was transmitted by a reference check to Mr. Billings; it was just transferred from one institution to the other. Do you understand what I am saying?
(Transcript of hearing at page 6)
*****
A * * * So, 'actually, it was racial tension and it was, in turn, transmitted to the Social Security 'Office. Whether Mr. Billings was aware of it, I have no knowledge of this, or what added to it in these regards. (Transcript of hearing at page 7)
*****
MR. JANUS [Hearing Officer] : Let me ask you this. Do you have any reason to believe that Mr. Billings did not want to hire you and used this as a convenient excuse not to hire you? Do you feel that he is prejudiced?
MISS BENNETT: I can’t very well say that. I’ve been in Mr. Billings’ office, as he well knows, time and time again and he was always pleasant and he was always willing to take his time out to sit and talk to me and what have you and he told me to feel free to come *213in Ms office at any time that I wished to check and see if there was any vacancies and I truthfully couldn’t say that Mr. Billings is prejudiced. I couldn’t say this. It’s just a matter that he got hung up through an unfavorable reference where racial tension was involved. That’s the only thing I could say at this point.
(Transcript of hearing at page 11)
It should be pointed out that the plaintiff’s testimony, quoted immediately above, was modified to some extent later during the hearing when she said:
* * * Would you have hired me on the basis of one unfavorable reference? Would you have hired me or would you not have hired me? It is a matter of opinion, really. I can’t say that he’s not prejudiced; I really can’t. But, as far as greeting me and going in his office, he made me feel at home and this type of thing. He talked to me and everything but, when it came to Mring me, this was a different capacity altogether. I mean, he just took a different attitude based on that reference.
(Transcript of hearing at page 18)
Despite tMs slight change, it seems to me that this additional testimony amounts to little more than a repetition of the charge previously made by her that the District Manager erred in assigning undue weight to the unfavorable report made by the hospital.
The transcript of the hearing was transmitted to the Director of the Equal Opportunity Staff with a report containing the following findings and recommendations:
*****
2) Mr. Billings, the Manager of the Beckley Social Security Office, was considering hiring Miss Bennett, and told her so. He decided not to after getting what he considered an unfavorable reference from her most recent employer. It appears to me to be a reasonable inference that his eventual decision not to hire her was not motivated by any racial prejudice on his part.
3) Mr. Billings said that it is his normal procedure to check references of all prospective employees. I can see no evidence that Miss Bennett was being unfairly treated by having her references checked before employment.
4) Miss Bennett did not charge, nor is there any indication, that Mr. Billings went out of his way or did anything unusual in asking for a reference from the *214Beckley Appalachian. Regional Hospital, since it was Miss Bennett’s most recent employer.
5) It is Mr. Billings’ contention that one unfavorable reference is enough, in his mind, to decide not to hire a person, and he cited a previous occasion in which this had occurred and resulted in not hiring a white person. In the hearing I asked Miss Bennett whether she had any information of any contradictory action on the part of Mr. Billings, i.e., an instance in which he hired a white person even though he had an unfavorable reference, and she said she did not.
6) The issue, as I stated in the hearing, is not whether Mr. Billings was wise or unwise in ruling out an applicant on the basis of one negative reference. The issue is whether Mr. Billings did what he did because of Miss Bennett’s race.
It is my conclusion, based on the testimony at the hearing, that there is no evidence of racially discriminatory behavior or action on the part of the Beckley Social Security Office.
The facts and findings in the foregoing recitals from the administrative record may be summarized as follows :
(1) The rejection of plaintiff’s application for employment was not based on racial discrimination but resulted from an unfavorable report from her former employer, which indicated that she would be an unsuitable employee.
(2) It was the regular and normal practice of the District-Office to obtain reports from the former employers of applicants, and the District Manager did not violate any applicable policies or regulations in relying on the unfavorable report.
(8) Plaintiff did not claim or testify that the District Manager was actuated by racial bias in rejecting her application for employment. The substance of her complaint was that the District Manager erred in assigning undue weight to the unfavorable report made by the hospital; that racial discrimination existed at the hospital, and that this racial bias was transmitted to the Department of Health, Education and Welfare by the unfavorable report. She admitted that she did not know whether Mr. Billings, the District Manager, was aware of the discrimination practiced in the hospital.
*215If tbe facts so found were not sufficient to refute the charges of racial discrimination, there remains the overriding-fact that the District Manager employed Mrs. Diane Smith, another black person, in the position sought by plaintiff. All of the reports obtained from the references submitted by Mrs. Smith were good, and Mr. Billings decided that she would be a more suitable employee.
It appears to me that the Health, Education and Welfare Equal Opportunity Director totally discounted findings of the special investigator and the hearing officer. Whether or not Mr. Billings was motivated by racial discrimination in denying Mrs. Chambers the position she applied for is a question of fact. Such a determination required an assessment of Mr. Billings’ credibility, taking into account not only his testimony but his demeanor. The special investigator and hearing officer both heard the testimony of Mr. Billings and believed his statement that race was not a factor in his decision. The resolution of this dispositive issue turned almost entirely on Mr. Billings’ credibility. The Director should have given great weight to the findings of the investigator and hearing officer, but I find no indication that he gave them any weight whatever.
As the Supreme Court said in Universal Camera Corp. v. Labor Board, 340 U.S. 474, 496 (1951), “[t]he significance of [an examiner’s] report, of course, depends largely on the importance of credibility in the particular case.” Where credibility is the most important factor, and where two examiners independently conclude that a particular witness is telling the truth, how can the reviewer responsibly discount their observations entirely? It is the examiner who “sees the witnesses and hears them testify, while the Board and the reviewing court look only on cold records.” Labor Board v. Walton Mfg. Co., 369 U.S. 404, 408 (1962).
In addition to the rejection of the findings made by the investigator and the hearing officer, it seems to me that in making his decision, the Director also considered matters that were beyond the scope of the complaint made by plaintiff. The Director correctly stated that the specific charge made by the plaintiff was that discrimination existed at the Beckley Appalachian Regional Hospital and by a reference *216check by Mr. Billings, it was transferred from one institution to the other. The Director then noted that if no more than that were shown, he would be inclined to conclude that the plaintiff’s case was not proven. However, he went on to state that the District Office failed to answer plaintiff’s charges “that it operated in and was unduly influenced by an environment of racial discrimination” and that “it offered no data on the racial composition of its office, its hiring practices or implementation of affirmative action.”
I have found nothing in the record which indicates that plaintiff made any general complaint about the racial composition of the District Office or its hiring practices. However, Mr. Billings gave the following testimony regarding the employment of Negroes:
DIRECT EXAMINATION OF MR. BILLINGS BY MR. SNYDER:
Q Mr. Billings, have you any objection to the hiring of a qualified negro to work in your office ?
A None whatever.
Q Have you in the past hired qualified negroes to work in your office?
A On several occasions; here and elsewhere.
(Transcript of hearing at page 8)
Mr. Billings was also asked by Mr. Snyder, attorney from the Regional Attorney’s office, whether he would have employed a white applicant if he had received a similar unfavorable report from a former employer of the applicant. At pages 9 and 10, the transcript of the hearing shows that Mr. Billings testified as follows:
Q Let me ask you this. If Miss Bennett had been white and you had gone to this depth that you did and received the same information that you did, would you or would you not have hired her ?
A I would not have. I can think of a similar illustration where I was right down to the last notch of an individual and it didn’t look right to me. I talked with the employer and he gave me all sorts of fine reports and so on and I said, “This doesn’t look right. Can I talk with someone else?” And he said, “Well, I’ll make an appointment for you to talk with a certain man,” and he said, “She’s a trouble maker.” She was a white girl, I 'had confidence in recommending her, but she had worked with him.
*217Q In other words, Miss Bennett’s race 'bad nothing to do with this consideration.
A None whatever.
In referring to Mr. Billings’ reliance on the unfavorable report submitted by the Beckley Appalachian Begional Hospital, the Director in his decision stated:
Even devoid of racial implications, it would appear unduly 'arbitrary to give such weight to one unfavorable recommendation, and nullify the preponderance of positive recommendations from other reputable sources as to her character and work.
If this was an important factor in the determination made by the Director, I feel that he must have overlooked the finding of the investigator that the District Manager did not err under existing applicable policies and regulations in assigning substantial and crucial weight to the report made by the hospital. I have seen nothing in the record which shows that the investigator’s statement as to the “applicable policies and regulations” was incorrect.
For the reasons stated, I would not adopt the stipulation as a basis for the decision in this case, would hold that the administrative decision is not supported by substantial evidence, and would dismiss plaintiff’s petition. In view of my conclusions, I would not reach the legal question as to whether the Tucker Act empowers this court to award plaintiff damages if it is established that there was a violation of Executive Order 11478 in the rejection of her application for employment.
Report of Investigation by Walter C. Statham, Assistant Regional Representative, BHI, Charlottesville Regional Office, at page 3.
Investigation Report at page 5.
Investigation Report at page 7. [Emphasis In original.]