NICHOLAS A ERWIN, Complainant
DON & CARY'S NOKOMIS INN, Respondent
An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued a decision in this matter. The complainant filed a timely petition for review.
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 and for the reasons stated in the Memorandum Opinion attached to this decision, the commission issues the following:
This matter is remanded to the Equal Rights Division for further proceedings to determine what amount of back pay, if any, should be awarded to the complainant.
Dated and mailed September 28, 2007
erwinni . rpr : 125 : 9
/s/ James T. Flynn, Chairman
/s/ Robert Glaser, Commissioner
/s/ Ann L. Crump, Commissioner
In a decision issued on May 8, 2007, the ALJ concluded the respondent terminated Nicolas Erwin's employment on October 24, 2005, because of his conviction record in violation of the WFEA. The ALJ ordered the respondent to cease and desist from discriminating against Erwin because of his conviction record and offer to reinstate him at the same rate of pay and with the same benefits had he not been terminated, but did not include an award of back pay.
The ALJ stated the following as reason for not granting an award of back pay:
The parties stipulated that Mr. Erwin earned $2,000.00 working for his mother and drew 26 weeks of Unemployment Compensation at $325.00 per week. (1) Mr. Erwin offered no proof of his damages. The burden is on him to do so. Once Mr. Erwin establishes the amount of his damages the burden shifts to DCNI to show a failure to mitigate. See Haas v. Jerry Sark (LIRC, 03/19/03) and Goldsworthy v. Elite Marble (LIRC, 10/15/04).
Regardless of the burden of proof, except for the stipulation, neither party mentioned damages or mitigation. There is no evidence upon which one can determine how long Mr. Erwin was off work; it can be inferred that it was at least 26 weeks. Beyond that, nothing. Since Mr. Erwin failed to meet his burden of proving damages it would be inappropriate to make a speculative award.
Responding to the ALJ's order that it file a compliance report detailing the actions taken to achieve compliance with the award, by letter dated May 22, 2007, the respondent's counsel advised the Division's compliance officer that the respondent had sold its business effective April 30, 2007, and was not in a position to offer any job or position. Further, with respect to the award of damages, counsel noted the ALJ had ruled that the burden was on Erwin to establish his damages and that he had failed to do that, and then quoted the second paragraph of the ALJ's decision statement shown above.
Subsequently, on May 29, 2007, the Division received a letter from Erwin. With respect to his lost wages, Erwin asserted that he was under the impression that all he needed to do for this was done when he had sent a letter to the equal rights officer (apparently a letter the ERD received on October 10, 2006 during the initial investigative stage of the case) in which he asked that the respondent "pay back the unemployment to the state (sic) of Wisconsin and that they pay me lost wages for the monies I lost because of them discharging me." Further, in his May 29 letter Erwin also made the following assertions:
I collected unemployment for 26 weeks at $325.00 per week and I also made $2000.00 from another employer.
Total unemployment 8450.00
I was making $11.15 per hour at the time of my discharge working a 40 hour week. I was let go October 28, 2005 and did not get full time employment until Sept. 15, 2006. I was off work for approximately 46 weeks. Had I stayed employed I would have made $446.00 per week.
Total Wages for 46 weeks $20,516.00
Difference of what I actually made $10,066.00
I am asking that I receive the difference for my lost wages plus interest. I applied for at least 2 jobs a week and sometimes more until I found gainful employment. I attended all of the job fairs in the area and also went to all of the employment offices in the surrounding areas to find suitable work.
By letter to the parties dated July 19, 2007, the Division's Chief of the Hearing & Mediation Section stated that the Division's June 1, 2007 letter indicating that a timely petition for review had not been received was sent in error, that in a letter from Erwin the ERD received on May 29, 2007, he set forth information regarding back pay to which he believed he was entitled, that it appears the clear intent of Erwin's May 29 letter was an appeal of the ALJ's decision, and that the Division will treat his letter as a petition for commission review.
By letter to the Division dated August 1, the respondent's counsel objected to Erwin's attempt to add additional evidence to the record after the hearing. Counsel stated: "When you read the Administrative Law Judge's Decision, it is pretty clear that he failed completely in his burden to prove lost wages. He is now attempting to do that after the hearing and the record has been closed."
One of the purposes of the WFEA is to make victims of discrimination "whole". Marten Transport v. DILHR, 176 Wis. 2d 1012, 1020, 501 N.W.2d 391 (1993), citing, Watkins v. LIRC, 117 Wis. 2d 753, 763, 345 N.W.2d 482 (1984). See also, Anderson v. LIRC, 111 Wis. 2d 245, 259, 330 N.W.2d 594 (1983). Similarly, one of the purposes of Title VII is to make persons whole for injuries suffered on account of unlawful discrimination. See e.g., Taylor v. Phillips Industries, Inc., 593 F.2d 783 (7th Cir. 1979), citing, Albemarle Paper Co. v. Moody, 422 U.S. 405, 418 (1975).
It is appropriate to consider federal decisions where the WFEA and Title VII serve identical purposes, although such decisions are not binding and must be disregarded if they conflict with the Wisconsin Legislature's intent in enacting the WFEA. Marten Transport, 176 Wis. 2d at 1020-1021. Back pay is one form of remedial relief to accomplish the objective of making a victim of discrimination "whole". Federal case law has long been considered when deciding back pay issues under the WFEA. See e.g., Vicherman v. Neuendorf Transportation (LIRC, 06/08/81); Scheidel v. American Council of the Blind (LIRC, 04/06/82); UW Whitewater v. LIRC, Ct. App., Dist. IV, unpublished decision, Nov. 25, 1985; Davis v. Braun-Hobar (LIRC, 04/18/90); Sahr v. Tastee Bakery (LIRC, 01/22/91); Crivello v. Target Stores (LIRC, 06/13/95), aff'd, sub nom. Target Stores v. LIRC, 217 Wis. 2d 1, 576 N.W.2d 545 (1998); Cintron v. Phil Wrobbel Service Corp. (LIRC, 04/29/96); Biggers v. Isaac's Lounge (LIRC, 10/29/99); Marten Transport, supra.
In Title VII cases, once a court finds unlawful discrimination, it is to presume that back pay should be awarded. Salveson v. Douglas County and Wisconsin County Mutual Insurance Corp., 2001 WI 100, ¶ 28, 245 Wis. 2d 497, 516, 630 N.W.2d 182 (2001). See also, Equal Employment Opportunity Commission v. Corinth, Inc. d/b/a Top Notch Restaurant, 824 F. Supp. 1302, D.C. N. D. Ind. (1993)(Once a plaintiff has established that her employment was terminated as a result of unlawful discrimination on the part of her employer, a presumption in favor of full relief arises, citing, Albemarle Paper Co., 422 U.S. at 421; Gaddy v. Abex Corp., 884 F.2d 312, 318 (7th Cir. 1989).
The plaintiff has the burden of proving the damages caused him or her. These damages are determined by "measuring the difference between actual earnings for the period and those which [he or] she would have earned absent the discrimination defendant." Horn v. Duke Homes, 755 F.2d 599, 606 (7th Cir. 1985), citing, Taylor, 593 F.2d at 786.
Once a Title VII plaintiff establishes the amount of damages he or she suffered because of his or her employer's unlawful discrimination, the burden shifts to the employer "to show that the plaintiff failed to mitigate his or her damages or that the damages were in fact less than plaintiff asserts." Salveson, 2001 WI, ¶ 52, quoting, Gaddy, 884 F.2d at 318, and citing, Taylor, 593 F.2d at 787.
The problem regarding the matter of back pay in this case, as indicated by the ALJ, is that Erwin did not prove what his damages were at the hearing. Unable to determine Erwin's damages, the ALJ therefore did not award any back pay to him.
For the following reasons, however, commission concludes that this case should be remanded for further proceedings to determine what amount of back pay, if any, should be awarded to Erwin. First of all, as noted by the ALJ, "neither party mentioned damages or mitigation." However, for many years it was the ERD's practice to only litigate the issue of liability at the hearing and to simply issue a generally worded back pay order if a violation of the WFEA was proven. As the commission stated in Kaczynski v. WSR Corp. Whitlock Auto Supply (LIRC, 10/29/97):
...[A]s noted by the respondent, the usual practice in discrimination cases is to conduct a hearing on the question of whether a statutory violation occurred and to issue a generally-worded back pay order if a violation is proven, and then to hold a hearing if the parties cannot agree on the amount of back pay owed. Toonen v. Brown County, (LIRC, 10/15/2). See also, Boynton Cab Co. v. DILHR, (Case no. 157-111, Dane Co. Cir. Ct. (1978)(The department need not make specific findings on the back pay issue, including the exact amount of back pay owing, unless the parties are unable to reach agreement. If the parties are unable to reach agreement on the amount of back pay, then a request for such a hearing should be made to the department). (2)
It is true that during the spring of 1999, at a meeting regarding obtaining compliance and enforcement of remedial orders, whose attendees included DWD equal rights staff, LIRC equal rights staff and DOJ staff, there was a discussion about doing more at the ERD and LIRC to make sure our orders were as specific and enforceable as possible. However, whether or not notice was ever given to parties that there was a change in practice which required litigation of the issue of back pay at the same time the issue of liability was being litigated, is not known.
Second, regardless of the question about whether the parties had notice of a change in practice that required litigation of the back pay issue at the same time the issue of liability was being litigated, it would appear that the stipulation made by the parties at the start of the hearing in this matter was sufficient to have put the ALJ on notice that it was their intent to address the question of back pay. The stipulation by the parties was that Erwin's rate of pay at the respondent was $11.15 per hour, that he drew unemployment insurance for 26 weeks at $325 a week and that he had earned $2000 while employed by his mother after his termination by the respondent. With respect to back, the WFEA states, in pertinent part, as follows:
Back pay liability may not accrue from a date more than 2 years prior to the filing of a complaint with the department. Interim earnings or amounts earnable with reasonable diligence by the person discriminated against...shall operate to reduce back pay otherwise allowable. Amounts received by the person discriminated against...as unemployment benefits...shall not reduce the back pay otherwise allowable, but shall be withheld from the person discriminated against...and immediately paid to the unemployment reserve fund...
Wis. Stat. § 111.39(4)(c).
The commission finds it unduly harsh to deny back pay to the complainant in this case on the ground that he failed to meet his burden of proving damages. Assuming a requirement that parties litigate the question of back pay at the same time the issue of liability is being litigated, given the stipulation made by the parties at the start of the hearing, together with the fact that the complainant was proceeding pro se, it would appear that the ALJ had an obligation to raise the issue of back pay before concluding the hearing. (3)
Third, Title VII case law also provides support for ordering a remand of this case for further proceedings on the back pay issue. Taylor, supra, involved an appeal from the district court's finding of sex discrimination and award of $78,828.49 as damages to plaintiff Anna Taylor. The district court had provided no breakdown as to the elements of this amount. After affirming the finding of sex discrimination, the Seventh Circuit noted that Taylor did establish economic loss with respect to her receiving lower pay than male employees doing substantially similar work, but had not established what loss she suffered as a result of her wrongful discharge as the record was totally silent as to whether Taylor had received any wages from employment after her discharge. Noting that it was only with information about whether Taylor had received any wages from employment after discharge that the court could carry out its responsibility to reduce the back pay award by the amount of "interim earnings", and that it was not until the plaintiff establishes what she contends are her damages does the burden of going forward to rebut the damage claim or to show plaintiff's failure to mitigate damages fall on the defendant, the court remanded the matter to the district court to determine the actual extent of Taylor's damages.
Further, in Horn, supra, on appeal from the district court's denial of back pay, which had reasoned that the record therein was "even less adequate" than that made by the plaintiff in Taylor, and implicitly held that plaintiff Vera Horn had failed to discharge her burden of proof on this issue, in a footnote the court stated:
Even assuming the district court correctly concluded that the plaintiff had failed to introduce adequate evidence of damages, this court's holding in Taylor did not necessarily require the draconian decision to deny any back pay. In Taylor, the court instead remanded for further factfinding on the issue. (Citing, Taylor, 593 F.2d at 787.)
Horn, 755 F.2d at 607 n.11.
Similarly, given that the parties had entered into a stipulation pertaining to the issue of back pay herein, while inadequate to determine the actual extent of Erwin's damages, Erwin should not be denied any back pay at all, but instead this matter should be remanded for further fact finding and a decision on this issue.
cc: Attorney James T. Runyon
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(1)( Back ) The parties also stipulated that Erwin's rate of pay at the respondent was $11.15 per hour.
(2)( Back ) Apparently, the rationale for this was that proving discrimination was difficult, and, in any case, it was not likely that the ALJ could make a determination as to whether or not unlawful discrimination had been proven until the ALJ had had a chance to review the evidence, so why bother taking up additional time at the hearing to litigate the question of back pay when it was not known if unlawful discrimination had been established.
(3)( Back ) It may simply be that it was not until after the hearing, when the ALJ had had a chance to review the evidence, that the ALJ concluded the complainant was discriminated against but then realized he did not have sufficient information to make a determination on what Erwin should be awarded as back pay.