BEFORE THE IOWA CIVIL RIGHTS COMMISSION
STACEY D. DAVIES, Complainant, and IOWA CIVIL RIGHTS COMMISSION,
vs.
NISSEN COMPANY, SUBHASH SAHAI, M.D., and WEBSTER CITY MEDICAL CLINIC, INC., Respondents.
CONCLUSIONS OF LAW:
I. Jurisdiction and Procedure:
A. Timeliness:
1. Complainant Stacey Davies's complaint was timely filed within one hundred eighty days of the alleged discriminatory practice. Iowa Code §601A.15(11) (now 216.15(11)). See Finding of Fact No. 2. All the statutory prerequisites for hearing have been met, i.e. investigation, finding of probable cause, attempted conciliation, and issuance of Notice of Hearing. Iowa Code §601A.15 (now 216.15). See Finding of Fact No. 3.
B. Subject Matter Jurisdiction:
2. Subject matter jurisdiction ordinarily means the authority of a tribunal to hear and determine cases of the general class to which the proceedings in question belong. Tombergs v. City of Eldridge, 433 N.W.2d 731, 733 (Iowa 1988). Ms. Davies's complaint is within the subject matter jurisdiction of the Commission as the allegation that the Respondents were responsible for the failure to hire her for an assembly line position at Nissen because of her sex (pregnancy) falls within the statutory prohibition against unfair employment practices which the Commission has the power to hear and determine. Iowa Code §§601A.6,.15 (now §§216.6, .15). See Quaker Oats Co. v. Cedar Rapids Human Rights Commission, 268 N.W.2d 862, 867 (Iowa 1978); (discrimination on the basis of pregnancy constitutes discrimination on the basis of sex); Cedar Rapids Community School District v. Parr, 227 N.W.2d 486, 494-95 (Iowa 1975)(same).
II. Official Notice:
3. Official notice was taken a specific fact. See Rulings on Objections No. 5.
10. Official notice may be taken of all facts of which judicial notice may be taken and of other facts within the specialized knowledge of the agency. Iowa Code § 17A.14(4) (1991). Judicial notice may be taken of matters which are "common knowledge or capable of certain verification." In Re Tresnak, 297 N.W.2d 109, 112 (Iowa 1980).
Dorene Polton, 10 Iowa Civil Rights Commission Case Reports 152, 160 (1992).
III. Admissions on Brief:
3A. There are several allegations made on brief by a party which are binding on the Commission because such allegations are adverse to the party making them. See Findings of Fact Nos. 21, 31.
When an allegation, which militates against the party making it, is made on pleadings or in a brief, and such allegation has not been withdrawn or superseded, it binds the party making it and must be taken as true by a court, administrative agency, or other finder of fact. See Grantham v. Potthoff-Rosene Company, 257 Iowa 224, 230-31, 131 N.W.2d 256 (1965)(cited in Wilson Trailer Co. v. Iowa Employment Security Comm'n, 168 N.W.2d 771, 776 (Iowa 1969)). See also Larson v. Employment Appeal Board, 474 N.W.2d 570, 572 (Iowa 1991).
Maxine Boomgarden, CP # 07-86-14926, slip. op. at 59 (Iowa Civil Rights Comm'n October 12, 1993).
IV. Respondents Dr. Sahai and the Webster City Medical Clinic Can Be Held Liable For Recommendations Which Resulted In the Sex Discriminatory Failure to Hire Complainant Davies:
A. The Iowa Civil Rights Act's Prohibitions Against Sex Discrimination in Employment Are Not Limited To Those Who Make Final Decisions in the Hiring Process:
4. On brief, Respondent cites a Michigan Court of Appeals case for the proposition that Respondents Sahai and Clinic cannot be held liable for any hiring discrimination against Complainant Davies because they were not "ultimately responsible" for the hiring decision. Anspach v. City of Livonia, 364 N.W.2d 336 (Mich. App. 1985). Respondent's Brief at 12.
5. The facts of Anspach are radically different from those here. In Anspach, a female, who had unsuccessfully applied for a court officer position, filed a sex discrimination action against both the district court judge and the city responsible for funding the district court. Anspach at 337, 339. By statute, the authority to hire court employees was vested solely in the judge. Id. at 339. Much unlike the present case, it is clear that the city had no role whatsoever in making hiring decisions or recommendations for court officers. See id. at 338-39. In the present case, Respondents Dr. Sahai and the Clinic not only made hiring recommendations, but these recommendations were considered final and not overridden by Respondent Nissen Company. They were, in a very real sense, final and ultimate hiring decisions. See Findings of Fact Nos. 9-10.
6. In any event, the Iowa Civil Rights Act does not limit liability to those who make final or ultimate hiring decisions. The Act states, in part:
1. It shall be an unfair or discriminatory practice for any:
a. person to refuse to hire, accept, register, classify, or refer for employment . . . any applicant for employment. . . because of the . . . sex . . . of such applicant or employee.
Iowa Code § 601A.6(1)(a) (now § 216.6(1)(a)).
7. Persons who refuse to "classify" applicants "for employment" or "refer" them "for employment," as well as those who "refuse to hire . . . for employment" can be held liable under the Act. See id. A "person" is defined, in part, as meaning "one or more individuals . . . [or] corporations." Iowa Code § 601A.2(10) (now 216.2(10)).
8. The prohibition of these acts by a "person," as opposed to an "employer," which is defined, in part, as "every . . . person employing employees within the state," Iowa Code § 601A.2(6) (now 216.2(6)), indicates that the prohibitions concerning actions respecting applicants are not limited to employers. The structure of the "unfair employment practices" section of the Act indicates that certain prohibitions are intended to apply to "person[s]", Iowa Code § 601A.6(1)(a)(d) (now 216.6(1)(a)(d)); while others apply to "labor organization[s]," id. at 601A.6(1)(b) (now 216(1)(b)), or a combination of "employer[s], employment agenc[ies], labor organization[s]," id. at 601A.6(1)(c) (now 216.6(1)(c)).
9. In determining the legal effect of the prohibitions against persons refusing to hire, classify, or refer applicants for employment because of sex, the Act is to be "construed broadly to effectuate its purposes." Iowa Code § 601A.18 (now 216.18). Respondents Sahai and Clinic are both "persons" who failed to classify Complainant Davies as being fit for employment or to refer her for employment due to her sex. They were responsible, through their recommendation to Respondent Nissen Company, for the failure to hire Complainant Davies due to her sex. Respondents Sahai and Clinic are liable for their violations of the Act.
B. Respondents Sahai and the Webster City Medical Clinic Can Be Held Liable For Sex Discriminatory Recommendations Because They Controlled Complainant Davies's Access to Employment Opportunities With Respondent Nissen Company:
10. Federal courts considering discrimination cases filed under Title VII of the Civil Rights Act of 1964 have repeatedly held "Title VII may apply even in the absence of a direct employment relationship between the plaintiff and defendant when a defendant interferes in a plaintiff's employment opportunities with a third party where the defendant controls access to those opportunities." Pelech v. Klaff-Joss, 61 Fair Empl. Prac. Cas. 507, 508 (D. N.D. Ill. 1993)(citing Sibley Memorial Hospital v. Wilson, 488 F.2d 1338 (D.C. Cir. 1973); Doe on Behalf of Doe v. St. Joeseph's Hospital, 788 F.2d, 411, 422-23 (7th Cir. 1986); Vakharia v. Swedish Covenant Hospital, 765 F. Supp. 461, 465-66 (N.D. Ill. 1991)). See also Pardazi v. Cullman Medical Center, 838 F.2d 1155, 46 Fair Empl. Prac. Cases 236, 238 (11th Cir. 1988); Zaklama v. Mt. Sinai Medical Center, 842 F.2d 291, 46 Fair Empl. Prac. Cas. 913, 916 (11th Cir. 1988); Williams v. City of Montgomery, 742 F.2d 586, 37 Fair Empl. Prac. Cas. 52, 54 (11 Cir. 1984), cert. den'd, 37 Fair Empl. Prac. Cas. 376 (U.S. 1985); Mitchell v. Tenney, 650 F. Supp. 703, 706, 42 Fair Empl. Prac. 1220 (N.D. Ill. 1986); Patzer v. Board of Regents, 577 F. Supp. 1553, 37 Fair Empl. Prac. Cas. 1019, 1021 (D. Wis. 1984), rev'd and rem'd on other grounds, 763 F.2d 851, 37 Fair Empl. Prac. 1847 (7th Cir. 1985); Puntillo v. New Hampshire Racing Comm., 375 F. Supp. 1089, 10 Fair Empl. Prac. Cas. 292, 294 (D. N.H. 1974); 3 Employment Discrimination Coordinator ¶ 23224 (1994).
11. In Pelech, the complainant was a female security guard working for a company providing security services for a building. Pelech at 507. She learned that the owners of the building were hiring a new elevator operator. Id. While the owners had the final authority to decide who to hire for the position, the interviews and recommendations for the position were conducted by a cleaning company which provided janitorial services under contract to the building owners. Id. at 507, 509. Complainant applied, but was denied the position. She then sued both the building owners and the cleaning company for sex discrimination in hiring. Id. at 507-08. Although the final decision to not hire her was made by the building owners, the suit was also permitted to proceed against the cleaning company because a discriminatory failure to recommend an applicant for employment by an entity that controls the applicant's access to that employment is a violation of Title VII. Id. at 508-09. In the instant case, there is no doubt that Respondents Clinic and Sahai controlled Complainant Davies's access to employment with Respondent Nissen Company and denied such access because of her pregnancy. See Findings of Fact Nos. 7-7A, 9-10, 12-14, 15-20.
12. This Title VII holding results from a liberal construction of that statute which makes in unlawful for any "employer . . . to fail or refuse to hire . . . any individual . . . because of such individual's . . . sex." 42 U.S.C. § 2000e-2(a)(1)(quoted in Pelech at 508)(emphasis added). The use of the word "individual" instead of "employee" results in an interpretation of Title VII which "encompass[es] more than the traditional employer-employee relationship." Pelech at 508.
13. The legislature sought a similar result in the Iowa Civil Rights Act. There, the use of the word "person," instead of "employer" indicates that "person[s]" are to be held liable for denying access to employment to "applicant[s] for employment" by "refus[ing] to hire, accept, register, classify, or refer [them] for employment". Iowa Code § 601A.6(1)(a) (now § 216.6(1)(a)). See Conclusions of Law Nos. 6-9.
V. The Respondents Dr. Sahai and the Webster City Medical Clinic Can Also Be Held Liable As Agents of the Nissen Company For the Failure to Hire Complainant Davies:
14. The Federal Courts have found that an entity which certifies candidates as being qualified for an employer is liable for discrimination committed as an agent of that employer. Patzer v. Board of Regents, 577 F. Supp. 1553, 37 Fair Empl. Prac. Cas. 1019, 1021 (D. Wis. 1984)(Department of Administration, which certified candidates for university, found to be agent of university), rev'd and rem'd on other grounds, 763 F.2d 851, 37 Fair Empl. Prac. 1847 (7th Cir. 1985). The Court noted the Department "was in important respects the perpetrator of whatever discrimination took place." Id. A City-County Personnel Board was also held to be an agent of the city because it exercised powers traditionally exercised by an employer. Williams v. City of Montgomery, 742 F.2d 586, 37 Fair Empl. Prac. Cas. 52, 54 (11 Cir. 1984), cert. den'd, 37 Fair Empl. Prac. Cas. 376 (U.S. 1985). These functions included formulating minimum standards for jobs, evaluating employees, and transferring, promoting, and demoting employees. Id. "Where the employer has delegated control of some of the employer's traditional rights, such as hiring or firing, [or in this case, evaluating the fitness of applicants for employment], to a third party, the third party has been found to be an employer by virtue of the agency relationship." Schlei, Employment Discrimination Law 1002 (1983).
15. In order to determine whether Respondents Sahai and Clinic are agents of Respondent Nissen Company, it is necessary to review the nature of the agency relationship:
Agency is a legal concept which depends upon the existence of required factual elements: the manifestation by the principal that the agent shall act for him, the agent's acceptance of the undertaking, and the understanding of the parties that the principal is to be in control of the undertaking. The relation which the law calls agency does not depend upon the intent of the parties to create it, nor their belief that they have done so. To constitute the relation, there must be an agreement, but not necessarily a contract, between the parties; if the agreement results in the factual relation between them to which are attached the legal consequences of agency, an agency exists although the parties did not call it agency and did not intend the legal consequences of the relation to follow. Thus, when one who asks a friend to do a slight service for him, such as to return for credit goods recently purchased from a store, neither one may have any realization that they are creating an agency relation or be aware of the legal obligations which would result from performance of the service.
RESTATEMENT (SECOND) OF AGENCY §1 comment b (1959).
16. Respondents Sahai and Clinic argue, on brief, that they are not agents of Respondent Nissen because they were not subject to the control of Nissen. (Respondent's Brief at 16-18). Respondents Sahai and Clinic argue that the following facts demonstrate there is no control by Nissen:
Neither Dr. Sahai nor The Medical Clinic had any type of written agreement or contract with Nissen to perform the physicals. (Tr. 100, l.25 and Tr. 101, l. 1-10). In addition, Nissen had never given Dr. Sahai or the Medical Clinic any particular directives as to the nature of the physical exam or how extensive a physical was to be performed. (Tr. 126, l. 3-9). It was left up to the individual doctor's discretion as to what type of physical should be done and what tests should be performed. (Tr. 125, l. 16-20; Tr. 126, l. 10-19). Finally, the Medical Clinic is compensated for the physicals on a per applicant basis and no special financial arrangement was made with Nissen for this service. (Tr. 125 l. 21-23).
(Respondent's Brief at 17).
17. There can be no doubt from the record that there is an agreement by Respondents Nissen, Sahai, and Clinic. See Findings of Fact Nos. 9-10. As noted in the Restatement comment, such agreement does not need to be a contract of any kind in order to result in an agency relationship. See Conclusion of Law No. 15. Respondents Sahai and Clinic agreed to an undertaking whereby, acting on Respondent Nissen's behalf, they would examine applicants sent by Nissen and make recommendations as to their fitness for hire. See Findings of Fact Nos. 9-10. While Respondents Sahai and Clinic are compensated by Nissen, the example given in the Restatement comment, of an agency relationship formed by performance of a gratuitous service for a friend, makes it clear compensation to the agent by the principal is not necessary to form an agency relationship. See Finding of Fact No. 9. See Conclusion of Law No. 15.
18. Thus, two of the elements of the agency relationship, "the manifestation by the principal that the agent shall act for him [and] the agent's acceptance of the undertaking" are established. See Conclusion of Law No. 15. Two of the facts cited by Respondents Sahai and Nissen, absence of a written agreement or contract and absence of a special financial arrangement for payment for the examinations are shown to be of no significance in determination of whether or not an agency relationship exists. See Conclusion of Law No. 16.
19. Therefore, the "fighting issue" of whether the alleged agent is subject to the control of the principal, Anderson v. Boeke, 491 N.W.2d 182, 187 (Iowa Ct. App. 1992), is reduced to the question of whether lack of "control of the undertaking" is demonstrated by Respondent Nissen's failure to control Respondent Sahai's and Clinic's actual physical conduct of the examinations with directives as to the nature, type, and extent of the physical examinations and tests done. See Conclusion of Law No. ___.
20. While control of an agent by a principal may extend to control of an agent's physical conduct, i.e the details of how the agent performs the undertaking, it is not necessary to demonstrate this level of control in order to establish an agency relationship. RESTATEMENT (SECOND) OF AGENCY SS 1 comments d, e; 2 (3) and comment b; 14 comments a, b; 14 N and comment a. (1959). See also, D.R.R. v. English Enterprises, CATV Division of Gator Trans. Inc., 356 N.W.2d 580 582-83 (Iowa Ct. App. 1984)("[a] person can be both an agent and an independent contractor"). A "principal" may include one "who has directed another to act on his account in business dealings . . . but who has no control or right of control over the [agent's] physical conduct." Id. at S 1 comment d. See id at § 1 comment e.
21. The example of the agency relationship established by the person (i.e. the principal) who obtains an agreement from a friend (i.e. his agent) to return goods to a store for credit serves to demonstrate how much "control of the undertaking" is needed to establish the agency. The "control of the undertaking" is demonstrated by the agreement that the agent is to perform a particular task for the principal. Certainly, the placement of the goods in the hands of the agent by the principal would be further evidence of such control. There is nothing in the example suggesting that the principal must direct the agent as to the means by which the goods will be taken to the store in order to establish an agency.
22. In this case, Respondent Nissen's control of the undertaking is amply demonstrated by Nissen having the exclusive right to determine which applicants will be sent to Respondent Clinic for examination. The purpose of the examination is understood to be for Nissen's benefit. See Finding of Fact Nos. 9-14. Respondent Nissen's placement of confidence in the medical expertise of Respondents Sahai and Clinic, and of trust in their acting for Nissen's benefit, simply demonstrates that Respondents Sahai and Clinic are agents with fiduciary duties toward their principal, the Nissen Company. See RESTATEMENT (SECOND) OF AGENCY § 1 comment b (1959).