STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126
http://dwd.wisconsin.gov/lirc/

KAMAR JEFFERY OWENS, Complainant

SBC COMMUNICATIONS / AMERITECH / AT&T, Respondent

FAIR EMPLOYMENT DECISION
ERD Case No. CR200103588


An administrative law judge for the Equal Rights Division of the Department of Workforce Development issued a decision in this matter on October 15, 2013. A timely petition for review was filed. For the reasons set forth in the memorandum opinion, the commission issues the following:

ORDER

The administrative law judge's decision of October 15, 2013 is set aside, and the matter is remanded to the Division for a hearing on the merits and decision on whether the respondent violated the Wisconsin Fair Employment Act, Wis. Stat. § § 111.31-111.395, by discriminating against the complainant in terms and conditions of employment and terminating the employment of the complainant because of race.

Dated and mailed March 28, 2014
owneska_rpr . doc : 107 :

BY THE COMMISSION:

/s/ Laurie R. McCallum, Chairperson

C. William Jordahl, Commissioner

/s/ David B. Falstad, Commissioner

MEMORANDUM OPINION

Procedural summary

The complainant filed a timely charge with the EEOC alleging racial harassment and constructive discharge on September 24, 2001. The charge was automatically cross-filed with the ERD, but because it was initially filed with the EEOC the ERD deferred its investigation until the EEOC completed its processing. The ERD mailed a letter to the parties dated October 12, 2001, informing them that: "The work sharing agreement specifies that the agency which originally receives the complaint will process it first. Therefore, the ERD will take no action pending EEOC's processing of this complaint." On November 30, 2001, the EEOC sent the complainant a Dismissal and Notice of Rights, giving the complainant 90 days to file suit based on the EEOC charge. The complainant did not file suit on the EEOC charge. The EEOC notice also advised the complainant: "The time limit for filing suit based on a state claim may be different."

The normal practice of the EEOC is to send a copy of the Dismissal and Notice of Rights to the ERD, so that the ERD can contact the complainant and ask whether the complainant wishes to pursue his claim under state law. It is not clear whether the EEOC followed that practice in this case. The case was dormant for over 10 years. At some point, it is not known when, the ERD obtained a copy of the EEOC's Dismissal, and on March 19, 2012, the ERD sent a letter to the complaint (1)  stating:

The Wisconsin Equal Rights Division (ERD) has had this case in abeyance for an extended period of time while you pursued this case with the Equal Employment Opportunity Commission (EEOC). EEOC has never notified our office about the results of your investigation.

The ERD will assume you no longer are interested in pursuing this case unless you send us a written letter indicating you wish to pursue an independent investigation into these allegations. Your response must be received within 20 days of the date of this letter or your case will be dismissed pursuant to Sec. 111.39(3) Stats.

The complainant timely responded with a letter that reached the ERD on March 26, 2012, in which he stated that he wanted the ERD to investigate.

The first letter from the ERD to the respondent requesting information about the complaint was not mailed until January 17, 2013. There is no explanation in the file for the ERD's delay from March 26, 2012 to January 17, 2013. The January 17th letter gave the respondent 45 days to respond (i.e., until March 3, 2013). The respondent did not file a response within 45 days, and the ERD investigator issued an Initial Determination on March 15, 2013, finding probable cause to believe that the respondent discriminated against the complainant in terms and conditions of employment because of race, and terminated the complainant's employment because of race. The case was therefore certified for a hearing on the merits.

After the case was certified for a hearing on the merits, the respondent requested several times to have it dismissed on the basis of laches. On August 29, 2013 the respondent filed a formal motion to dismiss.

The ALJ, considering the motion, recited the elements of a defense of laches under Wisconsin law:

For laches to bar a claim, an unreasonable delay must occur, the plaintiff must know the facts and take no action, the defendant must not know the plaintiff would assert the right on which the suit is based, and prejudice to the defendant must occur.

Haferman e al. v. St. Clare Healthcare Foundation, Inc., 2005 WI 171, 60, 286 Wis.2d 621, 647, 707 N.W.2d 853, 866.

The ALJ initially denied the respondent's motion, finding that the complainant did not "know the facts," that is, he did not know that he could have an independent investigation by the ERD, until he received the ERD's letter in March 2012, and that once he knew the facts he acted promptly.

The respondent filed a motion for reconsideration on September 25, 2013. This time the ALJ was persuaded that the complainant was on notice back in 2001 that he could have pursued a state claim, based on documents he received at that time. (2)   The ALJ went on to find that the complainant's delay in pursuing his claim in the ERD was unreasonable, and that as a result of the delay the respondent has been prejudiced in its ability to defend the case. The ALJ dismissed the complaint based on laches.

Discussion

Laches developed in courts of equity, in cases for which there was no statute of limitations. Despite the merger of equitable and legal actions and the widespread adoption of statutes of limitations, Wisconsin has continued to recognize laches as an independent basis on which a judge may dismiss a stale claim:

Laches is an equitable doctrine whereby a party that delays making a claim may lose its right to assert that claim. Laches is distinct from a statute of limitations and may be found where the statute of limitations has not yet run. See Shafer v. Wegner, 78 Wis.2d 127, 132, 254 N.W.2d 193 (1977). It may be asserted against actions founded in both equity and law. Anderson v. Kojo, 110 Wis.2d 22, 26, 327 N.W.2d 195 (1982).

Zizzo v. Lakeside Steel & Mfg. Co., 2008 WI App 69, 7, 312 Wis.2d 463, 469, 752 N.W.2d 869. Case law in Wisconsin shows that the defense of laches is used to dismiss a claim for untimely filing on equitable grounds, even though the claim may have been timely filed under the applicable statute of limitations.  (3)   See Haferman v. St. Clare Healthcare Foundation, 2005 WI 171, 60, 286 Wis.2d 621, 707 N.W.2d 853.

There are two difficulties with the idea of importing the principle of laches into the case at hand-first, laches is not a good fit with the facts of this case because there was no untimely claim filing by the complainant, and second, there is no statute that expressly or by implication has conferred on the ALJ or the agency the power to apply laches.

Laches unsuited to the facts

A consistent feature of court cases applying laches is the defendant's allegation that the plaintiff unreasonably delayed the filing of a claim, to the detriment of the defendant. In a case of laches, then, the plaintiff's alleged unreasonable delay occurs prior to the claim filing. This case, however, presents the reverse sequence-the alleged unreasonable delay of the complainant occurs after the timely filing of the complaint of discrimination. Once the complainant filed his complaint, there was no further filing that he had to make with the ERD, until the ERD sent him its 20-day letter of March 19, 2012, to which he promptly responded.

The ALJ was persuaded that the facts of the case were similar to the facts in a number of federal discrimination cases in which there was a timely filing of an EEOC charge, followed by a lengthy delay in the EEOC investigation. (4)   In one of those cases, Jeffries v. Chicago Transit Authority, 770 F.2d 676 (7th Cir. 1985), the plaintiff filed his EEOC charge in 1974, and the EEOC did not issue a right-to-sue-letter until 1984.  The plaintiff timely filed suit within 90 days.  The federal court dismissed the plaintiff's case based on laches.  Even though the delay in Jeffries, like the delay in this case, occurred after the filing of the EEOC charge, there were two important differences between Jeffries and this case.  First, laches was employed in Jeffries to stop entry of the claim into a new forum, federal court, so it was used in the traditional sense of barring the filing of an action, whereas here it would be used to cut off a process that had already timely begun within the ERD.  Second, the plaintiff in Jeffries, as is true of any complainant before the EEOC, had control over the prosecution of his claim, because he had the right to obtain a right-to-sue letter and terminate the EEOC process after the claim was 120 days old. 42 U.S.C. § 2000e-5(f).  He bore some responsibility, therefore, for the delay within the EEOC.  The same is not true within the ERD.  There is no right-to-sue opportunity; the administrative process in the ERD is the exclusive means by which a remedy may be pursued under the WFEA.  Bachand v. Connecticut General Life Ins. Co., 101 Wis.2d 617, 624, 305 N.W.2d 149 (Ct. App. 1981).  Under the department's administrative rules, a complainant has no opportunity to move a case to an administrative hearing until the investigator issues a determination on probable cause.  Wis. Admin Code § DWD 218.11. The role of the complainant in the investigative process is to respond to inquiries from the investigator. These differences distinguish Jeffries and other federal cases applying laches from the case at hand.

The fact situation of this case is a better fit with the notion of a failure to prosecute than it is with laches. Wisconsin courts have authority to dismiss a claim after it is on file, based on a plaintiff's egregious, unjustifiable delay in prosecuting it. Theis v. Short, 2010 WI App 108, 328 Wis.2d 162, 789 N.W.2d 585; Wis. Stat. § 805.03.  The commission notes, however, that even if this basis for dismissal were alleged, and even if the ALJ had authority to dismiss a case for failure to prosecute (see discussion on Lack of Authority, below), it would violate the complainant's due process rights to dismiss a complaint for failure to prosecute it without having first provided actual notice to the complainant, prior to entertaining a motion to dismiss, what standard of conduct was required of the complainant in order to avoid dismissal. Theis, supra. There is no information in the file in this case that anyone informed the complainant, prior to the respondent's first motion to dismiss for laches, that he was required to meet any particular standard of conduct for prosecuting his claim in order to avoid such a dismissal.

Lack of Authority

Even if laches were considered an appropriate tool to dismiss a timely filed complaint because of a post-filing delay attributable to the complainant, there does not appear to be any statutory grant of authority to the agency to dismiss claims based on laches. Comparing the authority of circuit courts to the authority of administrative agencies, the Wisconsin Court of Appeals stated:

Although Article VII, Section 8, of the Wisconsin Constitution grants circuit courts "plenary jurisdiction over 'all matters civil and criminal within this state,' " see Kotecki & Radtke, S.C. v. Johnson, 192 Wis.2d 429, 438 n. 6, 531 N.W.2d 606, 610 n. 6 (Ct.App.1995) (citation omitted), the authority and powers of an administrative agency are statutorily created and defined solely by the legislature. See Elroy-Kendall-Wilton Sch. v. Cooperative Educ. Serv. Agency, Dist. 12 (CESA 12), 102 Wis.2d 274, 278, 306 N.W.2d 89, 91 (Ct.App.1981) (stating administrative agency "created by the legislature has only those powers which are expressly conferred or which are necessarily implied from the statutes under which it operates"); Nekoosa-Edwards Paper Co. v. Public Serv. Comm'n, 8 Wis.2d 582, 593, 99 N.W.2d 821, 827 (1959) (concluding administrative agencies "have no common law power"). Further, if there is any reasonable doubt as to "the existence of an implied power of an administrative agency," it "should be resolved against the exercise of such authority." Elroy-Kendall-Wilton Sch., 102 Wis.2d at 278, 306 N.W.2d at 91 (citation omitted).

Jocz v. LIRC, 196 Wis.2d 273, 291-92, 538 N.W.2d 588 (Ct. App. 1995). There is no express statutory authority given to the agency in general or specifically to ALJs to apply laches. The question is whether that authority is necessarily implied from the statutes under which the agency operates.

The WFEA establishes a 300-day period in which to file a complaint of discrimination. Wis. Stat. § 111.39(1). Through statutory construction, that period of time has been interpreted to be a statute of limitations. County of Milwaukee v. LIRC, 113 Wis.2d 199, 205, 335 N.W.2d 4112 (Ct. App. 1983). In order to properly apply the 300-day period as a statute of limitations, it is necessary for ALJs to incorporate the body of law that has developed concerning the starting and stopping of that time period, and concerning whether the respondent is entitled to the protection of the statute. This body of law includes concepts such as waiver (County of Milwaukee, supra), the discovery rule (Anchor v. Wisconsin Dept of Workforce Development, ERD Case Nos. CR200501702, CR200504414 (LIRC Jan. 4, 2012)), the continuing violation theory (Mack v. Rice Lake Harley Davidson, ERD Case No. CR200901088 (LIRC Feb. 7, 2013)), equitable tolling (Schulke v. Mills Fleet Farm, ERD Case No. 201000011 (LIRC June 4, 2010)), and equitable estoppel (Dieter v. Richland Center Foundry, ERD Case No. CR201003815 (LIRC July 24, 2012)). These concepts are implied in the interpretation that the 300-day filing period is a statute of limitations. The concept of laches is not implied. As courts have noted, laches is a concept with a history and application independent from statutes of limitation. Zizzo, supra. The commission does not see any authority, express or implied, for an ALJ's implementation of laches in general, much less does it see any authority to apply it in a novel way, to dismiss a claim for a delay occurring after the filing of the complaint. (5)

 

cc:
Attorney Richard J. Steinberg
Attorney Julia S. Arnold



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Footnotes:

(1)( Back ) The greeting in the letter is to "Ms. Thomas." This appears to be a clerical error.

(2)( Back ) There were three documents mentioned. First there was the ERD's letter of October 12, 2001, informing the complainant that his claim was on file with the ERD, but the ERD would "take no action pending EEOC's processing of this complaint." Second, there was EEOC's Dismissal on November 30, 2001, which included the statement that "[t]he time limit for filing suit based on a state claim may be different." (This was attached to his order as Ex. 1). Third, there was a statement at the top of a document that the ALJ said was attached to the EEOC dismissal, which said: "If you also plan to sue claiming violations of State law, please be aware that time limits and other provisions of State law may be shorter or more limited than those described below." (This was attached to his order as Ex. 2). The ALJ said these statements were sufficient to put the complainant on notice that he had the ability to pursue a state claim with the ERD. Unfortunately, it appears that the ALJ went beyond the record by referring to Ex. 2. That document could not have been attached to the 2001 Dismissal. It appears to be a document generated in 2009.

(3)( Back ) In Shafer, a divorce decree awarded furniture to the ex-wife, but she waited for 13 years before taking any steps to recover the furniture, and then filed an action that was deemed to be an action to enforce a judgment (the divorce decree), for which there was a 20-year statute of limitations. Despite the timeliness of the claim, the court barred the claim based on laches. In Anderson, the plaintiff waited 12 years before attempting to execute on a judgment. The court found that laches was an available defense to an action at law, but that the trial court abused its discretion by finding, without factual support, that the defendant was prejudiced by the delay.

(4)( Back ) See, e.g., EEOC v. Dresser Indus., Inc., 668 F.2d 1199, 1202 (11th Cir. 1982) (a delay of five years and eight months); EEOC v. Alioto Fish Co., 623 F.2d 86, 88 (9th Cir. 1980) (delay of five years and two months); EEOC v. Massey-Ferguson, Inc., 622 F.2d 271, 278 (7th Cir. 1980) (delay of four years and nine months); EEOC v. Liberty Loan Crop., 584 F.2d 853, 857-58 (8th Cir. 1978) (delay of four years and four months).

(5)( Back ) The statute already provides a way to address a delay by the complainant after the filing of the complaint: The department shall dismiss a complaint if the person filing the complaint fails to respond within 20 days to any correspondence from the department concerning the complaint and if the correspondence is sent by certified mail to the last-known address of the person. Wis. Stat.§ 111.39(3).

 


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