PHILLIP CARERROS, Complainant
CHARTER MANUFACTURING CO, Respondent
An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued an amended decision in this matter. A timely petition for review was filed.
The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the amended decision of the ALJ, and it adopts the findings and conclusions in that decision as its own, except that it makes the following modifications:
In the second sentence of the first paragraph, the word "cause" is inserted after the word "probable."
The third sentence of the first paragraph, stating "The Complainant filed an appeal." is deleted.
The MEMORANDUM OPINION section is deleted.
The decision of the administrative law judge (copy attached), as modified, is affirmed.
Dated and mailed May 7, 2010
carerrp . rmd : 115 : 9
/s/ James T. Flynn, Chairperson
/s/ Robert Glaser, Commissioner
/s/ Ann L. Crump, Commissioner
ERISA pre-emption
ERISA, the federal Employment Retirement Income Security Act (29 U.S.C. 1001 et seq.) was enacted in 1974 for the purpose of creating a uniform regulatory scheme for employee benefit plans. Aetna Health v. Davila, 542 U.S. 200 (2004). The exclusive remedy for plan participants who contend they were wrongfully denied benefits is set forth in § 502(a) of ERISA (29 U.S.C. 1132(a)(1)(B)).
A distinction exists, however, between a contention that a provision of a benefit plan was incorrectly interpreted, which would fall within the ambit of § 502(a), and a contention, as here, that a provision was improperly included in a plan.
The commission recognized this distinction, within the context of a Wisconsin Fair Employment Act (WFEA) action, in Reich v. Ladish Co., Inc., ERD Case No. 199802467 (LIRC June 30, 1999). As the commission held in Reich, relying upon Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983), ERISA does not mandate that employers provide any particular benefits, and does not proscribe discrimination in the provision of such benefits. Consequently, an employee claiming that the failure of a plan to provide a particular benefit is discriminatory, as the complainant is claiming here, would have no remedy under ERISA. ERISA would not, therefore, operate to pre-empt such a claim.
The respondent argues that, since the record establishes that the plan provision at issue, which excludes coverage for services related to surrogate parenting, is gender-neutral, ERISA should operate to pre-empt the complainant's claim.
This reasoning, however, is circular.
What is examined at this stage of the analysis is whether the complainant's claim, i.e., that the exclusion of surrogate parenting benefits in the health insurance plan offered by respondent is not gender-neutral and constitutes sex/pregnancy discrimination, is pre-empted by ERISA, not whether the complainant has proved this claim.
ERISA does not pre-empt the complainant's WFEA claim.
Pregnancy/childbirth discrimination
The WFEA provides in relevant part as follows:
111.36 Sex, sexual orientation; exceptions and special cases.
(1) Employment discrimination because of sex includes, but is not limited to,
any of the following actions by any employer, labor organization, employment
agency, licensing agency or other person:
(a) Discriminating against any individual in promotion, compensation paid for equal or substantially similar work, or in terms, conditions or privileges of employment or licensing on the basis of sex where sex is not a bona fide occupational qualification....
(b)Discriminating against any woman on the basis of pregnancy, childbirth, maternity leave or related medical conditions by engaging in any of the actions prohibited under s. 111.322, including, but not limited to, actions concerning fringe benefit programs covering illnesses and disability.
The complainant here is a male. Pursuant to the clear and unambiguous language of Wis. Stat. § 111.36(1)(c), only females have standing to bring a pregnancy/childbirth claim under the WFEA.
The complainant argues that the "any woman" language of Wis. Stat. § 111.36(1)(c)does not require this woman to have been in an employment relationship with the respondent, but instead only to have an association with someone in such a relationship, in order to qualify for protection.
The complainant cites no authority for this argument and, if carried to its logical extreme, would provide standing to any individual associated with a pregnant woman, or one who has given birth, regardless of the relationship of this individual to the respondent.
Moreover, neither the commission nor the courts have recognized such a principle in interpreting Wis. Stat. § 111.36(1)(c) or any other provision of the WFEA. In fact, in interpreting the WFEA's prohibition against marital status discrimination, the commission, in a decision affirmed by the Wisconsin Court of Appeals, reached a contrary result. In Bammert v. Dons Super Value, ERD Case No. 199703978 (LIRC March 6, 1998), aff'd, Bammert v. LIRC et al., 232 Wis. 2d 365, 606 N.W.2d 620 (Ct. App. 1999), the commission and the court held that it is the status of being in a category, not an association with someone in such a category, that is protected by the WFEA. The Court of Appeals stated in its decision:
In essence, the emphasis of the WFEA is to prevent discrimination against classes of people, whether by age, race, creed, color, disability, marital status or any of the other classes protected by the statute. Given the language of the statute and the policy behind its prohibitions, we conclude that LIRC reasonably interpreted the WFEA "to protect the status of being married in general rather than the status of being married to a particular person."
The complainant does not have standing to bring a claim for pregnancy/childbirth discrimination under Wis. Stat. § 111.36(1)(c) of the WFEA.
Sex discrimination
Disparate treatment
Wisconsin courts, in the absence of the WFEA's establishment of a specific procedure by which a complainant must prove a claim of disparate treatment, have adopted the basic allocation of burdens and order of presentation of proof utilized to prove a claim of employment discrimination brought under Title VII. Puetz Motor Sales, Inc. v. LIRC, 126 Wis. 2d 168, 172-173, N.W.2d 372 (Ct. App. 1985). See, also, Rodriguez v. Flash, Inc., ERD Case No. 200004254 (LIRC Jan. 28, 2003).
As stated by the court in Puetz:
McDonnell Douglas [Corp. v. Green, 411 U.S. 792 (1973)] requires the complaining party to establish a prima facie case, which then raises a presumption of discrimination. To rebut the presumption, the defendant need only articulate a legitimate, nondiscriminatory reason for the action taken. Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 254 (1981). The complainant then must be given the opportunity to prove that the proffered reason is merely a pretext for discrimination. McDonnell Douglas, 411 U.S. at 804, 805; see also Hamilton v. DILHR, 94 Wis. 2d 611, 619, 288 N.W.2d 857, 861 (1980).
To establish a prima facie case, the complainant is required to show that he was a member of a protected group and suffered an adverse action, and that the circumstances create an inference of sex discrimination. The complainant has failed to establish a prima facie case of sex discrimination. Specifically, even assuming for purposes of analysis that the complainant is a member of a protected group and suffered a cognizable adverse action as a result of the exclusion of surrogate parenting benefits from the health insurance plan offered him by his employer, the circumstances here do not raise an inference of discrimination because the record does not show that the complainant was treated less favorably than female employees, i.e., neither the male nor the female employees of the respondent were provided coverage for medical costs arising from surrogate parenting.
The complainant cites a Title VII case, Newport News Shipbuilding and Dry Dock Co. v. EEOC, 462 U.S. 669, 103 S. Ct. 2622 (1983) in support of his argument that he was the victim of sex discrimination. However, in Newport, the pregnancy benefits available to female employees were more extensive than those available to the spouse dependents of male employees, and the Court relied upon this disparity in reaching its decision that the employer had engaged in sex discrimination. In contrast, under the plan at issue here, female employees and the spouse dependents of male employees have the same pregnancy/childbirth benefits.
The complainant has failed to sustain his burden to prove disparate treatment on the basis of sex.
Disparate impact
The "disparate impact" theory of discrimination under Title VII was set forth by the U.S. Supreme Court in Griggs v. Duke Power, 401 U.S. 424 (1971). It has been recognized as being applicable to the Wisconsin Fair Employment Act. Racine Unified School District v. LIRC, 164 Wis. 2d 567, 594-95, 476 N.W.2d 708 (1991). See, also, Wisconsin Telephone Company v. DILHR, 68 Wis. 2d 345, 368, 228 N.W.2d 649 (1975). Under the disparate impact theory, an employment practice which is neutral on its face can be found to be discriminatory if, in practice, it has a disproportionately adverse impact on a protected group. Disparate impact must generally be proved by statistical evidence, significant (in the statistical sense) to the confidence level required by law, comparing the effect of an employer's policy on employees in the different groups being compared. See, Racine Unified School District, 164 Wis. 2d at 594-96. See, also, Abaunza v. Neenah Foundry, ERD Case No. 9000749 (LIRC March 30, 1993).
Even if the complainant's charge could reasonably be interpreted to raise a disparate impact claim, he has failed to sustain his burden to prove such a claim.
What the complainant is essentially contending in this regard is that, because only females can get pregnant, any exclusion of health insurance coverage for pregnancy- or childbirth-related expenses necessarily has a disparate impact on females, and, within the context of this claim, their spouses.
It is correct that it is discrimination for an employer to offer a health insurance plan that treats pregnancy differently than other medical conditions. Hall v. Nalco Co., 534 F.2d 644 (7th Cir. 2008). See, also, Schultz v. GET, Inc., ERD Case No. CR200404250 (LIRC Dec. 8, 2006); Slife v. Mt. Morris Mutual Insurance Co., ERD Case No. CR200300282 (LIRC Nov. 3, 2005); Egger v. Sterling Optical, ERD Case No. 9001260 (LIRC March 26, 1992)(what is required is that pregnancy-related conditions be treated the same as other types of health conditions).
However, the distinction at issue here is not between pregnancy and other types of medical conditions but instead between different types of pregnancies. Since only females can become pregnant and give birth, this distinction, by definition, cannot be based on sex.
The complainant also argues that disparate impact is demonstrated by the fact that the subject plan provides "full coverage" for other medical conditions, but, because of the surrogate parenting exclusion, less than full pregnancy/childbirth coverage. However, the record does not establish that the plan provides coverage of other medical conditions without exclusion.
In advancing his argument, the complainant relies upon federal disparate treatment decisions, such as Newport News, supra., which are inapposite to this disparate impact analysis, and a decision of the Wisconsin Commissioner of Insurance, (MercyCare Insurance Co. and MercyCare HMO, Inc., Case No. 06-C29951 (Ofc. of the Wis. Comm. Of Insurance, Dec. 8, 2006), interpreting Wis. Stat. § 632.895.
The Office of the Wisconsin Commissioner of Insurance (OCI) has no authority to interpret or enforce the provisions of the WFEA, and did not purport to do so in the cited decision. Moreover, even if this decision had some persuasive value, OCI's reference in the decision to the "discriminatory" effect of an exclusion of "surrogate mother services" in a covered health insurance plan refers to discrimination between subgroups of insureds, prohibited by Wis. Stat. § 632.895(7), i.e., between insureds based upon the type of pregnancy, not pregnancy or sex discrimination per se, the only issue under consideration here.
As an aside, the commission notes that the health insurance plan at issue here is not one regulated by OCI, since it is a self-funded plan.
The complainant has failed to sustain his burden to prove that the surrogate parenting exclusion in the respondent's health insurance plan had a disparate impact based upon sex or pregnancy/childbirth.
Finally, considerations of neither policy nor equity favor the complainant
in this matter. The complainant and his wife entered into a business
agreement, trading the wife's reproductive capacity for $20,000, and
expecting, (1) incorrectly as it turned out, that a third party, i.e., the respondent, through its self-funded health insurance plan, would bear the expenses of this business arrangement.
cc:
Attorney Charles W. Jones
Attorney Kevin J. Kinney
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