BEFORE THE IOWA CIVIL RIGHTS COMMISSION

ORLANDO RAY DIAL, COMMISSIONER; CRISTEN HARMS, and MIKE DE VOLDER, Complainants,

and


IOWA CIVIL RIGHTS COMMISSION,

VS.


FRIEDMAN MOTORCARS, LTD., MIKE FRIEDMAN, TIM MANNING, GARY FRIEDMAN, SCOTT HENRY, PAT SULLIVAN and CHERYL RUBLE, Respondents.

 

FINDINGS OF FACT:

Jurisdictional and Procedural Facts:

1. On or before June 7, 1989, Commissioner Orlando Ray Dial filed his complaint CP # 06-89-18956 alleging race, sex, and disability discrimination in employment, which is prohibited by Iowa Code section 601A.6, and race discrimination in public accommodation, which is prohibited by Iowa. Code section 601A.7. (Complaint). The dates of alleged discrimination stated in the complaint are "before, on, and after May 18, 1989." Official notice is taken that June 7, 1989 is twenty days after May 18, 1989.

2. On November 17, 1989, Cristen Harms filed her complaint CP # 11-89-19422 alleging sex discrimination in employment, which is prohibited by Iowa Code section 601 A.6. The last date of alleged discrimination stated in the complaint is August 1, 1989. Official notice is taken that November 17, 1989 is ninety-eight days after August 1, 1989.

3. On December 6, 1989, Mike DeVolder filed his complaint CP # 12-89-19466 alleging race and sex discrimination in employment and public accommodations, which are prohibited, respectively, by Iowa Code sections 6OlA.6 and 601A.7. He also alleges that he was subjected to retaliation which is prohibited by Iowa Code section 601A.1l.The last date of alleged discrimination stated in the complaint is July 31,1989. Official notice is taken that December 6, 1989 is one hundred twenty-eight days after July 31, 1989.

4. Fairness to the parties does not require that they be given the opportunity to contest the facts officially noticed above.

5. These complaints were investigated. After probable cause was found, conciliation was attempted and failed. Notice of Hearing was issued on October 23, 1990. The hearing was held on April 1-5, 1991.

Background:

6. Commissioner Dial's complaint was filed in response to information provided by Mike DeVolder in May of 1989 concerning alleged discriminatory practices at Friedman Motorcars, Ltd. (hereinafter "Friedman's") and to the results of a "test" of that company's employment practices conducted by two Commission investigators on May 18, 1989. (Tr. at 158, 171, 177, 182, 192). Commissioner Dial was selected as the Commissioner to issue the complaint in accordance with a procedure whereby Commissioners are selected on a rotating basis to file complaints when Commission staff is aware of allegations of discrimination for which no complaints have been filed. (Tr. at 171-72).

7. Complainant Cristen Harms, a female, was employed at Friedman's as a Customer Relations representative from June 22, 1989 to on or about August 2, 1989. (Complaint; Tr. at 279, 304-05). She was hired by her supervisor and office manager, Respondent Cheryl Ruble. (Tr. at 281, 786-88). Ms. Harms' duties were to telephone customers who had either purchased or serviced cars at Friedman's and ascertain whether they were satisfied. (Tr. at 264, 788). Her work area was in the main office near the service department. (Tr. at 282). The main office was shared with Jackie Rice, Cheryl Ruble, and a man named Oren. (Tr. at 283). For one hour a day, she would also work in the receptionist cubicle on the showroom as relief for the receptionist, Catherine Koch. (Tr. at 225, 282).

8. Complainant Mike DeVoider, a white male, was employed as a salesperson selling new and used cars at Friedman's from April 12 to July 31, 1989. (Complaint; Tr. at 83). Mr. DeVoider was supervised by new car sales managers Mike Friedman and Scott Henry. He initially contacted the Iowa Civil Rights Commission when he became aware of race discrimination toward black customers and applicants for sales position. (Tr. at 97).

9. Respondent Friedman Motorcars Ltd. is a business engaged in the sales and service of new and used cars. The company has been owned by members of the Friedman family for many years. (Tr. at 465, 507, 630, 805). Initially, the company, then known as Friedman Motors, was owned by Harold Friedman and his brother. (Tr. at 465, 507). At some point, Mike and Gary Friedman, sons of Harold Friedman, became owners of the business. Respondent Gary Friedman bought out Mike Friedman and has been president and sole owner of the business since 1975. (Tr. at 630, 805, 825-26).

10. Immediately below Gary Friedman in the chain of command are several managers, i.e. the office manager, the business manager, new car sales manager(s), used car sales manager, parts man, service and parts director, and service man. (Tr. at 807). Of these, there are three positions in management which deal with car sales: new car sales manager(s), used car sales manager, and the business manager. (Tr. at 823-24). The supervision of salespersons is done by the new car sales manager(s) and the used car sales manager. (Tr. at 825).

11. The majority of the alleged discriminatory acts with respect to hiring and harassment which were the subject of these proceedings were said to have been committed by sales personnel on or near the showroom floor, in their offices, or outside on the car lot in 1989. The period of April 12 to August 2, 1989 encompasses the Commission's test of May 18, 1989 and the employment dates of Complainants Mike DeVoider and Cristen Harms. The chain of command for the sales department for that period was:

12. Respondent Mike Friedman has been employed with Friedman Motors or Friedman Motorcars, Ltd. during three different periods in sales positions. For 11 years, until approximately 1975, he worked with Friedman Motors. (Tr. at 775). He came back as a salesperson for Friedman Motorcars, Ltd. from approximately April to July 1987. (Tr. at 776). The last time, he was new car sales manager for Volkswagen and Saabs from late 1987 or early 1988 to at least the end of 1989 when his position, along with that of Respondent Pat Sullivan, used car sales manager, was reduced to salesperson due to high overhead and poor business. (Tr. at 83, 205, 337, 500, 507, 509, 511 582, 656, 698, 741-42, 750, 774, 809, 81415). He was terminated from employment with Friedman's in January of 1991 by Gary Friedman. (Tr. at 738, 815). During his last period of employment, he reported directly to Gary Friedman. (Tr. at 492).

13. Respondent Scott Henry, who was still employed at Friedman's as of the date of the hearing, started there in 1980 as business and finance manager. (Tr. at 695-96). He has switched at various times from new car sales manager to used car sales manager over his 11 years. (Tr. at 697). He was new car sales manager for Toyota for at least the period of Mike DeVolder's employment, i.e. April 12 to July 31, 1989. (Tr. at 83, 696-97). During that period, he reported directly to Gary Friedman. (Tr. at 492).

14. Respondent Pat Sullivan, who was still employed at Friedman's as of the date of the hearing, worked at Friedman Motors in sales positions from 1958 to 1971. (Tr. at 464). After working elsewhere, he returned to take the position of new car sales manager at Friedman Motorcars, Ltd. in June of 1987. (Tr. a,%- 464, 496). He became used car sales manager in 1988 and remained in that position until at least the end of 1989 when he and Mike Friedman were both reduced to sales persons. (Tr. at 511, 814-15). During 1989, he reported directly to Gary Friedman. (Tr. at 492).

15. Respondent Tim Manning started with Friedman's as a service writer, writing up tickets of repairs, in April of 1981. (Tr. at 580). In September of 1983 be became finance manager. (Tr. at 581). In February of 1990, he became new car sales manager, a position which he still held as of the date of hearing. (Tr. at 581). In May of 1989, while finance manager, he was supervised by Pat Sullivan, Scott Henry and Mike Friedman. (Tr. at 583-84).

16. Salespersons, other than Mike DeVolder, employed during the period of April 12 to August 2, 1989 included Jeffrey Rich, Curtis Peters, and Gene Cooksey, all of whom testified at the hearing. (Tr. at 236-37, 326, 335-36, 341, 644-45).

Application and Hiring Process for Salesperson Positions in 1989:

17. During 1989, Friedman Motorcars, Ltd. would periodically run newspaper advertisements for salespersons to sell new and used cars in the Des Moines Register. (Tr. at 206-07, 386,475-76, 590). The ad would usually give Friedman's address and list a particular time for the potential applicant to come in. (Tr. at 476) The advertisement would either indicate the potential applicant was to see Mike Friedman in person or call him at a specific telephone number listed in the ad. Both methods of contacting him were used by potential applicants. (Tr. at 206-07). An advertisement might run for up to ten days and yield from ten to fifty applicants. (Tr. at 479-80, 591-92, 76061).

18. For at least a one year period, during his time as sales manager, from the fall of 1988 to the fall of 1989, Mike Friedman was in charge of handling initial applicant contacts and conducting initial applicant interviews for the salespersons positions. (Tr. at 99, 205, 207, 345, 474, 477, 620, 698, 719-20, 744, 811). It is more likely than not that the actual period was up to eleven months longer, beginning shortly after Mike Friedman was rehired in the fall of 1987 or spring of 1988 as a sales manager, a total of twenty-three months. (Tr. at 474, 477, 742-43, 765). He handled at least "ninety-nine percent" of initial applicant interviews during that period. (Tr. at 699). During this period only one or two initial interviews each were handled by the other sales managers, Pat Sullivan and Scott Henry. (Tr. at 502). It should also be noted that, during his previous periods of employment with Friedman Motorcars Ltd. and Friedman Motors, he also had responsibility for interviewing applicants for salesperson positions.

19. An individual who wished to apply for a salesperson position would be given an application by the receptionist, or Mike Friedman or another employee. The potential applicant would then fill out the application. (Tr. at 207, 476, 699). The majority, but not all, of the applicants were interviewed. (Tr. at 480, 505). The decision on who would be interviewed was made by Mike Friedman. (Tr. at 505). After the initial interview was completed, he would decide whether the candidate was interesting enough to discuss with Pat Sullivan and Scott Henry. The three of them would then decide whether to hire the applicant based on Mike Friedman's interview or to conduct a further interview. (Tr. at 390, 475, 478, 50102, 756). If a second interview was given, it would be conducted by two of these three sales managers. Afterwards, they would decide whether to hire the applicant. (Tr. at 501-02).

20. There is a substantial turnover of salespersons at Friedman's. Fifteen to twenty sales persons, and probably more, are hired by Friedman's in any given year. A number also leave. (Tr. at 410, 484, 510, 59192). Because of this turnover, there is a continuing search for qualified salespersons. Normally, even if there is no hiring, applications are given out. (Tr. at 208). As car sales usually increase from the end of winter through the end of summer, the number of salespersons may also increase to a maximum of 12 or 13 in the summer. (Tr. at 593). In the spring of 1989, 10 toll people left sales positions at Friedman's. (Tr. at 205). Seven or eight salespersons, all white males, were hired as their replacements. (Tr. at 206).

21. Although Friedman's has looked for applicants with prior car sales experience, it has hired more than one salesperson who had no previous car sales experience. (Tr. at 475-77, 484, 503-04, 590, 700, 743). Pat Sullivan, Mike Friedman, and Scott Henry consulted together when making these hires of persons with no prior experience, as they did with other hires. (Tr. at 503-04). See Finding of Fact No. 19. One salesperson who was still employed in 1989, Curtis Peters, had worked at a farm, a gas station, and various part-time jobs prior to being hired as a salesperson by Bill Vestal, a former used car sales manager, in 1985. (Tr. at 644-45). Another salesperson, Mark Boyd, was hired by Mike Friedman and employed for one week in March of 1989. Although he had sales experience in other areas "on and off for ten years," he had only four months prior experience in car sales. (Tr. at 385-87, 390). In July of 1990, Friedman's hired James Sherman, whose total prior sales experience was six and one-half months selling cars. (Tr. at 396, 401-02).

Alleged Disability Discrimination in Employment:

22. Commissioner Dial's complaint specifically alleged that Respondents "treated . . . disabled persons . . . less favorably than . . . non-disabled persons . . . [in] the consideration [and] hiring of applicants for the salesperson position." (Complaint). On January 16, 1990, probable cause was found to believe that disability discrimination had occurred in regard to the consideration of applicants for employment. (Admissions). The Commission, however, presented no evidence or argument in support of this allegation. Therefore, this allegation must be dismissed.

Failure to Consider or Hire Blacks for Salesperson Positions:

Direct and Circumstantial Evidence of Race Discrimination:

23. During and after the Spring of 1989, Mike Friedman told Jeffrey Rich, a salesperson, that he did not want to hire Blacks as salespersons. (Tr. at 327). He would also frequently refer to Blacks as "niggers" and by other racial epithets which were overheard by Mike DeVoider and Cathy Koch, the receptionist. (Tr. at 85 88, 204, 212, 215, '133).

24. On some occasions, Black applicants would be allowed to fill out applications, but would either not be interviewed under circumstances where white applicants were interviewed; or Mike Friedman would talk to them for a very brief period of time while similarly situated white applicants would be interviewed at greater length. (Tr. at 93-94, 142, 327-28).

25. On other occasions, Mike Friedman would tell Black potential applicants that a job was not available or that it was filled, but would give white potential applicants, who responded to the advertisements after the Blacks, applications to fill out. (Tr. at 94-95, 357). On one of these later occasions, a Black potential applicant asked if he could leave his resume or fill out an application. He was told this would not be necessary. (Tr. at 95). No Blacks were interviewed, hired, or employed as salespersons at any time when Mike Friedman was in charge of interviewing at Friedman Motorcars Ltd. (:Tr. at 96, 357, 506-07, 770). There is no evidence in the record of any Black salesperson ever being employed at Friedman Motorcars Ltd. prior to February 13, 1990. (Tr. at 523).

Number of Black Applicants:

26. There is some dispute concerning how many Black applicants there were for sales positions in 1989. The greater weight of the credible evidence, however, supports the conclusion. that there were at least three and probably more Black applicants, including Bill Edwards, in the spring of 1989 alone.

27. On the one hand, some testimony of the Respondents presented a picture of almost no black applicants. Mike -Friedman testified, that during the twenty years when he was employed with either Friedman Motors or Friedman Motorcars, Ltd., he had responsibility for interviewing potential employees for sales positions. (it should be noted that Mike Friedman's total employment with both entities, including the times when he did not have responsibility for hiring salespersons, could not have exceeded fifteen years. See Finding of Fact No. 12). He testified that, during the time when he had that responsibility, a total of two Blacks, neither of whom were interviewed or hired, called or came to the dealership to make inquiry about employment as salespersons. (Tr. at 760, 766).

28. Sales manager Scott Henry maintained he was aware of less than five or six Black applicants from 1980 to 1991, three of whom applied during the year prior to the hearing. (Tr. at 717, 720).

29. On the other hand, Mike DeVolder testified that, in the Spring of 1989 alone, there were over three Black applicants, including Bill Edwards. (Tr. at 9395, 98-99). Cathy Koch saw at least two Black applicants during that period. (Tr. at 208-09). Jeffrey Rich's testimony indicates that he recalls there being six Black applicants during his employment with Friedman's which was essentially continuous from March 1987 to April or May of 1990 and then resumed from June of 1990 until the date of the hearing. (Tr. at 326-28, 340-42)..Two of these six applied and were hired after Mike Friedman was no longer conducting interviews. (Tr. at 343, 353). See Finding of Fact No. 12. More than one of the remaining four Blacks sought employment in the Spring of 1989. (Tr. at 327-28).

The employment test:

30. Mike DeVoider had originally telephoned the Commission to complain about race discrimination at Friedman Motorcars Ltd. after witnessing such discrimination in hiring for salesperson positions and in the treatment of Black customers. (Tr. at 97-98). At that time, Mr. DeVoider was not interested in personally filing a complaint. Therefore, after being informed of these incidents, Don Grove, the Commission's internal Administrative Law Judge, was requested by lnga Bumbary-Langston, the Commission's Executive Director, to listen to a tape recording of the Commission's interview of Mr. DeVoider and to recommend appropriate action ' (Tr. at 158). It was decided that a test be conducted to determine whether Mike Friedman considered race in the treatment of applicants for salesperson positions. (Tr. at 159).

31. The test was originally designed to occur in two parts, separated by at least a day. Part one utilized two male testers: Bill Edwards, a Black male, and Karl Schilling, a white male. (Tr. at 159, 168, 177-78, 192). Part two was to involve two female testers: one Black and one white. (Tr. at 159). Part two was never carried out. (Tr. at 171). In essence, the test called for the testers to observe what happened when they applied or attempted to apply, through Mike Friedman, for a salesperson position at Friedman's which was advertised in the newspaper. (Tr. at 155-56, 159, 182, 754). Both male testers were employed as Civil Rights Specialists with the Commission. (176-77, 191). Both were provided information on the automobile sales business concerning such subjects as sales training, what would constitute a good sales record, and salaries and commissions. (Tr. at 179,193). Both were given pseudonyms to use as testers in order to avoid being identified as Commission employees. (Tr. at 186-87)

32. Both testers were given personal profiles. (Tr. at 179, 193). Karl Schilling's profile was designed to represent his character as being somewhat less qualified than Mr. Edwards. (Tr. at 163,174, 180, 194). Mr. Schilling was to have had six months car sales experience with a Chevrolet dealer in Missouri. (Tr. at 193). His character's car sales performance was to have been lackluster, i.e. two months in training and slightly below average in sales at the end of six months. (Tr. at 194-196). His work background, other than car sales, was to be substitute teaching and full time teaching. (Tr. at 193).

33. Mr. Edwards' profile for his character, "Mr. Edmunds", included ten months of prior car sales experience with a Chevrolet dealer in Bloomington, Minnesota. (Tr. at 170, 180). He was ranked number 4 in the sales force there and always made his draw. He sold a minimum of 10 cars per month. (Tr. at 180). (At Friedman's the management liked to see sales-persons "at least hit 10" cars per month in sales.) (Tr. at 592). His prior experience included approximately two years in retail management at a shoe store. (CP. EX. # 3). In light of the minimum actual prior car sales experience and sales expectations of salespersons employed or hired at Friedman's during Mike Friedman's last period of employment, it is clear this is a profile of a qualified applicant. See Finding of Fact No. 21.

Findings of Fact Continued