BEFORE THE IOWA CIVIL RIGHTS COMMISSION

JOHN MACK BURTON, Complainant,

VS.

CONTRACT CLEANERS, INC., WALLACE SYKES, and the HENKEL CORPORATION, Respondents.

CONCLUSIONS OF LAW

Jurisdiction:

1. Mr. Burton's complaint was timely filed within one hundred eighty days of the alleged discriminatory practice. Iowa Code 6601 A.15(12) (1981). See Finding of Fact No. 1. All the statutory prequisites for hearing have been met, i.e. investigation, finding of probable cause, attempted conciliation, and issuance of Notice of Hearing. Iowa Code § 601A.15 (1989). See Findings of Fact Nos. 1-2.

2. Mr. Burton's complaint is also within the subject matter jurisdiction of the commission as the allegation that the Respondent Contract Cleaners, Inc. terminated him due to his race and his age falls within the statutory prohibition against unfair employment practices. Iowa Code§601A.6 (1981). "it shall be a . . . discriminatory practice for any person . . . to discharge any employee ... because of the age, race ... of such ... employee." Id

Default Judgment:

3. A motion that default judgment be entered against Respondent Wallace Sykes was made by the attorney for Complainant Burton. (Tr. at 5). "A 'default' is a failure to take a step required in the progress of an action and a judgment by default is a judgment against the party who has failed to take such step." Kirby v. Holman, 238 Iowa 355, 374, 25 N.W.2d 664 (1947). The question of whether or not to enter a default judgment is largely within the discretion of the adjudicating body. See Johnson v. Gib's Western Kitchen, Inc., 338 N.W.2d 872, 874(Iowa 1983). In district court, for example, the court is not required to enter a default judgment even though the conditions set forth in the specific Rules of Civil Procedure governing the entry of default judgment have been met. Id. The policy of the law is to favor trial on the merits. Id.

4. In order to enter default judgment against a respondent, it must first be shown, where the respondent has not voluntarily appeared, that the adjudicating body acquired personal jurisdiction over the respondent. 49 C.J.S. Judgments §24 (1947); 47 AM. JUR. 2D Judgments § 1174 (1969). Such acquisition of personal jurisdiction is shown by proof of service of process, i.e. service of the notice of hearing. 49 C.J.S. Judgments § 24 (1947); 47 AM. J UR. 2D Judgments § 1174 (1969). This rule is consistent with those rules of civil procedure which operate together to require that a defendant in a civil action, who has neither appeared nor filed an answer or motion, has been served with process prior to entry of default. See Iowa R. Civ. Pro. 53, 230.

5. This proceeding is a "contested case" because it is "a proceeding... in which the legal rights, duties or privileges of a party are required by..... statute to be determined by an agency after an opportunity for an evidentiary hearing ." Iowa Code §§ 17A.12 (2); 601A.15 (1989). As such, service of the notice of hearing may be made on a respondent by "personal service as in civil actions or by certified mail return receipt requested." Iowa Code § 17A.12(l) (1989).

6. Personal jurisdiction was acquired over Respondent Wallace Sykes by the Commission because evidence in the record and documents officially noticed prove that the statutory requirements for service of the notice of hearing on him have been met. See Findings of Fact Nos. 2-5.

7. Official notice may be taken of all facts of which judicial notice may be taken. Iowa Code § 17A.14(4) (1989). Official notice of these documents is proper because judicial notice may be taken of "all the . . . jurisdictional papers in a case on trial and the same need not be noticed in evidence." Searls v. Knapp, 5 S.D. 325, 327, 56 N.W. 807, 808 (1894) (taking judicial notice of summons and pleading), quoted in In Re Williams Estate, 90 S.D. 173, 240 N.W.2d 74, 76 (S.D. 1976); see Slater v. Roche, 148 Iowa 413, 126 N.W. 121 (1910)(taking judicial notice of writ of attachment and return of service as papers properly filed or returned).

8. In light of the Commission's acquiring personal jurisdiction over Respondent Wallace Sykes, of his failure to respond to the Notice of Hearing, and his failure to be present or represented at the hearing, the motion for entry of default judgment against him should be granted. See Findings of Fact Nos. 2-5. Under these circumstances, denial of default judgment would not serve the policy of the law favoring trial on the merits.

Order and Allocation of Proof Where Complainant Relies on Circumstantial Evidence of Discrimination:

9. The burden of proof or "burden of persuasion" in any proceeding is on the party which has the burden of persuading the finder of fact that the elements of his case have been proven. BLACK'S LAW DICTIONARY 178 (5th ed. 1979). The burden of proof in this proceeding is on the complainant to persuade the finder of fact that he was discharged due to his race or age or both. Linn Co-operativee Oil Company v. Mary Quigley, 305 N.W.2d 728,733 (Iowa 1981).

10. Although Federal court decisions applying Federal anti-discrimination laws are not controlling in cases under the Iowa Civil Rights Act, Franklin Manufacturing Co. v. Iowa Civil Rights Commission, 270 N.W.2d 829, 831 (Iowa 1978), they are often relied on as persuasive authority in these cases. Iowa State Fairgrounds Security v. Iowa Civil Rights Commission, 322 N.W.2d 293, 296 (Iowa 1982). Opinions of the Supreme Court of the United States are entitled to particular deference. Quaker Oats Company v. Cedar Rapids Human Rights Commission, 268 N.W.2d 862, 866 (Iowa 1978).

1 1. The burden of persuasion must be distinguished from what is known as "the burden of production" or the "burden of going forward." The burden of production refers to the obligation of a party to introduce evidence sufficient to avoid a ruling against him or her on an issue. BLACK'S LAW DICTIONARY 178 (5th ed. 1979).

12. In the typical discrimination case, which alleges disparate treatment on a prohibited basis, this burden of producing evidence shifts. Iowa Civil Rights Commission v. Woodbury County Community Action Agency. 304 N.W.2d 443, 448 (Iowa Ct. App. 1981). These shifting burdens of production "are designed to assure that the [Complainant has] his day in court despite the unavailability of direct evidence." Trans World Airlines v. Thurston, 469 U. S. 111, 121, 105 S Ct. 613, 83 L. Ed. 2d 523, 533 (1985) (emphasis added).

13. The Complainant has the initial burden proving a prima facie case of discrimination by a preponderance of the evidence. Trobaugh v. Hy-Vee Food Stores, Inc., 392 N.W.2d 154, 156 (Iowa 1986). Once a prima facie case is established, a presumption of discrimination attaches. Id.

14. The burden of production then shifts to the Respondent, i.e. the Respondent is required to produce evidence that shows a legitimate, nondiscriminatory reason for its action. Id.; Linn Cooperative Oil Company v. Quigley, 305 N.W.2d 728, 733 (Iowa 1981); Wing v. Iowa Lutheran Hospital, 426 N.W.2d 175, 178 (Iowa Ct. App. 1988). If the Respondent does nothing in the face of the presumption of discrimination which arises from the establishment of a prima facie case, judgment must be entered for Complainant as no issue of fact remains. Hamilton v. First Baptist Elderly Housing Foundation, 436 N.W.2d 336, 338 (Iowa 1989). If Respondent does produce evidence of a legitimate non-discriminatory reason for its actions, the presumption of discrimination drops from the case. Trobaugh v. Hy-Vee Food Stores, Inc., 392 N.W.2d 154,156 (Iowa 1986).

15. Once the Respondent has produced evidence in support of such reasons, the burden of production then shifts back to the Complainant to show that the reasons given are pretextual. Trobaugh v. Hy-Vee Food Stores, lnc.,392 N.W.2d 154, 157 (Iowa 1986); Wing B. Iowa Lutheran Hospital, 426 N.W.2d 175,178 (Iowa Ct. App. 1988). Pretext may be shown by "persuading the [finder of fact] that a discriminatory reason more likely motivated the [Respondent] or indirectly by showing that the [Respondent's] proffered explanation is unworthy of credence." Wing v. Iowa Lutheran Hospital, 426 N.W.2d 175, 178 (Iowa Ct. App. 1988) (quoting Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 256, 101 S. Ct. 1089,1095, 67 L. Ed. 2d 207, 216 & n.10 (1981)).

16. This burden of production may be met through the introduction of evidence or by cross-examination. Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 255, 101 S. Ct. 1089, 1095, 67 L. Ed. 2d 207, 216 & n.10 (1981). The Complainant's initial evidence and inferences drawn therefrom may be considered on the issue of pretext. Id. at n.10. This burden of production merges with the Complainant's ultimate burden of persuasion, i.e. the burden of persuading the finder of fact that intentional discrimination occurred. Id. 450 U.S. at 256, 101 S. Ct. at 1 67 L. Ed. 2d at 217. When the Complainant demonstrates that the Respondent's reasons are pretextual, the Complainant must prevail. United State Postal Service Board of Governors v. Aikens, 460 U.S. 711, 717-18 (1983)(Blackmun, J. concurring).

Establishment of Prima Facie Cases of Race and Age Discrimination:

17. In this case, Complainant Burton established prima facie cases of race and age discrimination in his discharge by showing:

(1) that he belongs to a group protected by the statute, (2) that he was qualified for the job from which he was discharged, (3) that, despite his qualifications, he was terminated, and (4)... that after his termination, the employer hired a person not in [complainant's] protected class or retained persons with comparable or lesser qualifications who are not in a protected group.

Wing v. Iowa Lutheran Hospital, 426 N.W.2d 175, 177 (Iowa Ct. App. 1988)(emphasis added). See Findings of Fact Nos. 7-14.

18. In regard to element number 4 above and age discrimination, it should be noted that the Iowa Civil Rights Act protects persons of all ages against age discrimination in employment with two exceptions: persons under eighteen years of age if they are not considered by law to be adults, and employees over forty-five years of age in apprenticeship programs. Hulme v. Barrett, 449 N.W.2d 63132 (Iowa 1989)(citing Iowa Code § 601A.6(2). Although the persons hired or retained by Respondent Contract Cleaners, Inc. after the Complainant's discharge, who were comparably or less qualified than the Complainant, are therefore within the protected group, the age difference of more than 10 years between these persons and Complainant Burton is sufficient to find, in conjunction with the other elements, that a prima facie case of age discrimination has been established. Buckley v. Hospital Corporation of America, 758 F.2d 1525, 1530, 37 Fair Empl. Prac. Cases 1082, 1085 & n.2 (llth Cir. 1985). See Findings of Fact Nos. 1314.

19. Complainant Burton also established prima facie cases of age and race discrimination in his discharge by showing:

(1) he was a member of a protected class, (2) he was capable of performing the job, and (3) he was discharged from the job.

Smith v. Monsanto Chemical Co., 770 F.2d 719, 38 Fair Empl. Prac. Cases 1141, 1142 n.2 (8th Cir. 1985); Johnson v. Bunny Bread Co., 646 F.2d 1250, 1253, 25 Fair Empl. Prac. Cases 1326 (8th Cir. 1981).

Respondent's Failure to Articulate, Through the Production of Evidence, A Legitimate Non-
Discriminatory Reason for Complainant Burton's Discharge:

20. In order to rebut the Complainant's prima facie case, the Respondent must introduce admissible evidence which would allow the finder of fact to rationally conclude that the challenged decision was not motivated by discriminatory animus. Linn Cooperative Oil Company v. Quigley, 305 N.W.2d 728, 733 (Iowa 1981). The Respondent need not persuade the finder of fact that it was actually motivated by the proffered reasons. Id. Nonetheless, the Respondent must produce evidence that "[Complainant] was discharged for a legitimate, nondiscriminatory reason." Hamilton v. First Baptist Elderly Housing Foundation, 436 N.W.2d 336, 338 (Iowa 1989). This burden cannot be met "merely through an answer to the complaint or through argument of counsel." Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 255, 101 S.Ct. 1089, 67 L.Ed. 2d. 207, 216 n.9 (1981)). If a Respondent fails to state a sufficient reason to meet this burden, the Complainant "need only prove the elements of the prima facie case to win." Loeb v.. Textron, 600 F.2d 1003, 1018, 20 Fair Empl. Prac. Cases 29, 40 n.20 (lst Cir. 1979).

21. The evidence produced must be sufficient to raise "a genuine issue of material fact as to whether Respondent discriminated against the Complainant." Hamilton v. First Baptist Elderly Housing Foundation, 436 N.W.2d 336, 338 (Iowa 1989)(citing Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 253-54, 101 S.Ct. 1089, 1094, 67 L.Ed. 2d. 207, 215-16 (1981)). The nondiscriminatory reason proffered "must be specific and clear enough for the [Complainant] to address and legally sufficient to justify judgment for the [Respondent]." Wing V. Iowa Lutheran Hospital, 426 N.W.2d 175,178 (Iowa Ct. App. 1988).

22. It has been found that Respondent Henkel failed to offer evidence which stated the reasons for the discharge of Complainant Burton with sufficient clarity and specificity for Complainant Burton to address. See Findings of Fact Nos. 28-31. Therefore, Respondent Henkel has failed to meet its burden of producing evidence of a legitimate non- discriminatory reason for Complainant Burton's discharge.

23. In addition to its failure to state reasons for Complainant's discharge with sufficient clarity and specificity, there are other reasons to conclude that Respondent Henkel has failed to rebut Complainant's primafacie case. Respondent's evidence failed to raise "a genuine issue of material fact as to whether Respondent discriminated against the Complainant." When the Supreme Court of the United States made reference to the standard "a genuine issue of material fact," it was undoubtedly aware that it was making reference to a standard which has long been applied in resolving motions for summary judgment under Federal Rule of Civil Procedure 56. The equivalent rule in Iowa is Iowa Rule of Civil Procedure 237.

23. There are, of course, differences between deciding a case after public hearing and a motion for summary judgment. The motion for summary judgment is a pre-trial motion designed to weed out "paper cases and defenses" by compelling an adversary party "to come forth with specific facts which constitute competent evidence showing a prima facie claim or defense."Gruener v.City of Cedar Falls, 189 N.W.2d 577, 580 (Iowa 1971). If the evidence Submitted demonstrates that there is "no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law," summary judgment will be granted. Iowa R. Civ. Pro. 237(c).

24. When a sufficiently supported motion for summary judgment is made, the party resisting the motion cannot rely upon "mere allegations or denials of his pleading, but his response ... must set forth specific facts showing that there is a genuine issue for trial." Iowa R. Civ. Pro. 237(e). See Gruener v. City of Cedar Falls, 189 N.W.2d 577, 580 (Iowa 1971). It is at this point where the burdens faced by a Respondent seeking to rebut a Complainant's prima facie case and a resisting party opposing a motion for summary judgment are very similar, if not identical. Neither can rely on pleadings or argument of counsel. Compare Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 255, 101 S.Ct. 1089, 67 L.Ed. 2d.207,216n.9 (1981) (answer or argument of counsel will not rebut prima facie case) with Gruener v. City of Cedar Falls, 189 N.W.2d 577, 580 (Iowa 1971)(party opposing motion cannot rely on pleadings). Both are required to set forth specific facts; Compare Loeb v. Textron, 600 F.2d 1003, 1011-12, 20 Fair Empl. Prac. Cases 29, 35 n.5 (lst Cir. 1979)(vague, general averments of good faith not sufficient to rebut prima facie case) with Gruener v. City of Cedar Falls, 189 N.W.2d 577, 580 (Iowa 1971)(generalities are insufficient to resist motion).

25. A party opposing a motion for summary judgment, like a Respondent attempting to rebut a prima facie case of discrimination, is attempting to show that a genuine issue of material fact exists. Gruener v. City of Cedar Falls, 189 N.W.2d 577, 580 (Iowa 1971). See Conclusion of Law No. 21. Since a party opposing a motion for summary judgment cannot rely on what someone has reported to a witness in order to establish that a genuine issue exists for trial, Gruener at 580, it would seem logical to conclude that a Respondent attempting to rebut a prima facie case also cannot rely on such evidence. Under similar reasoning, conclusions and beliefs are also insufficient to rebut a prima facie case. See Id.

26. Therefore, it may be concluded that Respondent failed to rebut Complainant's prima facie case for two additional reasons. First, the evidence presented by it relies on what someone has reported to a witness and not on the witness' personal knowledge. See Finding of Fact No. 27. Second, the reasons given constitute conclusions and beliefs and not the kind of facts which would be sufficient to rebut a prima facie case. See Finding of Fact No. 30.

Even if Respondent Henkel Met Its Burden of Production. Pretext Has Been shown:

27. Even if it had been concluded that Respondent Henkel had articulated, through the production of evidence, a legitimate, non-discriminatory reason for Complainant Burton's discharge, Burton has demonstrated that the "smart aleck" reason was was a pretext for discrimination by showing that, in light of all the evidence, this reason was not worthy of credence. See Finding of Fact No. 33. Complainant Burton has met his burden of persuading the Commission that intentional age and race discrimination has occurred. Credibility and Testimony:

28. In addition to the factors mentioned in the section entitled "Course of Proceedings" and in the findings on credibility in the Findings of Fact, the Administrative Law Judge has been guided by the following two principles: First, "[w]hen the trier of fact ... finds that any witness has willfully testified falsely to any material matter, it should take that fact in consideration in determining what credit, if any, to be given to the rest of his testimony." Arthur Elevator Company v. Grove, 236 N.W.2d 383,388 (Iowa 1975). Second, "[t]he trier of facts may not totally disregard evidence but it has the duty to weigh the evidence and determine the credibility of witnesses. Stated otherwise, the trier of facts . . . is not bound to accept testimony as true because it is not contradicted. In Re Boyd, 200 N.W.2d 845, 851-52 (Iowa 1972).