IN THE SUPREME COURT OF IOWA
No. 89-90-226
Filed June 19,1991
VICTORIA L. HAMER, Appellant,
VS.
IOWA CIVIL RIGHTS COMMISSION and UNITED PARCEL SERVICE, INC.,
Appellees.
UNITED PARCEL SERVICE, INC., Appellant,
VS.
IOWA CIVIL RIGHTS COMMISSION, AND
VICTORIA L. HAMER, Appellees.
Appeal for the Iowa District Court for Wapello County, Robert
Bates, Judge.
Parties appeal andcross-appealfrom
judicial review of civil rights action in sex discrimination case.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED WITH INSTRUCTIONS.
Albert L. Harvey and Rodney H. Powell of Black, Harvey, Goldman
& Powell, P.C., Des Moines, for appellant United Parcel Service,
Inc.
H. Edwin Detlie, Ottumwa, for appellant Victoria L. Hamer.
Thomas J. Miller, Attorney General, and Rick Autry, Assistant
Attorney General, for appellee Iowa Civil Rights Commission.
Considered by Harris, P.J., and Larson, Schultz, Snell, and Andreasen,
JJ.
LARSON, J.
Victoria Hamer was fired from her position with United Parcel
Service (UPS) at its Ottumwa, Iowa, facility, and she filed a
claim for sex discrimination under Iowa Code chapter 601A (1983).
The Iowa Civil Rights Commission awarded damages, ordered her
reinstatement, and assessed attorney fees. UPS petitioned for
judicial review, and the district court aff irmed the Commission's
award except forthe award of emotional distress damages, which
it re-versed. All parties appealed or cross-appealed. We affirm
in part, reverse in part, and remand.
Hamer began employment at UPS in 1977. In 1980, she began working
as an on-call delivery driver. In March 1984, UPS terminated Hamer
for failure to be available for work for three consecutive days,
claiming that Hamer violated the "no-call/no-show" provision
of UPS's collective bargaining agreement. On Hamer's claim of
sex discrimination, the Iowa Civil Rights Commission found UPS's
justification for the discharge to be pretextual.
Judicial review of Civil Rights Commission
actions is governed by the Iowa Administrative Procedure Act,
Iowa Code, § 17A.19. See Iowa Code, § 601A.17(l).
Under section 17A.1 9(8) (f), the
Commission's factual findings must stand if supported by substantial
evidence when the record is viewed as a whole. Substantial evidence
is what a reasonable mind would accept as adequate to reach a
given conclusion, even if the reviewing court would have drawn
a contrary inference from the evidence. Varied Enters., Inc. v.
Sumner, 353 N.W.2d 407, 409 (Iowa 1984). Our court cannot engage
in independent findings of fact unless the facts are established
as a matter of law. Eaves v. Board of Medical Examiners, 467 N.W.2d
23T, 237 (Iowa 1991); Aluminum Co. of Am. v. Employment Appeal
Bd., 449 N.W.2d 391, 394 (Iowa 1989); Armstrong v State of Iowa
Bldqs., 382 N.W.2d 161, 165 (Iowa 1986).
1. Evidence Issues.
UPS claims that the Commission erred in (a) drawing inferences
from UPS's failure to produce documents, (b) relying on prior
acts of alleged discrimination (c) basing credibility determinations
on the presence of certain parties at the hearing, and (d) finding
discrimination under the record.
A. Inference from failure to produce evidence.
According to UPS, Hamer was terminated because she was not
at her phone for three consecutive days when the company attempted
to call her for work. Hamer claimed this alleged justification
was pretextual. The administrative law judge determined that the
work records of the week in question were relevant and ordered
UPS to produce them. UPS did not produce the information, claiming
that its policy was to destroy documents after three years, and
the work schedule was no longer in existence. This explanation
was rejected by the administrative law judge in light of the fact
that the work records from the preceding six weeks were available
and were offered into evidence by UPS.
When relevant evidence is within the control of a party whose
interest is affected, a court may infer that the evidence, if
not produced, would be unfavorable to that party. Ritz v. Selma
United Methodist Church, 467 N.W.2d 266,271 (Iowa 1991); Crosser
v. Iowa Dep't of Pub. Safety, 240 N.W.2d 682, 685 (Iowa 1976):
Quint-Cities Petroleum Co. v. Maas, 259 Iowa 122, 127, 143 N.W.2d
345, 348 (1966). The administrative law judge drew that inference
here, and we find no error in doing so. The evidence in question
had been available to UPS; the evidence was not produced, and
the explanation tendered by UPS forfailure to produce it was found
by the administrative law judge to be insufficient.
B. The credibility issue. UPS also complains that the agency
wrongfully impugned the credibility of UPS employees who testified,
for UPS, that the work environment was largely free of sexual
harassment. The hearing officer found these employes were "very
nervous during the hearing and less than credible witnesses,"
and noted, as if in explanation, that wives, close friends, and
a "girlfriend" of the employees were present at the
hearing. UPS complains that the Commission erred in "basing
its decision" on the presence of those persons at the hearing.
We do not agree with UPS's premise that the Commission's findings,
when viewed as a whole, were "based" on the presence
of outsiders at the hearing. Credibility assessments are largely
left to the fact finder, and we give deference to those findings.
Peoples Memorial Hosp. v. Iowa Civil Rights Comm'n. 322 N.W.2d
87, 92 (Iowa 1982). While the administrative law judge did not
state that she considered the presence of these people in determining
the credibility of the witnesses, we cannot say that this would
be improper if she had.
C. Evidence of prior acts. UPS contends that the Commission
erred in considering evidence of earlier acts by UPS personnel.
The standard for admissibility in administrative hearings is that
the evidence be "the kind of evidence on which reasonably
prudent persons are accustomed to rely for the conduct of their
serious affairs ... even if it would be inadmissible in a jury
trial." Iowa Code § 17A.14(l) (1989). This section conforms
with the general rule that administrative agencies are not bound
by technical rules of evidence. McConnell v. Iowa Dep't of Job
Serv., 327 N.W.2d 234, 237 (Iowa 1982).
Evidence of a discriminatory atmosphere in relevant in considering
a discrimination claim, and it "is not rendered irrelevant
by its failure to coincide precisely with the particular actors
or time frame involved in the specific events that generated a
claim of discriminatory treatment." Conway v. Electrol Switch
Corp., 825 F.2d 593, 597 (lst Cir. 1987). As the court in Conway
stated:
While evidence of a discriminatory atmosphere may not be conclusive proof of discrimination against an individual plaintiff, such evidence does tend to add "color" to the employer's decision making processes and to the influences behind the actions taken with respect to the individual plaintiff ...
... I While this court has recognized that "proof of a general atmosphere of discrimination is not the equivalent of proof of discrimination against the individual," it may be one indication that the reasons given forthe employment action at issue were "implicitly influenced" by the fact that the plaintiff was of a given race, age, sex or religion.
Id. at 597-98.
In a claim of disparate treatment in employment, proof of the
employer's motive is critical. Hy-Vee Food Stores v. Civil Rights
Comm'n, 453 N.W.2d 512, 516 (Iowa 1990) (citing International
Bhd. of Taamsters v. United States, 431 U.S. 324, 335 n.15, 97
S. Ct. 1843, 1854, n.15, 52 L.Ed. 2d 396, 415 n.15 (1977)).
Of course, a discriminatory motive will rarely be announced
or readily apparent. Consequently, evidence concerning the employer's
state of mind is relevant in determining what motivated the complained
of acts. Evidence of prior acts have been allowed in numerous
federal cases. See, e.g., Estes v. Dick Smith Ford, 856 F.2d 1097,1104
(8th Cir. 1988) (employer's discriminatory treatment of black
customers might have some bearing on question of employer's motive
in discharging black employee); Hailquist v. Local 276, Plumbers
& Pipefitters Uniof, 843 F.2d 18, 23 (lst Cir. 1988) (statements
derogatory toward women by foreman is relevant to motive for discharge);
Miles v. M.N.C. Corp., 750 F.2d 867, 876 (llth Cir. 1985) (racial
slur by assistant superintendent relevant to motive in failure
to recall suit); Brown v. Parker-Hinnifan Corp., 746 F.2d 1407,
1412 (10th Cir.1984) (failure to remedy harassment by employees
may serve as proof that the employer's proffered nondiscriminatory
reason for the discharge was pretextual); Carter v. Duncan-Huggins,
Ltd., 727 F.2d 1225, 1236 (D.C. Cir. 1984) (the fact supervisor
laughed at racist joke could be evidence of discriminatory motive);
Rowe v. Cleveland Pneumatic Co., 690 F.2d 88, 97 (6th Cir. 1982)
(evidence of racial slurs by supervisor relevant to. plaintiff's
prima facie case and to establish pretext).
UPS's argument that the acts were not within 180 days of Hamer's
complaint is irrelevant, even though Iowa Code section 601A.15(12)
requires that a complaint be filed within 180 days of alleged
discrimination. See Lynch v. City of Des Moines, 454 N.W.2d 827,
831 (Iowa 1990). The prior acts are relevant to show the general
atmosphere of Hamer's I work place; they need not be actionable
in themselves in order to be admissible.
D. The substantial evidence issue.
UPS does not challenge the suff iciency of the evidence in the
record as a whole, but it points to alleged defects in the Commission's
analysis of specific items of evidence in the record underlying
the Commission's finding that Hamer's discharge was pretextual.
UPS contends, for example, that the Commission's ,findings
on the question of whether UPS had telephoned Hamer on a key date
lacked sufficient support in the evidence and were based solely
on the speculation of the hearing officer.
Hamer and the Commission counter, first, that the no-call/no-show
argument is a red herring: the rule is not aimed at on-call employes
at all, but tD employes who are scheduled to work but neither
show up for work nor call to tell UPS. Second, and more significant,
the key question is not whether substantial evidence supports
the officer's findings on specific facts but whether, when the
record is viewed as a whole, substantial evidence supports the
finding of discrimination. See Iowa Code § 17A.19(8)(f).
We believe there is substantial evidence to support that finding
here.
A party claiming a civil rights violation
in hiring practices has the initial burden to prove a prima facie
case of discrimination by showing that (1) the employee belongs
to a protected group; (2) the employee applied for and was qualified
for a job for which the employer was seeking applications; (3)
the claimant was rejected' and (4) after the rejection, the position
remained open and the employer continued to seek applications.
Hy-Vee, 453 N.W.2d at 516; Iowa State Fairgrounds Sec. v. Iowa
Civil Rights Comm'n. 322 N 6 (Iowa 1982). These criteria under
the Iowa Civil Rights Act are based on the application of the
federal act by the Supreme Court in.McDonnell Douglas Corp. v.
Green, 411 U.S. 792, 802, 93 S. Ct. 1817, __, 36 L. Ed. 2d 668,
677 (1973).
The test for a prima facie case as set out in HyVee (a promotion
case) and McDonnell (a hiring case) obviously does not apply literally
to the present case, which is a claimed pretextual firing of an
existing employee. The third and fourth elements of the McDonnell
test, pertaining to a failure to hire, are obviously inapplicable
to an existing employee status. However, as the Supreme Court
has characterized, this "test" is merely "an appropriate
model for a prima facie case" of discrimination. Texas Dept.
of Community Affairs v Burdine, 450 U.S. 248, 253 n.6,
101 S. Ct. 1089, __ n. 6, L. Ed. 2d 207, 215 n.6 (1981). And,
as McDonnell Douglas itself stated, "[t]he facts necessarily
will vary ... and the specification above of the prima facie proof
required from (the claimant] is not necessarily applicable in
every respect to differing factual situations." 411 U.S.
at 802 n.13, 93 S. Ct. at .. n.13, 36 L. Ed. 2d at 677-78 n.13.
See also Furnco Constr. Corp. v. Waters, 438 U.S. 567, 577, 98
S. Ct. 2943, __, 57 L. Ed. 2d 957, 967 (1978) ("The method
suggested in McConnell Douglas for pursuing this inquiry . . .
was never intended to be rigid, mechanized, or ritualistic.").
The court said, in Furnco, that the test
is merely a sensible, orderly way to evaluate the evidence in light of common experience as it bears on the critical question of discrimination. A prima facie case under McDonnell Douglas raises an inference of discrimination only because we presume these acts, if otherwise unexplained, are more likely than not based on the consideration of impermissible factors. And we are willing to presume this largely because we know from our experience that more often than not people do not act in a totally arbitrary manner, without any underlying reasons, especially in a business setting. Thus, when all legitimate reasonsforrejecting an applicanthave been eliminated as possible reasons for the employer's actions, it is more likely than not the employer, who we generally assume acts only with some reason, based his decision on an impermissible consideration such as race.
Id. (citations omitted).
Modifying somewhat the McDonnell Douglas test to fit an existing
emp!oyer/employee relation , ship, we believe that a prima facie
case of discrimination may be shown by establishing (1) that the
employee belongs to a protected group; (2) that the employee was
qualified to retain the job; (3) the claimant was terminated;
and (4) it is more likely than not that the termination was based
on an impermissible consideration, in this case sex. See Reeb
v. Marshall, 626 F. 2d 43, 45 (8th Cir. 1980), which stated that
the prima facie case is established if the claimant shows that
it is more likely than not that the employer's action was based
on a discriminatory criteria illegal unde the Civil Rights Act.
We believe that there is substantial evidence in the record
to support all of these findings. In fact, UPS does not seriously
challenge Hamer's establishment of a prima facie case. Rather,
it attempts to explain and justify her termination by the application
of its "no-call/no-show" rule.
Once a prima facie case has been established,
a presumption of discrimination arises. While the ultimate burden
of persuasion never shifts from the complainant, the employer
must meet the presumption by going forward with evidence to dispel
the presumption by articulating a legitimate, nondiscriminatory
reason for the employment action. Hamilton v. First Baptist Elderly
Hous. Found., 436 N.W 2-d 336, 338-39 (Iowa 1989); Iowa State
Fairgrounds Sec., 322 N.W.2d at 296. See Mc onnell Douglas, 411
U.S. at 802, 93 S. Ct. at .. 36 L. Ed. 2d it-678.
If the employer shows a nondiscriminatory reason for the discharge,
the claimant may present evidence to persuade the fact finder
that the articulated reason for the reason is prefextual. Id.
at 804, 93 S. Ct. at __, 36 L. Ed. 2d at 679.
We agree with the Commission that a "no-call/noshow"
provision in a contract refers to the case in which an employee
neither shows up for work nor calls to inform the employer. It
does not apply to the "on-call"employee such as Hamer.
She was not scheduled to work on the days in question, she was
in the process of moving at the time, and it was difficult to
reach her by telephone. No company rule required on-call employees
to be accessible by telephone, yet when the employer was unable
to reach her during the time she was moving, it simply fired her.
We believe that the evidence, when considered as a whole, sufficiently
established that the explanation offered by UPS for its
termination of Hamer was pretextual.
II. Damages.
A. The measure of damages. Hamer's
recovery for lost wages was based by the Commission on what she
would have earned, but Hamer argues that she should receive what
a male employe would have made. Hamer cites Hy-Vee, 453 N.W.2d
at 531, to support this argument. Hy-Vee, however, does not stand
for the proposition that this is an inflexible measure of recovery,
only that the Commission in that case had acted within its discretion
in fashioning a remedy based upon the earnings of a male employee.
Id.
Iowa Code section601A.15(8) gives authority to the Commission
to "take the necessary remedial action as in the judgment
of the Commission will carry out the purposes of this chapter,"
and we give considerable deference to the Commission's fashioning
of a remedy. Id. Implicit in this section is the discretion to fit a remedy to.the specific case, and
we believe the Commission's award based on Hamer's actual pay,
rather than that of a theoretical employe, was within that discretion.
In a related claim, Hamer asserts that it was error for the
Commission to fail to reduce the projected mileage allowance received
by Hamer of $ .25 per mile by her operating expenses of $ .21
per mile. However, as Hamer concedes, our cases do not require
"unrealistic exactitude" in computing awards in discrimination
cases. Hy-Vee, 453 N.W.2d at 53031 (quoting Pettway v. American
Cast Iron Pipe Co. 494 F.2d 211, 260-61 (5th Cir. 1974)).
We do not believe that the Commission's failure to specifically
discuss the impact of Hamer's automobile expense renders the Commission's
award invalid.
B. Mitigation of damages. The administrative law judge, in
determining the back pay award, stated that.
The law is clear that [UPS] has the burden of proving failure to mitigate damages. It did not do so. However, it is difficult to believe that Hamer could not have found at least minimum wage work, therefore, it will be assumed she could have done so and that amount should be deducted [from the back pay award].
Hamers says that this was error; UPS was required to raise
the issue of mitigation, and it failed to do so. She contends
that, if she had known that mitigation was to be involved, she
would have introduced evidence of the "considerable difficulty
she experienced in applying for work for near minimum wage, when
she had been fired from a job for over $15.00 per hour."
We hold it was error for the Commission to reduce Hamer's recovery
on the basis that she had failed to mitigate damages in view of
the fact that UPS did not raise or introduce evidence on the issue
of mitigation. We therefore remand to the Commission for recomputation
of Hamer's lost wages.
III. The Emotional Distress Issue.
Emotional distress is a proper element of damage in a wrongful
discharge case, Hy-Vee, 453 N.W.2d at 525; Chauffeurs, Teamsters
& Helpers v. Iowa Civil Rights Comm'n, 394 N.W.2d 375, 383
(Iowa 1986), and the Commission awarded such damages here. The
district court concluded that the award lacked substantial evidence
in the record and reversed, noting that Hamer's distress was short-lived,
that she had received unemployment benefits during the time of
her unemployment, and that no medical evidence was introduced
to show treatment for emotional distress.
The court contrasted the facts of this case to those in Chauffeurs
and concluded that the conduct of the employer in Chauffeurs and
the impact of thewrongful discharge in the case were more egregious.
As we said in Hy-Vee (which was filed after the district court's
ruling in this case), however, a civil rights complainant may recover compensable damages for emotional
distress without a showing of physical injury, severe distress,
or outrageous conduct. Hy-Vee, 453 N.W.2d at 526. It is true that
the impact on Hamer was concededly less severe than in Chauffeurs
and in HyVee, but the amount of the award, $5000, was correspondingly
reduced. We conclude that the record amply supports the award
of emotional distress damages and that it was error for the district
court to reject it. We therefore reverse the district court and
order the reinstatement of the Commission's award for emotional
distress.
IV. Attorney Fees.
Hamer argues that the Commission's award of attorney fees was
too low because it did not compensate for prenotice services by
the attorney. UPS argues the award was too high because it included
fees for Hamer's attorney in representing the interest of the
Commission in the judicial review proceeding.
A. Prenotice fees. The Commission
refused to allow attorney fees for services rendered by Hamer's
attorney before service of the notice of the Commission hearing.
The Commission's order stated that, under a prior Commission ruling,
only services rendered after notice of hearing would be allowed.
Hamer, however, points to later rulings by the Commission which
have expressly allowed such fees. Despite the later rulings, however,
prenotice fees are not required to be reimbursed; it is still
an area for Commission discretion, and we find no abuse of that
discretion here.
B. Fees for Commission's attorney. The Commission requested
by letter that Hamer's attorney represent the Commission in the
presentation of Hamer's claim.See Iowa Code §601A.15(6) ("The
case in support of such complaint shall be presented at the hearing
by one of the commission's attorneys or agents."). UPS contends
that the representation of Hamer before the Commission and on
judicial review should have been provided by the Commission's
own attorneys and that UPS should not be required to pay for those
services.
Iowa Code section 601A.15(8)(a)(8), however, provides for recovery
by a successful claimant of "actual damages, court costs
and reasonable attorney fees." This section, we believe,
clearly anticipates that when a claimant prevails the attorney
fees will be paid by the losing party, not by the claimant or
the Commission.
We affirm the district court except for its award of damages.
We reverse the damage award and remand to the Civil Rights Commission
for recomputation of lost wages without reduction for mitigation
and for reinstatement of its award for emotional distress. Costs
are taxed to UPS.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED
WITH INSTRUCTIONS.