STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)
LISA A ODYA, Complainant
CAPTAIN INSTALL INC, Respondent
FAIR EMPLOYMENT DECISION
ERD Case No. 199705081,
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 agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own, except that it makes the following modifications:
1. On line 4 of paragraph 29 of the FINDINGS OF FACT, the name "Mr. Legg" is deleted and the name "Mr. Richey" is substituted therefor.
2. Paragraph 2 of the ORDER is deleted and the following paragraph is substituted therefor :
"Captain Install, Inc., shall pay the complainant's reasonable attorney's fees and costs for pursuing the complaint in this matter. The amount of reasonable attorney's fees and costs incurred to date is $7,354.80. This consists of $6,811.00 in attorney's fees and $543.80 in costs. The attorney's fee award represents a reduction of the award granted by the ALJ, and the reason for this reduction is explained below. A check for the sum of $7,354.80 should be made payable jointly to Lisa A. Odya and Attorney Jon Deitrich and delivered to Attorney Deitrich."
3. Paragraph 3 of the ORDER is deleted and the following paragraph is substituted therefor :
"That within 30 days of the expiration of time within which an appeal may be taken herein, Captain Install, Inc., shall submit a compliance report detailing the specific action it has taken to comply with the commission's decision. The compliance report shall be directed to the attention of Kendra DePrey, Labor and Industry Review Commission, P.O. 8126, Madison, Wisconsin 53708. The statutes provide that every day during which an employer fails to observe and comply with any order of the commission shall constitute a separate and distinct violation of the order and that, for each such violation, the employer shall forfeit not less than $10 nor more than $100 for each offense. See Wis. Stats., § § 111.395, 103.005(11) and (12)."
The decision of the administrative law judge (copy attached), as modified, is affirmed.
Dated and mailed May 19, 2000
odyalis.rmd : 125 : 9
/s/ David B. Falstad, Chairman
/s/ Pamela I. Anderson, Commissioner
/s/ James A. Rutkowski, Commissioner
This case presents questions regarding the propriety of the administrative law judge in presiding over the hearing in this matter, and whether the record supports his finding that the respondent terminated the complainant's employment in part because of her sex and the award of attorney's fees.
The respondent, Captain Install, Inc., is a corporation owned and operated by James Richey, which is in the business of installing automobile alarms, stereos and accessories. Captain Install, Inc., is located in Milwaukee, Wisconsin. Richey hired the complainant as an installer in July 1997. The complainant began work on July 10, 1997. On August 1, 1997, Richey, the complainant and another individual not employed by Richey, Glenn Pulaski, drove to a motorcycle rally being held in Sturgis, South Dakota. Avital Technologies, a manufacturer of automobile and motorcycle alarm systems, had hired Captain Install, Inc., to install "Bike Keeper" motorcycle alarms systems that it was promoting at the rally. Richey, the complainant and Pulaski returned to Milwaukee on August 10, 1997. The next day, Richey terminated the complainant's employment.
On August 25, 1997, the complainant filed a claim under the Wage Payment Act alleging that the Respondent had not paid her wages for work she had performed in Sturgis, South Dakota.
On December 23, 1997, the complainant filed a complaint against the respondent under the Fair Employment Act. The complaint included the following allegations: That the respondent discriminated against her because she made a complaint under the Wage Payment Act; that the respondent discriminated against her in compensation because of her sex; that the respondent engaged in or permitted sexual harassment; that the respondent discriminated against her because she opposed a discriminatory practice under the Act; that the respondent discharged her because she opposed a discriminatory practice under the Act; and that the respondent discriminated against her by terminating her employment because of sex. The complainant's claims of discrimination are based on the period when she worked for the respondent in South Dakota and after she returned to Milwaukee from this trip.
At the time she initially filed her employment discrimination complaint, the complainant was represented by attorney Jeffrey Hynes, a partner in the law firm of Adelman & Hynes.
An initial determination was issued finding no probable cause to believe that the respondent had violated the Act by discriminating against the complainant because she made a complaint under the Wage Payment Act or that the respondent had discriminated against the complainant in compensation because of her sex, but probable cause to believe that the respondent had discriminated against the complainant with respect to the remaining allegations of her complaint.
At some point after the complaint was filed, Jon Deitrich, a member of the law firm of Adelman & Hynes, took over representation of the complainant. Deitrich filed an appeal of the issues on which the initial determination found no probable cause to believe discrimination had occurred.
On June 4, 1998, the administrative law judge held a pre-hearing conference. The respondent appeared in person and by attorney Lawrence Zieger. The complainant appeared in person and by attorney Deitrich.
Attorneys for the parties subsequently submitted written statements to the ALJ agreeing that the issues on which no probable cause had been found could be decided on the merits along with the issues for which there had been a probable cause determination.
Following a three-day hearing which began on November 17, 1998, the ALJ issued a decision concluding that the respondent violated the Act by terminating the complainant's employment in part because of her sex but that the respondent would still have terminated her employment had sex not been a factor, and that the complainant had failed to establish by a preponderance of the evidence that the respondent had violated the Act as otherwise alleged. Further, the ALJ awarded the complainant attorney's fees of $11,029.80, noting that the respondent had not filed any response to the complainant's petition for attorney's fees.
Only the respondent has filed a petition for commission review of the ALJ's decision.
On appeal the respondent seeks a reversal of the ALJ's finding that it terminated the complainant's employment in part because of her gender and the award of attorney's fees.
The respondent argues that the ALJ had a duty to recuse himself from presiding over the hearing due to a conflict of interest by virtue of his personal relationship with Jeffrey Hynes, a partner at Adelman & Hynes, S.C.
The respondent raised for the first time an objection to ALJ Schacht's involvement in this matter at the start of the hearing on November 17, 1998.
Attorney Hynes had been a roommate of Schacht's in college. Schacht has a friendship with Hynes where he sees Hynes once or twice a year, and maybe calls him once a year. The ALJ recuses himself in cases where Hynes is involved as an attorney or a witness.
ALJ Schacht had informed James Richey of his relationship with attorney Hynes sometime earlier. Apparently he had done so shortly after the notice of hearing issued on April 28, 1998, when Richey called Schacht because of his unfamiliarity with the process and to obtain some information. Sometime after April 28, but at least by May 21, 1998, Richey had retained attorney Lawrence Zieger. This is evident based on the fact that on May 21, 1998, a notice of pre-hearing conference listing Zieger as the respondent's attorney was sent to Zieger on that date stating that a pre-hearing conference was scheduled for June 4, 1998. As noted above, attorney Zieger appeared at the June 4 pre-hearing conference. Neither Richey nor attorney Zieger raised the issue of recusal at the pre-hearing conference.
At the hearing on November 17, 1998, attorney Zieger made the following assertions as to why the ALJ disqualify himself: Because the respondent believed that attorney Hynes "may be" or "should be" called as a witness to state what Hynes said in response to the complainant's claims about what was occurring to her during a telephone conversation she had with Hynes from South Dakota (Attorney Zieger had previously asked the complainant for attorney Hynes' response at her deposition taken on September 1, 1998, and attorney Deitrich objected, stating that this question was calling for information protected by attorney-client privilege, and instructed the complainant not to answer the question); or because at the very least there should be a ruling as to the admissibility of what the complainant told Hynes that had just occurred to her during the telephone conversation she had with Hynes while she was in South Dakota (it was argued that because the complainant had admitted at her deposition that she was upset and crying when she called Hynes, her statements fell under the excited utterance exception to the hearsay rule); because the respondent presumed that attorney Hynes/the law firm would have a monetary interest in the outcome of the case; and finally, because the respondent felt a recusal would be advisable "in the interest of the appearance of the best justice available for all of the parties."
Attorney Zieger conceded at the hearing that by requesting disqualification of the ALJ it was not an attempt to state that they thought the ALJ had done anything improper or would rule improperly, nor was this a personal attack on the ALJ's character or personality, it was just zealous advocation on behalf of his client.
Attorney Deitrich objected to the respondent's disqualification request, stating, among other reasons, that the request was not timely made, that the conversation between the complainant and attorney Hynes was protected by the attorney-client privilege, and additionally, that attorney Hynes should be excluded as a witness because the respondent had not identified him as a witness under the respondent's witness list 10 days prior to the hearing. (1) Further, Deitrich asserted that if the respondent were to prevail on its request, not only would the complainant's claim be delayed if the ALJ was forced to recuse himself, it could also cause her to lose her chosen counsel, which at this late stage would be devastating to her case because she could not find another attorney at this point who could step in and adequately represent her interests given the status of the litigation.
In response to the disqualification request, the ALJ made a number of comments with respect to actual bias on his part, and the appearance of bias on his part. For example, the ALJ stated that he did not believe that his rulings as to whether to exclude or admit evidence would be affected in any manner by his relationship with Hynes, and that if any ruling resulted in Hynes being a witness that he would recuse himself at that point. The ALJ stated that he was comfortable that he had no concerns regarding Hyne's financial situation, that his relationship with Hynes was not such that any potential financial benefit to Hynes "has one iota of influence on what my ruling would be." Further, with respect to the timing of the request, the ALJ stated that he had informed the respondent about the situation with Hynes, that he was up front, that he had taken a fair amount of time to go over the situation the respondent was facing so the respondent could best deal with it, that he was a public servant and would give the respondent his due as a citizen of Wisconsin, and that any concerns could have been raised at a time so that it did not impact on the case as it would now.
The ALJ stated that he understood how in this heated case anything could have the appearance of bias, but because of the combination of the timing of the disqualification request, when it could have been made at the prehearing when the respondent had the same information as it does now, and because to recuse himself before any rulings on the admissibility of evidence would cause the parties time and expenses not otherwise required, he found it inappropriate to recuse himself as the situation then stood. The ALJ stated that the line he draws is if Jeff Hynes is a witness or becomes involved as an attorney in this case. The ALJ then went on to comment that, "And, as a matter of fact, to prevent the situation from happening in the future, just because I don't want any, you know, I don't want this situation to arise in the future, I will not be taking cases with Adelman & Hynes on the cases in the future just so that this appearance does not arise, you know, so that any question does not occur."
Further, the ALJ stated that the complainant's contact with Hynes was covered by the attorney-client privilege (unless waived by the complainant), and that to the extent it might not technically be covered he believed it was contrary to public policy and the goals of the Fair Employment Act to impose additional financial cost upon the complainants by potentially having to get new attorneys because the firm they contacted eventually represented them. Finally, the ALJ stated that there were problems because Hynes had not been listed on the respondent's witness list and the respondent had not indicated any reason why, for surprise or any other reason, which would provide an exception to his exclusion as a witness.
The respondent claims on appeal that the ALJ's relationship with Hynes created at a minimum, the appearance of bias in favor of the law firm of Adelman & Hynes. The respondent argues that the ALJ's statement that he informed the respondent of his relationship with attorney Hynes showed that the ALJ "had some concerns about the appearance of bias or a conflict of interest." The respondent argues that, in fact, the ALJ "was quite conscious of the appearance of bias on his part, even volunteering to cease from hearing all future cases involving Adelman & Hynes, S.C." The respondent argues that the ALJ's decision to recuse himself from future cases with Adelman & Hynes demonstrates his belief that an appearance of bias or conflict of interest manifested itself during the pendency of this matter. Further, the respondent argues that the ALJ exhibited an overly broad concern for the complainant's ability to secure new counsel were Hynes allowed to be placed on the witness stand for questioning. The respondent also argues that it is important to note that Adelman & Hynes was a law firm comprising fewer than 10 attorneys at the time of the hearing, and that monetary benefits achieved by any of the attorneys associated with the firm can reasonably be expected to inure to the partners, including Hynes, who was identified as representing the complainant on the initial filing documents. Additionally, evidently referencing a discussion about settlement of the case occurring prior to the hearing where the ALJ apparently suggested that a settlement would be less costly than litigation, the respondent appears to suggest that this was also evidence of an appearance of bias on the part of the ALJ.
The commission concludes that the administrative law judge was not required to disqualify himself.
The respondent's request that the ALJ recuse himself was not timely. Wisconsin Statute, section 227.46(6), provides in relevant part as follows: "The functions of persons presiding at a hearing or participating in proposed or final decisions shall be performed in an impartial manner. A hearing examiner.may at any time disqualify himself or herself. In class 2 and 3 proceedings (2), on the filing in good faith of a timely and sufficient affidavit of personal bias or other disqualification of a hearing examiner.the.hearing examiner shall determine the matter as part of the record and decision in the case." (Emphasis in bold text added)
Similarly, the Wisconsin Administrative Code, § DWD 218.16 provides that "Upon the administrative law judge's own motion, or upon a timely and sufficient affidavit filed by any party, the administrative law judge shall determine whether to disqualify himself or herself because of personal bias or other reason. The administrative law judge's determination shall be made a part of the record and decision in the case." (3) (Emphasis in bold text added)
Waiting until the morning of the hearing to request that the administrative law judge disqualify himself or herself because of personal bias or other reason, when a party has fully known of the basis for alleging personal bias or other reason for disqualification well in advance, hardly constitutes a "timely" disqualification request. Here, the respondent itself had notice of the ALJ's relationship with attorney Hynes shortly after the issuance of the notice of hearing. By May 21, 1998, the respondent had retained counsel. Thereafter, on June 4, 1998, the respondent appeared with counsel at a pre-hearing conference but still did not raise the issue of recusal. Instead, the respondent continued to wait until over 5 months later when it appeared on the morning of the first day of what had been scheduled for a three-day hearing to request recusal of the administrative law judge.
While significant, despite what was a clear case of an untimely request for ALJ disqualification, the commission does not reject the respondent's argument that the ALJ should have recused himself on that basis. Neither the statute nor the administrative code provides that a waiver of a request for disqualification occurs due to a failure to file a timely request. The thrust of these provisions simply seem to be concerned with allowing an opportunity for the determination regarding disqualification be placed on the record. The fact that the respondent requested that the ALJ recuse himself just prior to the start of the hearing allowed the ALJ to make a determination regarding recusal on the record.
Instead, the disqualification issue seems to be largely controlled by the case of Gutherie v. WERC, 111 Wis. 2d 447, N.W.2d 331 (1983). As stated by the court in that case:
"It is, of course, undisputable that a minimal rudiment of due process is a fair and impartial decisionmaker (Citing, Goldberg v. Kelly, 397 U.S. 254, 271 (1970) and Withrow v. Larkin, 421 U.S. 35, 46 (1975))..
This does not mean, however, that due process can be violated only when there is bias or unfairness in fact. There can also be a denial of due process when the risk of bias is impermissibly high (4) (Citing, Withrow; State ex rel. DeLuca v. Common Council of City of Franklin, 72 Wis. 2d 672, 242 N.W.2d 689 (1976)).
Gutherie, pp. 454-455.
There is, however, a presumption of honesty and integrity on the part of those persons performing administrative adjudicatory functions, and any challenger bears a heavy burden of overcoming this presumption. Gutherie, 111 Wis. 2d at 455; DeLuca, 72 Wis. 2d at 684. In DeLuca, the court held that the challenger must show "special facts and circumstances to demonstrate that the risk of unfairness is intolerably high." Id. at 691-692
The situation presented in the instant case does not indicate that the risk of bias was impermissibly or intolerably high.
Neither the fact that the ALJ had informed the respondent of his relationship with attorney Hynes prior to the hearing, nor his decision made at the hearing volunteering to cease hearing cases involving Adelman & Hynes in the future, revealed an appearance of bias on the part of the ALJ. To the contrary, the ALJ informed the respondent of his relationship with Hynes as this was consistent with his obligation as an administrative law judge presiding over a contested hearing. Further, the record indicates that the ALJ made his relationship with Hynes openly known to the respondent immediately upon a scheduling of a hearing in the matter, allowing the respondent ample time to consider and timely raise any concerns it might have, but the respondent did nothing. The fact that the respondent did not see fit to raise any objection to the ALJ sitting as the examiner for nearly 6 months speaks strongly about the merits of its claim of an appearance of bias on the part of the ALJ. Moreover, the record shows time and again that the ALJ took his obligation of being an impartial decision maker very seriously. Further, the record indicates that the reason the ALJ volunteered to cease hearing cases involving the law firm of Adelman & Hynes was simply to avoid the situation which had occurred in this case from rising again in the future. Namely, the delay caused by a party seeking an untimely request for his disqualification based on his relationship with attorney Hynes when that relationship had been previously disclosed to the party providing it with ample time before the hearing to make a disqualification request.
The record does not support the respondent's claim that the ALJ exhibited an overly broad concern for the complainant's ability to secure new counsel were attorney Hynes allowed to be placed on the witness stand. On this matter what the ALJ stated was:
".I think that the--that it is contrary to public policy and contrary to the goals of the Fair Employment Act to impose upon complainants additional financial costs by potentially having to get new attorneys or new representation because the firms they contacted were--eventually represented them."
Attorney Deitrich had first raised this concern in connection with the prospect of attorney Hynes appearing as a witness when he noted that this could cause the complainant to lose her chosen counsel, which at this late stage would be not only prejudicial and detrimental, but devastating because he doubted the complainant would be able to find another attorney to step in at this point and adequately represent her interests given the status of the litigation. (Tr. 29-30) This concern, raised by Deitrich and recognized by the ALJ, was simply one of common sense.
The respondent's assertion that monetary benefits achieved by any attorney associated with the law firm can reasonably be expected to inure to the partners does not provide a basis for disqualification of the ALJ. There is absolutely no basis for concluding that there was a risk of unfairness too impermissibly high presented by the situation here. The respondent does not allege that the ALJ had any financial interest in the law firm representing the complainant. The ALJ stated unequivocally that he did not care what impact his ruling would have on attorney Hynes' financial situation, that his friendship with attorney Hynes was not such that any potential financial benefit to Hynes would have any influence on how he would rule. The fact that the ALJ only sees Hynes once or twice a year and maybe calls him once a year fully supports the ALJ's statements.
Finally, why or how the ALJ's effort to present the benefits of a settlement of the case, which all of the ALJ's routinely explore prior to the start of the hearing, would suggest evidence of an appearance of bias on the part of the ALJ has not been demonstrated. It has long been noted that conciliation and voluntary settlement are the preferred means for resolving employment discrimination disputes. See, e.g., United States v. Allegheny-Ludlum Industries, Inc., 517 F.2d 826, 846, 11 FEP Cases 167 (5th Cir. 1975), cert. Denied, 425 U.S. 944, 12 FEP Cases 1090 (1976); Alexander v. Gardner-Denver Co., 415 U.S. 36, 44, 7 FEP Cases 81 (1974). See, also, DWD § 218.09 ("The parties may enter into an agreement to settle the complaint at any time during the proceedings, with or without assistance by the department. The department may assist the parties to reach a settlement agreement..").
The respondent has further argued, however, that the ALJ's legal rulings were "suspect," as evidenced by his decision to bar the respondent from placing Hynes on the witness stand regarding any issue in the case. The respondent argues that the "biased predisposition of Judge Schacht was revealed" by this action. The respondent claims that it sought to demonstrate at the hearing that the complainant contacted attorney Hynes via telephone from South Dakota "in furtherance of her scheme to extort a settlement" from the respondent after filing a sexual harassment complaint against the respondent, which would force the respondent to 1) defend against the complaint at great expense or 2) pay a costly and unwarranted settlement to the complainant. Further, the respondent maintains that the substance of that conversation was revealed in the deposition of the complainant taken on September 1, 1998, at pages 74 through 76.
This argument by the respondent also fails. The ALJ based his decision not to allow attorney Hynes to be called as a witness on two reasons. One, because the testimony sought by the respondent involved a contact with the law firm which eventually represented her, and was therefore protected by the attorney-client privilege; and two, because the respondent had not placed Hynes' name on its witness list, and had not shown any reason, for surprise or otherwise, that an exception should be made to excluding him as a witness.
The lawyer-client general rule of privilege provides that a "client" has a privilege to refuse to disclose and to prevent any other person from disclosing confidential communications (e.g., between the client and the client's lawyer) made for the purpose of facilitating the rendition of professional legal services to the client. Wis. Stat., § 905.03(2). "A `client' is a person.who is rendered professional legal services by a lawyer, or who consults a lawyer with a view to obtaining professional legal services from the lawyer." Wis. Stat., § 905.03(1)(a).
Section DWD 218.17 provides that "By no later than the tenth day prior to the day of hearing, the parties shall file with the division and file upon all other parties a written list of names of witnesses and copies of exhibits which the parties intend to use at the hearing. The administrative law judge may exclude witnesses and exhibits not identified in a timely fashion pursuant to this section. The section does not apply to witnesses and exhibits offered in rebuttal which the party could not have reasonably anticipated using prior to the hearing."
The complainant's deposition testimony clearly shows that her communication with attorney Hynes was protected by the attorney-client privilege. The respondent offered no explanation for its failure to place Hynes' name on its witness list. As noted by attorney Deitrich, allowing Hynes to appear as a witness would not only have been prejudicial and detrimental, but devastating to the complainant because it could have caused her to lose her chosen counsel at a very late stage of the matter and resulted in her being unable to find another attorney to represent her interests given the status of the litigation.
An exception under the attorney-client privilege rule does provide that there is no privilege "If the services of the lawyer were sought or obtained to enable or aid anyone to commit or plan to commit what the client knew or reasonably should have known to be a crime or fraud." Wis. Stat., § 905.03(4)(a). However, the respondent's argument that it sought to demonstrate at the hearing that the complainant contacted attorney Hynes in furtherance of a scheme to extort a settlement from the respondent is not borne out by the record.
First, the substance of the September 1, 1998, deposition conversation does not reveal that the respondent sought to demonstrate that the complainant had contacted attorney Hynes in furtherance of a scheme to extort a settlement from the respondent as claimed by the respondent. In fact, all that the complainant's deposition shows is the complainant stating that she had a conversation with Hynes after becoming really upset and crying about how she was being treated in South Dakota, and counsel for the respondent asking what attorney Hynes said. At that point the attorney-client privilege was asserted. When the complainant responded to counsel for the respondent's inquiry that she had called Hynes as an attorney, counsel for the respondent then responded, "So be it. I'll ask another question." (Tr., Comp. Dep. p. 75) Moreover, it would seem that if it had been the respondent's intent to show that the complainant's conversation with attorney Hynes was "in furtherance of a scheme to extort a settlement" from the respondent so as to not qualify as an attorney-client privileged communication, that the respondent would have asserted that basis in a motion to compel the complainant to disclose the nature of her conversation with Hynes. But the respondent never did that. Even at the hearing when the respondent made its request that the ALJ disqualify himself, the respondent failed to assert that it was claiming that the complainant's conversation with Hynes was in furtherance of a scheme to extort a settlement from the respondent so as to warrant suspension of the attorney-client privilege. (5)
In short, the respondent's labeling the ALJ's ruling as "suspect" and characterizing him as having a "biased predisposition" in an effort to support a claim for disqualification of the ALJ indicates that this argument is nothing more than an after-the-fact attempt to establish a basis for setting aside the ALJ's decision.
The respondent further argues that the ALJ disallowed attorney Hynes as a witness largely based on attorney-client reasoning, despite the respondent's articulation that the complainant had waived the attorney-client privilege at her deposition. This argument is wholly without merit. Attorney Deitrich asserted the attorney-client privilege on behalf of the complainant at the deposition, and the complainant was instructed not to answer questions concerning her conversation with attorney Hynes. There was no waiver of the attorney-client privilege by the complainant.
Finally, the respondent has claimed that the decision rendered by the ALJ contained strong hints of bias in favor of the complainant and her counsel, arguing that an analysis of his decision "illustrate(s) the non-existent foundation upon which attorney's fees rest." But this argument goes to the merits of the complainant's claim that the respondent had terminated her employment because of her sex. As the discussion below shows, the ALJ's determination that the respondent violated the Fair Employment Act by terminating the complainant's employment in part because of her sex is fully supported by the record.
MERITS OF THE CASE
The ALJ's finding that the respondent terminated the complainant's employment in part because of her sex falls under the category of cases designated as "mixed motive" cases. A mixed motive case is one in which the adverse employment decision resulted from a mixture of legitimate business reasons and a prohibited discriminatory motive. Hoell v. LIRC, 186 Wis. 2d 603, 522 N.W.2d 234 (Ct. App. 1994). The fact that an employer's action was based in part on a prohibited basis makes such action an unlawful employment action. However, the fact that legitimate reasons also contributed to the employer's action allows consideration of this fact when fashioning a remedy. As stated by the commission in the Hoell case:
"If an employe is terminated in part because of an impermissible motivating factor and in part because of other motivating factors, but the termination would not have occurred in the absence of the impermissible motivating factor, the Commission has the discretion to award some or all of the remedies ordinarily awarded (i.e., a cease and desist order, reinstatement, back pay, interest and attorney's fees)..if an employe is terminated in part because of an impermissible factor and in part because of other motivating factors, and the termination would have been taken place in the absence of the impermissible motivating factor, the employe should be awarded only a cease and desist order and attorney's fees."
(Citations omitted; underlining emphasis in original.) (6)
At the center of the complainant's charge that she was terminated because of her sex is the complainant's claim that James Richey was attracted to her, and that Richey was jealous and upset that she was having a relationship with Avital employe, Jim Legg, while at the South Dakota bike rally.
The following paraphrased findings of fact issued by the ALJ, who found aspects of both the complainant and Richey's testimony to be not believable, summarize the basis for his finding that the complainant was terminated in part because of her sex but that the termination would have occurred even in the absence of the impermissible motivating factor:
#3. Richey found the complainant physically attractive. Richey hired the complainant both because he thought she had adequate installation skills and because he thought having a woman of her appearance as an installer could be an asset to his business. From the complainant's first interview with Richey, he was flirtatious and unusually friendly with her and treated her specially.
#11. Richey was possessive of the complainant at an initial training class by Avital held in Illinois prior to the trip to South Dakota.
#15. Richey insisted that the complainant ride with him on his motorcycle while in South Dakota. (Richey and Pulaski had transported their motorcycles on a trailer hitched to Richey's truck.)
#17. After setting up their booths on August 2, 1997, Richey bought a tight tank top for the complainant, told her that he wanted her to wear it, and when she refused, Richey became upset and an argument ensued between them.
#18. The problems between Richey and the complainant started with his purchasing of the tank top for her and her refusal to wear it.
#21. The complainant and Legg went out after work on August 3, 1997, during which time they started a consensual sexual relationship, and did not return to their hotel rooms until about 2 a.m.
#22. The complainant had difficulty getting up on the morning of August 4, and showed up tired for work. The complainant and Richey got into an argument when she arrived for work. They argued on and off for the rest of the week.
#23. The complainant and Legg starting flirting at work on August 4, which interrupted their work and distracted their colleagues. They continued to flirt the rest of the week. The complainant and Legg also took longer lunch breaks together than allowed.
#25. On August 5, the complainant came to work with 2 or 3 "hickies" on her neck that Legg had given her.
#26. The complainant and Richey got into an argument as soon as she got to work on August 5. John Studley, a technical service director for Avital told them to quiet down and move away from the booth, at which point Richey took the complainant 10 or 15 ft. away and told her he was upset about her seeing Legg, that her behavior was inappropriate and that she needed to keep her relationship with Legg on a professional basis.
#27. Richey was very upset and angry about the complainant's behavior because of its impact on her work, the problem caused by that relationship at work and because he was jealous. Richey would not have reacted in the way he did if the complainant had been a male, or if he did not feel possessive of her. Richey emphasized his objections to the complainant's relationship with Legg, rather than her performance at work in his conversations with the Avital representatives to get the complainant and Legg to stop the relationship.
#29. The complainant responded to Richey's concerns about her behavior by continuing her sexual relationship with Legg, continuing to get to bed late, arguing with Richey, complaining after August 6 to any Avital rep that would listen that Richey was harassing her because of what she was doing in her personal life and by telling Richey at one point that she did not have to listen to him because he was not her "fucking boss."
#38. The Avital reps made it clear to Richey by their attitude and statements, without saying it outright, that they would never hire the respondent as a subcontractor in the future because of the problems they considered the complainant to have caused.
#40. Richey decided to terminate the complainant's employment because of her relationship with Legg, his feelings about that relationship, the effect of that relationship on her work, her behavior towards Richey and Avital regarding her relationship with Legg, Richey's belief that that the respondent lost the chance to do future subcontracting work with Avital because of the complainant's behavior, Richey's belief that the complainant had shown photographs of herself at the booth in South Dakota, because of the complainant telling Richey that she did not have to listen to him because he was not her "fucking boss" and because she was still in her probationary period.
#43. Richey terminated the complainant's employment in part because of his different standards and expectations for women in general, and the complainant in particular, but the complainant's conduct was such that he would have terminated her employment even if his decision had not been affected by her sex.
On appeal, the respondent argues that the ALJ's determination that the complainant's employment was terminated in part because of her sex was contrary to the credible evidence. The respondent argues that despite his negative opinion of the complainant's credibility the ALJ made several findings on key points that deferred to the complainant's testimony. The respondent cites as examples the ALJ's findings that Richey was flirtatious and unusually friendly with the complainant and treated her specially during her first interview, that Richey was possessive of the complainant, that he insisted that she ride with him on his motorcycle, that Richey purchased a tight tank top for the complainant which she refused to wear, causing an argument between them, and that the tension between them developed after the complainant refused to wear the tank top purchased for her. The respondent argues that these findings were either uncorroborated, or corroborated by Legg, whose credibility the ALJ assessed by stating: "This is not a man whose word seems to be worth much." (Mem. op. p. 9) (7)
The respondent's argument ignores the fact the ALJ also had a negative opinion of Richey's testimony as well, as the ALJ concluded that "Mr. Richey's testimony also had serious problems." (See Mem. Op. p. 9) A finder of fact may accept certain aspects of a witnesses' testimony and reject others. See, for example, Bergman v. Mc Cautry, 65 F.3d 1372, 1378 (7th Cir. 1995), cert. denied, 116 S.Ct. 1552 (1996); Kranshaar v. Flanigan, 45 F.3d 1040, 1054 (7th Cir. 1995); United States v. Colston, 936 F.2d 312, 315 (7th Cir. 1991), cert. denied, 502 U.S. 951 (1991). In making his findings the ALJ was entitled to consider the record as a whole when assessing the credibility of the witnesses in order to, as he put it, "untangl(e) the conflicting stories about the events in Sturgis in 1997."
Moreover, the record supports the ALJ's findings regarding Richey's conduct. For example, the complainant testified, without contradiction by Richey, that at the training session with Avital before going to South Dakota, "It was like (Richey) was joined to my hip, constantly next to me. Like if Jim (Legg) or John (Studley) or any other Avital employees were talking to me, it seemed like (Richey) was upset or jealous." (T. 52) In fact, Legg testified that it was his impression that the complainant and Richey were involved in a boyfriend/girlfriend or husband/wife relationship because of the way Richey was standing very close to her and would place his head very close to her when talking to her. (T. 566) The complainant further testified that after arriving in South Dakota Richey and Pulaski argued about on whose motorcycle she would ride back and forth from the hotel to the work site. Richey did not rebut this testimony. (8) Additionally, the complainant testified that on August 3 Richey bought a tank top for her ( and his girlfriend and secretary back in Milwaukee) and asked the complainant to wear it which she refused to do. Richey never denied purchasing the tank top or asking the complainant to wear it.
The ALJ's memorandum opinion at page 10 states as follows:
".this decision reflects the conclusion that Mr. Richey's actions reflected both legitimate business concerns, and a combination of his possessiveness and the attitudes and double standards of Avital at Sturgis. First, Mr. Richey testified he went to the strip club out of respect for Avital and because of his desire to be one of the guys. The evidence is that this desire to be one of the guys was an important motivating factor for him, that affected his treatment of Ms. Odya. In a variation on the way women were displayed at the strip club, Mr. Richey wanted to display Ms. Odya. This is shown by the tank top he gave her and wanted her to wear. Second, it also is notable that Mr. Richey, in his conversations with Ms. Odya and with Avital, talked not about Ms. Odya's work performance, but about her affair with Mr. Legg. Had his relationship with Ms. Odya been a purely professional one, rather than an emotional one, his focus would have been on what she did at work. It was not. The way Mr. Richey reacted to Ms. Odya's affair with Mr. Legg demonstrated jealousy and possessiveness. Ms. Odya and Mr. Legg testified to this, and Mr. Richey did not effectively dispute that testimony. He would not have reacted in the same way to an employee's affair had that employe been male."
The respondent criticizes the ALJ's memorandum opinion as "painting" the respondent as jealous, possessive, angry and proud of the complainant's beauty. The respondent argues that it was not jealous or possessive of the complainant, and that it was angry about having to defend against a specious complaint. As noted by the complainant, however, the testimony at the hearing revealed that Richey's reaction to the relationship between the complainant and Legg had little to do with its effect on work (9) and manifested itself in a desire to "punish" the complainant. Richey's actions were simply inconsistent with someone concerned solely about his business; the fact that he imposed different rules on the complainant than on Pulaski (as shown in the next paragraph) reveals discrimination on the basis of sex.
Further, the respondent criticizes the ALJ's opinion, arguing that even though the ALJ was presented with no men similarly situated with the complainant, he concludes that the respondent would not have reacted in the same way to an employe's affair had that employe been male. The respondent argues that this opinion is without basis in the record and is pure speculation. The record evidence is to the contrary, however. For example, while Richey claimed that the reason for the termination of the complainant's employment included the fact that she had acted inappropriately by cultivating a relationship with Legg at the bike rally, he conceded that Pulaski was never told that he could not have a personal relationship after work or that Pulaski could not go out after work, that it was possible Pulaski could have had such a relationship because there were times he was not in his presence after work, and that although he (Richey) did not want people staying out late, Richey himself admitted that both he and Pulaski had stayed out after midnight. (T. 274, 279, 327-328) Further, when discussing what he found objectionable about the complainant showing up for work with hickies Richey's initial response was, "I found that showing up for work with hickies on her neck, being a woman in this type of environment, made her character appear less than professional." (T. 293) (Underlining emphasis added) (10)
Next, the respondent supplies the following quote of a portion of the comment made by the ALJ at the top of page 10 of his memorandum opinion:
"It is clear from the evidence that (Respondent) is most passionate about his business and reputation. It is not believable that (Respondent) would jeopardize his business and reputation by acting in a way that indicated that having sex with (Complainant) was more important than his contract with Avital, when he knew that in Sturgis there was no privacy and (Complainant) had told him she had filed a discrimination complaint against a prior employer for sexual harassment."
(Resp. brf. p. 11)(Emphasis in original).
The respondent then asks, "If it is not believable, then how can it be concluded that Respondent violated Wisconsin law by discriminating against an employee on the basis of sex? The simple answer to this question is that in this paragraph the ALJ was stating his opinion about the complainant's claim of sexual harassment as a form of discrimination on the basis of sex, and not his opinion regarding the complainant's claim of gender-based sex discrimination. This is made clear as the last sentence of the paragraph, omitted by the respondent in its quote, states, "Ms. Odya's allegation that Mr. Richey made sexual advances to her ten to fifteen feet away from the booth during working hours after he had just had an argument with her are not believable." (Underlining emphasis added).
Next, at pages 12 and 13 of its brief, the respondent cites several findings of fact made by the ALJ which support its position that the complainant was terminated for good reason. As noted by the complainant, however, the respondent fails to explain how these findings support its position that there was no violation of the Wisconsin Fair Employment Law in any other respect.
Finally, the respondent argues that the ALJ fundamentally misunderstood certain segments of its testimony in concluding that the respondent "trumped up" reasons for the complainant's discharge at the hearing. The respondent argues that "The reasons offered at hearing were expansions on the reasons offered in deposition." The record shows, however, as noted by the complainant, that there was no misunderstanding; Richey testified as to certain alleged bases for termination that he had no knowledge of at the time he made his decision to discharge. As noted by the ALJ at page 9 of his memorandum opinion (and which the record confirms), Richey testified that the complainant was discharged for lying on her resume, when he did not check on her previous employment until after he fired her. (T. 253-255) Richey testified that the complainant's discharge was in part because of the things the secretary, Ms. Legling, told him, but then admitted that Legling did not talk to him about the complainant until after the complainant was fired. (T. 330-332) Richey testified that the complainant was fired for her lack of skills and inability to do the job, but later testified that her work in Sturgis was acceptable to him. (T. 253, 273)
The respondent also apparently argues that it may appear that the respondent trumped up reasons for the complainant's discharge at the hearing because they were not covered at Richey's discovery deposition. Again, as noted by the complainant, if this is the respondent's claim it is simply incorrect. Richey testified about these bases at his deposition, as well as at the hearing. (T. 252- 253) He was then impeached with his deposition testimony when at the hearing he claimed knowledge of these additional bases prior to the termination decision.
The ALJ awarded the complainant attorney's fees of $11,029.80, noting that the respondent had not filed any response to the complainant's petition for attorney's fees.
However, a reduction of the attorney fee award is necessary. Under the Wisconsin Fair Employment Act, an award of reasonable attorney's fees may be made to a prevailing complainant. Watkins v. LIRC, 117 Wis. 2d 753, 345 N.W.2d 482 (1984). A complainant may be considered a prevailing complainant for attorney's fees purposes if the complainant succeeds on any significant issue in the litigation which achieves some of the benefit sought in bringing the suit. Hensley v. Eckerhart, 461 U.S. 424, 433, 31 FEP Cases 1169 (1983).
A reduced fee award is appropriate if the relief, however significant, is limited in comparison to the scope of the litigation as a whole. Id. at 439. In Hensley, the court stated:
"In some cases a plaintiff may present in one lawsuit distinctly different claims for relief that are based on different facts and legal theories. In such a suit.counsel's work on one claim will be unrelated to his work on another claim. Accordingly, work on an unsuccessful claim cannot be deemed to have been `expended in pursuit of the ultimate result achieved' (citation omitted).
In other cases the plaintiff's claims for relief will involve a common core of facts or will be based on related legal theories. Much of counsel's time will be devoted generally to the litigation as a whole, making it difficult to divide the hours expended on a claim-by-claim basis. Such a lawsuit cannot be viewed as a series of discrete claims. Instead the district court should focus on the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation.
Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee..
If, on the other hand, a plaintiff has achieved only partial or limited success, the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount..Again, the most critical factor is the degree of success obtained..
There is no precise rule or formula for making these determinations. The district court may attempt to identify specific hours that should be eliminated, or it may simply reduce the award to account for the limited success. The court necessarily has discretion in making this equitable judgment.."
(Hensley, at pp. 435-437).
Reviewing the complainant's fee petition submitted to the ALJ, it appears that the ALJ's fee award encompassed all 74.9 hours that were expended on the case. (The hourly rate was $140/hr; expense costs of $543.80 were added to the fee award.)
An award of the full fee request does not appear to be reasonable. The complainant failed to prevail on 2 claims that were distinct in all respects from her successful claim. They were her claims that the respondent discriminated against her because she made a complaint under the Wage Payment Act and her claim of discrimination with respect to compensation because of her sex. It is true that the claim that she did prevail on--sex discrimination with respect to termination of employment--appears to be intertwined with her other claims of sexual harassment, discrimination because she opposed a discriminatory practice and discharge because she opposed a discriminatory practice under the Act. However, while the bulk of counsel's time may have been expended on claims involving a common core of facts that were based on related claims, the degree of the complainant's success was fairly limited. This is shown by the fact that although the respondent's termination of the complainant's employment occurred in part because of her sex, it also occurred in part due to legitimate business reasons-- and the respondent would have terminated the complainant's employment even in the absence of the impermissible motivating factor. The commission considers that a 50 percent reduction of the fee award made by the ALJ is appropriate.
Finally, there is the matter of the complainant's fee petition for $1,568, representing fees incurred in responding to the respondent's petition for review. This amount consists of 11.2 hours at the rate of $140 per hour. The commission finds this fee request reasonable.
Accordingly, the commission has ordered a total fee award, including expense costs, of $7,354.80.
cc: Jon Deitrich
Timothy R. Klingman
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(1)( Back ) Section DWD 218.17 provides as follows: "By no later than the tenth day prior to the day of hearing, the parties shall file with the division and file upon all other parties a written list of names of witnesses and copies of exhibits which the parties intend to use at the hearing. The administrative law judge may exclude witnesses and exhibits not identified in a timely fashion pursuant to this section. This section does not apply to witnesses and exhibits offered in rebuttal which the party could not have reasonably anticipated using prior to the hearing.
(2)( Back ) Proceedings under the Fair Employment Act are class 3 proceedings. A class 3 proceeding is any contested case where the agency does not act under standards conferring substantial discretionary authority upon it for matters such as rate making, price setting (class 1 proceedings) or determining to impose a sanction or penalty against a party (class 2 proceedings).
(3)( Back ) The respondent has argued that "Notably absent from the Decision in this matter is the inclusion of the determination by Judge Schacht not to recuse himself from the case, as mandated by (this provision)." While the ALJ did not repeat the determination he made not to recuse himself in his decision, the record shows that this matter encompassed 27 pages of transcript, complete with all of the arguments of the parties as well as the entire basis for the ALJ's refusal to recuse himself.
(4)( Back ) The respondent asserts that Wis. Stat., § 757.19, which governs the disqualification of judges, serves as a useful guideline in determining whether or not an administrative law judge should recuse himself or herself from a case. However, as noted by the court in Gutherie, this statutory provision for disqualification does not govern administrative adjudicators not in the judicial branch of government as section 757.19(1), Stats., defines judges to include supreme court justices, court of appeals judges, circuit court judges, and municipal judges. Id. at p. 457.
(5)( Back ) On the final day of the hearing the respondent called the complainant adversely, as its last witness, and did directly ask her if she had called Hynes in an attempt to "set up" the respondent. (T. 611) However, the respondent still never argued that the attorney-client privilege should not apply for reasons stated under Wis. Stat., § 905.03(4)(a). The respondent also failed to uncover any reason to believe that the complainant had contacted Hynes in furtherance of a scheme to extort a settlement from the respondent.
(6)( Back ) The employer, of course, has the burden of establishing that the termination would have taken place in the absence of the impermissible motivating factor. Hoell, 186 Wis. 2d at p. 609. The ALJ's "Summary Of Decision" contained on the first page of his decision states, improperly, that the complainant "failed to establish that the Respondent would not have terminated her employment had they not treated her differently because of her sex." The commission has reviewed this matter placing the burden of establishing that the complainant's termination of employment would have taken place even in the absence of the impermissible motivation on the respondent. The commission is satisfied that the respondent has met that burden.
(7)( Back ) The ALJ concluded that Legg's testimony was hard to credit because he was not present in person to testify but had given his testimony telephonically, because the ALJ found it hard to know what to make of a married man who has an affair that interferes with his work and the work of the woman he's having the affair with (the complainant), because Legg talked about having sex behind the woman's back at work with his coworkers and because he did not break the sexual relationship off when he could see all of the damage it was causing and when he is repeatedly told to stop it by his supervisor.
(8)( Back ) The respondent had included Pulaski among its potential witnesses but the respondent never called Pulaski to testify at the hearing.
(9)( Back ) Indeed, Richey testified at the hearing that the complainant's work in Sturgis was acceptable to him and that she was able to install alarms on motorcycles to his satisfaction. (T. 273)
(10)( Back ) Under later questioning Richey stated that he did not want any employe to show up for work with hickies. (T. 325)