Wis.LIRC ER Decision: Shipley - July 14, 1987 - Arrest record discrimination - discharge of employe based on her arrest (not conviction) unlawful, however, no remedy awarded as employer could have suspended her because the offenses charged were substantially related to her job, and employer permanently shut down its restaurant when employe would have still been permissibly suspended - 'substantially related' - uttering forged checks / restaurant cashier

STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION

ZETTIE SHIPLEY, Complainant

TOWN & COUNTRY RESTAURANT, Respondent

FAIR EMPLOYMENT DECISION
ERD Case No. 8502472

On February 24, 1987, an administrative law judge issued a decision, dismissing the Complainant's complaint, and holding that the circumstances of the offenses of forgery and uttering a forged instrument with which the Complainant was charged in Green Lake County in the fall of 1985 and for which she was subsequently convicted were substantially related to the circumstances of her employment as a waitress cashier at Steeles Restaurant within the meaning of sec. 111.335, Wis. Stats.

The administrative law judge further held that the circumstances of the offense of theft of money from Howards department store with which the Complainant had been charged in 1985 and for which she was convicted in 1986 were substantially related to the circumstances of her employment as a waitress-cashier at Steeles Restaurant, within the meaning of sec. 111.335, Wis. Stats.

The administrative law judge further held that Respondent did not violate the Fair Employment Act's prohibition against discrimination because of arrest or conviction record when it terminated Complainant.

On March 6, 1987, the Complainant timely filed a petition for review.

Based on the applicable law, records and evidence in this case, the Commission makes the following:

FINDINGS OF FACT

1. The Respondent was at all times material herein a business operated by Francis and Dorothy Genereaux, consisting of the Towne and Country Restaurant and Cocktail Lounge located at 115 West Huron in Berlin, Wisconsin and an adjacent operation, Steeles Restaurant, located next door at 117 West Huron in Berlin, Wisconsin.

2. The Respondent's owner, Francis Genereaux, hired the Complainant, Zettie Shipley, on Wednesday, November 27, 1985 to work as a waitress-cashier in Steeles Restaurant. The Complainant worked there on Friday, November 29, 1985, and Saturday, November 30, 1985. On Monday, December 2, 1985, her next scheduled work day, the Complainant was informed by Genereaux that she was not needed there anymore.

3. Genereaux terminated the Complainant because on November 30 or December 1, 1985, he discovered that the Complainant had criminal charges pending against her in Green Lake County.

4. The criminal charges against the Complainant which Genereaux found out about, and which led him to terminate her, were brought against the Complainant on November 14, 1985. They consisted of six counts of forgery (Section 943.38(1)(a), Stats.) and five counts of uttering a forged instrument (Section 943.38(2), Stats.) .

S. The circumstances of the charges brought against the Complainant in Green Lake County in November 1985 were related to conduct of the Complainant engaged in over a number of days shortly preceding the bringing of the charges. Briefly put, the Complainant, with the assistance of her husband and another couples, opened a checking account in a local Bank under a false name and other false information, and then passed numerous checks on that account in stores and businesses in and around the area, in amounts totaling well in excess of the $200 or so with which the account had been opened. The Complainant did all of this knowingly, intending to defraud the venders and links with whom she was dealing and then to return to her home in Texas with articles she had "purchased."

6. Although unknown to the Respondent at the time, and thus playing no part in Respondent's decision to discharge the Complainant, the Complainant had also been charged with a crime in Texas in September 1985, and the charge was pending against her when she came to Wisconsin in November. That charge was one of theft of $2,400 committed by the Complainant against a department store, Howards, while the Complainant was employed there as a cashier.

7. The job for which the Complainant was hired, and from which she was terminated, was that of head waitress-cashier at Steeles. In connection with that job, the Complainant would have been responsible for, among other things, preparing guest checks for customers, receiving payment on guest checks in either cash or check, depositing such payment in the cash register and accounting for it properly, and preparing daily summaries of receipts and transmitting the same, with the actual receipts, to another representative of the restaurant at the end of the day. The Complainant would, in that position, have been authorized to accept checks in payment for meals and to accept checks for amounts in excess of meals for which cash would be returned. The Complainant would also have been authorized to issue and take payment for gift certificates for the restaurant, which were kept by the restaurant in blank and which could be filled out in any denomination for later use in the restaurant, and which could he purchased by customers by cash or check.

8. At the time the Respondent terminated the Complainant, the Complainant had not been convicted of any of the crimes with which she was charged.

9. On September 4, 1986, the Complainant was convicted of all 11 counts of forgery and uttering of forged instruments brought against her in Green Lake County in 1985. She was sentenced October 21, 1985. Additionally, on February 5, 1986, the Complainant was convicted of the charge of theft arising out of her employment as a cashier at the Howards department store in Texas. The Complainant is presently serving a sentence of five years probation for the conviction in Texas, and has also been sentenced to five years probation in Wisconsin for the offenses she was convicted of here.

10. On July 22, 1986, the Respondent's restaurant was closed by its owners, the Genereaux, and the property itself was allowed to revert back to the previous owners from whom the Genereaux had purchased it. At the time of the closing the restaurant liabilities far exceeded its assets. It is not now being operated by anyone.

Based on the findings of fact made above, the Commission makes the following:

CONCLUSIONS CF LAW

1. The Respondent is an employer within the meaning of the Act.

2. In violation of the Wisconsin Fair Employment Act the Respondent discharged the Complainant because she had been arrested.

3. At the time of discharge, Complainant was an individual who was subject to a pending criminal charge, within the meaning
of sec. 111.335(1)(b), Wis. Stats.

4. At the time of discharge, Complainant was not an individual who had been convicted of a felony, with the meaning of
sec. 111 .335(1)(c), Wis. Stats.

Based on the findings of fact and conclusions of law, the Commission makes the following:

ORDER

That no remedy is awarded Complainant. (See Memorandum Opinion for reasons.)

Dated and mailed July 14, 1987

/s/ Hugh C. Henderson, Chairman

/s/ Carl W. Thompson, Commissioner

/s/ Pamela I. Anderson, Commissioner

MEMORANDUM OPINION

In reversing the administrative law judge's decision, the Commission has not disagreed with his assessment of credibility and demeanor of the witnesses. The Commission has reversed the administrative law judge's decision as a matter of law.

At the beginning of the hearing, and before testimony was taken, Respondent conceded Complainant was discharged because Francis Genereaux, the owner, had learned on November 30 or December 1 , 1985, that Complainant had been arrested for passing bad checks and that criminal charges were pending in Green Lake County. Respondent has, therefore, admitted he discriminatorily discharged Complainant, within the meanings of secs. 111.325 and 111.322, Wis. Stats. The issue then is whether Respondent has an affirmative defense under sec. 111.335, Wis. Stats., which would exonerate Respondent.

Sec. 111.335, Wis. Stats., provides affirmative defenses for an employer who has taken a discriminatory employment action based on the arrest or conviction record of an employe. However, such affirmative defenses are subject to certain statutorily prescribed conditions.

Sec. 111.335(1)(b), Wis. Stats., provides in pertinent part:

". . . it is not employment discrimination because of arrest record . . . to suspend from employment . . . , any individual who is subject to a pending criminal charge if the circumstances of the charge substantially relate to the circumstances of the particular job . . . ."

Under this defense the action taken by the employer is unequivocally stated by the statute, i.e., "to suspend" from employment. In this case Respondent terminated Shipley. She was not suspended.

All the other criteria of the defense are met. At the time of discharge Complainant had an arrest record within the meaning of sec. 111.32(1), Wis. Stats., and Respondent was aware of it.

Complainant was an individual who was subject to a pending criminal charge at the time of the employment action. There is no doubt that the circumstances of the charge (defrauding merchants of money and merchandise) substantially relate to the circumstances of the particular job, (cashier in a restaurant).

Because Respondent terminated Complainant instead of suspending her, the statutory defense under sec. 111.335(1)(b) does not exonerate Respondent.

Sec. 111.335(1)(c) provides in pertinent part:

". . . it is not employment discrimination because of conviction record to . . . terminate from employment . . . any individual who:
1. Has been convicted of any felony, . . . the circumstances of which substantially relate to the circumstances of the particular job . . ."

In this case Complainant had no conviction record. Nor is there any testimony or contention that Respondent believed there was a conviction record. Moreover, Complainant was not, at the time of discharge, an individual who had been convicted. The only factor that meets the statutory conditions for the defense is that she was terminated from employment.

As the statutory conditions have not been met, the affirmative defense provided in sec. 111.335(1)(c) also cannot exonerate the Respondent.

In his memorandum opinion, the administrative law judge discusses the distinction between the two actions, i.e., suspension versus termination, and the probable reason for the distinction, but concludes that since the later convictions would preclude any possibility of relief for Complainant, he was justified in ignoring the distinctions. However, the end result does not justify the means when the result is accomplished by ignoring the unambiguous words of the statute.

The purpose of the statutory defense scheme is clear. The scheme protects the innocent employe who is discharged based on rumor or bias. The statute does not protect an employer who discharges an employe based on rumor, bias or speculation. The Commission agrees with the administrative law judge's statement: "but the use of the term 'suspend' implied quite clearly that it is expected that when the charge is resolved (by a court of law) there will also be some resolution of the employment status. Thus, presumably, if a person is acquitted of a charge substantially related to the circumstances of his/her employment, an employer would have no grounds for refusing to reinstate (the employe) to employment."

In order to claim the statutory defense, an employe cannot be terminated (1) if the employe is subject to a pending criminal charge (and has not been convicted); and (2) if the circumstances of the offense do not substantially relate to the circumstances of the job.

As the Complainant was terminated, was subject to a pending criminal charge and was not (yet) convicted (when discharged), the statutory defenses cannot be claimed by Respondent. As the statutory defenses under sec. 111.335, Wis. Stats., cannot be claimed by Respondent, only the discriminatory violation remains in the case. The next step then is the fashioning of an appropriate remedy.

Complainant's job with Respondent was a five-day, 40 hour-per-week job, paying $2.25 hourly, plus average tips of $15 daily. Following discharge she worked six weeks at a Country Kitchen restaurant and was discharged. On June 2, 1986, she worked for Del Monte one month and quit. In July she worked two weeks for the Larsen Company and quit. On July 22, 1986, Respondent went out of business and closed its doors.

The issue here is, what remedy will make Complainant whole?

Sec. 111.39(4)(c), Wis. Stets., empowers the Commission to "order such action by the respondent as will effectuate the purpose of this subchapter, with or without back pay." The Commission is, therefore, vested with broad equitable discretion in fashioning a remedy. The Fair Employment Act is intended to make the victims of unlawful discrimination whole. Anderson v. LIRC, 111 Wis. 2d 245, 259, 330 N.W. 2d 594 (1983). The Fair Employment Act, like the analogous Title VII federal action, "is intended to make the victims . . . whole and . . . the attainment of this objective . . . requires that persons aggrieved . . . be, so far as possible, restored to a position where they would have been were it not for the unlawful discrimination." Franks v. Bowman Transportation Co., 424 U.S. 747, 763, 12 FEP 549, 555-56 (1976).

The position Complainant would have been in were it not for the unlawful discrimination would have been suspension from her employment continuing until Respondent closed its doors on July 22, 1986. Respondent did not want Complainant present on its premises working. Under sec. 111 .335(1 )(b), Wis. Stats., such suspension would not have been discrimination because of arrest record because Complainant was an individual who was at the time subject to a pending criminal charge and the circumstances of the charge substantially related to the circumstances of her job as a cashier in a restaurant.

The circumstances of the criminal charge were that Complainant used a fairly elaborate scheme to defraud merchants of cash and merchandise by theft. She used a false name and identification to pass bad checks to merchants. Her employment as a waitress/ cashier involved substantial responsibility for and contact with, both cash and check transactions. The position also involved the potential for use or misuse of another kind of negotiable instrument, respondent's gift certificates, which were in essence a form of check, in that they were paper for which the bearer could receive items of value.

As the position Complainant would have been in until Respondent's business was closed was suspension without pay, no back pay is appropriate. Reinstatement is not feasible because Respondent is no longer in business. Also a cease and desist order would not be beneficial because Respondent is out of business.

As the crime committed in Texas by Complainant was unknown to Respondent at or before the time of discharge, such evidence is after-the-fact and not relevant to prove that Respondent's decision was justified. Hence it is not included in the Conclusions of Law.

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