DUANE CARLSON DEERING JR, Complainant
BEVERLY ENTERPRISES WISCONSIN INC, Respondent
An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued a 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 makes the following:
1. By letter dated December 16, 2005, the Equal Rights Division notified the respondent that a complaint was received from the complainant, a copy of which was enclosed, alleging that the respondent violated the Wisconsin Fair Employment Law. The Division requested that the respondent respond to the complaint within 45 days. This letter notice was sent to the respondent's address at 300 Race Street, Wisconsin Dells, WI 53965, the .address the complainant provided for the respondent in his complaint.
2. On February 2, 2006, the ERD sent by certified mail a second notice of the complaint to the respondent's 300 Race Street address in Wisconsin Dells because the Division had not received a response to the complaint within 45 days as directed by the December 16, 2005 notice.
3. Michael S. Holzum, the respondent's Regional Employment/Labor Relations Manager, subsequently filed an answer to the complainant's complaint with the ERD on behalf of the respondent. Holzum submitted the answer on stationery with the respondent's corporate letterhead logo, "beverly healthcare," and the following address and phone number:
W325 S8120 Jericho Road
Mukwonago, Wisconsin 53149
414 430-2328
4. Holzum identified the respondent as a skilled nursing facility located in Wisconsin Dells, Wisconsin and made assertions refuting the complaint allegations. At the end of his response to the complaint, Holzum wrote: "Please feel free to contact me at (414) 430-2328 if you have any further questions or require any additional information."
5. Holzum's subsequent responses to further inquiries by an equal rights investigator of the Division were also sent on stationery with the "beverly healthcare" logo and Holzum's Mukwonago address and phone number.
6. On May 1, 2006, the equal rights investigator issued an initial determination finding probable cause to believe the respondent may have violated the Wisconsin Fair Employment Act and a notice certifying the matter to hearing. The respondent's address, 300 Race Street, Wisconsin Dells, Wisconsin appears in the caption of the initial determination. At the bottom of the initial determination the following were listed as "carbon copies":
Complainant
Respondent, Attn: Michael Holzum, Regional
Employment/Labor Relations Manager
Erin M. Frieberg, Attorney for Complainant
7. On January 5, 2007, the Division issued a notice of hearing to the parties, which set forth April 26, 2005 at 9:00 a.m. in Portage, Wisconsin as the date, time and location of hearing on the complainant's complaint. The respondent's address, 300 Race Street, Wisconsin Dells, Wisconsin appears in the caption of the notice of hearing. At the bottom of the notice
of hearing the following were listed as "carbon copies":
Complainant
Respondent, ATTN: MICHAEL S HOLZUM, Director HR
CATHERINE CETRANGOLO, Attorney for Complainant
The notice of hearing was not mailed to the respondent's Wisconsin Dells address.
8. Thereafter, as a result of a January 10, 2007 letter request for a hearing location change by complainant's counsel and counsel's subsequent January 19, 2007 letter request for a different hearing date, the ALJ gave notice by letter dated February 8, 2007, addressed to the complainant's counsel and Holzum at his street address in Mukwonago, Wisconsin, that the hearing scheduled for April 26, 2007 in Portage was cancelled and rescheduled for Monday, May 14, 2007, at 9:00 a.m. at the state office building at 201 East Washington Avenue in Madison, Wisconsin.
9. Apparently, when complainant's counsel made the January 10, 2007 letter request for a hearing location change, counsel sent a copy of this request to Michael Holzum at the respondent's 300 Race Street address in Wisconsin Dells, but it was returned to counsel with the hand written notation "NO SUCH PERSON HERE". Subsequently, by letter sent to Holzum dated January 16, 2007, at his Mukwonago address, counsel wrote: "Please find enclosed a letter mailed to your Wisconsin Dells office regarding the April 26, 2007 hearing, which was returned to sender for some reason. Unless I hear otherwise, I will direct future correspondence to your Mukwonago address, as shown above."
10. On May 14, 2007, the ALJ held a hearing on the complainant's discrimination complaint, but no one appeared on behalf of the respondent.
11. On July 23, 2007, the Division issued a NOTICE OF SCHEDULING FOR FILING AND RESPONSE TO PETITION FOR ATTORNEY'S FEES.
Included was notice that a decision finding that discrimination has occurred would be issued in the matter, and a copy of the decision as it would appear when issued in final form. The respondent's address, 300 Race Street, Wisconsin Dells, Wisconsin was listed in the caption of the case of the notice and the attached decision. At the bottom of the notice regarding the petition for attorney's fees the following were listed as "carbon copies":
CATHERINE CENTRANGOLO, Attorney for Complainant
MICHAEL HOLZUM, for Respondent
12. On August 23, 2007, the Division issued the ALJ's final decision in the matter. The respondent's address, 300 Race Street, Wisconsin Dells, Wisconsin was listed in the caption of the case in the decision and the cover letter attached to the decision. At the bottom of the cover letter the following were listed as "carbon copies":
Complainant
Respondent
CATHERINE CETRANGOLO, Attorney for Complainant
MICHAEL S HOLZUM DIRECTOR HR, for Respondent
13. On August 31, 2007, the Division issued the ALJ's amended decision and order. The respondent's address at 300 Race Street in Wisconsin Dells was listed in the caption of the case in the amended decision and the cover letter attached to the decision. The following were listed as "carbon copies" at the bottom of the cover letter:
Complainant
Respondent
CATHERINE CETRANGOLO, Attorney for Complainant
MICHAEL S HOLZUM, Representative of Respondent
This decision was mailed to the respondent at its Wisconsin Dells address.
14. With the respondent's knowledge and consent, Holzum held himself out to the ERD, in this case and others, to be part of the entity Beverly Enterprises Wisconsin, Inc., doing business as Beverly Health and Rehabilitation Services. He identified himself as a regional manager of employment and labor relations for the entity. (C. Ex. 49). His job responsibilities included responding to complaints of employment discrimination against Beverly Enterprises Wisconsin, Inc., filed with the EEOC and state agencies, including the ERD. On behalf of the respondent, he handled all aspects of complaints filed with the ERD until the time they were noticed for hearing. While Holzum held this position, the standard practice at the Wisconsin Dells facility was to forward all correspondence it received regarding ERD and EEOC complaints to Holzum.
15. In May 2006 Holzum received an Initial Determination in this matter finding probable cause to believe that the respondent had violated the Wisconsin Fair Employment Act in this matter and stating that it was certified for a hearing on the merits. Shortly thereafter Keith Jewell, the general counsel for labor and employment matters for the respondent, was made aware of this determination.
16. Holzum's last day of employment for the respondent was January 5, 2007. He voluntarily resigned that day.
17. Holzum notified his employer of his resignation about one month before its effective date. (C. Ex. 52). After he gave notice, but before his resignation, he had a discussion with his supervisor, Keri Oviedo, about outstanding litigation matters on which he was working. He mentioned that there was one EEOC case outstanding. Oviedo did not retrieve documents from Holzum about this case or any other specific information about the status of this case. As of the time Holzum announced his resignation, the respondent's legal department knew that the Deering case was pending, that it had been certified for hearing, that the hearing had not yet happened, and that Holzum was the only one handling the case.
18. On January 5, 2007 Holzum went through an exit interview by telephone with Patricia Powell, an HR director for the respondent. (C. Ex. 55). He told her that he would return all his files, which Powell understood to consist mainly of litigation files, to Oviedo, who was taking over Holzum's responsibilities on an interim basis. Holzum never returned the files to Oviedo and no one for the respondent followed up on the return of the files until well after the May 14, 2007 hearing in this matter.
19. The notice of hearing dated January 5, 2007 (see ¶ 7 above) was mailed by the ERD to three locations: 1) to the complainant in Wisconsin Dells; 2) to the complainant's attorney in Madison; and 3) to Michael Holzum, the respondent's representative, in Mukwonago.
20. The notice of hearing sent to Michael Holzum in Mukwonago was delivered to the Mukwonago address shortly after January 5, 2007.
21. Additional correspondence concerning the Deering case mailed to the Mukwonago address between January 5, 2007, and the date of the hearing included: a letter dated January 12, 2007, from the ALJ concerning the complainant's request for a change in the hearing location (C. Ex. 19); a letter dated January 16, 2007, from the complainant's attorney (C. Ex. 20); a letter dated January 19, 2007, asking for a new hearing date (C. Ex. 21); a letter dated January 22, 2007, from the ALJ asking for respondent's position on the rescheduling request (C. Ex. 21A); a letter dated February 6, 2007, from the complainant's attorney following up on the rescheduling request (C. Ex. 22); a letter date February 8, 2007, rescheduling the hearing for May 14, 2007 (C. Ex. 23); and a letter dated May 4, 2007, from the complainant's attorney, with his witness list and copies of proposed exhibits (C. Ex. 24). All this correspondence was delivered to the Mukwonago address. The content of any of these letters would have alerted the recipient to the fact that a hearing in this matter was going to occur shortly.
22. On January 10, 2007 the attorney for the complainant mailed a letter to the ALJ with a copy to "Mr. Michael Holzum, Beverly Health & Rehab Services." The copy for Holzum was addressed to the Wisconsin Dells facility. This copy was received at the facility, but was returned by the facility to the complainant's attorney with the handwritten note on the envelope: 'NO SUCH PERSON HERE." (see ¶ 9 above). (C. Ex. 18, 20). The content of this letter would have alerted the recipient to the fact that a hearing in this matter was going to occur shortly.
23. Holzum was rarely in his office in Mukwonago for several months after his resignation. His wife was there and collected incoming mail for Holzum. She piled all his mail on his desk for a period of two to five months. Then she threw it all away, and continued throwing away additional correspondence that arrived. No one on behalf of the respondent took steps to secure this mail, discover its content, or have it delivered elsewhere.
24. At no time prior to the May 14, 2007, hearing did anyone on behalf of the respondent inform the ERD that Holzum was no longer associated with the respondent, or that the Mukwonago address was no longer an appropriate address for the respondent's representative.
1. The respondent has the burden to prove that it had good cause for its failure to appear at the May 14, 2007, hearing on the merits of the complainant's charge of discrimination.
2. The respondent sustained this burden.
The respondent's request for oral argument is denied. The ALJ's decision of January 14, 2010, which incorporates the amended decision issued on August 31, 2007, is set aside, and this matter is remanded to ERD for further hearing on the merits of the complainant's charge consistent with this decision. This hearing should be conducted by the same ALJ (Brown) on an expedited basis, if practicable.
Dated and mailed September 30, 2010
deeridu . rrr : 115 : 9
/s/ James T. Flynn, Chairperson
/s/ Robert Glaser, Commissioner
/s/ Ann L. Crump, Commissioner
The underlying charge is one of disability discrimination. Hearing on the merits of this charge was held on May 14, 2007. The respondent (Beverly Health) did not appear at this hearing. The ALJ issued a decision on August 31, 2007, that the complainant had been discriminated against as alleged, and ordered reinstatement, back pay1(1), and attorneys fees and costs totaling $42,244.70.
Beverly Health appealed this decision to the commission, requesting that further hearing be ordered because it had not received notice of the May 2007 hearing. Based upon this representation, the commission, on June 20, 2008, remanded this matter to ERD for hearing on the issue of whether the respondent had good cause for its failure to appear at the May 2007 hearing.
The ALJ held the remand hearing, and, on January 14, 2010, issued a decision finding that the respondent had failed to sustain its burden to show good cause, reinstating the August 2007 decision on the merits, and ordering an additional $288,270.00 in attorneys fees, and $16,041.37 in costs.
Good cause issue
One of the guiding principles of administrative practice is that the ability of all parties to assert their claim and defense before an appropriate tribunal will not lightly be discarded. Verhaagh v. LIRC, 204 Wis.2d 154, 554 N.W.2d 678 (Ct. App. 1996).
Wisconsin Administrative Code § DWD 218.11(1) provides as follows, as relevant here:
DWD 218.11 Notice of hearing.
(1) CONTENT. In any matter which has been certified to hearing following an initial determination of probable cause under s. DWD 218.07 (2)..., the department shall advise the parties and their representatives and attorneys of record in writing by first-class mail, of the specific time, date and place established for the hearing. The notice of hearing shall fully identify the parties and the case number....
As the ALJ found, the notice of hearing was sent to Michael S. Holzum (Holzum), the respondent's Regional Employment/Labor Relations Manager at the Mukwonago, Wisconsin address he had provided ERD when he began corresponding with ERD during the investigation of this matter. This address was Holzum's home address.
As the ALJ also found (finding of fact #4, above), when Holzum first contacted ERD during the investigation, he "identified the respondent as a skilled nursing facility located in Wisconsin Dells."
By the time the notice of hearing would have been received, Holzum was no longer working for Beverly Health. Holzum did not advise Beverly Health that he had received a notice of hearing in this matter.
The ERD staff member assigned responsibility for issuing hearing notices testified at the remand hearing,2(2) that, based upon the practice at ERD, she considered the respondent party to be Beverly Health at 300 Race Street in Wisconsin Dells, and Holzum at his Mukwonago address to be the respondent's representative.
As the ALJ also found, although a hearing notice was mailed to Holzum at his Mukwonago address, a notice was not mailed to Beverly Health at 300 Race Street in Wisconsin Dells.
Consequently, ERD did not abide by the mandate of Wis. Adm. Code § DWD 218.11(1) that hearing notices be mailed to "the parties and their representatives and attorneys of record" (emphasis added). Under the particular circumstances here, where distinct addresses for the respondent and for its representative had been provided to ERD; the hearing notice had been mailed only to the address of the representative; and, at the time the hearing notice would have been received, the representative was no longer serving as an agent of the respondent, ERD's nonfeasance provided good cause for the respondent's failure to appear at the May 2007 hearing. See, Contizano v. D & G Main Street Ltd., ERD Case No. 199902391 (LIRC Sept. 28, 2000)(whether notice provided to party's attorney irrelevant in determining good cause for party's failure to appear at hearing since 218.11(1) requires that notice be mailed to parties and to their representatives and attorneys).
The commission also notes in this regard that, when ERD mailed the ALJ's decision to the parties after the May 2007 hearing, a copy was mailed to Holzum at his Mukwonago address as well as to Beverly Health at the Wisconsin Dells address despite the fact that no additional information had been received by ERD in this regard between the date the notice of hearing had been mailed and the date of the decision.
The ALJ held that the party respondent and its representative were identical so notice to Holzum at his Mukwonago address constituted notice to the respondent.
First, this is belied by the testimony of the ERD witness that Beverly Health at its Wisconsin Dells address would be considered by ERD to be the party respondent, and Holzum at his Mukwonago to be the respondent's representative.
Moreover, ERD apparently did not consider the respondent and its representative to be the same entity when it mailed the ALJ's decision since copies were sent to Holzum in Mukwonago as well as to Beverly Health in Wisconsin Dells.
Finally, when ERD is provided an address for the respondent which is different than the address provided for an individual representing the respondent, regardless of whether this individual is employed directly by the respondent, the rule requires that hearing notices be mailed to both. The language of the rule does not distinguish between representatives or attorneys who are employees of a party and those who are not.
The complainant argues in the alternative that constructive notice of the May 2007 hearing was provided to the respondent through a January 10, 2007, letter from complainant's counsel to Holzum at the 700 Race Street address in Wisconsin Dells. The record shows, as the ALJ found, that this letter was returned to complainant's counsel with a handwritten note stating "No such person here." The record does not show that this letter was opened before it was returned.
However, constructive notice requires more than proof that a letter directed to a former employee at an address where he never worked was sent and returned.
The complainant also argues that constructive notice of the May 2007 hearing was provided by the fact that certain of respondent's managers and attorneys were aware of the issuance of the initial determination of probable cause in which ERD stated that the matter had been "certified to hearing." However, the fact that a matter has been certified to hearing does not provide notice that a hearing has actually been scheduled.
The complainant, and the ALJ, rely upon case law as to the individuals who are authorized to accept service of process on a corporation in judicial proceedings. However, this is not a judicial proceeding but instead an administrative proceeding with its own distinctive notice and service requirements.
It is true, as the complainant argues and the ALJ held, that, after Holzum's resignation, the respondent's process for handling the cases that had been assigned to him was careless. However, this carelessness was not the cause of ERD's failure to mail the hearing notice to respondent at its Wisconsin Dells location, as required by Wis. Adm. Code § DWD 218.11(1), and it is this failure that provides good cause for the respondent's absence at the May 2007 hearing.
cc:
Attorney Catherine Cetrangolo
Attorney William E. Hughes
[ Search ER Decisions ] - [ ER Decision Digest ] - [ ER Legal Resources ] - [ LIRC Home Page ]